During Pope Francis' visit to the United States in 2015, Robert Reiss of The CEO Show and Forbes spoke with Dan on the interrelated subjects of catholicism and capitalism. Dan, a practicing Roman Catholic, explains how leaders can pursue a business career in order to make a positive difference in the world. Published September 2015.
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ROBERT REISS: Pope Francis has denounced capitalism as a new “tyranny.” Do you agree with him?
DAN HESSE: I understand why the pope holds this view, but no. As a practicing Roman Catholic, I’ve never supported a pope more enthusiastically than this one. I carry a Pope Francis medal in my wallet. He’s addressing many of the right issues during his papacy and making the Church more inclusive. As you point out, in his papal exhortation almost two years ago, Pope Francis used very strong language. He discussed how exclusion and inequality in today’s capitalist system are dehumanizing, and that our culture of prosperity makes many indifferent to the plight of the poor.
Pope Francis is troubled by the widening gap between rich and poor. He goes so far as to say our love of money is a rejection of ethics. He also criticizes capitalism for the deteriorating state of our planet, stating that the environment is defenseless against man’s search for power and possessions. On the one hand, I’m glad he has the courage to speak his mind clearly, and not mince words, because his strong rhetoric is helping to bring attention to important issues. On the other hand, history has demonstrated that capitalism is by far the best economic system among the alternatives. Witness the growth in the economy and the hundreds of millions pulled out of poverty in China as they moved away from communism and toward capitalism. Yes, the gap widens between the haves and the have nots, but overall, the majority of people are much better off.
Capitalism, at its core, is financial freedom, the free movement of capital and the power of individuals, not government, to determine how money and resources will be spent. Capitalism also goes hand-in-hand with freedom of information. Capitalism and free markets cannot work properly without it. Capitalism also goes hand-in-hand with political freedom and democracy. Completing this virtuous cycle is religious freedom, which the pope certainly supports. So, capitalism, or financial freedom, completes the virtuous cycle of political freedom, religious freedom, and freedom of information, and in my view, a capitalist world is a better place than it would be under any other system.
REISS: So, what would you say to Catholics who are interested in becoming business leaders?
HESSE: I’ve often stated that I believe the role of a CEO or business leader is a vocation, akin in some respects to teaching, parenting, public service, or even the clergy. The leader of a company influences the lives and livelihoods of many people: employees, customers, shareholders, suppliers, business partners, and those living in the communities in which a company serves, by what they do, and how they do it. I would encourage anyone who wants to make business more ethical, regardless of religion, to pursue a business career in order to make a positive difference in the world.
REISS: Do you think it antithetical for Catholic schools to teach and promote capitalism and business?
HESSE: Pope Francis is a Jesuit, and they're well known for their mission of teaching. Jesuit and other Catholic schools flourish, particularly in America, through strong private funding, and funding can suffer when an economy isn’t functioning smoothly. It is absolutely critical in my view that Catholic schools teach business. Perhaps it’s ironic that the University of Notre Dame has been ranked as America’s best undergraduate business school by Bloomberg Business Week for the past five years. Business ethics are at the core of Notre Dame’s curriculum. I believe Pope Francis should encourage Catholics, and non-Catholics who share his views, to become capitalists and pursue business careers.
REISS: The Pope implores politicians to get involved in this issue. Do you think politicians can make a difference?
HESSE: Frankly, not really. There are some good public-private partnership examples, like the ConnectED program, where the federal government and a handful of technology and communications companies have come together to provide computers and high speed Internet service to students who cannot afford them. But the real power of capitalism lies in the hands of consumers. Once consumers decide to wield their tremendous economic power and choose to buy products only from responsible companies, capitalism will change for the better. I have seen consumers begin to take notice of corporate responsibility, but slowly.
An interviewer on TV once observed that it is hard for a CEO to act responsibly because Delaware law states that only shareholder interests matter. I argued that responsible behavior strengthens the brand over the long term, so it is in the shareholders' interest. If consumers voted for ethical corporate behavior with their wallets, corporate responsibility would be aligned with shareholder interests in both the short and long term. If consumers decide to spend their money only with companies that treat all of its constituents well, including employees and communities, capitalism will evolve. In capitalism, it’s one dollar, one vote. The consumer, the person with the money, is king.
One might ask, how does a consumer find out which companies act responsibly and which ones don’t? There are many sources of information out there, like the Dow Jones Sustainability Index or the CR magazine 100 Best Corporate Citizens list, as well as publications and rankings devoted to sustainability, financial transparency, diversity, and other important social issues, but it takes investigation by consumers to find these sources. If consumers wanted a comprehensive Consumers Report for responsible companies and paid attention to its rankings, a single, comprehensive guide would likely exist
REISS: Do you think our capitalist system can change?
HESSE: Perhaps no person on the planet has the potential to improve capitalism more than Pope Francis. His power of the pulpit, with Catholics and non-Catholics, is perhaps unprecedented. If he exhorts consumers to only buy from responsible companies that treat the planet and all of their constituents well, this pope might become the most important person in the history of capitalism, ushering in a new age of conscience-driven capitalism.