Sunday, March 13, 2011

Review of "Doing Virtuous Business"

The critical factor in producing wealth is not land or toil or machinery. 
It is entrepreneurship: the imagining, creating, and running of an enterprise. 
This cannot be done without risk, and the successful entrepreneur takes risks, 
assumes responsibility for their outcome, and acts responsibly toward
those whom he includes in his gamble. That is how wealth is created. 

The hardest part of getting through Dr. Malloch's spirited defense of capitalism is the temptation to Google every juicy quote by Thomas Hobbes, Isaiah Berlin, Adam Smith, John Locke and other ancients, including Biblical writers. Malloch also quotes modern thinkers and business leaders, but this is a deeply conservative book—returning over and over to the underlying ethos phrased best by Edmund Burke: that the treasure of civilization is stored up in tradition, principle and prejudice

From this foundation Malloch identifies spiritual capital:  "the fund of beliefs, examples, and commitments transmitted from generation to generation through a religious tradition, attaching people to the transcendental source of human happiness." He demonstrates the reality of spiritual capital most clearly in China's recent resurgence. "Mao...set out to destroy Chinese culture and to trample on all pieties...he ruined the economy, murdered millions of people, and sowed wherever he could the seeds of hatred and distrust. Yet the spiritual capital invested by Confucius and his followers...remained ambient in the souls of the ordinary Chinese and has now begun to bear fruit [after] sixty years..."

Despite nods to a few outstanding Muslim or Hindu enterprises, Malloch is unashamedly Christian. His chapter on Virtue begins with "Aristotle’s list of the cardinal virtues—temperance, courage, justice, and practical wisdom". But he quickly arrives at Thomas Aquinas, who insisted that "charity is the virtue without which no other virtue [can be] perfected...following St. Paul’s famous evocation in 1 Corinthians 13. a translation of the Greek agape, the New Testament name for the love that we can offer to everyone..."

Of course Adam Smith hovers over every page, not so much his themes from The Wealth of Nations as those from The Theory of Moral Sentiments. Though not a history book, Malloch illuminates Calvin's "Protestant work ethic" in the example Herman Miller Chairman Michael Volkema. And he recites an amazing number of corporate mission statements from England and America that list "honoring God" before mentioning "shareholder value"—which is found at the bottom of many such statements. There are many real-world illustrations like the Presbyterian underpinnings of real-estate developer Tom Cousins, the Southern Baptist convictions of Truett Cathy, CEO of Chick-fil-A and the redirected ministerial path of Sir John Templeton, arguably the world's most successful investor. 

Malloch lays bare the straw-man argument against capitalism that greed and lust for power animate and maintain the march of free enterprise. For every Enron, WorldCom, and Tyco there are dozens of honest, upright, spiritually-motivated businesses that seek—first and foremost—to do good. And Malloch includes an appendix entitled "A Gallery of Virtuous Companies". He painstakingly documents how successful businessman spend far more time actually DOING business than counting their money or gloating over defeated adversaries. Anybody who knows entrepreneurs knows it is the activity, the process, the delighted customers, the approval of peers, the satisfaction of providing jobs, the joy of running of the race—indeed the work itself—that motivates them and drives their profitability. Did you catch that? Profits flow out of the well of spiritual motivation, because money alone is insufficient to empower the imagination and life-force of all but the rarest individual. The critics of capitalism have it exactly backwards, and Malloch contends that Adam Smith, F.A. Hayek and Ludwig von Mises got it right. 

" changes business for the better, just as it changes lives. It injects into business...spiritual capital. Agnostics and nonbelievers make use of spiritual capital as well, but only people of faith renew it. And by replenishing spiritual capital, they benefit us all." This is a book to be kept, not on the bookshelf, but in a conspicuous spot on every businessman's desktop. 

Doing Virtuous Business: the Remarkable Success of Spiritual Enterprise
by Dr. Theodore Roosevelt Malloch
$21.99 U.S.
Hardcover, 176 pages
ISBN-13: 978-0849947179
from Thomas Nelson (available March 29, 2011)

Disclosure of Material Connection: I received this book free from the publisher through the book review bloggers program. I was not required to write a positive review. The opinions I have expressed are my own. I am disclosing this in accordance with the Federal Trade Commission's 16 CFR, Part 255: "Guides Concerning the Use of Endorsements and Testimonials in Advertising."