Solutions – A Blueprint for Socially Responsible Free Market Capitalism

Do you miss the days when people trusted one another’s integrity so much that their handshake was their bond? I do.

Sadly, as handshakes became increasingly untrustworthy, individual self-responsibility, business social responsibility, politician constitutional responsibility, and media journalistic integrity, slid to the new lows they’ve reached today.

This is the REAL story behind today’s outrageous levels of government over-regulation.

What’s the real cause of government over-regulation? And what’s the solution? Read this and find out… because you’re part of the solution no matter who you are! (Hint: it’s not what the Tea Party advocates!)

A Deadly Trio: Business Social Irresponsibility, Consumer Non-Self-Responsibility & Government Over-Regulation

One of the basic tenets of free market capitalism is the Darwinian notion of survival of the fittest. If a product or service of yours, or the way you provide it, isn’t strong enough to profitably provide better benefits than your competitors, it doesn’t deserve to survive. It follows, then, that any product or service needing to resort to Darth Vader-like Manufactured Consent tactics in order to be profitable doesn’t deserve to survive either. (The same goes for any political candidate or policy requiring these tactics in order to gain sufficient support!)

Socially responsible free market capitalism builds on these basic tenets. Survival of the fittest means creating and selling sustainably profitable products and services that provide consumers with truly helpful benefits without damaging the common good (that is, sacrificing consumer or employee health, incurring irresponsible debt, resorting to manipulative marketing tactics like manufactured consent, etc.).

All economic systems include three elements: producers, consumers and a method of exchange. When you combine today’s version of free market capitalism with the way the U.S. government currently works, here is how it looks: Producers are primarily for-profit businesses. Consumers are citizens, businesses and other organizations, and the government. The method of exchange is a combination of money policies and rules of engagement, which are regulated by the federal government and the federal reserve.

If one or more of these elements does more or less than it is ethically capable of doing, the others compensate by expanding or diminshing what they try to do. Here is how this looks in today’s debtism-oriented fake capitalism system:

  1. Too many businesses have placed short-term profits before social responsibility.
  2. Too many consumers have placed short-term gratification and entitlement before self-responsibility.
  3. Too many in government (and the federal reserve) have responded poorly to this by polarizing into two short-sighted groups:
  • One group pushes under-regulating businesses and the financial services industry, which reinforces social irresponsibility
  • The other group pushes over-regulating businesses and the financial service industry, which reinforces citizen self-irresponsiblity

When free market capitalism functions in socially responsible ways and citizens are self-responsible, government over-regulation is unnecessary. Governments get into the business of over-regulation when certain businesses and industries persistently behave in socially irresponsible ways and too many consumers don’t take sufficient responsibility for looking out for themselves.

The more businesses that act in social irresponsible ways and the more common citizen self-irresponsibility and entitlement becomes, the more the following occurs in response:

  • Pressure mounts to over-regulate business and over-protect consumers
  • This pressure leads to policies that create bureaucratic bloating in government, which drives up taxes and government budget deficits.

Far too few businesses, citizens, politicians and media pundits adequately understand this dysfunctional interplay among consumer self-irresponsibility, business social irresponsibility, and government over-regulation. Ignoring this has these consequences:

  • Special interests and ideological extremists (socially irresponsible capitalists and socially over-responsible socialists) manipulate the political agenda and public opinion into supporting less regulation or more regulation (that is, symptom control).
  • Political polarization, divisiveness and partisanship erupts in place of the systemic rebalancing among these three elements. Instead, symptom-control measures are forced through by whichever side wins this battle this time around.
  • Regardless of whether these symptom-control measures are in the direction of under-regulation or over-regulation, the root causes remain unaddressed and the dysfunctional dynamic they create continues — self-irresponsibility, business social irresponsibility, and government over-regulation continue to play off each other in destructively unsustainable ways .
  • Only when consumers, businesses and government join together to eradicate this dysfunctional dynamic will sustainable solutions be created. In other words, this dynamic resolves itself the more self-responsible consumers become and the more socially responsible businesses become.

There are three reasons it is counter-productive for governments to over-react to consumer self-irresponsibility and business social irresponsibility by over-regulating businesses:

  1. Over-regulation places undue financial and compliance burdens on socially responsible businesses.
  2. Over-regulation reinforces consumer entitlement and self-irresponsibilty by making choices for consumers that they are supposed to be responsible for doing for themselves.
  3. Over-regulation creates bloated government bureaucracies, which must be paid for either through higher taxes and/or increasing government debt.

How to Create Socially Responsible Free Market Capitalism

If it is unacceptable for consumers to abdicate self-reponsibility, for businesses to behave socially irresponsibly, and for government to over-regulate, what might the solution look like? Here is Dr. Gruder’s proposal for establishing socially responsible free market capitalism that is compatible with what America’s Mission Statement requires from the federal government and from citizens:

  • Stop Punishing Socially Responsible Businesses for What Irresponsible Ones Do: Stop over-regulating all businesses in an attempt to constrain the socially irresponsible ones. (Our current system punishes good companies by subjecting them to over-regulation that was created because of irresponsible companies. Making it pay to be good is a much better way to go.)
  • Create Corporate Social Responsibity (CSR) Incentives: Give tax breaks to socially responsible businesses and levy tax surcharges to socially irresponsible ones.(Incentives options for enhancing the profitability of socially responsible businesses are virtually endless.)
    • Of course, for this to happen, elected officials from across the political spectrum would have to find the backbone to approve truly honorable criteria for “socially responsible” and “socially irresponsible” status. Kind of like health codes for restaurants but regarding social responsibility.
    • Those criteria might best be developed within each industry and then reviewed and possibly modified by an independent integrity commission comprised of ethicists and consumers who do not have a vested interest in that industry, before being passed to government officials for approval.
    • These levies will effectively drive up the cost of buying from socially irresponsible businesses. Hitting consumers in the wallet/pocketbook may provide them with more motivation to consider the consequences of supporting social irresponsibility.
  • Have Socially Irresponsible Companies Fund Projects That Their Irresponsibility Necessitates: Use portions of the tax surcharges collected from socially irresponsible businesses for these purposes:
    • Funding the independent integrity commissions I described further above.
    • Educating consumers about how to vote with their wallets/pocketbooks. Consumers need to learn how to recognize and see through manufactured consent tactics and demand informed consent marketing instead. Otherwise it will remain difficult for consumers to distinguish between socially irresponsible and socially responsible businesses, and therefore to take responsibility for who they choose to buy from.
    • Relieving socially responsible businesses of some of their tax burdens. This will effectively drive down the cost of buying from socially responsible businesses, which in turn can help them expand and hire more employees.

This is a formula for what Dr. Gruder calls “Accountability-Centered Governance.”

Business groups spend collectively spend tens if not hundreds of millions of dollars a year to manipulate government officials. This is an extremely expensive and ultimately unsustainable way to block government from over-regulating them. The most sustainable way businesses can prevent government over-regulation is by creating business adaptations of two key ethics principles from the fields of psychology and medicine: The Hippocratic Oath, Informed Consent, and Dual Relationships.

  1. The Hippocratic Oath = First do no harm. Applied to businesses, this means making profits providing products and services that at minimum don’t harm people, and that preferably contribute to their sustainable happiness not merely their short-term gratification. (This is, in fact, the heart of Corporate Social Responsibility.)
  2. Informed Consent = Help consumers make truly well-informed choices about the products and services they buy instead of manipulating them into their purchase decisions through the profoundly unethical marketing tactic of Manufactured Consent.
  3. Dual Relationships = Stop tolerating them. A dual relationship is having more than one kind of relationship with a person or group when you are in an authority position, power position or dependent position with them. For instance, psychologists are barred from having dual relationships with clients (such as simultaneously doing therapy and business investments with each other). When a business or industry that sells products to or through the government also tries to tell the government how to regulate it, this is an equally dangerous dual relationship because this conflict of interest almost invariably leads to socially irresponsible public policy. It is therefore the responsibility of government to refrain from dual relationships, the responsibility of businesses to stop trying to force them with government, and the responsibility of citizens to stop supporting politicians and businesses that engage in them.

This combination of changes by the business community and government can create an integrated root-cause solution that can upgrade corporate social responsibility, restore citizen self-responsibility, and return the government to its rightful role of educator and logical consequence implementer should these responsibilities be abdicated in the future. More specifically, this combination of changes…

  • Allows the free market to be free to create more sustainable alternatives than it can when it is being strangled by governmental over-regulation. (This is the business social responsibility ingredient.)
  • Empowers consumers with the knowledge they need to vote with their wallets/pocketbooks by wisely choosing which businesses to buy from. (This is the citizen self-responsibility ingredient.)
  • Enables government to fulfill its constitutional mandate to function at the intersection of preserving individual freedom and promoting the common good without becoming bloated by the costs of over-regulation. (This is the government constitutional responsibility ingredient.)

This integrated accountability-centered three-dimensional approach could go a long way toward ending the hijacking of happiness, health, prosperity, patriotism and problem-solving, which have combined to severely damage our society’s integrity as individuals, as businesses, politically, and economically.

Sustainable solutions to our problems must become integrative. This means developing coordinated strategies that simultaneously upgrade business social responsibility, citizen/consumer self-responsibility, and government constitutional responsibility. Focusing on only one or two of these completely intertwined areas (such as only advocating for smaller less regulatory government or only arguing for more business social responsibility, for instance), will only perpetuate the dysfunctional dynamic that needs end. The time has come to for us finally leave behind the socially immature symptom-control measures that have created high political drama at the expense of leaving the root causes of our issues untouched, and to instead co-create socially mature integrative solutions that resolve those root causes.

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Dr. Gruder is the multi-award-winning clinical & organizational psychologist providing resoures for Freesponsible Happiness & Prosperity, including:

  • Self-Improvement for Socially Responsible People
  • Staff Development for Socially Responsible Organizations
  • Integrity, Problem-Solving & Accountabililty Training for Socially Responsible Leaders

Invite him to help your business, organization or agency…

Dr. Gruder, an eight book-award-winning integrity restoration and develop expert, including awards in “Conscious Business & Leadership,” and “Social Change” and “Current Events in Politics & Society” (plus numerous awards in personal development categories), draws upon three decades of experience as a clinical and organizational psychologist to assist your business.

For more about Dr. Gruder’s services for businesses, entrepreneurs, leaders, and helping professionals, click here.

For more about booking Dr. Gruder to to provide a keynote, training or consulting in any of these areas, click here.

Dr. Gruder is Interviewed on the VoiceAmerica Health & Wellness Network
Friday 2 April 2010 at 8 AM Pacific Time (and by recording 24 hrs after)

Mind, Brain & Body

David Gruder, PhD, DCEP

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