A powerful and compelling interview by Arleen Westerhof with David Hodgson from Kingdom Investors. Make sure to watch this video.
Economic Summit Interview on ‘Capit-holism’ (Capitalism + holistic practice)
with David Hodgson, Kingdom Investors
In 2007 Dave founded Kingdom Investors (KI), a marketplace ministry which has spread around Australia and Overseas. KI is using its vast marketplace experience to teach Christian businesspeople to multiply their incomes and their influence to be part of a strategic vision to create the world’s first “Sheep Nations”, as portrayed by Jesus in Matthew 25. Dave has been married to Merlene for 37 years, they have 5 adult “children”, 8 grandchildren, and one great granddaughter. Dave has attended CityEdge Church on the Sunshine Coast in Australia for over 19 years.
Arleen asked me to talk about my ideas for what it means for a company to behave responsibly. I formed my ideas about how a company should behave responsibly by watching a particular macroeconomic implosion back in the 1970’s-80’s when I first went into business in Zimbabwe in Africa. In this instance the once prosperous nation of Rhodesia (Zimbabwe), which was once known as the bread basket of Africa, was handed over to President Robert Mugabe in 1980 when the nation got its independence. Mugabe and his extended family set about plundering Zimbabwe to enrich himself and his family. They turned it into the economic basket case that it is today.
Zimbabwe went from being the bread basket of Africa to being the basket case of Africa in a short period of time. Today Zimbabwe’s economy is collapsed and it is one of the poorest and most corrupt nations in the world. Mugabe, on the other hand, became one of the top 20 richest men in the world and all the while his people starved. He died last year and his successor is probably worse and even richer. Much richer in fact, all at the expense of the people.
A culture of greed and self-centredness
With that as a trigger, I looked back over history. I realised that there is a culture of greed and self-centredness that has driven the motives and activities of mankind since the beginning of time. I saw that this was actually the root cause of all the social and economic distress that I had witnessed. I also realised it was particularly predominant in business and corporate activity and of course it was completely unsustainable, as proven by the catastrophic thing in Zimbabwe.
So when I moved to Australia in 1985 I actually saw the same culture firmly embedded in the marketplace. In the business world that culture of greed and self-centredness was still there and it caused a lot of corruption but it was more sophisticated. It was not as blatant as you see in some countries in Africa. I realised that it didn’t matter where I was or who was in charge. Whether they were black or white people, greed and self-centredness are the driving factors in the marketplace. If left unchecked, greed and self-centredness always push the strong people – the strong entrepreneurs or the leaders or whoever they might be – to maximise their own self-interests. This usually happens to the great detriment of others.
That’s particularly evident when it comes to business and the control of wealth and power. By wealth I mean the accumulation and control of assets, or money, or estates. By power I mean anything from bullying at school, dominating in sport, lording it over a partner in a marriage, corporate climbing in business, businesses dominating market share, cartels ruling whole sectors or industries and even entire economies such as is the case in many African countries today.
At a national level, countries agitate for their economic and national interests. They even go to war because of this and its always at the expense of somebody else. So we narrowed that down to the question that Arleen asked about company behaviour in the modern market place. We find the same pattern to this very day. We find companies driven by greed and self-centredness, focused only on profit for the owners, who happen to be the shareholders. If we are focused only on shareholder profit it will always be at the expense of the other stakeholders; the employees, the customers, our community, the supply chains, and the environment.
Given that a company relies on its environment, customers, supply chain, etc. to prosper and to survive, exploiting them then must by default lead to a collapse at some point.
If it’s going to implode, it’s going to do so every 80-100 years, as we learn from history, and nowadays more frequently because we never address the problem but keep fixing it with more debt. We are getting these implosions more often in the form of recessions, depressions, revolutions and wars. So over the centuries economic theory changed. Universities taught new models, corporate law and policy changed, but the cycle of socio-economic distress and human mystery leading to regular economic collapse remained, because the root cause of the problem was never addressed.
If you keep doing what you’ve always done, don’t expect it to change. It didn’t matter if nations evolved from tribal Feudalism to Theocracies; Monarchial Rule, Democracy, Capitalism, Communism, Socialism, etc. the problems always remained because it was never addressed. It didn’t even matter when Adam Smith proposed the idea of the invisible hand in the 1760’s, or when John Maynard Keynes’ proposed his theory of expansionary physical policy in the 1930’s. It didn’t even matter when Milton Friedman proposed the idea of monetarism in the 1970’s. Economic collapses and socio economic misery have always continued because nothing addressed the root cause. That’s obviously the culture of greed and self-centredness. If the culture is flawed, it doesn’t matter which model we use, the corporate behaviour is still going to be bad. It was still a story of economic collapse and socio economic misery in the modern age because we’ve used up all the margin that we had in the environment.
That all would prosper. Creating a culture of caring and sharing.
In the mid 90’s I became a Christian. I turned to the Bible for solutions because nothing was working. I’d studied economics and I wondered why business wasn’t working. I went back in history to see what was going on and now I wanted to see what the Bible offered as a solution. In it (the Bible) I discovered a model of holistic Capitalism that prevailed, and that was present at almost every major milestone in the Scriptures. I also discovered that even Christians had completely missed this incredible programme which God has given us to perpetuate throughout time. The Bible says that the marketplace should have a culture of caring and sharing and if we were to deploy that in a practical sense we would all prosper. That is, all the stakeholders and shareholders would prosper. All the employees, customers, supply chain, the community, the environment, and everybody else.
It was there in the Bible, but since nobody seemed to be using it, I didn’t know if it worked. I couldn’t find anybody teaching it. So I set about testing the principles with my own business to see if it would work and if this could be applied in the modern marketplace. What I found what astonishing. If the biblical principles are interpreted correctly, not christian-ease, but if we figured out what the Author was thinking and then did that and applied it correctly, it always worked. I discovered that I could create a wealth without creating poverty or any other socio-economic distress. I also discovered that I could create even more wealth because the nature of the principles were such that my employees, supply chain, customers, community and environment prospered, as did the shareholders.
I even found we could create more wealth if I sought to include my competitors and my opposition by applying the same culture of caring and sharing. That’s completely the opposite of profit driven Capitalism where we’ve got to compete with our competitors and make sure that they’re not better than us. I’m saying that if we work with these principles we would prosper and a lot more.
‘Capit-holism’ (Capitalism + holistic practice)
In one experiment I created 21 millionaires out of very poor people and we ourselves really grew as a corporation in the process. We also taught them the how and why in the process so that they didn’t go out and plunder other people. So from this experiment I concluded that the biblical economic model was the only one that could possibly prevail, and create long term human flourishing because it actually started out with the right culture of sharing and caring instead of self-centredness. Because it was a holistic form of capitalism, I termed it ‘capit-holism’ to my group. You call it the Economics of Mutuality, which is probably a better word, but it’s almost the same thing. It is the use of this ‘capit-holism’ which has built my company into a 1.2 billion dollar company today and which is now creating a huge amount of momentum for change in company behaviour around the world.