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Ethics and Global Capitalism
Jeff Rosensweig's photo

Jeff Rosensweig

      . . . is an international business and finance professor at Emory University in Atlanta, GA. He has served as senior international economist at the federal Reserve Bank of Atlanta, worked with a number of international companies, is frequently quoted in the national business press and seen on television discussing economics. He publishes widely in academic journals and is author of Winning the Global Game. With economics degrees from Yale and a PhD from MIT, his master‚s degree from Oxford is in philosophy, politics and economics. A highly regarded teacher, Rosensweig‚s faculty colleagues elected him to chair Emory‚s Center for Ethics in Public Policy and the Professions.

Excerpts3:22 secs

      In the coming global economy, 5/6s of the world‚s people will be in the Middle East, Southwest Asia and Africa, not Europe and Japan or even China and India. These people will live in the very places where, today, only a handful of companies are investing.

      More than economics is at stake in how we shape the emerging global economy, according to Jeffrey A. Rosensweig, professor of finance and international business. Ethics are key. Today, 1.3 billion people subsist on $1 a day. Are we willing to accept a world shadowed by the vicious circle of poverty-population-environmental degradation (PPE)? How do we break that circle?

      Put capitalism to work, Rosensweig urges. Create a „win-winš capitalism. While Rosensweig acknowledges that inequalities within capitalist societies are real, he points to the United Nation‚s Human Development Report to remind us that societies which have not embraced capitalism usually have generalized impoverishment.

      Specifically, Professor Rosensweig urges business and investors to make direct long-term investments now in the infrastructure of emerging economies where most of the world‚s people will live. There‚s money to be made doing so, he‚s confident, but it‚s long term gain and not to be confused with portfolio investing where short-term hot money chases the quick buck. The other half of the winning equation, of course, is that host countries must learn to work with foreign investors.

      Rosensweig is optimistic that „capitalism with a human faceš -- not „pure capitalismš -- gives us the tools and experience with which to break PPE‚s vicious circle, if investors and far-sighted business leaders take a long-term approach. Link profits to economies which today are under-served and under-invested. Create opportunities for people in emerging economies to enter the information age as knowledge works and the global economy as consumers.

      Women may hold the key, Rosensweig thinks. First, women represent half of humanity‚s leadership and talent potential. And we now have ample evidence that when women and girls have education and economic opportunity, they have fewer children and build better lives, whether they live in Newark, New Jersey, or in developing nations where childbirth is still a deadly risk for the mother. But if women are to be knowledge workers, we must also break the bonds of illiteracy which entrap billions of women (99.2% of all the women in Africa would not recognize their own written names).

      Jeffrey Rosensweig makes clear that the global economy ensures that PPE‚s challenges are everyone‚s problem. Successful capitalist countries and emerging economies alike have lessons to learn. Linking people and profits in the global economy is a very good long-term business decision. It‚s also the right thing to do.

Conversation 1

Jeffrey Rosensweig uses Kazakstan as an example while telling Paula Gordon and Bill Russell about people and countries entering the global economy. Professor Rosensweig suggests America, which has always preached capitalism and free enterprise, has things also to learn from developing nations who have acted on our advice. He applauds Chile‚s privatization of social security and tells why. He explores different economic scenarios that might come to pass in the future, finding reasons for optimism where others are pessimistic.


Conversation 2

Knowledge will be critically important if people in emerging economies are to have access to the global marketplace, according to Rosensweig. He describes anticipated human population demographic trends: China and India will grow in absolute numbers, but the real growth is expected in Africa, the Middle East and South Asia. He worries that only a handful of companies are investing where the biggest population growth is expected. In addition, more than half the women in Africa are totally illiterate, says Dr. Rosensweig, who links a variety of major economic challenges to this fundamental inability among many of the world‚s women. He suggests where private philanthropy could help. He shows how everyone is now impacted by global economic linkages. He describes cultural relativism, cultural imperialism and cultural absolutism in action.


Conversation 3

Professor Rosensweig compares pure capitalism to what far-sighted business leaders might do with a more long-term approach to linking profits to economies which are now under-served and under-invested. He sees potential opportunities in today‚s emerging economies, where 5/6ths of the world‚s population will live. He proposes capitalism with a human face, capitalism combined with sustainable development, a win-win capitalism. Dr. Rosensweig uses the United Nations‚ Human Development Report to demonstrate his belief that in spite of inequalities, capitalist nations have made the greatest strides in improving the human quality of life. He uses examples to contrast the problems hot money chasing short-term high-yield investments create with the benefits possible when direct investments are made to build an economy. He describes why both investors willing to make long term commitments and receptive host countries are required for direct investments to work in developing economies.


Conversation 4

The importance of infrastructure is discussed. Professor Rosensweig reiterates the importance of the world population shifting away from Europe and Japan into Southwest Asia and Africa, where potential future workers and consumers will be, IF they are the beneficiaries of economic development. He notes cultural antecedents and attitudes that affect how host countries perceive and receive foreign investments and the effects they have on investors. He describes the vital role and potentially powerful multiplier effect of training in developing nations. He compares the „PPEš he studied at Oxford University -- philosophy, politics and economics -- with today‚s „PPEš -- poverty, population and environmental degradation. He shows how the latter create an inextricably interconnected vicious circle.


Conversation 5

Professor Rosensweig is certain that women represent both half of humankind‚s brains and half the world‚s potential leadership talent. He describes how the vicious circle of poverty, population and environmental degradation keeps women educationally and economically dis-empowered at the same time we approach the age of the knowledge worker. He shows how simply valuing female children could solve the problem of the human population explosion which is degrading the earth.  He links human freedom to the urgent need to help women worldwide rise out of socially and economically inferior positions. He uses studies done in impoverished urban and rural communities in the United States to make his point, urging the U.S. to learn lessons from others nations who have adopted capitalism. Dr. Rosensweig describes the synthesis he is seeking between his work as a professor of finance and international business and his concern for ethics


Conversation 6

Education, Professor Rosensweig is confident, is one of the answers to the world‚s challenges. He urges individuals as well as investors and business people to find ways to empower themselves and others who may not now be viable in the global economy. He describes a growing role for distance learning and adult education and suggests ways individuals can help others prepare for the new global market. He calls us to remain optimistic.


Acknowledgements

The Commerce Club in Atlanta, GA was the ideal setting for this conversation, which was also enjoyed by a number of Commerce Club members and their guests. We were delighted to welcome them all and thank The Commerce Club for its impeccable hospitality.

Related Links:
Winning the Global Game:  A Strategy for Linking People and Profits is published by The Free Press of Simon & Schuster.


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