Leiden Law Blog

There is light at the end of the economic tunnel

There is light at the end of the economic tunnel

I was pleasantly surprised by a recent episode of the Dutch TV programme VPRO Tegenlicht, which was devoted to the so-called purpose economy. This name is given (by Aaron Hurst) to a new form of economy which radically differs from the market economy and is taking root in a bottom-up way all over the planet, especially after the financial crisis of 2008. Under this heading, corporations and companies practice a completely new way of doing business. Their first focus is not so much on financial profit but on the increase of well-being: of people, of the community and in a larger context also of planet earth. They start with a problem and create their business to try and solve it, from a deep sense of responsibility. The connection to the community and to the wider environment is the only reason for these companies to exist. The importance of financial benefit has not disappeared completely, but has been reduced to one relatively small factor among others.

The power of openness, trust and care

In the documentary Kees Klomp, a Dutch business advisor, calls it a new paradigm of doing business. The examples that are shown or mentioned – The Mobile Factory, Tony’s Chocolonely, Landlife, Greyston Bakery, and a good few others – beautifully illustrate that businesses can actually operate very successfully on a basis of openness, trust and care. The passion of the people running these businesses is a real pleasure to watch, and also very encouraging. It is just a big relief to know that you don’t have to be self-interested and continually focused on squeezing a maximum financial benefit out of every activity – in other words, that you don’t have to be a nasty, distrustful person – to be economically successful.

Healing criminal behaviour

At some point in the documentary there is an interesting issue related to criminal law. An ex-delinquent is interviewed who had been given a job at a company called Greyston Bakery which makes  brownies (for Ben & Jerry’s). For new employees the company has a policy of ‘open hiring’, which means that the people who want to work there just have to put their name on a list, and are given jobs purely on that basis. The fact that there are no background checks made it possible for this ex-delinquent to get a job there. More importantly, the continual practice of mutual care among the workers in this company had transformed him from a tough but lonely criminal – who for many years had sold drugs on the streets – into a happy, caring and connected person. He thoroughly enjoyed the atmosphere where everybody was always helping one another – so radically different from his former disconnected life of crime, which he never wanted to go back to.

The thin dividing line

I think the relevance for criminal law goes even much further than this. If a mentality of openness, trust and care can heal the wounds of crime, then we may wonder whether it can help to prevent crime as well. For this, we first have to get a clear view of the opposite, of the relationship between the market mentality and crime. As I have argued in a previous blog (and in a (Dutch) article), the world view of homo economicus can be linked to the world view of the criminal – both being focused primarily on taking as much as possible from others, maximizing individual profits in the process. The criminal is only practising it in a more extreme form, completely ignoring the needs of the other, their victim. In this respect we have seen what happens when bankers collectively practise this homo economicus mentality on a global scale: the financial crisis has shown repeatedly how thin the dividing line between legality and crime really is. The recent revelations in the Panama papers – of  the large scale tax evasions among the financially rich, including some politicians – demonstrate something similar. Although it seems that most of the exposed tax evasion activities were legally permitted, I think the mentality of the people responsible for this – who like the bankers are continually bent on carefully weighing what is still legally allowed and what is not – can no longer be clearly distinguished from the criminal mentality.

Building a new society

It is clear that the people who believe in creating a purpose economy do not have that mentality. It conflicts directly with their sense of connection to the community and the planet. And they cherish this sense so much because they know our troubled society needs it more than ever at this point in history. The people in their companies will also take their feelings of trust and care back home with them after work, spreading it even further in their community. This is where the element of crime prevention comes into the story. In a society with an increased sense of connection, of stronger mutual bonds – with more openness, trust and care – people are simply less likely to commit crimes.
Are these mere utopian dreams? Well, the people running these new businesses are convinced that they are not just building a successful company, but that they are also helping to create meaningful lives and to build a sustainable society – the kind of world we all want to live in, if we look deep into our hearts.

3 Comments

Wim Bonis
Posted on May 29, 2016 at 22:54 by Wim Bonis

Thanks Kevin for your valuable comments. It is interesting that you point to the fact that companies like Apple and Google also promote feelings of trust and care in their employees and customers. These large companies definitely have helped to connect us on a planetary level, to realize the global village which transcends local and national limits. But it is obvious that this development of virtual connectedness has not really improved our sense of being present in the here and now.  In this respect some Dutch cyclists provide telling images which capture this state of affairs very well:  it has become quite common for cyclists to read messages on their mobile phone while cycling (the phone in one hand, the other hand on the handlebar), sometimes even with headphones on as well. It shows how they continually want to be connected to their virtual community while being largely unaware of whatever is happening around them. 

I think we can see that – due to the latest scientific insights – the human self image in the Western world is changing from someone who is primarily competitive and selfish to someone who in the first place is cooperative and empathic and only in the second place competitive. All people are affected by this changing self image, also the people working in large companies. But unfortunately the companies themselves usually keep operating in the top-down system of the market economy, fuelled by the homo economicus mentality of focusing on maximizing their financial profits. In this regard the much smaller scaled companies who are organized and working in according to the principles of the purpose economy are very different.

I fully agree with you that the large companies should return a fair share of their enormous corporate profits to the communities they have done business with. As they operate on a global level, I doubt whether they can be forced to do this by law. When I see Bill Gates going around the world to donate his money to projects he firmly believes in, I get the impression that there is a growing awareness that something must be given back to the communities.  But it would even be better of course if the profits were a lot smaller in the first place.

Kevin Walsh
Posted on May 28, 2016 at 01:00 by Kevin Walsh

Here you have brought together some fascinating ideas about human behaviour and the influence of communal bonds on the welfare of society. It is perhaps a little too harsh to link the market mentality and criminal behaviour; even companies such as Apple and Google, both with profoundly amoral tax avoidance strategies, will promote feelings in their employees and their customers of trust and care for each other. They cleverly position themselves as having the common purpose of bringing people together in the digital age. It is difficult to find words which segregate the good things that the “purpose economy” does from those things that these global corporations do. But I take heart from the perspective you are taking; and that you have spoken from a centre of legal expertise….because I think that to take on the mighty corporations, the strength of the law will be required. It will be a considerable struggle, best achieved with legal finesse, to return a fair share of these enormous corporate profits to the communities where they do business. Then, they wouldn’t just be paying lip service to “having a social conscience” or “being a great place to work”; they would be really contributing to the community in the same way that small companies do.

Reino
Posted on April 28, 2016 at 16:34 by Reino

Nice blog. Guess it will take a long time before this can be realised on a larger scale, considering the more evil side of persons trying to use this form of business to infiltrate one way or another. My trust in mankind is not very high, I am afraid. But I applaud attempts made!

Add a Comment

Name (required)

E-mail (required)

Please enter the word you see in the image below (required)

Your own avatar? Go to www.gravatar.com

Remember me
Notify me by e-mail about comments