The Evolution of an Idea: Integrity, A Chronology

LIFE, LIVING, AND WINNING THE GAME

Excerpt from a presentation given by Werner Erhard in San Francisco on May 23, 1973

CLEANING UP YOUR MESS

The mastery of life includes integrity. Integrity is the process of cleaning up the mess you made. We made a whole bunch of agreements and didn’t keep them. I said I wanted to be a chemist and never kept that agreement. I only made that agreement with myself, but I am very important in my life. So I have to get my agreement that it is alright to let that agreement go. Once I do that, the agreement ceases to exist. I start to look at the things that I agreed that I wanted to be, do and have, and find out that it’s all right not to be, do and have those now, and the agreements go.

I’ve also made some agreements with other people and I will have to handle those agreements. I’ll have to say to whomever I made the agreement, "Look, I made an agreement with you and what I’d like to do now is not to keep that agreement. I’d like to know what you need in order to be willing to accept that."

In your lives there will be people that you have an inherent agreement to communicate with that you haven’t communicated with. You’ve withheld your communication. You can go back and clean up that mess by taking responsibility and communicating with those people.

If you’ve left some problems unsolved in your life – and a problem unsolved in your life is one that keeps coming up – you can handle it by expanding your purposes to include solving it. All of a sudden, what was a problem ceases to be a problem. It becomes a part of the solution. For the most part, simply acknowledging to the person that you made an agreement with them, that you didn’t keep your agreement with them, or that you did something to them, would be enough to clean it up. Essentially, what you do it for is to expand your purposes – which are to make your life work – to include making their life work.

You can say, "My goal is to make my life work and for your life to work." You’ve got to clean up the mess with the people you have upsets with, the people you are out of sorts with. That’s the beginning of mastery. You need to clean up the mess you made, whatever the mess is. To make it effortless to clean up the mess you’ve made, you’ve got to assume the point of view that your purpose in life includes cleaning it up. That allows you to move from here to there and include on the way over, cleaning up the mess. You could also stop moving from here to there and go clean up the mess you made, but that isn’t necessary. If there are any things you’ve done wrong, any badness, any horrors, any secrets – if you’ve got any of that stuff in your life, you don’t have to stop your life. All you have to do is expand your purposes, so that the process of getting from where you are to where you want to be includes cleaning up all the messes you’ve made. That takes the heaviness and horror out of it.

-Werner Erhard

 

"INTEGRITY: A POSITIVE MODEL THAT INCORPORATES THE NORMATIVE PHENOMENA OF MORALITY, ETHICS, AND LEGALITY"

Academic Paper March 23, 2009

Werner Erhard, Professor Michael C. Jensen and Steve Zaffron define integrity and discuss their research linking integrity and personal and corporate performance. Their recent presentations have included, Harvard University's Center For Public Leadership at John F. Kennedy School of Government, Harvard Law School, Yale University, University of Rochester Simon School of Business, and posted at the Kaufman Foundation.

From the Abstract

"Our primary purpose here is to present a positive model of integrity that provides powerful access to increased performance for individuals, groups, organizations, and even societies. Our model reveals the causal link between integrity as we clarify and define it, and increased performance and value-creation for individuals, groups, organizations and even societies. And our model provides access to that causal link for private individuals, executives, economists, philosophers, policy makers, leaders, and legal and governmental authorities." Read the Full Abstract or Paper or View the Slide Presentation.

 

"PUTTING INTEGRITY INTO FINANCE: A PURELY POSITIVE APPROACH"

Harvard Business School; Social Science Electronic Publishing (SSEP), Inc.; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

November 27, 2015

Abstract

"The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare argue strongly 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 nothing more than a virtue (a normative phenomenon), the damaging effects of out-of-integrity actions are assigned to causes other than out-of-integrity actions – that is, these damaging effects are assigned to false causes. This makes the actual source of the damaging effects of out-of-integrity actions 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 actual source of these effects continue to be repeated.

Integrity as we define it (or the lack thereof) on the part of individuals or organizations has enormous economic implications (for value, productivity, quality of life, etc.). Indeed, integrity is a factor of production as important as labor, capital, and technology. Without a clear, concise and actionable definition of integrity, economics is far less powerful than it can be. So too finance and management."

"Putting Integrity Into Finance: A Purely Positive Approach" by Werner Erhard and Michael C. Jensen Ph.D. at Social Science Research Network (SSRN), Inc. This paper is also available at:

National Bureau of Economic Research (NBER), Also Online Appendix

European Corporate Governance Institute (ECGI)

Harvard Law School Forum on Corporate Governance and Financial Regulation

Harvard Business School Working Knowledge

THE MULTIPLE FACETS OF INTEGRITY IN BUSINESS AND MANAGEMENT

2018

The Multiple Facets of Integrity in Business and Management, Edited by Marc Orlitzky and Manjit Monga; Published by Rutledge, 2018.   Chapter 2, “Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics and Legality (Abbreviated Version)” by Werner Erhard, Michael C. Jensen and Steve Zaffron

In their introduction the editors write: "In Chapter 2, Erhard, Jensen, and Zaffron present an eminently well-argued, positive model of integrity, which clearly differentiates integrity from morality and ethics.  They argue that integrity, a necessary condition for the workability and optimum performance of organizations, exists in a positive realm and, therefore, can be the subject of social scientists' descriptive, observational study of behavior.  Their definition of integrity as honoring your word is clearly differentiated from the normative realm of morality, ethics, and legality.  The authors show that defining integrity as honoring one's word provides an unambiguous and actionable access to the opportunity for superior performance and competitive advantage at different levels of analysis and empowers the three virtue phenomena of morality, ethics, and legality.  This chapter is most consistent with the conceptualization as behavioral integrity, the first facet of integrity introduced above."