I call Italian Luigino Bruni and Dutchman Leo Andringa ‘Angels of Hope’ because they hold the formula that could narrow our yawning wealth gap and help address many other issues that plague our country.
On July 11, Bruni and Andringa will arrive to share their experience and expertise about a business philosophy that anchors itself on the values of humanity and communion. This business model, known as the Economy of Communion, fosters a shift to a new capitalist mindset that is anchored on a culture of sharing as against the more pervasive culture of having and amassing.
The Economy of Communion (EoC) is now successfully practiced by over 750 profitable companies in Europe, North, Central and South America, Asia, Africa, Australia and the Middle East.
Our wealth gap is the result of social injustice and the indifference, and worse even, greed, of the few who are privileged. Less than 3% of Filipinos control over 85% of the national wealth. The great majority of Filipinos is trapped in their poverty and therefore cannot get that much needed quality education and proper health services to free themselves, much less assure their future generations of a life that is less miserable. We are all sitting on this social volcano.
Luigino Bruni holds two PhD degrees, one in History of Economics from the University of Florence and another in Economics from the University of East Anglia. Leo Andringa had an illustrious career as Regional Director at the Central Bank of the Netherlands from 1988 to 2001, General Director of the Dutch Government Purchasing Office from 1979 to 1988 and Chief Inspector for the Budget of the Dutch Ministry of Finance from 1970 to 1979.
Both Bruni and Andringa have been involved in guiding and monitoring the successes of the over 750 EoC companies now operating in over 30 countries, including the Philippines. Here they will conduct an Asia-wide Congress on EoC in Tagaytay from July 13 to 16, a meeting and talks with CEOs, entrepreneurs and media practitioners in Makati on July 18 and a forum with the Academe to be held at the Pontifical University of Santo Tomas on July 19.
Chiara Lubich, the founder of The Focolare Movement and one of the greatest women of our time, was inspired to conceive the EoC when she landed in Sao Paolo, Brazil in 1991 and saw from the airplane the hovels of poor people surrounding enclaves of the rich. The sight made her wonder how a society can find peace and harmony when such a socio-economic polarization exists.
Most prescriptions for solving a wealth gap problem range from revolution from the bottom class of society to outright state confiscation and redistribution of wealth. In between these two severe prescriptions is state taxation that is designed to get the wealth from the rich in order to give to the poor.
Historical experience on these approaches showed a number of negative effects which sometimes brought humanity to worse conditions. Other than promoting class antagonism, revolutions leave behind a trail of long-lasting hatred and cultural polarization. State confiscation and redistribution of wealth as well as heavy taxation of the rich do not always happen without a negative backlash—usually capital flight—which renders the country more impoverished.
EoC provides the best solution to bridging the wealth gap, a solution that does not carry the negative effects of revolution, state confiscation or high taxation. Not only that, EoC gives the owner of the wealth (and the means to produce wealth) the freedom and the initiative to distribute the wealth—thereby promoting a better climate for generating more wealth.
By inspiring a genuine spirit of sharing and providing the wealth owner the freedom to earn profit and expand his business, EoC triggers the natural propensity of man to share and distribute wealth. By creating a fraternal kinship and a caring environment, EoC companies inevitably become happy environments that create positive vibes. What’s more, the core values of EoC—the communion of the haves and the have-nots under a climate of openness and mutual respect and love—ensures the harmony under which greater wealth is generated.
This is how the Economy of Communion (EOC) works:
1. EoC ensures the right of the investor to make a decent return on his investment. The investor freely takes from the net income of the company his targeted return on investment—be it 20%, 25% or 30%. That is a reward due him and the company’s stockholders for investing and taking a risk in the venture. He may also allocate for himself a salary from the operation. It is his option whether to just earn a salary, make a return on investment or get both.
2. The residual profit is then divided into three parts intended for the following:
a.) The first part is for further reinvestment in the company. This can be in the form of capital equipment to replace aging machinery or money for expansion so that more economic opportunities are created. The workers benefits and share of the profits also increase with business expansion and growth.
b.) The second part is for the lesser privileged in the EoC community so that their standard of living can be raised. The EoC community is the circle of people covered by the profits that can be shared. Foremost logical beneficiary is of course the workers. Then this circle can include an adopted poor community. The gap between the haves and the have-nots are thus reduced and this fosters unity and harmony in the community.
If a community has already achieved a desired distribution of wealth, this part can be shared with other communities in the world which then makes the communion global. In Germany, the EoC companies of Solingen use this part to provide capital to other EoC companies in other countries in Eastern Europe.
c.) The third part is for the creation of structures for the new man. While love and compassion are the engines for creating the harmonious unity that mark EoC communities, it is a realistic need that value formation comes with attendant costs. Seminars and other value formation activities need to be funded. Physical structures need to be erected—like centers where meetings are held to strengthen members in their formation in the life of unity and in the culture of sharing.
There are no set rules for determining the three parts as these may be equally apportioned or one may be greater than the other two. No two industries are alike and the EoC recognizes the need for flexibility. The spirit of communion/sharing is not bound by hard and fast rules but exercised in freedom.
One may be inclined to think that the EoC is utopian, a system or model that can only work in heaven. However, the fact is EoC has chalked up a track record of success with over 750 companies in five continents where the Focolare has spread its mission of unity. The Focolare is present in over 180 countries including Muslim states like Syria, Iraq, Turkey, Libya, Jordan, Iran and Algeria. While EoC may appear to have been crafted for the third world countries and economies, there are many companies in the developed countries—notably in North America, Australia and Western Europe—who have also adopted it because they saw the EoC as yet the most equitable system that delivers the following benefits:
1. The investors make their desired returns. The EoC must first ensure that the business is viable and should make a profit otherwise there will be no profits to allot for man, for the poor and for reinvestment.
2. The EoC, being people-oriented, it assures the workers a fair share of the fruits of their labor and therefore the firm achieves industrial peace and harmony. EoC companies enjoy production efficiency; wastage is very minimal because of high worker morale and reciprocal concern for the owners who take good care of them.
3. The EoC improves the standard of living of the poor members of the company and the EoC community not through a dole out but in a way where the beneficiary has contributed to his benefit. This is the essence of communion—one person brings his surplus while the other brings his need into the relationship.
4. The EoC ensures the further growth of the venture by the profits that are plowed back for reinvestment.
5. Because values are the underlying foundations of the EoC, the laws are followed to the letter, taxes are dutifully paid, and the environment is protected, among other good practices.
A steel foundry in Brazil employs as many as 8,000 workers who operate in a climate of sustained profitability, growth and harmony. Bangko Kabayan, an EoC rural bank based in Batangas, has profited from micro-lending—an operation very few banks ever venture into. Bangko Kabayan grew with the poor folks they financed and has expanded its operations into 19 branches, making Bangko Kabayan the biggest rural bank in the region.
Any EoC community has what is takes to prosper. Any businessman who is worth his salt will adopt a productive working formula. An EoC community can well mushroom into an economic zone when other businessmen are attracted by the profits and the climate of industrial peace and maximized productivity. There are now EoC industrial parks rising in two continents, one in Italy and another in Brazil.
In an economically viable community where people can send their children to better schools, live in harmony, afford better things in life—democracy thrives. Democracy will improve with the economy and the values introduced to the community. The people of such communities eventually learn the importance of their vote, their responsibilities as voters and how they can make the democratic system work for them.
You may email William M. Esposo at: firstname.lastname@example.org