Saturday 24 November 2012

Comparative Gain - in What Sense?

It is conventional wisdom that the reply you receive depends on the question you ask. The question can often efficiently set the frame around the subject you are treating. An example of such questions is "How can we make the world economy as efficient as possible?". I believe this is base question for most if not all economic theory.
But what if. What if the question is not correctly posed? All of these politicians constantly focusing on how to increase the growth of their country, all of these company leaders constantly asking themselves how they can restructure their company to get a higher leverage on invested money. But what if you would take these actions and these incentives and try to plug them in to a bigger "entity", a bigger question. Like "How can we make our society a better society?". You would notice that once you take the question of economics and plug it in to this larger context the question becomes more complex. It is great if you wish to try your fantasy. And who knows, maybe also important if we wish our society to develop.
What makes a good society? There is an aphorism saying that how civil a country is is determined by how it treats the lesser of its people. It is one way of seeing things, I'm sure you can find others. The following factors are interesting to consider though:

  • In Spain, a free trade country part of the efficient economy, the number of unemployed young people is huge, they are even labelled "the lost generation". When the need for these people to step up and take responsibility for the country, they might no longer be able.
  • The huge gaps in income between rich and poor are in part an explanation of the riots both in London and in Paris. I believe it can be considered a side effect of an efficient economy.
  • When in Sweden we had a scandal of telephone salesmen tricking old people to buy expensive phone subscriptions originally aimed at companies, it was only one scandal in a long line of similar incidents. The efficient economy is giving us "rational" jobs that really most people wish wouldn't exist.
  • When the capital is fleeing Greece, among other things the health care is collapsing, this might very well lead to the super bacterias that have developed through an economically efficient animal industry (using antibiotics to feed animals) to spread to the rest of Europe. The social cost of other European countries is a factor that is probably not part of the calculation when European leader are letting Greece deteriorate.
I'm sure you can find other factors that are interesting when thinking about economics and its relationship to society, if you do, please leave a comment. But these are all things found just when asking "How can we make our society a better society?". You could also ask "How can we make our society a sustainable society?". Or any other question you would like. Just remember that the answers you get depend on the question you ask.

Wednesday 7 November 2012

On Change

Some people would say that there has to be a change in how we as a collective lead our lives, otherwise the environment that supports our living will collapse in the future. Most people of course, are not concerned with this since most people have enough worries with their everyday life and don't really feel like digging into the big philosophical question regarding large scale behavior patterns of our planets many billion inhabitants. This is natural and expected. But among the many billion people on this earth you will also find people that get highly involved in these issues, spending a lot of their time and energy in thinking and debating the current state of the planet, and what needs to be done to change a potential hazardous future. This is, I would say both natural and admirable at equal lengths.

It is among this group of people where the debate on what the society and individual can and should do flourishes, where ideas are born to give hope to the many people here on earth. It was among this kind of clique I found myself as I was watching the documentary "no impact man" together with a friend. No impact man is an American that decided he wanted to lead a life that gave no impact on the planet what so ever. He sketched up nine steps he would follow where he step by step would decrease his and his family's dependency on the fruits of modern society, and hence also not be part of the pollution that these fruits generate. The movie described his (and his wife's) efforts made to leading this kind of life, mixed with thoughts and philosophical reflections regarding the endeavour. 

The hopes of the director and main participant of the movie (also author of a book describing the project) seemed to have been to probe if it is even theoretically possible to live a life that is beyond doubt sustainable. With his project I expect he was also hoping to inspire other people to reduce their own consumption and hence live a life where their personal ecological foot print became as small as possible.

In the debate following the movie the discussion came to focus on the usefulness of this individuals project. A PhD student argued that in order to change society, the impact of the individual's actions are miniscule compared to the impact that is generated based on policy changes by politicians, or based on large scale projects where many people can be organized together to in different ways reduce their consumption or in other ways help the environment. A student argued that albeit big policy actions are important, one should not underestimate the importance of each individual's virtue. Trying to argue for a way of life that you don't lead yourself gives you a blunt at best case to argue. The student also presented his real life experience of being part of an animal rights group, where his vegan friends would fret over people eating animals. He argued that a kind of moralism or finger pointing would never be a good basis for inducing change.

And I suppose this is where my own thoughts also start touching the subject. I often find that people arguing societal change end up having a fragmented view of the problem, dividing the problem into small pieces and from that standpoint they try to optimise mitigation strategies for each individual piece. This is in large the scientific approach to any problem and in that sense it is obviously a technique that historically have worked. I think when it comes to the society as a whole though, the society is so complex that trying to divide it into pieces and examining each piece by itself put you at great risk of missing the big picture. Perhaps you will have found a solution for each individual problem, but as the result of any given action or solution is hard to predict, you will never really know if you've solved the wide array of problems or not. For example, you could in todays society find both the problem of unemployments/poverty, and of climate change. You could perhaps find a brilliant solution on how to battle climate change, but this solution's consequences for poverty might be negative. This negative effect in turn might actually rebound and in the long run turn out to have a negative impact also on the climate change issue.

It is because of these thoughts I'm thinking that discussing wether individual or collective action needs to be the leading initiative for lowering environmental abuse is not the best way of approaching the question of our environment. This should not be miss understood as me not agreeing both to individual and collective actions for saving the environment, I think both are greatly important. But when it comes to changing a society a core problem needs to be pinpointed and handled. A core problem would be the reason both for our individual and our collective actions (the symptoms) not being in line with what we would like them to be. So, why are we performing these (from the environments standpoint) negative actions and in which ways could our actions have been different?

Either way I turn this problem to analyze it the following points keep on re-appearing:
  • Our economical system, with its interest based debt will always keep the amount of the debt higher than the amount money in the world (as the debt increases when a loan is taken, as well as with the interest, while the amount of money at large only increases while a new debt is created or new money is printed). This means that on a global scale, a large amount of people will be indebted and hence forced to perform a kind of desired service to make his personal economy work. This creates a dependency for the individual, where he is dependent on having an employer.
  • Most companies are either aimed at (other companies exist but their part of the economy is in comparison small, look at the companies listed at NYSE to get an idea):
    • Making companies more efficient, ie. less staff intensive. (Most IT-firms)
    • Helping companies sell their products (PR-firms, facebook, google etc.)
    • Selling physical products.
  • Running a business is a darwinian process in the sense that the businesses that can optimize their ROI (return on investment) will flourish and other companies will perish. Optimizing ROI is in no way required to be good for society as a whole. For example, a light bulb company that would sell light bulbs that never break would pretty quickly run out of business, as the demand for that product quickly would dwindle.
To me, these points argue that although you can find many good examples of responsible companies doing a lot of good, the system as a whole will constantly move against a) requiring less people, b) increasing the material consumption globally. Something from what I've understood also reflects the development we've seen especially the last 20-30 years. It seems likely that a system driven by these mechanism will act like a tilting plane, directing development in a direction that is bad according to environmentalists. The individual's involvement in society is crucial to accomplish any kind of change, but as long as the overall system isn't altered, it seems unlikely that a lasting impact on the global consumer patterns can be made. Simply because debt and necessity will force people to act in a way less favorable for the environment. If for nothing else, so simply to be able to eat.

So what is change. What created change that has lasted. How can a big society, or even a global society be impacted? When discussing these things it is natural that individuals like Gandhi or Martin Luther King will be mentioned. Both accomplishing things, or canalizing the efforts of people in a way that created irreversible change. Of course, in neither case a paradise was created, and for example Gandhi that struggled to create a de-centralized strong economy in India was murdered and hence unable to complete the mission that he was once lead into. But still they are both encouraging figures that shows that conviction and and not budging make a difference. I would argue though that while Gandhi and King both were fighting against more obviously unfair systems, the environmental challenge of today is more diffuse and more difficult to pinpoint. It is in a way a totalitarian system that can count on us defending it as we are all dependent on it according to its own logic. The only logic we know.