Actics Blog

Even if the case of Cheminova is hardly known to anyone but Danes (perhaps a few poisoned Brazilians) it epitomizes the new reality of business too well not to mention here. Cheminova has been continuing to produce chemicals for especially farming documented to be harmful for both the farmers and involved ecosystems. Now, a Danish newspaper revealed how they have started to sell methyl parathion, a chemical known to be very poisonous. When criticized, they wave Code of Conducts in the air:

“We’re doing nothing illegal in Brazil”.

“True”, FN and Danish politicians answers, “but what you are doing is unethical”.

“Well, that might be”, Cheminova’s CEO responds, “but I do not deal with ethics”.

Now that is an impressively … ahem … ‘brave’ statement. And it might have worked until the 80′ies. But today, it’s not too bright and probably pretty expensive to dismiss ethics like that.

He probably realized that before an avalanche hit him. Today, four days later, Cheminova has invited Danish politicians to come and visit the facilities because ‘their 1500 employees try to promote responsibility every day’….
And, what’s worse for Cheminova, some of their main investors have started to get impatient and making threats. What’s interesting from an Actics point of view (we’re operating with a scenario just like this) is that some of these investors are semi-public retirement funds handling investments for many Danes. They are themselves under a lot of pressure from an increasingly concerned and aware public, which will soon start asking: Why are you placing OUR money in Cheminova?

So what can we learn from this little real world tale? Companies cannot hide behind legal compliance any longer. And before long neither can anybody investing in such companies or people buying products and services from or deal with or work for these companies for that matter. We’re all in the same boat.

Read the story for yourself: http://politiken.dk/indland/article206218.ece

Recent developments highlight the conflict between two principles of the information economy. One, the old one, says that value is premised on restricting access to information, the other, the new one, says that value is based on the free circulation of information:

“Although desktop users may prefer distributions of Linux which are free (as in beer) as well as free (as in freedom), businesses that rely on this software for serving products and services online and maintain internal development platforms and networks (as openDemocracy does), often pay for “enterprise” Linux distributions, such as Red Hat’s Fedora or Novell’s SuSe. Unlike their proprietary colleagues at Microsoft, who make money licensing owned code, Novell and Red Hat spend the fees paid for “enterprise” products on providing regular support and security updates. Net profits from Linux-related sales run into the tens of millions. Thus an open pool of shared knowledge fosters a vibrant knowledge economy around it.

now however Microsoft claims that Linux code violates a number of patents currently held at its Redmond campus.

read the excellent summary at openDemocracy.net

A lot of people have asked me about clarifications of this concept. What do we mean by the term ‘Ethical Economy’? Let’s start with what we don’t men. We donät think that contemporary economic processes are somehow nicer or more ethical than their precedents. The term ethical economy does not per se entail any value judgement. Rather, with the term we want to refer to the fact that cooperation, the construction of social relations, community, values in common- is becoming the most important force of production. Think about it. The more complex an economy gets, the more crucial it becomes to produce the often temporary and mobile social forms that can provide cooperation (team works, project teams and the like); the more empowered and networked users get, the more likely they are to produce innovation and creativity that can be appropriated by companies, and the more unstable the social world becomes, the greater the value we attach to more or less stable values, lifestyle and processes. In short it is the production of ethically relevant things- let’s call it an ‘ethical surplus’ that comes to increasingly underpin the generation of values.

Management is by no means blind to this, over the last ten years or so there has been a long discussion about corporate values, corporate culture, brand values and the like. Implicit in this discussion is are cognition that the ethical climate- the ways in which people go about in producing an ethical surplus has a relevance for the performance and value of a company. The problem with these discussions is that they have no way to manage and or even to make visible such crucial ethical variables. That is the problem that Actics will solve. We make visible and allow our clients to manage the increasingly crucial ethical aspect of social action.

For a more detailed discussion of these issues you can consult my ongoing book project, hosted by Michel Bauwens and the P2Pfoundation.

Milton Friedman, the perhaps most influential economist and economic policy thinker of the post-War years passed away last Thursday, at the age of 94. Milton Friedman, who experienced the Great Depression of the 1930s in his early career, became a strong proponent for neo-classical, monetarist economics, against the interventionist Keynesian approach that had directed the US government’s response to the depression. Indeed Friedman went so far as to argue that the main cause of the depression had been federal miss-management of the money supply, and not insufficient government regulation as the Keynesians had argued. Friedman achieved his influence on public policy during the Thatcher and Regan administrations, where his monetarism and lassez faire approach became the main philosophy behind the ongoing neo-liberal restructuring of the British and US economies. After the end of the cold war that model was exported globally and Friedman and his ‘Chicago boys’ (the young economists that the educated at the University of Chicago) came to have a great influence on the restructuring of the world economy.

Friedman’s hostility to government intervention and his emphasis on the positive role of markets was grounded in his embrace of ‘freedom’ as the ultimate value for economic policy (and for policy in general). To Friedman ‘freedom’ would work as a guarantee for efficiency – free markets where individuals acted with a minimum of restraint would be more efficient than centrally planned allocation systems. But ‘freedom’ was also an important value in itself. It was more important that people be ‘free’ than that they be equal. This emphasis on freedom as an ultimate value was based in a belief, inherited form ‘classical economists’ like Adam Smith (and classical liberalism in general), that the freedom to choose is what defines human nature. To champion freedom- defined as free individual choice- as against state regulation was thus a way to champion human nature against the artifice of society or ‘socialization’. This philosophical move managed to effectively bracket the question of ethics. To Friedman it was not important what people chose, as long as they chose freely. (This position was perhaps particularly clear in the famous line in his 1962 book Capitalism and Freedom, claiming that  “There is only one social responsiibility of business [..] to increase its profits.”).

Today this embracement of freedom as an abstract principle seem problematic to us for, chiefly two reasons. First, it is fairly clear to us, having absorbed the impact not only of Michel Foucault, but also of Friedrich Hayek, that the kind of freedom- the freedom to chose rationally- is by no means a natural human quality, it is the outcome of a long term and fairly intensive project of socialization (or ‘civilization’ to use Hayek’s term). People have not always had the capacity to be free agents in Friedman’s sense, but the realization of that kind of freedom is a historical fact contingent on the establishment of a highly particular (liberal, capitalist) ethical order. This way ethics re-enters through the back door. As economists and social thinkers we can no longer bracket off the question of ethics by introducing an idea of ‘natural ‘ human freedom. Rather we need to question and examine the ethical framework of that very idea (and the ethics if the social system to which it belongs).

This philosophical need for a new reflexivity about the ethical context of economic action and economic thinking- our inability to keep wearing the ‘veil of ignorance’ necessary for a position like Friedman’s, is paralleled by an emerging recognition of the growing economic role of ethics itself. In the contemporary economy, productivity and innovation are contingent on complex forms of cooperation and interaction that are often autonomous and self-organized. This means that the ethical qualities of actors, how they relate to others, how they respect their own values and those of others, how much they give back to the (however temporary) community that they find themselves in, become variables that enter directly into the production function. Indeed the most exciting forms of production right now are various forms of peer-to-peer systems that rely on ethical rather than monetary coordination. (P2P systems have been notoriously more successful than corporate models in building complex things like software) Management is discovering this through concepts like ‘Return on Values’, where it is argued that investments in corporate values have direct economic returns through their ability to streamline forms of cooperation. But this new role of ethics as something internal rather than external to economic calculus has not yet been grasped by economics. Indeed, most economists are dinosaurs in this respect. Their models and assumptions are based on an old economic system: a bureaucratic, industrial capitalism where it was possible to separate ethics and economics and assume, like sociologists form Weber to Habermas have done, that economic action is chiefly guided by a calculating instrumental rationality. It was possible to think that way, because in the industrial, Fordist organization the ethical context of production (and of economic action in general) was relatively stable, inscribed in the regulations of the bureaucratic corporation, or in societal norms more generally. Now we produce value by producing such norms and regulations, by producing ethically significant contexts that can act as however temporary ways of coordinating fluid forms of cooperation. Economics today needs to take this ethical productivity in account. Michel Bauwens extensive work on P2P production is an attempt in that direction. Actics is another. It is a system that aims to the make value of ethical action visible.

Yet another good case for how people’s devotion and ethical commitment can be a great marketing vehicle.

“So when it comes to community barn-raising and product development, keeping your design and development efforts geared to a tightly knit core of enthusiasts is the best way to create the first drop that will ripple out to the wider audiences that your VCs are constantly (and damagingly) telling you to go after. There’s simply no better way to effectively and organically build out to a wider audience than taking the concentric circles approach.”

reblogged from Unmediated and Michel Bauwens at the P2PFoundation

The Danish innovation network Crossroads Copenhagen has just launched their Actics Plugin today (in Danish, sorry to our non-Danish speaking readers). Being an early customer and supporter to Actics, Crossroads Copenhagen have been eager to explore and deploy the Actics methodology and now our latest software to engage their proxies. The Actics plugin captures the core services of the Actics method and intended for use in ‘local’ contexts such as blogs or websites rather than full system deployed on an intranet or as a public social community.

The Crossroads Copenhagen launch marks an important entry point for the future public services of Actics. In fact, we are working hard to make similar public services available to everyone via a simple web interface. Go check out the plugin and get prepared. More Actics plugins will start surfacing soon around the web – perhaps even your own!

I’ve been ‘touring’ Danish universities lately claiming that we are witnessing the rise of an invigorated second generation CSR. Something we call CSR 2.0 in Actics. Both to hint at our own web orientation, to the co-creative nature of next-gen CSR and simply to endow tired old CSR with a much needed edgy flavor. Allow me to offer my view on the intersection of bleeding edge business strategy and ethics from the talks. Unfortunately, I can only offer a Quicktime movie because of the fancy animations that doesn’t translate into PDF or Powerpoint. Besides the slides are without some bonus features only available for the live audience.

However, in order not to bypass those of you who cannot or will not download the file, let me ultra-briefly sum up my view:

CSR 2.0:

• means taking the company to the ethical economy (formal explanation by Adam) by treating stakeholders as assets in the social capital of the company rather than critical inspectors.
• is strategically balanced multi-stakeholder value management with deep impact on innovation, productivity and communication.
• is providing leverage to the 10% truly value creating stakeholders and offering every stakeholder say and sort by merit.
• is NOT manipulating or exploiting the social/cultural. In the words of Isaac Tigrett, founder of the Hard Rock Café: “You can not seek simply to exploit culture, but you must earn the right to represent it.” This translates to: provide meaning to your stakeholders by acting ethically (i.e. following your own values consequently)

Comments are appreciated! (I shouldn’t get away that easy.)

Just when I thought that Actics had powered our London branch with a new PR manager by reading a short piece on the ‘Social enterprise’, I noticed that the article didn’t mention Actics specifically. However, that’s probably the only thing that is missing from Diana Verde Nieto’s perfect promotion of Actics in a recent Sense PFK piece. A couple of quotes (my emphasis):

In response to this new imperative [social enterprise] the corporate giants are coming to realise that their future depends on their willingness to understand and embed the principles of “responsible business” in all levels and parts of their organisation, and to communicate their performance to customers and other stakeholders. It will not be long before all mainstream brands have to demonstrate their responsible approach to customers, simply to survive.

Successful CSR implementation and communication is in many respects simply about understanding and aligning values.

Corporations with strong CSR policies and communications are riding the new wave of consumer-driven ethical and sustainable consumption.

Sounds like our sales pitch. A brief must read if any one of you ever doubted that the future is Actics’.

If you need another indicator that the future belongs to commercially attuned responsible conduct, read this short interview with Good Magazine founder Max Schorr.

- Diana Verde Nieto works for Clown Fish Marketing, a London communications consultancy specializing in social and environmental responsibility