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Ethical consumerism has been around for a long time—during the revolution, many Americans protested against the Stamp Act of 1756 by refusing to buy tea and other Brit- ish goods. In recent years, ethical consumerism has become an increasingly prominent feature of social life, as new forms of technology have allowed consumers to use their choices in the marketplace to address various environmental, labor and trade concerns.

Surprisingly, relatively little attention has been paid to the moral issues raised by ethical consumerism. Suppose that consumers are morally permitted to use their buying power to pressure companies to treat animals better or to reduce carbon emissions. Does this mean that they can also pressure pharmacies not to stock the “morning after” pill? Can they pressure Wal-Mart not to sell books or music that they find offensive? Even in cases where consumers are pressuring companies to do the right thing, do their actions amount to a kind of vigilante justice?

Waheed Hussain is an assistant professor in the Department of Legal Studies and Business Ethics at the University of Pennsylvania's Wharton School of Business. He has a Ph.D. in Philosophy from Harvard University and an A.B. in Philosophy from Princeton University. His main research interests lie in moral and political philosophy, particularly in those areas that bear on the morality of economic life.

One of his major research projects focuses on the philosophical debate about how best to understand the political concern for freedom. After formulating and defending an interpretation of this concern, he argues that the most attractive economic arrangements from the standpoint of freedom are those that extend democratic forms of decision making into economic life. An example of such an arrangement would be the codetermination system in Germany, which gives representatives of labor a significant role to play in economic decision making.

Other current projects include developing a more adequate understanding of the nature of personal autonomy and its significance in political contexts, examining the role of secondary associations in a capitalist democracy, formulating a moral contractualist account of the duties of corporations and their managers, and assessing the case for the corporation's right (and perhaps duty) to engage in civil disobedience.

At Wharton, Professor Hussain teaches Legal Studies 210, Corporate Responsibility and Ethics and Legal Studies 226, Markets, Morality and the Future of Capitalism, which is cross-listed in both the Philosophy Department at Penn and the Program in Politics, Philosophy and Economics.

Graham Stuart Lounge

Waheed Hussain Assistant Professor, The Wharton School Speaker University of Pennsylvania
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About the speaker:

Dr. Franz Cede is a retired Austrian diplomat who served as the Austrian Ambassador to Russia (1999-2003) and to NATO (2003-2007). He also was the Legal Advisor to the Austrian Foreign Ministry. He has a strong California connection dating back to the time when he was the Austrian Consul General in Los Angeles 20 years ago. Dr Cede holds the degree "Doctor of Law" from Innsbruck University. He received an M.A. in international affairs from the School of Advanced International Studies (SAIS) in Washington, D.C., and is currently an associate professor at the Andrassy University in Budapest, Hungary. Dr. Cede has published several books and articles in the field of international relations, international law and diplomacy.

Jointly sponsored by The Europe Center at the Freeman Spogli Institute for International Studies, and the Center for Russian, East European and Eurasian Studies.

 

Audio Synopsis:

In this talk, Dr. Cede details his views on Russia's evolving relationships with the EU, NATO, and the US, drawing on his experiences as Austrian ambassador to the Soviet Union from1999 to 2003. Cede first outlines his perceptions of present-day Russia-US and Russia-NATO relations. Russia, he explains, still thinks in Cold War terms of bilateral relations and considers the United States to be its primary strategic partner on global security issues, especially in light of the Obama administration's recent "reset" of relations and ratification of the new START treaty. In contrast, Russia views NATO as outdated and yet still a threat. Its expansion to the East is viewed with suspicion by Putin's administration, which considers these developments to be distinctly anti-Russian. Russia engages with NATO only to the extent that it believes it can influence the organization's behavior and policies toward Moscow.  Still, in Cede's experience, the NATO-US-Russia triangle continues to be at the forefront of Russian policymakers' dialogue. Russian leaders prefer to avoid dealing with the EU because it lacks a coherent foreign policy, and also because Russia prefers bilateral relations with countries that offer a strategic benefit. Dr. Cede quotes Timothy Garton Ash, who wrote in a recent op-ed that "much of the Russian foreign policy elite treats the European Union as a kind of transient, post-modern late 20th century anachronism: flawed in principle, and feeble in practice. What matters in the 21st century, as much as it did in the 19th century, is the...determination of great powers." Dr. Cede cites the Georgian military intervention and recent Ukrainian gas crisis as examples of Russia's renewed attempts to reestablish dominance in its neighborhood.  

In the second portion of his talk Dr. Cede traces the evolution of Russian views of the EU and NATO.  Ten years ago, the EU-Russia relationship was largely ignored in the Russian media. When Cede asked Russian citizens for their views on the EU, they "either didn't know or didn't care." As Ambassador, Dr. Cede found Russian officials better informed, but  disdainful of being given orders by EU donors and "treated like a developing country." Cede illustrates this dynamic by recounting the 2004 incident in which the EU forced the residents of Russia's Kaliningrad Oblast region to apply for EU Shengen visas, which then required special permits to travel throughout Russia.  Western assurances that EU expansion to the east was not an attack on Russia but rather an attempt to extend stability to the Eastern bloc fell on deaf ears. Cede believes that notwithstanding Russia's attitude, the country is too big to ever join the EU, or to be influenced by Europe in its policy decisions. Because Russia still views itself as "one of the poles in a multipolar world," Dr. Cede insists that any change must come from within the country. However, Cede views Russia's candidacy to the WTO, which would require a clearer commitment to democracy and open economic policies, as a glimmer of hope.

Finally, Dr. Cede outlines several "permanent" features of Russia's relationship with the world, including economic interdependence, lack of cooperation on security policy, and weak relations with stateless organizations like the EU and NATO. He lays out several recommendations, which are elaborated on during the Q&A session:

  1. EU policymakers and other Western powers (notably the US) should strengthen their common Russia policy. Given the EU's dependence on Russia for oil and gas, it should also diversify its own energy sources to strengthen its bargaining position.
  2. The EU should consider membership for "bridge countries" such as Ukraine, Moldova, and Belarus.
  3. Personal diplomacy between universities, civil society, and citizens is important.  This includes reevaluation of visa policy. Cede hopes that the advent of the internet will also help improve attitudes between Russia and the rest of the world.

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Franz Cede Former Austrian Ambassador to Russia Speaker
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After the peaceful mass uprising that toppled one of the world's oldest autocracies, it is now possible to imagine the emergence of a genuine democracy in Egypt-the most important country in the Arab world. The very possibility of it marks an historic turning point for the entire region. However, there is a long and often treacherous distance between the demise of an authoritarian regime and the rise of a democracy.

With no experience of democracy in recent decades, and no apparent government leadership that is committed to bringing it about, Egypt's transition faces more formidable challenges than the transitions that led to democracy in recent decades in countries like Spain, Greece, Argentina, Brazil, Chile, the Philippines, Poland, South Africa, Indonesia, and Ukraine. (Which isn't to say these were easy: We forget how difficult each of these transitions seemed at the time, and how fraught they were with dangers and uncertainties.) With an energized civil society and deep resources of youthful talent, creativity, and mobilizing skill, Egypt has a real chance to get to democracy in the next few years. But doing so will require a keen analysis of the numerous potential traps that could sandbag the process.

The first trap is the Machiavellian opaqueness of the aging generals who are now running the country. Beginning with the Defense Minister (and now junta leader) Mohamed Tantawi, until a few days ago a close ally of the deposed President Mubarak, Egypt's new military rulers cannot be trusted to structure the political process and emergent rules in a way that will favor genuine democracy. Their principal goal, it appears, is to preserve as much of the old order as possible-Mubarakism without Mubarak (the father or the son). This means another round of the old shell game of Arab regimes-what Daniel Brumberg has called "liberalized autocracy." The process of liberalization-which runs in cycles, and which countries like Morocco and Jordan have seen many iterations of-institutes just enough change in the rules and faces to give the appearance of movement toward democracy without any of the dangers (for the ruling elite). But the changes, imposed from above, stop well short of the sweeping institutional transformations that would open wide the political arena (and the functioning of government) while leveling the playing field.

In their initial "communiqués," Egypt's ruling generals show signs of treading down this duplicitous path. Their initial choices have evinced the seductive veneer of democratic change but the closure and control of authoritarian continuity. To begin with, there appears so far to be little consultation with democratic forces in determining the character and pace of transition. Despite opposition demands, emergency rule remains in place, and so do many political prisoners. The military's initial decisions have been unilateral and preemptory. We learn there will be a constitution drafted within two months, followed by a referendum. A respected retired judge will head the process. This will produce "amendments" to the now-suspended authoritarian constitution. But what will be the role for Egyptian opposition and civil society in this process? What will be the scope down the road to draft a completely new, more democratic and legitimate constitution with broad popular participation and support? Will the president to be elected later this year serve another imperial six-year term, or be a caretaker heading a neutral government until a new constitution can be adopted and fresh elections held? At this point, if anyone knows the answers to these questions, it is only the junta.

The military is talking about early presidential and legislative elections, within six months. What could be more democratic than that? But, in fact, after the fall of a longstanding autocracy, it typically takes a lot longer than six months to organize competitive, free, and fair elections. Think of the steps. A neutral and independent electoral administration must be established. This requires not just legal authorization but also new leadership, and recruitment, training, funding, and deployment of new staff and equipment. If Egypt's generals intend to have elections administered by the same Ministry of Interior that shamelessly rigged the vote for Mubarak and his ruling National Democratic Party (NDP), that will be a sure sign that they do not intend to deliver democracy-or are too incompetent and cavalier to care. Then, the next step must be to produce a new register of voters. Experts believe only a quarter of eligible Egyptians are registered to vote today. The exclusion was very useful to perpetuating autocracy but could be deadly for an emerging democracy. That will take months, money, and far-reaching organization to do even reasonably well.

It will be one thing to elect a new president and quite another to choose a new parliament in Egypt's transitional flux. The military now suggests the two elections can be held together within six months. But they will have very different logics and requirements. A presidential election will be much simpler. The old order will no doubt throw up a somewhat more palatable face, perhaps the former Foreign Minister Amr Moussa. The democratic opposition may well rally behind a single candidate (though the regime, no longer able to exclude a democratic alternative, will probably try to fragment the field with as many opposition candidates as possible). Still, voters will be faced with a few principal choices for national leadership, and it won't matter where people vote, so long as they are of voting age and only vote once. This kind of election can be done more roughly and quickly, tossing aside the voter register and just dipping every forefinger in indelible ink after it has marked a ballot for one presidential candidate or another. It will be important in this election-and every future one-to ensure transparency and citizen monitoring of the vote, as well as to have Egypt's judiciary oversee the balloting (as it did in previous elections until the judges got too good at it and Mubarak cut them out). But, otherwise, a presidential election won't be a complicated affair.

By contrast, new parliamentary elections present formidable challenges. First, Egyptians (and hopefully not just the military) must decide what electoral system will be used. This choice can invoke arcane debate, but it may be one of the most important that Egypt makes in pursuit of democracy. If the electoral rules are "majoritarian," in that they make it hard for small minorities to get elected, they will work to the disadvantage of not just small ideological tendencies but also the welter of new, emerging parties and political forces-many of them liberal and secular-that will just be taking shape and starting to test their strength. This will inflate the strength of the only two political forces that now have effective political organizations on the ground-the old ruling party and the Muslim Brotherhood (with a smattering of some of the other older opposition parties). If Egypt retains the current electoral system of two-member districts (with each voter getting two votes), these two established political forces could sweep most of the seats between them, marginalizing the moderates, polarizing the parliament and political system, and dooming democracy from the start. Creating a liberal center in democratic politics requires more than moral and technical support for these parties to function; it also requires rules that enable them to get traction.

A much better-and fairer-alternative would be to elect the new parliament using some form of proportional representation, so that parties would win seats roughly in proportion to their vote shares. That way, new parties could begin to gain a foothold in the political process. Perhaps ironically, the best way to do this might be the way Iraq now does, by using the existing governorates (29 in Egypt) as multimember districts, and having each district then elect a share of seats equivalent to its share of the population. This would allow for very proportional results, with districts generally containing ten to 25 seats, while still enabling some accountability and candidate familiarity at the local level.

A truly democratic parliamentary election in Egypt cannot be pulled off in six months. In fact, it might require well over a year to prepare. But the alternative would be to rush to a vote with a flawed system that would leave Egypt's new democratic forces on the margins not just of legislating but of constitution-making as well.

How a new permanent constitution will be drafted-if it is even intended by the military-also remains a mystery at this point. The worst option would be to have a closed and hurried process dominated from above by the military. But that seems to be what the junta intends for the transitional period. Successful democratic transitions either use an expert but broadly representative constitutional drafting commission, and then a popular referendum to confirm the draft, or an elected constitutional assembly (often acting simultaneously as a parliament), possibly followed also by a popular referendum (as in Iraq). Some have used all of these methods combined. Experience of recent decades underscores the importance for future democratic legitimacy and stability of eliciting extensive public dialogue and broad popular participation in the constitution-making process, with adequate preparation and civic education and widespread media exposure, as in South Africa. A thorough, inclusive, and deliberate process of constitutional drafting and debate can also help to breed a more democratic culture at both the elite and mass levels. A rushed and closed process perpetuates authoritarian mentalities (and, often, authoritarian rules as well).

Prior to all of this is the most basic question of who writes the rules, the timetable, and the mode of transition. Egypt has now entered a classic transition game where the authoritarian regime and the democratic opposition have sharply different interests and little basis for cooperation and trust. As an institution, Egypt's military may not be hated the way Mubarak and his cronies were, but many of the generals were Mubarak's cronies. And the military's core interests are not freedom and democracy for the people, but preserving their own power, wealth, privilege, and impunity. The core lesson of numerous prior transitions is the need for a negotiated way out of this potentially fatal impasse. Democrats want democracy with no guarantees to autocrats. Autocrats want guarantees, with no real democracy.

There is an obvious generic compromise, and every successful negotiated transition-from Spain and Brazil to Poland, South Africa, and Indonesia-has settled on a version of it. The old order gets to hang on to most of its wealth and privilege, along with military autonomy at least for a time. Few, if any, henchmen of the old order are prosecuted for their past crimes, unless it is for the last, desperate excesses of a few diehards trying to hang on during the transition. Real accountability waits for a later day. Democrats get democracy. Autocrats (mostly) retain their wealth and influence, but they cannot bid for power unless they play the democratic game. The Yale political scientist Robert Dahl coined a term for this type of bargain. He called it "mutual security." From the Spanish transition on, the generic bargain became known as a political pact.

Only a negotiated pact between Egypt's surviving authoritarian regime and its emergent democratic forces can steer the transition through the current treacherous straits to calmer and freer waters. For that to happen, Egypt's disparate democratic forces must unify in a broad negotiating front that unites the "outside" opposition of the youthful movements with the "inside" opposition of the "wise persons" and established parties who have so far dominated, on an ad hoc basis, the discussions with the old order.

Opposition unity will give Egypt's democrats strategic leverage; if negotiations stall due to regime intransigence, then the unified opposition can more credibly threaten to turn out people by the millions again in protest. But, if negotiations move forward to ensure the essential conditions for a democratic transition-an end to emergency rule; freedom of organization, expression, and assembly; judicial independence; and new and fair electoral administration-then a unified opposition can guarantee social peace and political stability. Opposition coherence enables clear negotiating priorities to level the playing field and ensure a democratic transition. It will also give the old order a clear set of interlocutors who can credibly commit to deliver popular support behind a difficult compromise agreement. No condition is more important for a successful transition.

The role for the United States and other international actors is not to dictate terms for the transition or structures for the new political order. That is not our place, and Egyptians of every political stripe will resent it. But international actors should offer training to political parties and technical and financial assistance to the new civil society organizations and state institutions needed to make democracy work. For the United States., this will mean millions of dollars in new assistance for democracy in Egypt-but that is a trifle compared to the $68 billion we have invested in dictatorship (even if it was to buy peace). No less importantly, other democracies (including leaders of recent democratic transitions) can encourage Egypt's opposition groups to coalesce and share lessons of the strategies and choices that have led to democratic outcomes. And the Obama administration can make it clear to Egypt's military rulers that nothing less than a real transition to democracy-with broad consultation, serious negotiations, and a new climate of freedom-will return Egypt to stability and a lasting partnership with the United States.

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Two decades after the fall of Soviet-bloc dictatorships, popular movements for democracy are erupting in the last regional bastion of authoritarianism: the Arab world.

So far, only Tunisia's dictator, Zine el-Abidine Ben Ali, has been toppled, while Egypt's President Hosni Mubarak - who has ruled that ancient land longer than many pharaohs - announced Tuesday that he will step down in September. But other Arab autocrats are bound to go. From Algeria to Syria to Jordan, people are fed up with stagnation and injustice, and are mobilizing for democratic change.

So, what happens when the autocrat is gone? Will the end of despotism give way to chaos - as happened when Mobutu Sese Seko was toppled in 1997 after more than 30 years in power in Zaire? Will the military or some civilian strongman fill the void with a new autocracy - as occurred after the overthrow of Arab monarchs in Egypt and Iraq in the 1950s, and as has been the norm in most of the world until recently? Or can some of the Arab nations produce real democracy - as we saw in most of Eastern Europe and about half the states of sub-Saharan Africa? Regime transitions are uncertain affairs. But since the mid-1970s, more than 60 countries have found their way to democracy. Some have done so in circumstances of rapid upheaval that offer lessons for reformers in Tunisia, Egypt and other Arab countries today.

Unite the democratic opposition.

When a dictatorship is on the ropes, one thing that can rescue it is a divided opposition. That is why autocrats so frequently foster those divisions, secretly funding a proliferation of opposition parties. Even extremely corrupt rulers may generate significant electoral support - not the thumping majorities they claim, but enough to steal an election - when the opposition is splintered.

In the Philippines in 1986, Nicaragua in 1990 and Ukraine in 2004, the opposition united around the candidacies of Corazon Aquino, Violeta Chamorro and Viktor Yushchenko, respectively. Broad fronts such as these - as well as the Concertacion movement that swept Christian Democrat Patricio Aylwin to power in Chile in 1989 after the departure of Gen. Augusto Pinochet - often span deep personal and ideological differences. But the time for democratic forces to debate those matters is later, once the old order is defeated and democratic institutions have been established.

Egypt is fortunate - it has an obvious alternative leader, Mohamed ElBaradei, whom disparate opposition elements seem to be rallying around. Whether the next presidential election is held on schedule in September or moved up, ElBaradei, or anyone like him leading a broad opposition front, will probably win a resounding victory over anyone connected to Mubarak's National Democratic Party.

Make sure the old order really is gone.

The exit of a long-ruling strongman, such as Ben Ali, does not necessarily mean the end of a regime. Fallen dictators often leave behind robust political and security machines. No autocrat in modern times met a more immediate fate than Romania's Nicolae Ceausescu, who was executed by a firing squad of his own soldiers in 1989 just three days after a popular revolution forced him to flee the capital. Yet his successor, Ion Iliescu, was a corrupt former communist who obstructed political reform. Most of the former Soviet states, such as Georgia and Kazakhstan, had similar experiences.

Countries are much more likely to get to democracy quickly if they identify and embrace political leaders who are untainted by the old order and are ready to roll it back.

But also come to an understanding with the old order.

Victorious democrats won't be able to completely excise the pillars of the authoritarian order. Instead, for their country to turn toward democracy, those pillars must be neutralized or co-opted. This old order may descend into violence when, as in Iraq, broad classes of elites are stigmatized and ousted from their positions. In a successful bargain, most old-regime elites retain their freedom, assets and often their jobs but accept the new rules of the democratic game.

Unless the military collapses in defeat, as it did in Greece in 1974 and in Argentina after the Falklands War, it must be persuaded to at least tolerate a new democratic order. In the short run, that means guaranteeing the military significant autonomy, as well as immunity from prosecution for its crimes. Over time, civilian democratic control of the military can be extended incrementally, as was done masterfully in Brazil in the 1980s and in Chile during the 1990s. But if the professional military feels threatened and demeaned from the start, the transition is in trouble.

The same principle applies to surviving elements of the state security apparatus, the bureaucracy and the ruling party. In South Africa, for example, old-regime elements received amnesty for their human rights abuses in exchange for fully disclosing what they had done. In this and other successful transitions, top officials were replaced, but most state bureaucrats kept their jobs.

Rewrite the rules.

A new democratic government needs a new constitution, but it can't be drawn up too hastily. Meanwhile, some key provisions can be altered expeditiously, either by legislation, interim executive fiat or national consensus.

In Spain, the path to democratization was opened by the Law for Political Reform, adopted by the parliament within a year of dictator Francisco Franco's death in 1975. Poland adopted a package of amendments in 1992, only after it had elected a new parliament and a new president, Lech Walesa; a new constitution followed in 1997. South Africa enacted an interim constitution to govern the country while it undertook an ambitious constitution-writing process with wide popular consultation - which is the ideal arrangement.

An urgent priority, though, is to rewrite the rules so that free and fair elections are possible. This must happen before democratic elections can be held in Egypt and Tunisia. In transitions toward democracy, there is a strong case for including as many political players as possible. This requires some form of proportional representation to ensure that emerging small parties can have a stake in the new order, while minimizing the organizational advantage of the former ruling party. In the 2005 elections in Iraq, proportional representation ensured a seat at the table for smaller minority and liberal parties that could never have won a plurality in individual districts.

Isolate the extremes.

That said, not everyone can or should be brought into the new democratic order. Prosecuting particularly venal members of a former ruling family, such as those tied to the Philippines' Ferdinand Marcos, Indonesia's fallen strongman Suharto or now Tunisia's Ben Ali, can be part of a larger reconciliation strategy. But the circle of punishment must be drawn narrowly. It may even help the transition to drive a wedge between a few old-regime cronies and the bulk of the establishment, many of whom may harbor grievances against "the family."

A transitional government should aim for inclusion, and should test the democratic commitment of dubious players rather than inadvertently induce them to become violent opponents. However, groups that refuse to renounce violence as a means of obtaining power, or that reject the legitimacy of democracy, have no place in the new order. That provision was part of the wisdom of the postwar German constitution.

Transitions are full of opportunists, charlatans and erstwhile autocrats who enter the new political field with no commitment to democracy. Every democratic transition that has endured - from Spain and Portugal to Chile, South Africa and now hopefully Indonesia - has tread this path.

Fragile democracies become stable when people who once had no use for democracy embrace it as the only game in town.

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Today is the last day of the Year of the Tiger in Vietnam. Tomorrow is the Year of the Cat (while in China it is Year of the Rabbit).

There was so much talk about Vietnam being an Asian Tiger in the past. Now, there is a growing concern about the country getting into the "middle-income trap." There is a real risk that the country might turn out to be just a cat and not a tiger.

The Party is aware of that threat and is struggling to find the right path to accelerated prosperity for the people while maintaining political monopoly.

This talk will be from the perspective of a man on the ground and will try to separate the smoke from the fire and find the heat.

Mr. Kien Duk Trung Pham is currently the Chairman of Red Bricks Group, a private investment firm. He is the founder of the Vietnam Foundation and the Vice Chairman of the VietNamNet Media Group, the leading multi-channel media company in Vietnam. Prior to VietNamNet he was the founding executive director of the Vietnam Education Foundation.

In business, Mr. Pham was a market development executive in Fortune 500 companies as well as an entrepreneur in technology and consulting startups. In government, he served in the executive branch under Presidents Reagan and Bush, as well as in the U.S. Senate. He has established nonprofit foundations to assist college students, orphans, and the handicapped in Vietnam. Mr. Pham is publicly recognized for his leadership and management abilities.

Mr. Pham is active in international affairs. In 1986, he was chosen a Young Leader by the American Council on Germany, and in 1992 a U.S.-Japan Leadership Fellow by the Japan Society. In 1993, he was elected as a term-member of the Council on Foreign Relations and a participant in the American Assembly. Mr. Pham was the founder and chairman of the Vietnam Forum Foundation, a U.S. nonprofit organization that provides college scholarships, schools, and orphanage support in Vietnam. He was also a Board member of the Vietnam Assistance for the Handicapped, a leading humanitarian program to help war victims. In 1996, Mr. Pham was a recipient of the "Never Fear, Never Quit" Award.

Mr. Pham grew up in Saigon, Vietnam. In 1977, at the age of 19, he led his family on a high sea escape and came to the United States where they settled in Colorado. Mr. Pham became a factory worker, learned English, and later attended college on scholarship. He received a BS in marketing and international business from the University of Colorado at Boulder, and won a scholarship to study in England. His graduate degrees, earned concurrently at Stanford University, include an MBA in international and organizational management, an MA in international economics, and a special diploma in public policy management. In 1990, Stanford University named Mr. Pham among of the "Most Outstanding Alumni" in the school's 100 years of history. Mr. Pham is former White House Fellow and a recipient an honorary JD degree from Pfeiffer University.

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Pham Duc Trung Kien Executive Chairman Speaker Red Bricks Group (RBG)
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For over 2,000 years, banks have served to facilitate the exchange of money and to provide a variety of economic and financial services. During the most recent financial collapse and subsequent recession, beginning in 2008, banks have been vilified as perpetrators of the crisis, the public distrust compounded by massive public bailouts. Nevertheless, another form of banking has also emerged, with a focus on promoting economic sustainability, investing in community, providing opportunity for the disadvantaged, and supporting social, environmental, and ethical agendas. Social Banking and Social Finance traces the emergence of the “bank with a conscience” and proposes a new approach to banking in the wake of the economic crisis. Featuring innovations and initiatives in banking from Europe, Canada, and the United States, Roland Benedikter presents an alternative to traditional banking practices that are focused exclusively on profit maximization. He argues that social banking is not about changing the system, but about improving some of its core features by putting into use the "triple bottom line" principle of profit-people-planet. Important lessons can be learned by the success of social banks that may be useful for the greater task of improving the global financial system and avoiding economic crises in the future.

 

 

Critical Acclaim for This Publication

 “This volume provides a description of social banking and social finance, their background in the history of ideas and their importance within the current globalized economy. It is not only an excellent didactical introduction, but also an entertaining and at the same time scientifically sound and differentiated explanation, which to my knowledge is so far unparalleled in English-speaking academia. I believe that the insights of this volume can have a progressive impact on the thinking about money and finance of the new generations, as well as the broader public in theUnited States and inEurope. I therefore consider this volume to be one step (among the many necessary) toward a realistic and sober rethinking of capitalism. Even if it is just a brief text and thus a small step, it is an important one. Because, as German philosopher Friedrich Nietzsche said, every long voyage starts with a brief first step. And this step, as compressed, simple and surprising as it may sometimes seem, may prove to be inspiring for those which come afterwards. I think that Benedikter’s volume is a valid response to the profound challenges arisen with the economic and financial crisis of 2007–2010. The solutions and perspectives it proposes are useful tools to help us to avoid further crises.”

-Professor Dr. Hans Christoph Binswanger, Chair Emeritus of National Economics, University St. Gallen, Switzerland, and former director of the Swiss Research Association on National Economics, Zürich 

 

“The recent crisis has shown that the time for more differentiated and just approaches to money and finance is ripe. I hope that with this outstanding didactical introduction oriented not primarily toward specialists, but to students and teachers, as well as to the broad public, the discussion about how we can move forward in making better use of money and finance will gain further momentum. This volume is an important contribution to broadening the financial literacy of our time.”

-Professor Dr. Udo Reifner, Department for Economics and Social Science, Hamburg University

 

“This is a clear and intense text. It has the advantage of summoning up some of the most important questions of current economics and finance in a short, easily  understandable and well-structured way. The reader is on the one hand provided insight into the main issues of today’s debate about the future of capitalism. On the other hand, she and he are informed about the ongoing (r)evolution in the banking and finance sector. The present change goes beyond the traditional reductionisms of the mainstream banking and finance sector. It starts to demonstrate how the creation of economic value on the one hand and a sustainable social and environmental development on the other hand can be integrated into one and the same approach. The international educational sector has to be grateful for this volume.”

-Professor Dr. Leonardo Becchetti, Department of Economics, Università Roma II “Tor Vergata, ”Italy 

 

“One of the first soundly scientific publications of its kind in English, this volume provides a complete overview over the contemporary field of social banking and social finance. Written in a short and easily understandable manner, it explains the history, the philosophy, the current state, and the perspectives of social banking and social finance in theUnited Statesand inEurope. This volume is an indispensable first entry for everybody who wants to know how we can deal with money in a better, sustainable way.” 

-Professor Dr. Ernst Ulrich von Weizsäcker, dean emeritus, Bren School of Environmental Science and Management, University of California at Santa Barbara, former policy director of the United Nations, Centre for Science and Technology for Development New York City, member of the Club of Rome, ordinary commissioner of the World Commission on the Social Dimensions of Globalization  

 

“Without need of prior knowledge, this volume is the ideal introduction to social banking and social finance for students and teachers. As a result of the economic crisis of 2007–2010, the request for a better handling of money and finance has increased on a global level. Social banking and social finance are answers that while not everybody must agree with them, they are worth to be known by everybody who wants to join the discussion on a well founded basis.”

-Professor Hanns-Fred Rathenow, director of the Institute of Social Sciences and Education in History and Politics, head of the Center for Global Education and International Cooperation, The Technical University of Berlin

 

“Social banking is a field of civil society engagement that has surfaced to international attention during the most recent financial crisis. This volume is an excellent introduction from a contemporary viewpoint. It departs from outlining the main traits of the economic crisis of 2007–2010, but its insights and teachings are not limited to it. This volume uses the crisis just as a starting point to explain how the financial system can move forward toward a more rational constellation of balance and inclusion. It is as unique as it is valuable.”

-Professor Dr. James Giordano, The Oxford Uehiro Centre for Practical Ethics, Oxford University, director of Academic Programs of The Potomac Institute for Policy Studies Arlington, Virginia

 

“I appreciate particularly the interdisciplinary and multilayered approach of this volume. It is one of the first English publications that transcends the limits of reducing social banking and social finance to ‘developmental aid’ for the so-called ‘developing world,’ or to simply identify it with approaches like ‘helping the poor’, like it has been done too often in the past. Instead, as this volume shows, social banking and social finance are more: They are about rationally and soberly innovating the system of capitalism, but without revolutionizing it. That is because social banks consider capitalism as a basic social good of modernity, that in the aftermath of the crisis has to be transformed into a ‘better’ capitalism which serves the greater society instead of benefiting just a few. The whole argumentation of this volume is about creating a broader range of options for the average bank customer in theUnited Statesand Europeand to make the use of capital more ‘humane,’ by serving the specific needs of the ‘real economy’ instead of abstract speculation. This volume, although short and concise, gives a quite realistic picture of the situation and its perspectives. The author finds the right balance between simplification, precision, and vision.”

-Professor Dr. Michael Opielka, Department of Social Welfare and Social Politics, The University of Applied Sciences Jena, Germany

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Students and researchers who are interested in a stay in Austria will find a wide variety of scholarships and grants with the Austrian Agency for International Mobility and Cooperating in Education, Science and Research (OeAD). Programs range from broader geographical – and theme- oriented scholarships like the Ernst Mach programme, to more specific programs for individual fields of study (Franz Werfel for students of German language and literature; Richard Plaschka for historians), also including programs with a regional focus. These programs are designed for a worldwide application, except the Ernst Mach Grant for Austrian Universities of Applied Sciences, which is only aimed at non-European countries. All three programmes are funded by the Austrian Federal Ministry for Science and Research (BMWF).

To access information on grant programs and scholarship opportunities, please consult the OeAD's online database: www.grants.at.

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