Posts Tagged economics
80% of the world’s population live in what any middle class westerner would regard as abject poverty. Many live in destitution.
So many people know intuitively that they don’t belong where they are, even those who were born where they are.
So many are looking for that home, that small place where they belong in contentment, with family and friends and pets, and a small garden of their own. And all of these people are the daughters and sons of mothers and fathers, and they’re brothers and sisters and cousins and aunts and uncles. Just like everyone else. Like you and me.
What is it then about the way we run things that allows so many people to be so unhappy? Everything required for everyone is there and available. If we’re so clever, why are we not able to moderate our behaviour to account for all of our real needs, rather than for the imagined needs of just a few? What would it take?
For the past ten years or more, I’ve pondered the state of humanity and the world we believe we’ve created, dependent as it is upon a natural environment that we continue to take for granted. I’ve looked at most issues – from antibiotic resistance to population growth via land use, deforestation and biodiversity reduction, economic inequity and excessive consumption, pollution and climate change. I’ve seen how all of these problems are interlinked and are interdependent. How all cause each other.
I’ve seen how our political and economic systems manage these issues as stovepipes, independent from one another. And I’ve seen how religious and political dogma work against the human ability to rationally assess contexts and solutions. How ignorant people are led by ego driven fools. And I’ve seen how our simple minded greed is driven by our selfishness.
In short, I’ve seen how our ignorance is driving our demise, as well as that of most other species, compounded by our stubborn stupidity and ego.
I believe that human civilisation, as we understand it to be, will be no more eighty five years from now. And that within four decades, we’ll be experiencing a sense of upheaval that will render most people’s lives unpleasant at best, untenable at worst.
That by the end of this century, humanity will comprise some ten percent of its current volume, some existing self sufficiently, growing their own food and living a simple life, whilst a minority contiue to try to utilise our knowledge to our advantage, but in doing so come to represent an elite that may have complete control over the rest. The ignorant will finally become subsumed, and the fate of humanity will rest with the ability of those with knowledge to resist becoming arrogant. Our final destiny lies with these people.
I don’t have much hope.
Past the train station.
Its old stones and arching glass having seen
Tanks and wars and revolutions.
I stood amongst shoppers with garish bags
From all the top brands.
Then past me walked a woman in blue plastic
With tears running down her face
As she saw the cold night ahead living on the street.
And I wanted to give her something to help
But I didn’t.
I stopped and turned and watched her walk away
Through the hurried, selfish crowd.
Now it’s I who weep.
For my weakness.
If you stopped to ask him why,
As he sat filthy bent there on the street,
A few small coins in a paper cup,
Would he lift up his sag skinned face,
Filthy creased leather and wire wool beard,
Eyes red rimmed and shocking piercing,
And answer you?
Would he tell you his story?
Would he warn you why?
Would he tell of children and lost love?
Of missed chance and chances taken?
Would his eyes water with regret
Or turn deep with hidden meaning?
Or would he ask you the same question?
Whether the majority of us know it or not, humanity is undertaking massive genocide of hundreds (actually it’s thousands) of species of other creatures. We are proactively creating the Sixth Great Extinction, the last one being of the Dinosaurs. In doing so, we’re destroying the very biosphere that supports us. We are without doubt, unfathomably stupid.
The last Great extinction occurred 66 million years ago. And it took at least a thousand years, probably several thousand. If you map the lifetime of the Earth to a 24 hour clock, humanity has been around for about 4 seconds. In this blink of the planet’s eye, we’ve eliminated at least a third of the world’s forests and hundreds of thousands of species. If we’re so stupid as to commit collective suicide through religious and political dogmatism and ignorance, that’s our choice (and it is a choice). But we have no right to take every other species down with us.
And all this derives from our value systems. The way we perceive what wealth is, and how we manage it. Money. Particularly debt based money. And the externalisation (leave the consequences for someone else to clean up) of the bad impacts of wealth acquisition. The conventional political right and left both maintain these value systems, and many religious perspectives, especially in the US, support and advocate them under the guise of ephemeral supposed ethical standards like ‘freedom’ and ‘the work ethic’. How many corporate CEOs and bankers attend church every Sunday? Did you know that the pay of CEOs has risen 127 times faster over the last thirty years than 99% of the US population? What do you expect the consequences of such greed and inequity to be, particularly at a global scale, if not conflict? And as this money wealth is squirrelled away or squandered on yachts and stupidly big houses, it’s unavailable for such things as building cities that are worth living in for everyone, for education and the encouragement of more enlightened perspectives, the protection of the very biosphere that contains and supports us, and every other crying need that the fruits of all our labour is supposed to allow us to cater for. Yet the religious right encourage it.
Factor in other emerging crises like the impending failure of our medical systems through antibiotic resistance, shifting and more extreme climate events, ocean acidification and the consequent destruction of marine food resources, desertification and water shortage.. and a host of others, virtually all caused by humanity, and there’s good reason to believe the better minds than mine that predict global ecological, societal and economic collapse within just a few decades.
Life comprises many strands. Like sine waves, they overlap each other. Some peaking as others dip.
Music is one such sine wave. As a cultural phenomenon. In the West, the music sine wave peaked in the 18th century with the advent of music from the likes of J S Bach.
In terms of happiness, that wave probably peaked just prior to the First World War. Or perhaps shortly after it.
The sine wave for the visual arts has a longer wavelength, and probably last peaked in the 19th Century.
The wisdom wave arced high in the 1960’s, even as it became dissipated and high jacked by perceived economic necessities.
Economically, in terms of managing money within our societies, we probably last knew a peak in the 1950’s and again the 60’s.
But one thing is for sure. With the noble exception of the technology sine wave, all are at a low right now.
Don’t make the mistake of thinking that global problems and issues are the result of human nature. A couple of years back, when the Somali pirates were frightening factory fishing trawlers away from the East African coast, indigenous local Kenyan fishermen suddenly found that they could catch enough fish to feed themselves, and have enough to sell again. Because the bloody foreign trawlers weren’t in there taking all the fish. Indigenous people worldwide don’t overfish. It’s the fishing practices of the so called developed world that do the damage. So called developed simply because they have a sophisticated consumerist, market economy. And this is where the root of the problem lies. Our economic model derives from an experiment that emerged after the second world war. It was called the ‘American Dream’. As many cars and gadgets as possible in every household, and a household being based on the nuclear family model. Out of that has sprung an economic system that is obliged to grow, because its debt based money creation system needs growth in order to pay the interest on its money (making the banks rich). So everyone is encouraged to consume. Our societal narrative is to consume means success. No form of natural capital is seen as capital until its converted into cash. And then we think we have economic growth, when in fact we simply have a process that converts one form of capital into another, to the detriment of the first form which is finite but isn’t regarded as such.
We abuse our resources because our economics don’t see those resources as capital. And our social values are such that we assess each other on how much the other owns (or consumes). But this is a societal narrative, not some genetic driver born of ‘human nature’. We chose to run things this way. And we have a political system that puts power in the hands of people who are ignorant of the facts, namely democracy, which itself is then undermined by industrial vested interests whose only concern is to play the game they understand, which is to make loads of money, and stuff everything else.
It’s a human invention, this system. Not a force of nature. We don’t have to manage things this way. But in the UK we can choose between the Conservatives (name speaks for itself) and Labour (who are so close to the other lot as makes no difference), and in the US you have the Democrats who can’t fart without permission from corporate demagogues, or the Republicans who are, in a nutshell, the same corporate vested interests, sometimes hiding behind stupid religious children who don’t understand the world. So democracy, as we’ve chosen to implement it, is failing. Our systems are failing. They’re tired and outdated and have become corrupted. The experiment needs to be evaluated now. This is the challenge now… to reinvent our narratives and to start again with a new approach, taking the best of the old and casting off the poisonous bits, reinventing our societies and bringing them back inline with values that are more true and which make more sense.
There was a woman who stood beautiful,
Who being made of stone and soil, was as tall as the clouds
And who looked down even as her legs were blasted to dust.
As she cried her imperious cry to the righteous,
Her voice was drowned by the sound
Of the driven masses.
As she reeled and collapsed into the swarming crowd below,
She pleaded with them to hear her dying message
As she shrivelled and shrank before her time,
And crumbled into her own sweet ground,
Reaching out to the plaintiff sound
Of her own kind as they died.
That the power of markets and democracy are two different things.
Power and voice like oil and water.
One floats upon, and smothers, the other.
That the land of the free has become the great illusion,
Corrupted by the greed of the few,
And allowed by the complacency of those
Who think they know better.
Much as I want to believe in one of the new, sustainable versions of capitalism that are being widely discussed at the moment, I’m not sure the concept is feasible.
Business is dependent upon capital for its survival. Capital derives from the financial system. Our financial system is debt based. Debt with interest. So any business, or any national economy, must grow in order to pay the interest. It must run to stand still in other words. It has to grow to be bigger in order to pay back the money it borrowed, because the value of that debt is itself growing, and so to reduce the size of the debt, the borrowing organisation has to grow faster than the value of the debt.This is surely the first systemic flaw. And Governments need businesses to grow in order to generate higher taxes with which to pay their own growing debt. So the idea of economic growth is built into the system and cannot be avoided.
A second systemic flaw might be that any business’ raison d’etre is to generate wealth for its shareholders and directors. Regardless of how it prioritises its environmental responsibilities, or its social ones, it will only be paying attention to them in order to fulfil its first objective, which is the generation of surplus profit, and I doubt its possible to change the system such as to stop individuals wanting too much. So the business will always seek to maximise this surplus profit. This is a strong incentive to minimise employee wages as far as possible, and also to externalise costs wherever possible. This too cannot be avoided as long as businesses seek to maximise profit.
A third systemic flaw might be that within the marketplace, any commercial organisation, being driven as it is to grow, will seek to take over smaller businesses until the market in any sector is controlled by a very few, very large businesses. These become unwieldy and difficult to control. They become unresponsive to local needs because policy is driven from a far away central point. A kind of commercial version of a centralised Soviet state. A few large organisations reduces choice in the marketplace, so consumers can no longer exercise influence over product designs by choosing competitive products. And the large organisations themselves become so fabulously wealthy that they start to exert political influence within national governments, despite their never having been elected to any such position of power, and their underlying focus on generating shareholder value means their influence is used to the advantage of their own vested financial interests. Again, I don’t see how this is avoidable.
A fourth flaw is the obvious one from the perspective of sustainability. For a business to grow, it has to sell more. To do this, more of its products need to be consumed. Increased consumption means increased resource use whilst sustainability requires reduced resource use. So everything that is required of business and which drives it, and which is its essence, is completely the opposite of what can be sustainable.
Surely, a sustainable, capitalist market economy must therefore be an oxymoron.
The whole global paradigm that is the modern economic and business infrastructure seems to have the appearance of a slow motion train crash… too big and with too much momentum for us to be able to stop it, even as we anticipate the impending explosion.
I’d love to be proved wrong.
And there came a time when to sigh or to cry
Was deemed antisocial behaviour.
So we all put our shoulders to the grindstone
And behaved the right way.
But up there in the tops of the various towers
They laughed at us and took away
What was rightfully ours.
Then one day the foundations of a system
That all abhorred
Shook and trembled
And started to fall.
Now the trick is how to make sure
That the fragments of crumbling edifice
Are shared well between those
That made it all happen
And those for whom
Wealth and justice
Befalls those who play the smartest game.
And how to generate a society
That makes manifest humanity’s greater wisdom
Without having to shoot the lot of the bastards.
Whenever I consider alternative perspectives to the status quo, for example those espoused by E.F.Shumacher (whom I read when I was 16), I can’t help but visualise the sentiments expressed being sold to the majority of the world’s population, which of course is what’s required. Be those prospective recipients of ‘the message’ residents on a tower block estate in Liverpool, or a slum in the scrambling chaos of India, or rednecks in endlessly consumerist America, or aspiring young executives in Nairobi. Or even disease ridden children in Sudanese refugee camps. And then I wonder just how one would apply such ideals. Youfs in Liverpool just want lager and football, and money to pay for them. Slum dwellers in India want a house, and land and status in a country that just doesn’t have enough room. American Republicans have enormous power and also have an ideal that they too cling to tenaciously, however simplistic and naive it may be. And people all across the world, from Sudan to Bolivia via the South Pacific islands need electricity, and medicine, and a framework that allows them rights of tenure and the means to acquire the goods to build themselves a house and pay for everything from education to windows. This is the way the world is. The experiment that was the twentieth century and the resulting economic and social paradigms that grew from it has, unfortunately in its entirety rather than selectively, been accepted as the way to do things. And another unfortunate truth is that, as things stand, the kind of large scale commercial operations that now exist may represent the only sufficiently large scale approach that can provide sufficient economies of scale to provide all these things.
It seems to me that there are a few key variables in the human context that have primary influence over our ability to manage things.
One is population growth. If, theoretically, the population of the world was suddenly frozen where it is, then we’d have time to rearrange things to bring those that don’t have enough, and those that have too much, more into align with each other and with available resources. But as things are, each unit of progress is swallowed up by another unit of population growth, and the physical constraints of resource availability ever more stressed, are ignored.
Secondly, there’s the question of wealth creation and distribution, and what we consider to be wealth. The twentieth century experiment has produced a system where the entities that are supposed to allow us to organise to generate wealth have a twisted idea of what wealth is, and at the same time, they are designed to function in a system that requires them to only generate that form of wealth, and then only for a select few, namely their shareholders. The scale issue mentioned two paragraphs above suggests that we need large organisations. That’s not the problem. It’s who owns them, how they’re run and for what purpose that needs to be considered. There are many forms of wealth and cash is only one of them. Whilst cash works if treated as a means to achieve contentment for all, it doesn’t work if its seen merely as an end in itself and ‘success’ is deemed to be the acquisition of more money than one needs. It’s possible to be a lonely and depressed millionaire in New York as it is a depressed homeless person on the streets of Mumbai.
Finally, there’s the problem of establishing a sustainable common view of what humanity should aspire to. If we assume (and I’m really not sure) that democracy is an ideal, or is anyway the least undesirable of all of the alternatives, then this is a fundamental requirement for moving forwards in the right direction. But in countries where democracy does indeed exist, the majority of the populations are largely ignorant of what the true issues are. Be it climate change (clueless about the science) to economics (dunno… just want to get this mortgage off my back, or worse, get a bigger one to outshine the neighbours). What is the practical way then to initiate a kind of massive paradigm shift (apologies for the cliche) in people’s perspectives such that they shift their priorities? How do you do it? How? Unless the majority of people, in democracies or not, from the Liverpool footie hooligan to the Mumbai slumb dweller via the New York corporate CEO, change their understanding and their aspirations, and the focus of their concerns, requisite change that might make a real difference and divert us from what appears at the moment to be a disastrous route, is surely unattainable. And just how do you persuade religious fundamentalists that they need to change? Be they nutcases in the US, or even greater nutcases in Afghanistan and Pakistan?
I actually have a more positive perspective than this rant may suggest, although I fight shy of trying to explain to myself why. A key tenet of the book I’m supposed to be writing (if I ever finish it) is the concept of temework. Not a spelling mistake but an acronym that stands for technology, education, moderation and equity, brought together into a strategic, societal framework that emphasises policies designed to encourage each of these aspects. We need technology. We need really clever technology that’s designed to suit our real requirements. An example of a real requirement is clean energy. 3D television is not a real requirement. A solution to providing clean energy lies with some really clever, bleeding edge stuff that costs a hell of a lot of money to research and develop… so we need institutions that have the cash and are incentivised to spend it in this way – think about that. Certainly for me, as a cynic of corporate organisations, it’s food for thought.
For example, it’s possible to burn coal, which is by far and away the most plentiful resource (ok.. what about wind and waves etc.. but think realistically about scale and cost and implementation) in such a way that hydrogen is generated, which can power fuel cells, the only by products from which are water and CO2, which can now, thanks to some phenomenal and very expensive scientific work, be combined with silica to make house bricks. Wow. Clean energy and cheap building materials, from the worlds most easily accessible energy resource. The kind of intermediate solution on the road to ubiquitous renewables that might actually be useful in a world of 9 billion people, most of whom are homeless and energy starved, in a world threatened by CO2 emissions. And remember that this coal resource is being used anyway. Now. That’s the reality. The Chinese are building masses of power stations based on this fuel. And neither you, nor me, nor anyone else is going to stop them. We haven’t got time to discuss niceties. Climate change is happening. We have to work with the realities. And technical innovations like this CO2/fuel cell stuff might allow that. But it wouldn’t be happening if as a society, we just turned away from the institutions that we have instead of working with them and modifying them. And they need modifying. Both corporates and Governments, to reflect different and more pressing realities. Why on earth are our oil companies subsidised with tax payer’s money? Because our Governmental priorities are all wrong. Why is the development of clean energy technology driven only by the corporate profit motive and not as a desirable thing to happen in society? Because in that simplistic, 20th century model, money is the only way we have of reflecting value or defining aspiration.
So that’s technology. There’s also GM crops, and alternatives to antibiotics (would we be objecting to those if they wee just being invented?), and nuclear power, and the meat debate, and the vulnerability of mega cities, and desalinisation, and a whole load of technologies that could have the kind of short term beneficial impacts that we need. But that would take too long to talk about. All take loads of wonga though, and very complicated organisations to make them happen.
What about education? Again, the problem seems to be one of trying to shift established paradigms. We in the west, and elsewhere now, raise our children to aspire to make money. In a sense we have no choice, because by virtue of the fact that we ourselves (in the main) are spending most of our lives focused on that objective, our children of course acquire the same habit. And its all exacerbated by the trash media that promotes such aspirations as being proper. There’s actually nothing wrong with seeking to be comfortable, but no one is ever taught about the costs. No one is ever taught about the context that enables us to be acquisitive, and what it actually means. How many American children realise that whilst the US comprises some 5% of the world’s population, it uses some 25% of its energy and creates about 26% of its waste? All that energy is sucked in from other parts of the world, where people can’t afford it. And the ignorance of those American children who, were they to know the facts would probably act to create a better world, is down to an educational system that just doesn’t tell them. The whole system rattles on as though it were still 1895 and the internal combustion engine was emerging as a catalyst of a whole new dawn of humanity, that led to that great 20th century experiment. It’s daft. The world has changed, as have priorities. But just how the hell do you change a global school education system? It’s hard enough faffing about with primary school syllabi in the UK. And then there’s religious fundamentalism, and celebrity culture, and home influences related in turn to poverty and ignorance etc etc. And don’t get me started on stubborn adult ignorance.
Then there’s moderation. Oh dear. Big one this. Has fingers in every pie. Everything from the education system to social hierarchies, to workplace ‘success’, to pension systems all point towards more and more acquisition and stuff. The whole idea is so entrenched in just about every aspect of every society on earth. And who’s to tell those in developing countries that they shouldn’t aspire to more than a mud hut and one meal a day if they’re lucky? But as such realisation manifests, the great machine kicks into gear and all of a sudden, a level of wealth that approximates to a global average kicks in as the minimal desirable objective. Of course, we all know that that average is hugely distorted by unequal distribution of resource use, but (back to education) how do you convince millions and millions of people that that’s the case? And that the rich should become less materially well off so the poor can become materially better off? And then there’s meat eating, and water use, and power use, and land use etc etc.
Finally there’s equity. Touched on already (all these issues are interlinked and interdependent). The debate about inequity isn’t based upon the idea of equitable distribution. It’s based upon the idea of everyone having the same degree of material wealth as the wealthiest. That’s what economic growth is about. That’s what ‘developing ‘ countries are developing for. To be the same as the US or Europe. But it’s not possible. Or rather it is, but only if some really smart tech is embraced really quickly, and then there’ll be a different sort of price to pay from the environmental decimation that we’re witnessing now. Rather a sort of environmental modification. Where wild spaces are no more but exist only due to benevolence, and most are utilised Be that with bloody great wave or wind farms, or factory farmed GM agriculture, or organic farmholding forced on people who’d rather not have their material aspirations capped by government. Consider the practical ideal of Contraction and Convergence, as espoused by Aubrey Meyer. Yeah, yeah. Well done Aubrey. Completely agree with you. Now go and tell the Chinese and the Yanks.
Which ever way it plays out, a crowded planet, with too few resources, lots of ignorance, too much religious bigotry and prejudice and an economic system that’s not only too inflexible but is based upon the wrong objectives, is not a context where higher ideals can be applied. One might believe in them, but there’s a danger that doing so is only to satisfy some selfish need to feel good about oneself. OK, OK. Better than doing nothing.
We have no choice but to hope that a greater wisdom will come to prevail. But the truth is that it isn’t going to happen quickly enough, and the sheer scale of the global change that’s required is too big. Unless we all stop arguing, look at what we have, become far more realistic about what’s required and what’s possible, and very rapidly implement global changes that must include the adoption of technologies like nuclear power, and hydrogen power, and solar and the rest, and GM crops in the right (non commercial) way, and land redistribution, and the changing of the whole prerogative and raison d’etre of all out of our economic, religious (fat chance) and commercial institutions, implemented according to national and local circumstances and needs, to reflect the actual global priorities that we now face. Not to mention changing the personal aspirations and value sets of millions of people. That requires a complete reassessment of what is meant by democracy – less big govt and more devolution. National institutions that exist to serve a national need, such as health, pharmaceutical research, energy research, education. Economies that are structured to reflect real, local needs, including changing the way people belong to organisations. People are not ‘human resources’ . People ARE the organisation. The organisation exists to serve our needs. Not the other way round. Look at the Mondgragon Corporation for an example of a different and better way of organising corporates, with broader and more realistic objectives and priorities. Local organisation to allow differentiation and freedom from enslavement to an outdated economic dogma, and the profit driven corporate institutions that represent it.
I doubt it’s going to happen. But I live in hope. Only just though. And I switch between stressed out ‘aware person’ and ‘oh fuck it’ resigned person.
A corporate is a human construct. It’s not an aspect of nature that we have no choice but to contend with. We make corporates. They’re a device designed to facilitate the satisfaction of needs and the exchange of wealth within our societies. We made them. We are not beholden to them. We’re supposed to control them.
If it becomes apparent that the activities of corporates, as driven by those who run them, is going against the general good, then we should be able to effect them such that they stop working against us and continue to work for us. Isn’t this common sense?
Two elemental forces play a big part… democracy and greed.
We seem to have built societies that use wealth as a measure of everything that’s of value. The unending complexity of our societies requires that we have formulae to allow us to calculate appropriate ways forward in virtually every regard – cost benefit analyses. So everything becomes reduced to numbers, and the only available metric that could arguably encompass all variables is a monetary one. Just how much is that landscape worth to you? Enough to pay off your mortgage? More? Less? Never mind your first reactions. When the man from the corporate comes knocking on your door with a checkbook, what’s your price?
Democracy is supposed to be a process whereby decision making is collective. Decisions are supposed to reflect a consensus, and the supposition is that a consensus represents a kind of average view that stands the best chance of satisfying all parties at least to some degree. Those whose opinions vary from the mainstream are quietened by needing to acknowledge that their view isn’t shared by most and therefore wouldn’t command many followers. And so would probably be unworkable.
This all depends upon what people regard as being worth voting for. Why do people vote the way they do? Broadly, two reasons. national or global interest, or self interest.
Corporates are human constructs, but they’re also devices of power within society. Given the power of their role, they ought to be subject to democratic principles. But they’re not. Instead, they’re subject only to the democracy of people who deem the corporate a device for personal wealth creation. Noting else. Shareholders. People who could live anywhere on the planet, who’ve bought shares in the corporate with a view to selling those shares at a profit at some point in the future. And Directors, who can become wealthy beyond the wildest dreams of almost everyone, and they do.
Remember that these organisations… these corporates… are societal devices that we invented to facilitate general well being. The provision of goods and services, of social well being and of employment.
But corporates are run by people who’s brief is to generate profits for shareholders. They have no other defined objective. They’re not subject to any democratic process beyond that which reflects the ambitions of shareholders. In our free market economy based society, corporates seek to grow. And they do this by swallowing up any other company that threatens it’s position in the market, or which offers it the opportunity to become more powerful. Ultimately, corporates wield such power of the distribution of wealth and jobs that they become powerful enough to influence the decisions of our governmental representatives in our democracies even though only a tiny minority of vested interests ever voted for them.. the shareholders. And their motives are not necessarily for the common good. So these organisations that wield such economic and political power, with their industry lobbies and their ability to fund political parties, with all the societal ramifications thus implied, are in effect mini republics in their own right, the electorates of which vote purely out of financial self interest.
So where are we? We live in a democracy, but it seems that an undue proportion of influence within a system that is supposed to be driven by majority sentiment, which in turn is supposed to reflect a desire for a common good is actually driven by financially driven minority vested interests.
Why do these corporates wield such power? And is it a bad thing? Let’s look at our key players again; democracy and greed.
On the democratic front, corporates appear to lose out completely. But if there are enough corporates, and everyone in society has a shareholding, then doesn’t this equate to increasing democratic control over the means of production? No actually. Firstly, the way wealth is distributed means that most people are unable to become shareholders, as they simply can’t afford it. And even if they could, corporates standardise their operations wherever they are and are rarely able to accommodate specific local needs and requirements. Just because Joe Soap happens to own a few shares in ABC Inc, doesn’t mean he’s then able to influence their decision to demolish two hundred houses to make way for a shopping mall in his community any more than he’d be able to as a non-shareholder.
And as far as greed is concerned, as long as the raison d’etre for a corporate is the generation of shareholder profits, and nothing else, then by virtue of this, other priorities will always take second place. The whole organisational edifice is structured to harvest money from everyone in society and to funnel it to shareholders, and in particular to the top of the organisation. And if it can achieve this, then it’ll be deemed to have been successful, regardless of any negative impacts it may have on other aspects of life.
In short, a corporate’s financial interests are rarely the same as the interests of the regional or national communities in the more immediate sense. Consider a mining or oil production facility that destroys or at least damages the local natural environment, removing that form of wealth from the people who live there and making billions from it on global markets. Or a factory in India that employs people on a pittance working fifteen hour shifts to provide cheap clothes for the West at a huge markup to the cost of production. Or closer to home, a retail giant that overwhelms and kills local businesses purely by virtue of it’s enormous buying power and control it wields over suppliers, and the resulting uniformaity of choice, wherever one goes within a given country. All three examples are making money and so are deemed to be successful. But if one agrees that a corporate is supposed to exist to be of use and benefit to society, are they successful?
Consider how wealthy countries rely upon cheap labour for their quality of life. Corporate buying power in a globalised world. How cheap would plastic toys be if they were produced in America? And whilst you’re about it, consider how carbon emissions by consumer oriented countries such as constitute the West are actually externalised to other countries such as India, where the goods they use are produced. So the carbon emissions of those factories are deemed to be Indian, even though the factories only exist to supply cheap goods for the West. Things operate in this way regardless of the nature of the national governments that are in place. Corporates operate in a global economy and governments are malleable.
There’s a need for a third player to balance the greed and the lack of democracy. Wisdom. Corporates are constructs designed to facilitate progress and structure in society. So why are they run in such a way that their only prerogative is the generation of wealth for the people who run them and for shareholders who are usually unaffected in their lives by their physical activities? We need to be wiser in the way that we utilise these constructs within our society. We’ve allowed ourselves to forget why corporates exist. We’ve allowed them, as legal entities, to get out of control and to dominate us rather than serve us. We need to redefine what the corporate is and why we have them.
And in the process of doing this, we need to look again at our own individual behaviour. Just what are aesthetic and qualitative benefits worth to us? And how do we value them? Is monetary value always appropriate? And are we sufficiently driven by a desire for general well being, as much as for our own?
We need to reconsider how our corporates are run. Who they’re run by and who they’re run for. And what they’re run for. And we need to look again at the concept of shareholders. Who should own the shares in an organisation that can wield such enormous damage, or benefits, on communities locally, or on democratic nation states?
We need to consider why we have corporates. A wiser approach to the way we implement them at present would surely include consideration of who owns them, and how the real interests of those affected by their operations is reflected in the purpose of the organisation. The generation of monetary wealth is all very well, but if the end result is inequity and the exploitation of people, and the degradation and destruction of other more abstract forms of wealth such as quality of life, happiness and the aesthetic value of the natural environment, all to serve the burgeoning bank balances of a few, then these institutions that we’ve invented are failing. They need to be reinvented. They need to be formed in such a way that they nurture and support society and people and the world we live in. They need to be forces for positive improvement and progress in a sustainable way, that preserves all forms of wealth and value and benefits us all, including generations to come. They should be tools within democracies that further societal well being and progress.
Corporates are constructs that are supposed to work for us. So it’s time they functioned as more integrated components of democratic society that reflect our real needs, and they should be utilised in such a way that recognises all forms of wealth and value, not just cash.
[There are no truly good examples. Yet. But one that goes a long way in the right direction is the Mondragon Corporation. See http://en.wikipedia.org/wiki/Mondragon_Corporation for more.]
Consider a number of the issues that humanity faces right now. Population growth. Increased resource use. Increased energy requirements. Increased food requirements. Increased water requirements.
Consider the context in which these requirements are being expressed. Increasing droughts and floods. Increasing corporate hegemony. Huge changes in global balances of power. Universal aspirations to the traditional American -way-of-life. A consumerist model, with an economic system that’s based on debt, both at an individual level and a national one. So growth is required just to pay the interest on the debt.
Where does all this reach some sort of equilibrium? Some real balance between supply and demand. Some state where people are happy with their lot.
Climate change is just one part of the dynamic that’s changing the world we live in. But why it’s significant s that it permeates all other aspects of our lives and our plans and our aspirations. It affects all of the processes that we rely upon to achieve our objectives. It causes disruptions to food supply. It causes floods and great storms. It fundamentally alters the physical context in which we operate. It changes our world. Therefore it has huge implications for the way our societies operate.
Climate Change is not the only issue that we face. There are a whole army of them. Most are caused or exacerbated by climate change but all are increasing in significance at exponential rates. Whilst climate change is a fundamental driver for many of these issues, we also have to deal with:
- Growing populations and their inherent increases in demand on resources.
- Simultaneous growing affluence and its resulting increase in demand on resources, such that this demand is accelerating.
- Microbial resistance to antibiotics and the consequent inherent threat of the undermining of many medical advances since the mid 20th century that are dependent upon antibiotics.
- Oil and energy resource shortage as demand increases and supplies become ever more hard to recover and ever more tenuous and unpredictable in their longevity.
- Increasing inequity between a small minority of people in the world, who increasingly control mote of its assets, and the vast majority who, on an average basis at least, have very little and who are powerless against a system where money is all powerful.
- The evolution of mega cities, where all of our problems become concentrated.
- The loss of biodiversity, the very aspect of the natural world that supports us that enables it to do so, and which allows for a flexible planet that’s able to accommodate typical crises.
- Competition between the need to use land to grow food, and the need to preserve natural environments and biodiversity that enables the ecological systems that support the production of plant and animal based food in the first place.
- Water shortage as more people use more, depleting underground aquifers, whilst climate change alters supply as rainfall patterns change, glaciers retreat and deplete dependent rivers, and precipitation that once fell as snow now falls as rain and runs away, causing floods.
- Accumulating waste as we continue to convert natural resources into short term material products that are discarded and thrown back into an environment that can’t break down their constituents quickly enough.
How the hell does all of this add up? The great challenge facing the people of the 21st century is how to reconcile their aspirations with what’s available to satisfy these aspirations. Never before has humanity been in such control. And never before has it been so hungry for more. How we deal with this conundrum over the next few decades will decided how we survive. Not whether or not we survive, because we will survive, but in what way we survive. We have reached a crux point, where we need to choose between different directions. For the first time we’re able to choose our own evolutionary path. And the worrying thing is that we don’t seem to realise that that’s the decision we’re in the process of making.
Consider all of this. Think about it. Look at the world about you. Research. Read. Think. And when you’ve realised for yourself what’s happening, take action. Join in. Rise and sing your own opera. For the sake of your children.
There’s an interesting post about whether development or democracy comes first, on the Global Voices website .
The fact that China has enjoyed such phenomenal growth for so long would seem to undermine any view that democracy is a prerequisite for economic growth. It all depends, it seems, on how the given non-democratic Government run things.
Before people are able to spend time considering the finer points of their ideal society, and whether or not their Government is doing well by their country, they need to be able to feed and shelter themselves. To do this, they need land to grow food and the means by which to construct a home. They also need a market. Markets have been around since the dawn of the agricultural revolution. I’ll swap this much cassava for that much maize. Or I’ll give you one fifth of the produce from my land in exchange for four weeks of your oxen ploughing my land.
Natural environmental constraints aside, these are the basics. But they need some sort of societal framework. Land tenure rights. Rule of law. Perhaps a currency. It doesn’t matter what body of authority establishes and provides these, as long as they exist. Then a society can start to flourish.
Then things get complicated. There’s a desire to move beyond subsistence. Having satisfied their basic requirements, people begin to innovate in order to gain advantage. Competition emerges and an hierarchy takes shape. So economic growth appears, as increasing wealth amongst innovators generates different forms of employment, which in turn generates further wealth and enables further innovation. The hierarchy acquires more levels.
Now a distance is opening up between those innovators who have power, and those lower down the hierarchy. Now a voice in the way things are run becomes a desirable objective for those without power. How desirable an objective this is depends upon how generous and inclusive are the existing power brokers. As absolute power corrupts, the power broker’s benevolence may be seen as inadequate, or patronising.
And so, an emerged society that has moved from chaos, though subsistence to adequate provision for all, then moves to competition for power. The only way such competition might be utilised satisfactorily is though the democratic process.
Bu this requires that all members of society respect that process. Which, in turn, requires that everyone is content to accept a result that doesn’t reflect their own vote. For this to happen, they need to be able to continue to achieve, in their own lives, material and philosophical goals regardless of who it is that’s in Government. The poorer a society is, the harder it is for any Government of any disposition to achieve this, simply because of there being fewer resources available.
In a society where the disparity between the best off and the worst off is extreme, and resources are few to enable to Government to moderate this difference, those lower down the hierarchy will always feel discontented. Discontented people will always be less inclined to accept the jurisdiction and policies laid down by the Government, which will be mainly populated by those at the upper end of the hierarchy.
In other words, the poorer the electorate is, the less likely they are to accept the democratic process. So it must be that economic growth is a prerequisite for democracy.
Conversely, it might be argued, that where a society contains levels that are frustrated and are therefore disinclined to democracy, their best interests are served by a benevolent dictatorship. Or at least a Government that is less concerned with democracy and more concerned with raising general standards of living. The problems occur when said dictatorship doesn’t care about such niceties and is instead happy to maintain the status quo. Of course, the irony is that such governments can’t be removed precisely because of the lack of democracy.
However, a society can become sufficiently wealthy such that the relative planes of wealth within the hierarchy all move upwards. So the poorest are now actually quite wealthy relative to the poorest in a less affluent society. A welfare state provides for basic needs, and the people at the top of the pile are very wealthy indeed. The whole dynamic now changes, as economic growth is, to an extent, a given. Or rather it’s considered less of an issue, or is even considered a bad thing as perfectly adequate amounts of wealth are perceived to already exist. The issue becomes one of wealth distribution rather than generation. Now, democracy becomes the higher objective, in the search for more equitable wealth distribution and more distributed control.
So, growth is a prerequisite for democracy, but once sufficient levels of growth have been achieved, democracy becomes a prerequisite to growth.