Harvard Prof. Clayton Christiansen address to the MBA graduates before they took their MBA Oath. His message is very relevant to all emerging economies – corruption and all.
“Most of us are so eager to formulate the right answer and then begin implementing it that we often forget to think about whether the right question has been asked. Let me illustrate this by exploring two institutions, democracy and capitalism, which Americans broadly believe to be the right and enduring answers, seemingly without having asked the salient question.
America seems to have played a role in the ouster of rulers with names like Batista, Duvalier, Marcos, Allende, Ortega, Suharto and others, so that we could help the people in those nations experience the blessings of democracy and free markets. We have spent trillions of dollars and tens of thousands of lives trying to bring the freedoms of democratic governments to Lebanon, the Balkans, Haiti, Afghanistan, Iraq, Liberia, Rwanda, Pakistan and many more countries. We anguish that democracy is giving way to dictatorship in Russia. Trying to make trial-by-jury work in Iraq and Afghanistan is like climbing a mudslide: People are committing heinous crimes at a much faster rate than a legal system grounded in democratic principles can handle.
All of these efforts have been built upon an assumption that in every situation, democracy is the best form of government. An important question to have asked, however, is, “Is there a situation where democracy is the wrong solution?”
I learned the importance of this question in a conversation 12 years ago with a Marxist economist from China who was nearing the end of a fellowship in Boston, where he had come to study two topics that were foreign to him: democracy and capitalism. I asked my friend if he had learned here anything on these topics that was surprising or unexpected. His response was immediate and, to me, quite profound: “I had no idea how critical religion is to the functioning of democracy and capitalism.” Though de Toqueville also had observed this, I had never made this association between religion, democracy and capitalism in my mind. But it was like this guy parachuted in from Mars ? and this is what he saw. He continued,
“In your past, most Americans attended a church or synagogue every week. These are institutions that people respected. When you were there, from your youngest years, you were taught that you should voluntarily obey the law; that you should respect other people’s property, and not steal it. You were taught never to lie. Americans followed these rules because they had come to believe that even if the police didn’t catch them when they broke a law, God would catch them. Democracy works because most people most of the time voluntarily obey your laws.
“You can say the same for capitalism,” my friend continued. “It works because Americans have been taught in their churches that they should keep their promises and not tell lies. An advanced economy cannot function if people cannot expect that when they sign contracts, the other people will voluntarily uphold their obligations. Capitalism works because most people voluntarily keep their promises.”
My friend then invited me to look around the world at those countries where, in his words, “America had snapped its fingers at the country and demanded, ‘We want democracy here, and we want it now!’” Unless there was already a strong religious foundation in those countries, he asserted, democracy has failed miserably. There are religions in every country, of course. But he made clear that democracy-enabling religions are those that support the sanctity of life, the equality of people, the importance of respecting others’ property, and of personal honesty and integrity. Those religions also had to be strong enough that they held power over the behavior of the population. People had to believe that God would punish them even if the police and court system did not. He then gave some examples.
In Russia, for instance, there are religions ? but few people are influenced by them. As a result many people avoid taxes, and the government cannot collect them. Murder, bribery and stealing are a part of everyday life. He noted that American foreign policy has been naïve in Haiti and the nations of Africa that have been torn by such brutal civil strife. “You just think that because democracy works for you that it will work everywhere. It only works where there is a strong foundation of religion.” In the course of researching the issue my friend posed I happened upon an elegant summary of what he was trying to teach me, penned by Lord John Fletcher Moulton, the great English jurist, who wrote that the probability that democracy and free markets will flourish in a nation is proportional to “the extent of obedience to the unenforceable.”
My Chinese friend heightened a vague but nagging concern I’ve harbored ? that as religion loses its power over the lives of Americans, what will happen to our democracy? Our prosperity? We are living on momentum. The ethic of obedience to the unenforceable was established by vibrant religions, and some of these teachings have become a part of our culture. As a result, today there are many Americans who are not religious, who still voluntarily obey the law, comply with contracts, value honesty and integrity and respect other people’s rights and property. This is because certain religious teachings have become embedded in our culture. But is culture a stalwart protector of democracy’s enabling values? I don’t think so.
Those who seek to minimize the role that religions can play in the public stage are making two very serious mistakes. First, they are seeking to minimize the very institutions that have given us our civil liberties in the first place. And second, the debate swirling in judicial discourse about the separation of church and state is a false dichotomy. There are two classes of religions, if we broadly define as philosophical traditions: theistic religions and atheistic ones. Zealots of atheistic religions who assert that theistic religions must be swept off the democratic stage, even as they knit the doctrines of their religions into our legal and regulatory fabric, are asking the wrong question, and therefore giving us an answer that may well prove to be toxic to democracy.
My Chinese friend’s insight has helped me understand what the valuable question really is: “Because democracy is possible only when most people most of the time voluntarily obey the laws, what institutions can we rely upon to inculcate this instinct amongst the American people? And how can we strengthen those institutions, so that they do this better?”
When the instinct of even a minority of people in a society is to steal what belongs to others, lie when it suits their selfish purposes, evade taxes, demand bribes and disregard the rights of others, then capitalism won’t work, either. Just look at our current economic crisis. It didn’t take many Americans whose instinct was to take what belongs to others and to stretch rather than obey the rules, to cause capitalism to very nearly collapse.
When the extent of disobedience to the unenforceable grows, not just democracy, but prosperity becomes in jeopardy. We treasure democracy because it gives us freedoms of speech and the press. But democracy without near-universal obedience to the unenforceable strips from us other crucial freedoms, which include the freedom from want, and the freedom to be employed. I again ask what I believe is a crucial question for America: Because capitalism and the prosperity it brings are possible only when most people most of the time voluntarily obey the laws, what institutions can we rely upon to inculcate this instinct amongst the people, before they arrive in our executive suites and on Wall Street? And how can we strengthen the institutions that teach these things, so that they do it better?
When a nation lacks the requisite foundation of extensive obedience to the unenforceable, what form of government will work?
Unfortunately democracy and capitalism won’t. It requires the rule of someone who can define good laws and then wield the power required to compel obedience. Living proofs of this hypothesis cover the globe. Just run this experiment. The next time you’re in a taxi with a Haitian cab driver, just ask whether things are better now under democracy than they were under the corrupt rule of the Duvaliers. I guarantee that every one of them pines for the day when there was an iron-fisted ruler who had the instinct and ability to stomp his heel into the chest of those who didn’t follow the rules.
It’s not a coincidence that the countries that have transitioned from poverty to prosperity in the last 40 years ? including Korea, Chile, Taiwan, Singapore, Portugal and the Dominican Republic ? all were led by relatively honest but iron-fisted dictators, who had the instinct and ability to wield power quite ruthlessly, in some instances, to break the vested interests of those that profited from the corruption that had trapped those nations in poverty. Impoverished countries with democratic governments such as the Philippines and India, in contrast, struggle to prosper because imposition of democracy has simply democratized corruption to the point that capitalism won’t work: The investments that would stimulate economic growth simply cannot be made, because you can’t bribe enough people to make anything happen.
Those who assume that the atheistic religions of secularism are a better backbone for freedom and prosperity than the theistic ones that they are trying to push under the back seat, have a huge burden of proof which they’ve not had the intellectual fortitude to discuss, let alone bring forward.
I offer this view of democracy and capitalism simply to illustrate how important it is to ask the right question. Normally, graduation is the occasion on which we pronounce the education of the graduates to be complete. I cannot do that, because I fear that many of you, like most Americans, have yet to be schooled in the art of asking the right questions. I hope that as you leave to seek success in your chosen professions, however, that learning to ask the right questions becomes your intellectual compass.
Could I suggest that you take time tomorrow to ask some questions of yourself that are awfully important? The first is, “What is the purpose of my life?” Another would be, “Does my behavior reflect the instincts of honesty, integrity, respect and consideration for others that must be my contributions to our nation? If not, what changes must I resolve to make?” And a third might be : “How can I do for others the things that bring me enduring happiness?”
Again, graduates, I give you my warmest wishes and congratulations. May God be with and bless each of you and your families”