Clayton Christensen on Religion and Capitalism
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Clayton Christensen on rescuing free markets.
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CLAYTON CHRISTENSEN:

Clayton M. Christensen is a professor of business administration at the Harvard Business School. He is the bestselling author of five books, including his seminal work, The Innovator's Dilemma, which received the Global Business Book Award for the best business book of the year, and most recently, The Innovator's Prescription, which examines how to fix our healthcare system. Christensen serves on several public and privately traded boards and is the founder of a successful consulting company and an investment management firm. He holds a B.A. with highest honors in economics from Brigham Young University and an M.Phil. in applied econometrics and the economics of less-developed countries from Oxford University, where he studied as a Rhodes Scholar; he received an MBA with high distinction from the Harvard Business School in 1979, graduating as a George F. Baker Scholar, and was awarded his DBA from the Harvard Business School in 1992.
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TRANSCRIPT:

Question: Why is there such a crisis in business leadership?

Christensen: Can I just maybe make two provocative comments, which are not that provocative but I really believe that they’re true. There is a fellow that came to Boston about 10 years ago who is a Marxist economist from China and he’d gotten a Fulbright Scholarship. And he came to Boston to study capitalism and democracy of all of the arcane topics. We got to know him very well while he was in Boston, so at the end of his time, we invited him and his wife and child to our home just to have a goodbye dinner. And I asked him, “So of all the things you learned about capitalism and democracy while you were here, was there something that was very surprising to you that you just did never thought about before?” And with no hesitation, he said, “Yeah. I never understood how critical religion is to the functioning of free markets and democracy.” And I’d never put these things together before but it’s like this guy flies in from Mars and this is what he sees. And he said, “You guys are living on cultural momentum that’s actually losing its momentum now. But if you go back 150 or 200 years ago, almost everybody in America on the weekend went to a synagogue or a church and they were taught there by people who they respected that they should voluntarily follow all the rules, because even if the police did not catch them, God will catch them.” And so you’ve got to be honest, whenever you make a commitment, honesty requires that you follow through. You’ve got to respect other people’s property and never take it from them. Their life and freedom are as just as valuable as yours. And he said, “Because most Americans most of the time have voluntarily followed the rules, democracy works.” Even if the police don’t show up on your doorstep to beat you up, you pay your taxes, because we’re conditioned and the root cause was it was our religion’s that instilled in us that ethic. Now, he said, you just look around the world where America has gone into a country and just snap its fingers and said we want democracy right here and we want it right now, if you don’t have a foundation of a religion there and you said it’s not any religion, that it’s got to be a religion that teaches those particular rules and has enough power over people’s lives that they instinctively follow those rules. If you try to put free markets and democracy into a country that doesn’t have that foundation, all you get is chaos like Haiti, for example, where they don’t have that foundation, we try to impose democracy and free markets and just get a complete breakdown of social order. It’s what happened in Russia to a large extent. So my first concern about our system is that if you don’t have an instinct and generally born from a religious tradition amongst the CEOs to voluntarily follow the rules, capitalism just doesn’t work. There is no way that you can police honesty if it doesn’t come instinctively for you. And, you know, I thought a lot about this conversation with that Marxist economist, and as so many institutions in our society try to push religion out of the public eye, what they don’t get is these are the very institutions that gives us our civil liberties in the first...

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