A "personal" issue I would like to discuss is one I feel to be both relevant and closely allied to difficulties we face in our lives as we try to fathom the "irrationalities" that seem to be all around us today. Let's label the problem "moral relativism", which for ease of understanding I will address in broad terms. "Moral relativism" is a term that perhaps best describes a trend that has been underway in society for several centuries.

Earlier, evidence suggests, civilization sought to act more on what are known as "moral truths." You may wish to recall references to such truths in lead sentences of our founding documents. We Hold These Truths To Be Self Evident; The Right To Life, Liberty and the Pursuit of Happiness; All People Are Created Equal; The Endowment By Our Creator Of Certain Inalienable Rights; and, To Freedom And Justice For All, are the first lines our children learn in civics classes.

This language did not appear by accident, nor was it just flowery writing skills used by our Framers to make things sound nice. These were great moral truths from the time of the ancients and the Greeks, and with intent were deliberately inserted to become the framework for the U.S. legal and social system.

It may not have occurred to you before now (as was true in my own case), but the five truths mentioned above just so happen to be the very same "Great Ideas" or "truths" that have been argued by philosophers since antiquity as being essential to the civility and survival of mankind. Our Founders were obviously aware of such philosophical thinking (Aristotle, Socrates, Aquinas, etc.), when they chose to flee to the New World because of a disregard of truths in England at the time, primarily the denial of religious freedom by an autocratic monarchy.

I bring this up now because I attended and participated in an intensive conference on "Great Ideas" at The Aspen Institute, moderated by philosopher Mortimer Adler. Parenthetically, I tell you without hesitation that this conference was perhaps the single most satisfying and uplifting experience of my life. The relevance of the discussions to modern world problems (especially the financial world) was inescapable. I promise to avoid deep philosophical reasoning by focusing on just two basic points that I believe need making.

The first is that it has been repeatedly proven by philosophical logic and reason that it is impossible for a "radical" free system like the one conceived by our Founders to survive any prolonged denial of those basic ideals. The second point is that our type of democracy is the first grand social experiment to be tried since antiquity that involved the principle that mankind is capable of being self-governing for the maximum benefit of all. Some may be startled to learn that even our long friend and ally, the United Kingdom, has no constitution.

Its "Sovereign" or Queen has the final word in respect to all law, notwithstanding that a Parliament of elected representatives and a House of Lords debate on behalf of the people "for the purpose of presenting such laws to the Queen" for approval. Notwithstanding that Britain's practices have changed over the years toward more democracy, the United States, as an experiment in republican democracy, was really the first truly free system to be put in place and tried in modern times.

With those significant two points in mind, I will simply pass on that Dr. Adler, perhaps the 20th century's greatest mind, submits with considerable force and logic, that there are but six "objects of thought or desire" undergirding all knowledge known to the human species since the origins of life. He says these six are in two sets, namely: Truth, Goodness, and Beauty, on the one hand; and Liberty, Equality, and Justice, on the other. From these flow ALL other ideas, which he also argues number only fifty and no more. I will not discuss that controversial point here now.

Moral relativism was argued forcefully in modern times by the "skeptic" philosopher Immanuel Kant (1724-1804). As a mathematician, physicist and later in life, a philosopher, his works in simple terms sought to deny the existence of moral objectivity, or in other words, that there is no "right" versus "wrong," but rather that everything is relative to each person. Since antiquity mankind has been pondering and seeking to explain "why" we live and do things mainly from a perspective that "relates" to what is right or wrong by some commonly accepted standard, rather than what one "wishes" to be right or wrong using each person's own sense of things.

Philosophy has rationalized the "why" of many things over the centuries, but Dr. Adler tells us it was only when we began to deviate from six basic truths in favor of Kantian "relativism" (popular in modern teachings) that mankind began to meander into a world of unexplainable human behavior and missing ideals. In this new, relative world, injustice begets remedy solely on the basis of whether it is "legal"; whether it has it been conveniently written into law rather than whether it can stand the harder test of being right or wrong by just standards or morality.

Dr. Adler decries the fact that settlement of disputes in accordance with basic truths is being replaced by legalistic justifications. This is what philosophers refer to as "positive" law versus "natural law". Making positive laws allows insertions of whatever words faceless writers of such laws wish to assert as their own truth or good -- no proof needed that what they write is philosophically just, good or true. The fight becomes a political one as to how to get it passed into law.

Reason has demonstrated fairly conclusively that humans have always had inherent "needs" that exist within all members of our species. In a system based upon "moral relatives," the ability to fulfill basic "needs" fails as we judge increasingly on the basis of human "wants," which of course are very different from "needs." Confusion of the two is deadly. Needs are clear and unambiguous (air, water, food, knowledge, shelter) while wants are never capable of being fully satisfied, i.e., they are relative to each of us and totally subjective. Today, what "ought" is often misunderstood and taken to mean what "is." The resulting confusions multiply our problems. What is right under man-made law is often quite different from what ought to be viewed and accepted by everyone as right under natural law. Only a belief in moral virtue can lead to a definition of what ought to be right. If we think about this long enough the implications begin to be seen for what they are, and they are enormous -- and potentially ominous in their disregard.

Societies grow and thrive when education focuses on such core issues so as to add responsibilities and clarity to citizenship. "Just" solutions become possible when this happens and tend to be sought after rather than fought over, the latter occurring much too often today under systems mainly based on written statutes and governed by "might makes right" rather than on what is morally right.

Unfortunately, we have moved heavily into the more legalistic world, which has become a primary concern of Dr. Adler now (he is 96). Public unrest is an inevitable consequence of this trend, as is easily observed these days. His unhappiness is with our country's immoral direction, which he believes to be a direct product of our educational departure from, and ignorance of the indispensability of, teaching "moral virtue." On this score I was saddened to hear his less than optimistic outlook in regard to our next hundred years.

For the record, I was able and did voice disagreement with Dr. Adler's opinions on this, which I supported by references to the very same technological changes of which he was so fearful. In the investment business it is my contention (yet to be proven), that the presence of "moral relativism" and the cure for its resulting gross absence of virtue on Wall Street, will ultimately be found directly within technology. (I am also highly suspicious this will prove true in other fields as well). The progress I experience every day, and which is currently underway because of better, more rational methodology using computers, is radically changing the way securities prices are going to be set.

It is still true that financial leaders can continue to ignore fairness as they seek to extract wealth from one another rather than create it. Their access to clever, imaginative, highly intricate schemes that bear only peripherally on real capital creation or allocation has given rise to many abuses, without doubt. It is still much too convenient for them to rely solely on laws, and too easy and inviting within our highly "legalistic" regulatory system, to challenge the regulators to "catch me if you can".

Virtue is almost a non-existent word on Wall Street now, which absence has been the main contributor to the very same distrust by the public that is growing and widespread and which the "Street" says it wishes to mend. Wall Street still believes goodness, fairness and justice to be mere words we should teach schoolchildren -- schoolchildren, I might add, who know and sense much more than leaders and their parents imagine. Anyone who doubts this need only watch two children who know without having been taught how to discern what is "just" and "fair" regarding sharing pieces of candy.

Watching our leaders at work, it is probably important to ask ourselves if our children are destined to be just another generation of moral relativists, void of virtue, doing as they saw rather than as they learned in school? Or, are we going to choose as a society to teach them by example as well as by words? Are we ever going to again live our own lives governed by moral truths as we would wish to have our children live theirs?

Fortunately (and this is my own view, which I believe was the same one held by our Founders), our type system possesses inherent cures within itself that allow free people to work through periods like those we are experiencing today. And, given a free choice, it can never by definition be too late to change, ever.

Finally, for the benefit of one of the greatest minds of all time, I say to you Dr. Adler that, for my part at least, I am more confident than ever that our radical, grand democratic experiment will prove its own virtue, by eventually reversing current trends. I think you will be pleased wherever you may be when it does. Society's fate was secured when Madison, Jefferson, et al., had the courage and wisdom to include most of your Six Great Ideas in our founding documents.

* Essay by member Roland G. Caldwell, Chairman and Founder, Caldwell Trust Company - Venice, FL

BUSINESS THEORY DECONSTRUCTED

Business ideas are coming at a dizzying pace. Consultants, academics and business leaders are filling the shelves, trying to lay claim to the next hot concept.

But what works and what doesn't in today's business environment? Many of the theories smash head-on; others are impractical. With that in mind, Breakaway asked Thomas Petzinger Jr., who pens the Frontlines column that appears in The Wall Street Journal each Friday, to help sort through all of that. Think of this guide to current books as a cheat sheet for your time.

THE COMPLEXITY ADVANTAGE: HOW THE SCIENCE OF COMPLEXITY CAN HELP YOUR BUSINESS ACHIEVE PEAK PERFORMANCE
By Susanne Kelly and [Center Member] Mary Ann Allison
Business Week Books, 1999; 261 pages

Warning: This book is not for the faint of heart. The theory is challenging and the terminology is intimidating. But anyone who grasps the concepts in The Complexity Advantage will have the power to transform a business in startling ways.

Complexity, in this case, is not the opposite of simplicity. Rather, this book takes its title from the science of complexity theory, which suggests that certain deep laws hold true across all living systems, from ecosystems to economies. Among them: that independent agents, whether cells or human beings, naturally organize themselves toward the best and most efficient means. "This process is not directed or controlled by a conscious entity, but rather emerges through the interrelationships of the system's parts," the authors write. What work does that leave for management? Creating the right structure, the most nurturing environment and the simplest rules possible. This means replacing political structures and power hierarchies, for instance, with robust communications and personal independence, the hallmarks of any "self-organizing" system. "By wasting the intelligence, reasoning power, and adaptability of human beings, mindless compliance causes us to lose enterprise money and customers," they write, "not to mention the pride of those whose capabilities are ignored." Co-author Susanne Kelly drives home the point with her personal accounts of life as a Citicorp technology executive.

At times the authors reach too far in applying the living-systems metaphor. In addition their heavy use of methodologies and prescriptive methods sometimes undercuts their emphasis on the need for self-organization. But there is no more ambitious book out there today. These are big ideas. I strongly suspect that the insights of complexity science will blaze a bright new trail for business. And there is no better place to start the journey than here.

The Complexity Website

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