Values and the price of capitalism

The recent release of Naspers’ results was marred by a reputation scandal after it was revealed that Paarl Web, a subsidiary of the Cape Town based multinational media company, printed Zanu-PF pamphlets for the Mugabe regime. Read Naspers and the trail of Mugabe’s blood money as well as Mugabe’s man unmasked on MoneyWeb for background. You can also listen to the interview I took on SAfm with Alec Hogg, that offers more insight into the story.

The story raises a number of interesting questions about capitalism, values and the role of journalism in society. I was chatting to my good friend and mentor, Jerry Schuitema about this. An economic journalist with decades of experience, Schuitema is the author of the recently published Value through Values. In short the book challenges the validity of the understanding of capitalism based on self interest, and details how transaction from a contributory point of view would address many of the current problems facing the economic world.

“Ten years ago business existed purely to make a profit, and did not concern itself with ethics and morals. The only concern was that it shouldn’t break the law. If you extend that pure profit motive thinking to Naspers and the Mugabe money, then why shouldn’t Naspers have printed that electioneering material?” says Schuitema.

At the time when the job was briefed in to Paarl Media, Morgan Tsvangirai had yet to depart from the election process and it could be argued that the printers were serving a client, supporting the election process and making money for their shareholders. They certainly hadn’t broken any laws. Why the big media fracas about the fact that they were merely exercising their capitalist wont?

It is not as if they were selling arms to Mugabe. There are arguably more gross forms of capitalism, like McDonald’s selling junk food and contributing to growing global obesity, or tobacco companies selling products they know are harmful to their customers.

Looking at the Naspers story, one needs to question why their leadership was embarrassed about printing the Zanu-PF material. The response to the media coverage, and statements made by Hein Brand (“there’s no way we could have consciously had peace with this”), Stephen van der Walt (“this is a deeply regrettable circumstance”) and Koos Bekker (“of course that’s embarrassing to us and a great pity that it happened”) point to the fact that this is behaviour that Naspers is ashamed of.

“This is because they have missed the point,” says Schuitema. “Business has only one overriding value and that is to care for their customers and care for others. Industry should serve markets by serving their customers, and make a profit by doing this well. The embarrassment of Naspers was, I believe, caused by their absolute drive for profits. What a vulgar blight. That the propaganda material supporting a corrupt and murderous government was printed solely for cash.”

And there’s the rub. Business will always be on the back foot if it is chasing money. If decisionmaking is informed solely by money, how can business motives ever be right, or noble, or filled with any values?

However if industries’ overriding principle is to serve their market, their position of defense is infinitely stronger. If the overriding value is that you care for others (the basis of a free market system) you will be well guided through the toughest business challenges. However if you are purely guided by profits and complete self-interest, prepare to include a huge budget in your business for reputation experts and spin doctors in the hope they will clean up the damage and scandal you leave in your wake. For then your sole motive is greed, and that which would fatten the purses of your shareholders. Then it doesn’t matter if you do business with cruel dictators, murderous despots or Satan himself. As long as you’re not falling foul of the law it doesn’t matter because there’s no moral compass to guide you.

Lastly what is the role of the media in all of this? My view of journalism is that we are the fourth estate. The concept of the fourth estate goes way back to Thomas Carlyle in the first half of the 19th century, but is best summed up by novelist Jeffrey Archer in his work The Fourth Estate when he made the observation: “In May 1789, Louis XVI summoned to Versailles a full meeting of the ‘Estate General’. The First Estate consisted of 303 clergy, the Second Estate, 300 nobles, the Third Estate, 600 commoners. Some years later, after the French Revolution, Edmund Burke, looking up at the Press Gallery of the House of Commons, said, ‘Yonder sits the Fourth Estate, and they are more important than them all.'”

As the Fourth Estate the media are the guardians of democracy and defenders of the public interest. It is therefore the role of the media to force transparency and shed a light on what business (or politics) would prefer to keep hidden so that there is robust and open public debate. It is not the job of journalists to try and change society, rather to stimulate society to discuss what should be changed.