JAN 7, 2014 ROTARY IN REVIEW:
Steve Young

President Jim Kosmo brought the meeting to order at 12:15 p.m. on a cold day in Minnesota.  It wasn’t quite as bad as Monday and there was a good turn out considering the weather.  Jim Field of the Independent School forum led in the singing of God Bless America, with Past President Bob Jones, retired, on piano.  Carol Bufton of the Minnesota Safety Council, provided today’s invocation, asking that we be mindful in the hours and days ahead and to fill them with actions of consequence.  She asked God’s help that we not be distracted by our busy lives from the needs of others.   Jill Petsel of the Wilder Foundation facilitated the introduction of visiting Rotarians and guests.  Today's Greeters were Larry Morgan of TKDA Engineering  and Kathleen Riley, retired.  President Jim announced that the Thursday morning meeting would feature Past President Al Zdrazil, retired, talking about his recent adventures in Egypt.  Carol Bufton returned to announce that the speaker next week will be Paul Weirtz, President of AT&T Minnesota. 

Past President Dan McKeown of Specialty Mfg. announced the results of the election of officers and board members.  (See list elsewhere in the Hub.)  Jim Field announced a National Day of Immunization in India.  The dates are February14 to 25.   It includes helping with the nationwide immunization campaign, specifically in Delhi.  It also includes a side trip to Agra to see the Taj Mahal and to the Rotary Jaipur Limb factory.   Interested individuals should contact Sherry at the Rotary office.  Your scribe has been on a National Day of Immunization in Delhi and can certify that it is a moving and satisfying event.  The Taj Mahal is amazing.

Kathleen Riley assisted members to contribute Happy Dollars.  Members who where there heard about all the good news.

Vice President John Guthmann, Judge of Ramsey County District Court, introduced today's speaker, Steve Young.  Mr. Young was Assistant Dean at the Harvard Law School and Dean and Professor of Law at the Hamline University School of Law from 1980 to 1987.  In 1992, he was a founder of the Center of the American Experiment.  He has practiced law both in New York City and the Twin Cities, written commentaries for the Star Tribune, Pioneer Press, the New York Times, and the Washington Post.  In 1999, the journal Law and Politics listed him as one of the 100 smartest people in Minnesota.  He became the Global Executive Director of the Caux Round Table in 2000.  He wrote the book Moral Capitalism to explicate the economic and moral approach of the Caux Round Table to free market capitalism. He teaches corporate responsibility at the Carlson School, University of Minnesota and at the Sasin Graduate Institute of Business Administration, Chulalongkorn University Bangkok.  He is also a member of the Rotary Club of Saint Paul.

Steve started by answering the question, “What has happened to the American Middle Class since 1980.”  His answer was that not much good has happened.  He went on to say that we need to do more than whine and complain about the problem, we need to have the ability to stand up and make things better.  That is the core of Rotary.  When he thinks about how much there is to do he is reminded of a story about Winston Churchill.  Mr. Churchill was running against an opponent who was campaigning against the “demon rum”.  When the opponent accused Mr. Churchill of drinking enough to fill the room up to shoulder height, Mr. Churchill responded, “So much left to do, so little time.” 

He emphasized that in dealing with businesses; it is important to implement ideas, not just talk about them.  The Caux Roundtable has tried to help companies of all sizes integrate values with self-interest. They have tried to work with different religions of the world. 

He pointed out that there are two theories of capitalism and that we often get them confused.  There is the theory of Adam Smith which emphasizes the use of a moral sense.  The Rotary 4 Way Test flows into this.  It is the idea that every human being has the moral capacity to be a moral, ethical person. There is the competing theory of Herbert Spenser which emphasizes social Darwinism.  This is a victory to the winners type of value system.  Spenser writes that human beings are animals and we feed on each other.  The critical thing about corporate responsibility, which is the implementation of Adam Smith’s ideas, is stakeholders.  A successful business depends on its stakeholders.  A business has more than finance capital.  It also has reputation, social, physical and human capital.  These intangible assets allow you to get finance capital.  Good successful businesses think about all of the capital accounts.  All businesses are surrounded by people, government, society and laws. 

The crisis in 2008 resulted because we miss-valued assets. Present value reflects the risk of actually receiving future income.  The valuation process failed because most business value comes from intangible assets.  Misjudgments about future income distort present capital values.  Future value also depends on risk management.  You have to know your risks.  To improve the value of your business you need to take care of people.  This is traditional capitalism. You have to bring your self interest and your virtue together.  This is what Adam Smith was saying.  We can manage how we incorporate our values in our lives.   This is why they try to align Caux Roundtable principles with all major religions.

There has been a remarkable change over the last five years by companies that interface with consumers.  He cited Wal-Mart and Target as cases where consumer reaction to the corporation’s policies has resulted in a change of those policies.  This would not have happened 20 years ago.    

A problem is that business schools and finance people have not been open to these ideas.  The Caux Roundtable efforts have been to try to get them to listen and incorporate values in their thinking.  The question is how to deal with the social Darwinists.  This is especially critical with people on Wall Street.  We need to stand up, not take no for an answer and get things done. 

President Jim thanked Mr. Young for his presentation and noted that a donation in his name would be made to the Saint Paul Public Library’s “Read With Me” program.  He adjourned the meeting at 1:04.

Al Zdrazil
Scribe