Putting Integrity Into Finance: A Purely Positive Approach

Capitalism and Society, Vol. 12 [2017], Iss. 1, Art. 1

4 May 2017  

Werner Erhard and Michael C. Jensen

Abstract

The seemingly never-ending scandals in the world of finance, accompanied by their damaging effects on value and human welfare, make a strong case for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that reveals integrity as a purely positive phenomenon with no normative aspects whatsoever. Adding integrity as a positive phenomenon to the paradigm of financial economics provides actionable access (rather than mere explanation with no access) to the source of the behavior that has resulted in those damaging effects on value and human welfare, thereby significantly reducing that behavior. More generally we argue that this addition to the paradigm of financial economics will create significant increases in economic efficiency, productivity, and aggregate human welfare. Because integrity has generally been treated as a virtue (a normative phenomenon) the actual cause of the damaging effects of out-of-integrity behavior are hidden, resulting in assigning false causes to those effects. This keeps the actual source of these damaging effects invisible to us. As a result, in spite of all the attempts to police the false causes of these damaging effects, the out-of integrity actions that are the source of these effects continue to be repeated. This new model of integrity makes the actual source of the damage available for all to see, and therefore to act on. Integrity as we define it (or the lack thereof) on the part of individuals or organizations has enormous economic implications for value, productivity, and quality of life. Indeed, integrity is a factor of production as important as labor, capital, and technology. Without a clear, concise, and most importantly, an actionable definition of integrity, economics, finance and management are far less powerful than they can be.

Citation:

Erhard, Werner and Jensen, Michael C., Putting Integrity Into Finance: A Purely Positive Approach, Capitalism and Society, The Center for Capitalism and Society, Yale University, Issue 12, Volume 1, May 2017. http://capitalism.columbia.edu/journal/12/1

A Visit With His Holiness The Dalai Lama

On October 19, 1979, the eve of his departure back to India following a historic 49-day visit to the United States, The Fourteenth Dalai Lama met in conversation with Werner Erhard in Boston. The presentation of The Werner Erhard Foundation before 300 guests grew out of Werner Erhard's initial meeting with the His Holiness the Dalai Lama, the acknowledged "Pontiff of Buddhism," three years earlier. They first met in Dharmsala, India, where His Holiness has resided since 1959, when the Chinese occupied his Tibetan homeland.

The Holiday Project

The Holiday Project

The Holiday Project, was started as an independent non-profit organization managed by volunteers nationwide. They organized visits and gift-giving to people confined in hospitals, nursing homes, shelters, prisons, and other institutions during Christmas, Chanukah, and other holidays throughout the year.
The Holiday Project (National Organization)
The Holiday Project Washington D.C.
The Holiday Project Visits Lonely, Elderly - The West Side Spirit
Letter from a Holiday Project Volunteer
Homeless Kids Manage To Smile - San Diego Union 1979

Youth at Risk

In March of 1983 I was hired by the Babbie Enterprises Research Group to work with them on gathering data on the new Youth at Risk program, a program of the Breakthrough Foundation. Part of their work was designing instruments for assessing that data on a longitudinal basis. One of my jobs was interviewing kids in Oakland who were applying for admission to the Youth at Risk ten-day course. Being interviewed were leather-jacketed eighteen-year-olds whom I would not have wanted to meet on the street at night. There was a black girl of fifteen, a hundred pounds overweight, with an "I don't give a damn" expression on her face and a cigarette dangling from her mouth. We knew she did give a damn or she would not have been trying to get into the course. Sitting across the table from another applicant, a baby faced fourteen year old, I had the shock of my life when, in response to my question, "What did you do?" he replied, "Killed a guy." The course consisted of ten days in the mountains with, as in the Six-Day course I'd done in 1978, a strenuous physical activity program combined with classroom work designed to have the kids confront and acknowledge rsponsibility for their own lives. Werner led this first one. At the time, I questioned whether or not the course could do anything for these kids but Iwanted to see, so at the end of the ten days Rebecca and I went to FOrt Mason to meet the bus when they returned to San Francisco. The parking lot was filled with parents, social workers and people like 'Becca and me who were just interested in seeing what, if anything, happened. It was hard to believe that the youngsters getting off that bus were the same kids I had talked to in Oakland. The black girl had opened up like a flower. She jumped off the bus singing and ran to hug her mother. SOme of the toughest looking kids had turned into pussycats with grins. There was laughter and tears and the boys picked Werner up on their shoulders and carried him around the parking lot. I was in tears, then looked at Rebecca, hugged her and began laughing. It was nothing short o miraculous! from Reading Under the Covers: An Autobiography, by Elizabeth Goodell Russell

Werner Erhard

Werner Erhard Biography

Werner Erhard is a critical thinker who has influenced the academic community worldwide with his revolutionary ideas first expressed in The est Training. He introduced the 20th Century notion of transformation and has had an enormous impact as a thought leader, humanitarian and business man. Currently retired from business, Werner Erhard devotes his time to speaking, publishing his ideas in academic papers and developing courses and other materials for Universities such as Harvard, Dartmouth, and Erasmus.

Breakthrough Foundation

Breakthrough Foundation The Breakthrough Foundation was an independent non-profit organization dedicated to changing the direction of thousands of young people’s lives through the Youth at Risk Program. The project won national acclaim for its outstanding results in turning around the lives of young people who were severely at risk for drug abuse, unemployment, and violent crime. The National Institute of Justice studied the Youth At Risk Program and found a significant reduction in recidivism. President George H.W. Bush recognized the Breakthrough Foundation as one of his "thousand points of light." - Werner Erhard Foundation
Here is an inspiring video about the Youth at Risk program in Colorado:

Werner Erhard Foundation Projects

Werner Erhard's est Training inspired thousands of est participants to fulfill humanitarian objectives and create a better world. Creating many not-for-profit organizations, the foundation which was started by Werner Erhard along with other original est staffers, most notably Gonneke Spits. Literally hundreds of thousands of people illustrated that the power of "the little individual" can improve communities and the world. 'The Breakthrough Foundation' gave 'Youths At Risk' new opportunities in their lives. The Breakthrough Foundation also fostered and funded development in Africa. People committed to end hunger in the world through 'The Hunger Project' and its many offshoots created many projects that continue 4 decades later. The 'Community Workshop' gave ordinary citizens a new opportunity to contribute to their communities. These organizations, along with the Werner Erhard Foundation, played a hand in inspiring est Training participants to go out and make a difference in their lives,to contribute to humanity, and give back to their communities, in addition to providing forums for the individual to make a difference worldwide. For more information about the Werner Erhard Foundation visit http://wernererhardfoundation.org.