Michel Camdessus, the former Managing Director of the IMF, told participants in IESE's Doing Good Doing Well conference that the crisis was brought about by behavior "deeply rooted in a culture where the seduction of money induces a collective blindness."
Camdessus was one of many speakers to provide his views on how companies can contribute toward creating a better world during the annual DGDW conference, held at IESE's Barcelona campus on Feb. 27-28.
Since the 1960s, he said, individuals have been driven to earn and consume more.
"Man was reduced to a simple economic function," he said. "Consumption became destiny. Greed has subliminally become politically correct."
Camdessus called for a new paradigm claiming that the market had shown that it was not capable of self-regulation.
"The idolatry of money and the ethical rejection of managing financial affairs led to the catastrophe," he said, adding that corporate social responsibility would substitute for the frantic search for short-term gain. Responsibility will become a key economic, environmental and social value, and social values such as responsibility, solidarity and citizenship have an economic value in themselves.
The most urgent question, he said, was addressing the link between poverty and climate change, which could have a knock-on effect of massive climatic migration.
The other priorities, he believes, are the education of girls and the issue of water. Reflecting on the economic crisis, he concluded, quoting Isaiah, that the young people at the conference were those who would "be called upon to repair the breach and restore the paths to dwell in."
Social Entrepreneurship is the Future
"Investment banking as a career is over," Rodney Schwartz told the Doing Good Doing Well conference. "The future is in social entrepreneurship."
Schwartz spent 20 years as an investment banker on Wall Street and in the City of London and worked for, among others, Lehmann Brothers. He kissed it all goodbye in 1997 to set up his first social enterprise, Catalyst Fund Management & Research, a venture capital firm investing in social businesses.
Out of this grew ClearlySo, a marketplace for social business and enterprise. One of its specialities is to organise "speed-dating" sessions where 15 social entrepreneurs and 15 investors are brought together and rotate their partners every four or five minutes. Schwartz has little faith in our political leaders, whom he describes as "like parents in a dysfunctional family - they can't look after us because they're always doing something else" - and says the future lies in individuals taking power to bring about change.
He cites the pioneering social entrepreneurs Anita Roddick, founder of the Body Shop, and Muhammad Yunus who, with $7 of seed capital created the micro-finance sector and went on to prove that "lending money to small groups of women in the developing world was better business than big banking."
While he says there is no absolute necessity for social businesses to scale up, he would like to see the sector grow as a percentage of GDP. At present, it represents a minuscule proportion but, on the other hand, the social enterprise sector is "booming" and growing faster than the economy and so it will create jobs.
He says it is difficult to answer the question whether you can you do well while doing good because social enterprise introduces a third factor into the typical risk / return model, a factor that is difficult to quantify.
"How can you compare complex elements as diverse as clean drinking water in Chad with providing good education in Sri Lanka?"
However, you can do good and do well, he said, but first you have to go out and do it.
He concluded with this advice to the conference: "Follow your dreams and your passions. Your dreams may change, but they won't go away."
