A theory of moral sentiments and entrepreneurship

The below article was written by Michael Baxter for FreshThinkingBusiness.com on 29th August 2017. Please click here to read the original article:

The media, maybe the public and probably government have got entrepreneurship wrong – it’s not just about money, not just about greed, and altogether about something much bigger than that.

“Most entrepreneurs don’t want to live in a mansion when the neighbours are in a tented village, or wear a Rolex watch when the neighbour cannot afford egg and chips!”, Stephen Fear, the head of the Fear Group, a company with a turnover in excess of £100 million, recently told Fresh Business Thinking. 

Stephen was expressing the sentiments that you hear over and over again when talking to entrepreneurs.  The traditional view of the entrepreneur, the view that is commonly expressed in the media, is of the the conniving, greedy, entrepreneur, as typified by someone like Phil Mitchell from the BBC’s EastEnders, but this is a character type that many successful entrepreneurs find abhorrent.

To understand why this image is so wrong, consider words once written by one of the finest minds the UK has ever produced. The incredibly clever, economist John Maynard Keynes once said “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”

So, there you have it, our views and the way we look at life is distorted by what economists and political philosophers have pondered in the past.

Adam Smith, the father of laissez-faire economics, believed in the free market, in people acting selfishly, and in the process creating something that was to the benefit of the wider society. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” he said.

Or there is Charles Darwin, the man who taught us that survival of the fittest, that nature red in tooth and claw, that extreme, vicious, and selfish competition creates the wonders of nature.  This is illustrated by the likes of Richard Dawkins, a disciple of Darwin, who talked about the selfish gene.  Selfishness, greed and the act of advancing one’s self-interest are the cornerstones of capitalism and which has created such extraordinary wealth; wealth that has trickled down into the pockets of hundreds of millions of people.

Stop.  Rewind. Keynes, clever as he was, was wrong. What he should have said is that “the way we interpret the ideas of economists and political philosophers, even if our interpretation is quite different from what was intended, is more powerful than is commonly understood…etcetera.”

In fact, Adam Smith, was also the author of The Theory of Moral Sentiments, he wrote: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”

Or take Darwin. It turns out that the word evolution did not appear in Darwin’s book the Origin of Species until the 6th edition.  And Darwin put very little, if any emphasis on such phrases as survival of the fittest.’ In fact, it was the Victorian biologist Herbert Spencer who first used this description when describing Darwin’s work, and was advanced by Thomas Huxley – also known as Darwin’s bulldog.   Darwin instead wrote “tribes of moral men have an immense advantage over fractious bands of pirates.”

And in his book, the Selfish Gene, Richard Dawkins put emphasis on cooperation and collaboration – the human body is the result of genes cooperating with each other.

In an interview with Fresh Business Thinking, Lucy-Rose Walker, Chief Entrepreneuring Officer of Entrepreneurial Spark said: “The world is less about people squirrelling away, hiding what they are doing, and more about how we can work together to create something for the future. . . people love the sharing of ideas. People know that collaboration creates a better outcome, you bring together different ideas and different people for the greater good. The previous way you worked was based on the view we are in a competitive world, striving to achieve by competing against one another. We are in a world now where people recognise that we are going to have to work together and collaborate to be able to keep up with the change.”

She talks about a Ted talk given by Margaret Heffernan who cites research from a team at MIT. “They brought in hundreds of volunteers,” said Heffernan, “they put them into groups, and they gave them very hard problems to solve. And what happened was exactly what you’d expect, that some groups were very much more successful than others, but what was really interesting was that the high-achieving groups were not those where they had one or two people with spectacularly high IQs. Nor were the most successful groups the ones that had the highest aggregate IQ. Instead, they had three characteristics. First of all, they showed high degrees of social sensitivity to each other. Secondly, the successful groups gave roughly equal time to each other, so that no one voice dominated, but neither were there any passengers. And thirdly, the more successful groups had more women in them.”

So, you see, in the digital age we have now entered, an age of accelerating technology, we need collaborators, people who are sensitive to other people, pay heed to the needs of our members of the team.

Darwin was right, a tribe of moral people may outperform fractious bands of pirates, Smith was right, but he may have understated the importance, “there are evidently some principles in the nature of humans which interest us in the fortune of others,” but actually, contrary to what Smith said we derive something beyond the pleasure of seeing it because we are entering an age when collaborators and people who have strong empathy skills will be those that flourish.

Author’s note: Stephen Fear and Lucy-Rose Walker are both judges at the NatWest Great British Entrepreneur Awards.

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