Book review: The Politics of Integrity

The Economics of Integrity: From Dairy Farmers to Toyota, How Wealth Is Built on Trust & What That Means for Our Future
Anna Bernasek
harperstudio/an imprint of HarperCollins (2010)

As Anna Bernasek suggests in the Introduction, “If we ignore the important ways that people cooperate to create wealth, we miss the most valuable source of wealth creation imaginable. Recognizing the true value of relationships, we can build stronger relationships and create and share greater wealth. It’s a powerful way to reinvigorate the economy.” With regard to this specific book, she explains, it is a tool kit “for creating integrity anywhere in the economy. When policy makers are thinking about changing health care, reforming the tax system, or improving the financial system, they can use these tools to systematically build value. I encourage readers to see that integrity unlocks enormous opportunities for wealth creation that we may not yet imagine.”

Throughout her lively and eloquent narrative, Bernasek examines a number of situations in which everyone involved benefits because they do what is right and do it right, who abide by rules that “set people free to do the right thing, rather than holding people back,” rules and values that encourage activity and create more wealth. What is required to deliver a gallon of milk offers a case in point. Here’s the supply chain: farmer (serviced by feed supplier, co-up, vet, hoof trimmer, and nutritionist) > milk hauler > second driver > milk plant > distributor > store > consumer. Prior to point of sale, everyone involved must be both worthy of trust (i.e. honest, following the rules, being careful on the job) and trusted by everyone else. These relationships of trust throughout the process require an integrity that produces value for everyone involved.

The other examples that Bernasek examines include the ATM value and supply chain, what the Federal Reserve is and does, Toyota’s production system (whose integrity has recently been rigorously questioned), L.L. Bean’s total trust in its customers, W.L. Gore & Associates obsession with quality, and eBay that provides a mini-case study of mutual trust within a multi-dimensional structure. When eBay was launched, its backbone was a feedback that subsequently underwent several modifications. “Users if eBay get feedback on how they conduct themselves from other users. This was critical for two reasons. First, the feedback system provided users with an incentive to behave well.” Misbehave and you cannot be associated with Ebay. “Second, the feedback system effectively brought everything out into the open.” In terms of behavior lacking integrity, Martha Reeves and the Vandellas said it best:

“Nowhere to run to, baby
Nowhere to hide
Got nowhere to run to, baby
Nowhere to hide”

I agree with Bernasek that the potential ROI from a commitment to personal integrity will be substantial for an individual and even greater in direct proportion to the number of people who share a commitment to collective integrity. The potential applications and benefits of the principles that Anna Bernasek affirms are unlimited. I share her hope that our nation will adopt the economics of integrity even as I fear that the “legions of entrenched interests eager to protect their turf,” seeking its own advantage through special pleading and sophisticated public relations,” will once again prevail. How can we expect them to demonstrate integrity when they do not possess it?