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.

Werner Erhard Foundation Video

Video from 1982 which describes the many projects created by The Werner Erhard Foundation.

The Werner Erhard Foundation (originally founded as The est Foundation) fostered and supported this emerging paradigm by providing financial and organizational support to individuals and groups engaged in charitable and educational pursuits – research, communication, education, and scholarly endeavors in the fields of individual and social transformation and human well-being. We see our contribution to these people and groups as an investment in the development of a new context: a world that works for everyone.

Reviewing the grants they made, one might question what a Tibetan holy man and a systems analyst have in common. A closer look reveals that the emerging paradigm shows itself in every field of endeavor: from religions to sports, from health care to art, from education to entertainment. The Werner Erhard Foundation supported a remarkable diversity of ideas, projects, and people, welcoming opportunities to provide for interdisciplinary interactions. - read more at http://www.wernererhardfoundation.org

PHYSICS CONFERENCE
"Novel Configurations in Quantum Field Theory"

Sponsored by The Werner Erhard Foundation

January 22 through 24, 1977 San Francisco, California

The Werner Erhard Foundation Physics Conference, like the early Solvay Conferences, brought together a relatively small group of renowned physicists who experienced a close working relationship in a supportive and congenial environment outside of a university or professional society setting. This particular group of outstanding physicists had never before met together in a conference. This was the first opportunity for these distinguished physicists to participate directly with each other.


NAMES OF PHYSICS CONFERENCE PARTICIPANTS
Eduard Brezin C.E.N. Saclay Gif sur Yvette
Curt Callan Universite de Paris - Sud
Geoffrey Chew University of California at Berkeley
Sidney Coleman Harvard University
Roger Dashen School for Natural Sciences Institute for Advanced Study
Richard Feynman California Institute of Technology
David Finkelstein Yeshiva University Jean-Loup Gervais Universite de Paris - Sud
Fred Goldhaber State University of New York at Stony Brook
David Gross Princeton University
Roman Jackiw, M.I.T.
T. D. Lee Columbia University
Claudio Rebbi M.I.T.
Stanley Mandelstam University of California at Berkeley
Leonard Susskind Yeshiva University
J. A. Swieca Pontificia Universidade Catolica do Rio de Janiero
Steven Weinberg Stanford University
John Wheeler University of Texas
Edward Witten Harvard University

Werner Erhard Physics Conference - at scribd.com

Physics Conferences

In 1977 the Werner Erhard Foundation brought together a relatively small group of renowned physicists working closely together in a supportive congenial environment outside of a university. The topic of discussion, representing the frontier of theoretical physics at the time, was "Novel Configurations in Quantum Field Theory" Richard Feynman, Leonard Susskind, Sidney Coleman and David Finkelstein were among the notable physicists in attendance. Read more about how the Werner Erhard (est) Foundation created this event.

Presentations by the Werner Erhard Foundation

The Werner Erhard Foundation funded and organized public programs and national speaking tours in order to present the ideas of prominent philosophers, scientists, and theologians to the public. By 1980, the Werner Erhard Foundation had sponsored 31 of these presentations, which were attended by 57,000 people in cities throughout the US. The global thinker R. Buckminster Fuller; British philosopher Douglas Harding; an eminent leader of Tibetan Buddhism, His Holiness the XVI Gyalwa Karmapa; and a world renowned siddha yogi, Swami Muktananda were among the presentations given. Read more at the Werner Erhard Foundation website.

Werner Erhard's est Training inspired est participants to fulfill humanitarian objectives. Creating a number of not-for-profit organizations, founded by Werner Erhard along with other original est staffers, 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' a new opportunity in their lives, and fostered and funded development in Africa; people committed to work to end hunger in the world through 'The Hunger Project' and its many offshoots; 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, 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://www.wernererhardfoundation.org.

Jeff Bridges Works To End Hunger

From the days of doing Werner Erhard’s est Training and co-founding the End Hunger Network, which, among other things, put on the first Live Aid concert, to his role in 2010 as national spokesman for No Kid Hungry Campaign, Jeff Bridges has been passionate about making a real difference in people's lives.

“Poverty is a very complex issue, but feeding children isn’t,” he said, unveiling an initiative that suits today’s political and economic climate because it requires no new money, or programs. Federally funded programs are in place but only half the kids eligible for a government-funded breakfast receive it, and only 15 percent of kids eligible for assistance during the summer get it. Bridges has signed on with Share Our Strength, a nationally recognized nonprofit, in what he says is “like a public-relations assignment,” to publicize the gap and get governors to commit to closing it.

Bridges has been involved in the hunger issue for a long time, and in 1983 helped found the End Hunger Network, which among other things staged the Live Aid concerts in 1985 and produced the movie “Hidden in America,” about a father who can’t provide for his children, starring his brother, Beau Bridges. Asked to be more specific about what triggered his interest in the issue, Bridges revealed that it goes back to “est” and the human-potential movement headed by Werner Erhard, who challenged his followers that once they knew the facts—that widespread hunger could be overcome—they shouldn’t look to others to solve the problem but should take action themselves.

From: The Most Significant Thing He’s Ever Done - Newsweek November 12, 2010

Getting 'it" in prison

In an article written in 1978 about the est Training given at the Lompoc Federal Penitentiary, writer Neal Rogin talks about the process inmates went through in gaining responsibility for their actions. This is an excerpt of that article:

What comes up for the trainees to experience is often more than uncomfortable. Take the case of Bobby. Bobby was in Lompoc for homicide. Throughout the training he wore very dark glasses and sat in the back row. The only time he took them off was when Ted (the trainer) confronted him in the Danger Process, and even then he did everything to avoid looking at anyone. "The Danger Process was really a high point in this training," Ted later told me. "It was the time when they got in touch with their tough guy acts and became a group."

It was after the Danger Process that things really began to come up for Bobby. Sometime during the afternoon of the third Saturday, I looked up and saw an empty chair in the back row. Turning toward the door, I saw Bobby moving unsteadily towards it. Joe walked over to him. They stood there for a long time. A very long time. I wondered what was going on. Joe later explained, "What Bobby was looking at, what had come up for him was whatever it was that made him kill people. He said he couldn't stand being in the room any more and that he not only wanted to get out of the training, he wanted to get out of the prison. He was literally ready to go over the wall, rather than experience what was coming up."

"I didn't press him on it. That doesn't work. I just gave him the space to look, and to communicate. He knew that this was his number, and he was able to see that he was standing at a crossroad. I pointed out to him that he was totally free to leave the training without being hassled, that it was perfectly OK with Ted for him to be there or not be there, and that this was an opportunity for him to do something he never did before, to move through the barrier he was up against and to be done with it. After four hours, he chose to stay...."

After all the trainees had become graduates, people refused to go away; the feeling of love and communication in the room was so intense that I have rarely experienced any thing like it. The graduates walked around getting to know one another, laughing, sharing, swapping stories, hugging. All differences disappeared. There was no outside or inside, no prisoners or visitors, there was just the commonly shared experience of knowing who's responsible for it all....

We were about to leave when Bobby came over to Ted and stood there, without his glasses for the first time. He moved close to Ted, took his hand, muttered and stammered something under his breath and hurried shyly away. "What did he say?" I asked. Without taking his eyes off Bobby as the inmate walked away, Ted said, "He told me he loved me."

From Getting 'it" in Prison, reprinted from The Graduate Review, June 1978

Prison Possibilities

Prison Possibilities, Inc. was an independent non-profit organization established by the Werner Erhard Foundation that enabled men and women in prisons to alter their predictable futures. This organization's programs demonstrated concrete results in significantly lowering the rate of re arrest and imprisonment among those inmates who participated. A number of the inmates who participated in the programs continue to this day to make the program available to others.

For additional studies of est in Prisons see:

Earl Babbie, Ph.D., "est in Prison - General Overview", American Journal of Corrections, Nov-Dec 1977 & Jan-Feb 1978

Mark Woodard, "The est Training in the Prisons: A Basis for the Transformation of Corrections?", University of Baltimore Law Journal, 1982

Breakthrough Foundation

The Breakthrough Foundation, an independent non-profit organization has been dedicated to changing the direction of thousands of young people's lives through the Youth at Risk Program. The project has 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. President George H.W. Bush recognized the Breakthrough Foundation as one of his "thousand points of light."

Werner Erhard Foundation

The Werner Erhard Foundation was established in 1973 to provide opportunities for individuals to express their commitment to altering what is possible for human beings in life. The Foundation's mission was to foster and support projects that would provide breakthroughs in fields related to personal and social development. The Foundation brought people together from all over the world to contribute to and participate in ground-breaking work in the area of human achievement and transformation.

In the nearly 20 years of its existence, the Werner Erhard Foundation provided funds for research, scholarly endeavors, and voluntary action. They supported more than 300 diverse individuals and organizations from a variety of disciplines. Working in many different fields and surroundings, these people made a profound contribution to human thinking, growth, and achievement.

Contributions from the Werner Erhard Foundation helped avert a catastrophic famine in Ethiopia, rebuild an elementary school in Mexico City following a devastating earthquake, and also made the work of Buckminster Fuller more widely known. The work of transformation and personal responsibility was brought to the former Soviet Union and the Werner Erhard Foundation launched projects such as The Hunger Project, The Mastery Foundation, and the Youth at Risk Program, which continue to be vital and active today.

Werner Erhard Foundation Website

"What we create together is a relationship in which we work on making a difference in people’s lives. I welcome the unprecedented opportunity for us to work globally on that which concerns us all as human beings." Werner Erhard

The Werner Erhard Foundation was committed to bettering the human condition through non-profit, voluntary action. Many of the projects founded by the Werner Erhard Foundation have evolved into independent self-sustaining organizations that continue their work in bringing about a transformation in the quality of life on our planet.

Read more at the new Werner Erhard Foundation Website

Werner Erhard, Buckminster Fuller and John Denver

Werner Erhard, John Denver and Buckminster Fuller in September 1980.