Asia's New Crisis: Renewal Through Total Ethical Management

Although flawed, an attempt to analyze this tricky area of Asian ethics proves worthwhile.

Initially at least, it is difficult to warm to 'Asia's New Crisis: Renewal Through Total Ethical Management', put together by Frank Jurgen Richter and Pamela CM Mar.

For example, the editors fulsomely thank Malaysia's former prime minister Dr Mahatir and the Philippines' Corazon Aquino ahead of other contributors, even though the former's contribution originally came from the World Economic Forum in Davos, Switzerland, while the latter's contribution amounts to an un-illuminating couple of hundred words.

In a book meant to be about the old-fashioned virtues of rigour, truth-telling and transparency, such flattery is irritating.

Equally annoying is that so many of the senior contributors from business and political circles peddle such self-serving clap trap.

Yet despite this, the editors should be thanked for the book's ambition in tackling the issue of ethics across half a dozen countries, castes, industries and religions.

While they should perhaps have been less deferential to the attempts by their powerful contributors to use the book as a means of self-promotion and exculpation, there is sufficient quality for some pearls to emerge.

Mahatir brilliantly conjures up the irony of the richest and most powerful countries in the earth preaching to the world's bitter and desperate poor about how they should live their lives.

Wang Gungwu, an academic at the University of Singapore is one of the better contributors who looks at China's legacy of Confucianism.

After an illuminating tour of the primacy of the Confucian ethic in its dynastic and ideological form, and the corresponding dearth of a pure Chinese business ethic, he nevertheless concludes that the core ideas are sufficiently common-sensical to be universal, and sufficiently pragmatic to be constantly re-worked over time.

An extraordinary echo down through the ages in the exhortation of the sage, quoted by Wang, that people need to act in accordance to their status and position in society. How well that lesson was learned by the Japanese, where the expert and loyal performance of duties is so engrained and how interesting that it should be so neglected in China, where fake policemen, company accounts, ID cards, license plates and educational qualifications as well as moonlighting, job hopping and scamming exist in such abundance.

Perhaps one of the last vestiges of Confucius's moral precepts is family loyalty, which still seems to be the core of many people's lives.

Wang admits this reliance on family and friendship ties can spill over into cronyism. An interesting parallel (and a reflection of the value of the book's broad scope) is Japan. After WW2, the Japanese were forced to transfer their loyalty from the universal focus of the emperor to the much more narrow and self-serving focus of the company. Contributor Oki Matsumoto's point is that trust between wider members of society disappeared in favour of a much narrower focus within the company. That has resulted in employee loyalty being perverted into covering up company misdemeanors at the expense of their fellow citizens, and indeed has a parallel with the extreme and misguided willingness the Japanese showed to do whatever their emperor or his henchmen told them to do in the War.

Indeed, it makes one wonder whether loyalty is hard-wired into the Japanese psyche.

Wang's comments on the family as being ideally imbedded in the state as one circle within gradually widening concentric circles are fascinating, because they reflect how radically the relationship between family and state has changed. Rather than being seamlessly integrated into the state along the totalitarian model, the family in China seems to have become the last bastion against the state - a lesson learned during the devastation of the Great Leap Forward, the Cultural Revolution and other instances of state aggression.

That in turn leads an interesting take on the private sector in China. Despite the role of organizations such as the World Bank's International Finance Corporation in promoting the private sector as the bed rock of China's future economic expansion, family-held companies are looked on with a degree of skepticism in China. After all, how could minority shareholders or any outsiders ever hope for a fair deal in the face of such a primal bond?

One aspect Wang leaves out of his analysis is the nature of the Confucian precept of 'Li' or etiquette. It is difficult for a foreigner to fully understand this concept since no real equivalent exists in English, but one suspects it is the root of much disillusion amongst foreigners. That is because Li seems to imply that the appearance or face of things must be respected even if the crude facts point to the opposite conclusion.

At its worse, to foreigners, raised on the Christian precept 'Thou shalt not lie' drummed into them from birth, the idea of not breaching Li can seem like a conspiracy to maintain lies and untruths, as when newspapers and TVs spout moral exhortations which are clearly not followed, or when people do not speak up against dishonest or wrong-headed practices for fear of causing offence.

Matsumoto makes a similar point about the nature of reality when he discusses how Japanese balance sheets do not show the myriad favours and obligations that have been granted and taken to enable the balance sheet to appear in its present form.

Any foreigner thinking the balance sheet is a clear cut snapshot of events would be in for a nasty surprise if he had not taken that on board.

A great contribution is made Sundeep Waslekar in his analysis of Hinduism in the Indian economy.

He also pinpoints on the collapse of moral standards as a main reason of what he pretty bluntly calls the country's 'degeneracy'. He believes that the country's commercial elite has captured the state - a fascinating contrast to China, where the formidable bureaucracy has - so far - been successful at maintaining its ascendancy over the commercial sector, while at the same time financing itself through generous commissions on any deals initiated by the commercial sector.

It is subconscious fears that the same could happen in China which perhaps explain the suspicion that so many successful entrepreneurs are viewed with.

Further insights are gained by Farish A. Noor's analysis of the relationship between Muslim values and economics. He describes the balancing act performed by Mahatir in orienting Malaysia to the international capitalist economy while trying not to alienate traditional Muslims. He also shows the magnificent role the Islamic opposition has played in uncovering misdeeds in the ruling party, a classic example of the value of a democratic opposition.

However, he also shows how Islam has failed to interact with modern theoretical thinking to find an alternative to global capitalism. Instead, it is obsessed with finding the most 'authentic' and backward-looking version of Islam, irrespective of the nature of present-day problems. That also carried echoes of the pre-modern Chinese historical tradition of looking back to a perceived 'golden age' during the Zhou dynasty. Fortunately, China has realized the futility of that approach.

In contrast, capitalist Islam is left with such cosmetic changes as abolishing interest on bonds only to get the gains in a different form.

The sad truth of Islamic weakness is illustrated by the revival of Malaysia's fortunes in the second half of the 1980s thanks to FDI from the powerful economies of Korea, Japan and Taiwan, rather than the more politically correct middle-eastern countries.

The scope of the book is clearly huge, and not all the authors sing from the same hymn sheet. The portion on Korea is especially uninspired. Still, the concept of the book is brilliant and anybody who believes in the value of the 'compare and contrast' method deepening one's understanding is encouraged to take it up.

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