February 10, 2015
I was recently flying back from a Sub-Saharan African country. Coincidentally the former president, who ruled and ruined the country over a twenty-three year period, was sitting across the aisle. He was of course not alone, but had nurse and doctor (he is old and fragile) and another half-dozen or so people in his entourage. On the fingers of both hands he had huge gold rings encrusted with precious stones. A former military man, he obviously knew how to give commands which he dispensed liberally to his retainers and the hapless flight attendants. A real scoundrel, but still a VIP!
Meanwhile the abundantly resource rich country he ruled and ruined has a lower GDP per capita today than when he first took power some forty years ago. 94% of the population live below the poverty line. Fertility rates are very high, but so is child mortality. Many have no shoes, not to mention toilets. There is little access to sanitation or drinkable water. Illiteracy, especially female illiteracy, is high. Infrastructure is in an appalling state. This is not a "developing" – let alone "emerging" – country. It is an under-developing country; in other words things, virtually everything, get progressively worse.
The former president, who was accused of stealing millions from the country's coffers, then pardoned, lives in quite comfortable splendour in France. There is a tiny extremely rich elite whose wealth comes mainly from the illegal trade of the country's precious resources. Their ill-gotten gains are laundered, offshored and tax-evaded by global financial institutions.
Most recently, HSBC's Swiss affiliate is accused of having helped some 100,000 individuals, including notoriously corrupt politicians, stow away their stolen money to evade taxes. The same bank's Mexican affiliate was found guilty three years ago of laundering money for the country's drug cartels. Drug wars are a terrible tragedy in Mexico; more people die every year than in the war in Afghanistan.
There is clearly something rotten in the state of HSBC. How can individuals who are employees in what should be a respected institution, many of whom presumably have families, lead social lives, maybe even go to church, mosque or synagogue, do such criminal, harmful, illegal and totally amoral things? But it is of course not only HSBC. There are many cooks engaged in this lethal broth, including not only many other financial institutions and corporations, but also governments.
As has been clear for some time, and as I have argued before, in light of the disintegration of its moral fibre, the future of global capitalism is at great risk. This is not just because of some of the more notorious perpetrators of financial crime, such as the Madoffs of this world, but the active complicity of the many and the passive acceptance and implicit commitment of even far, far more: the many who turn a blind eye!
We live in an age of moral turpitude, where people, especially capitalists, seem bereft of an ethical compass or humanitarian considerations. When the money of Mexican drug cartels is being laundered, are the bankers thinking of the woman who is left widowed with hungry children to feed because her husband has been killed in the drug war? When the financial "consultants" are working out packages allowing former African (or other) dictators to fleece their country and hence their own people, are they giving even a second's thought to all those who die premature and awful deaths because there are no proper medical facilities – the funds for which have been embezzled by politicians feathering their own nests?
The pervasive money culture has obscured what society is supposed to be about. This is painfully true in a lot of business school education. For example, when the Financial Times
(and other media) publish their MBA rankings, the most important criterion is the salary increase. There is no criterion for social contribution, for those who think they should not only take, but also give.
With such weak moral foundations, it is simply impossible for global capitalism to survive. While global capitalism (to paraphrase Winston Churchill's famous comment on democracy) is the worst form of world governance, it is better than all the others – less we forget earlier ages of Stalinism, Communism, Nazism, Fascism, Militarism and Maoism. In virtually the last words of the former Evian Group@IMD Chairman David de Pury, written shortly before his untimely death in 2000: "let us not repeat the mistakes of the past".
We imperatively and urgently need to bring about a moral reformation. Business and business schools need to be actively involved. Future generations of business leaders and managers must have a conscience. Society at large must not sit idly by. HSBC and others should seize this opportunity to give really profound thought on what is the true meaning of creating genuine wealth and determine actions to seek to ensure that never again will such immoral acts be committed.
Jean-Pierre Lehmann is Emeritus Professor of International Political Economy at IMD, Founder of The Evian Group@IMD and Visiting Professor at the University of Hong Kong and NIIT University in India.
From 21 to 26 June, 2014, IMD will be running its Orchestrating Winning Performance (OWP) program. Professor Lehmann will be leading a stream on Globalization with Chinese Characteristics.