Who will do what and when will they do it? 2002
Douglass Carmichael
Monday, August 19, 2002
http://www.dougcarmichael.com/
In 1998 I wrote a paper with this title about y2k.
(www.dougcarmichael.com/y2kwho.html ).
It feels right to do it again, and to propose a new set of scenarios that cut a bit below appearances of the current amazing fast developing situation..
I realize that the potential war in Iraq, and the confusion of the American political process, has taken a kind of precedence over other questions. At the same time I sense that the potential can distract us – which might be its purpose, intended or not, from other issues that are also important. George Soros just published an interesting article in The New Republic on the causes of market problems,
http://www.thenewrepublic.com/docprint.mhtml?i=20020902&s=soros090202
and the environmental conference in South Africa is potentially important. So I will continue with issues that are somewhat behind the scenes.
I start with the following assumption. Globalization is a self-eliminating activity. It is driven by differences in wages or raw material costs in different parts of the world. But as its activity increases it brings higher wages and costs with it. Indian programmers are now much closer in parity to western costs, and mangers the world over are close to the same annual salaries. This means that over time the advantages to shifting production large distances will yield to a preference for local production – on strictly economic reasoning. At that point – different for each industry - economic activity shifts to local and regional efforts. With that shift in economic activity local education for local jobs becomes more important, which should mean better education. Local politics is now more purposeful and more interesting to local people. Local media now have a reason to focus on local activities. Local environmental issues are related to local industry and people can deal with those who create the impacts. The loops are tighter and more relevant to actual quality of life, and give local and regional leadership leverages to make a difference.
Of course this development could be interfered with, especially if the forces of concentration of wealth and power persist in centralization, which will eventfully, if it isn’t already happening, produce a violent reaction. The following scenarios help clarify the possibilities, and most importantly clarify strategy.
First, some preliminaries. In the current state of the world, there appear to be two main views of what is going on. The first view is that we will muddle through, with slightly more democracy, decency, health – with technical progress and economic advancement for many, with environmental remediation enough to hold on. There will be loses but on the main things will improve for the majority of people. Those left behind are so because either their governments are not in synch with the free markets and government framed democracy, or the people have themselves to blame for squandering personal opportunities, because they could have moved ahead if they had tried. (There is no modeling of what would happen if all the governments and all the people went down this path. The argument that “some people are just losers” seem to absolve the necessity of being analytical). The failure to look at numbers – such as environmental warming, fishing yield loss or – especially – income and wealth distribution figures – undermines this perspective.
The other view is that environment, health, education, income inequalities are on the negative side and we are moving towards a (usually un-described) catastrophe. The impression is that “somebody ought to do something”. The range of the actions is extremely vague and hard to consider as a substantive actionable alternative. There are a number of pieces that could be integrated into a solution, such as shifting the tax base to environmental extraction rather than wages so that real costs are internalized to the system. Rethinking education (and that is wide open about what that could mean), and basically some sense of more normal citizen input and down grading of the role of the experts – who seem to create systems that put themselves in the leading position, in terms of power and income, hint at an alternative view. But so far these fragments do not add up to a coherent means to the goal, and the specter of bureaucratic socialism still nags like a nightmare hanging over any move in this direction.
My view is that most people know in some deep intuitive (non-mystical) way that any solution only has a chance to work if it works for most people. So that, for example, pulling way back on commerce to save the environment is a non-starting solution. The result is, there appears to be only one alternative – muddle through. You can’t convince people to leave a sinking ship for the idea of another ship.
My own sense is that increased infrastructure costs, religious polarization, and politicians who are afraid to lead outside the box (and their own systems probably would pull them down if they tried) are creating a situation that could easy break. The danger is that with that break things we take for granted – international capital flows and international and regional food distributions systems, would come apart. If finance went – for whatever reason – people would locally seize power opportunities driven by fear and survival instincts. I personally think the food system is more critical and vulnerable than recognized.
In other words, we are living in a civilization with traditions of governance and decency, for which fewer and fewer people are showing up (there are some numerical assumptions here to which we may not know the answer.). This is quite dangerous, and our lack of historical reading – even of recent history- puts us in an awkward position for analysis and leadership. Not enough people, especially leaders, understand the fall of Rome, the conditions that drove the French Revolution, why Europe went towards fascism, or how China is different.
To give a very concrete example of this. At the Texas Economic Meeting on august 13 most newspapers said Bush’s options were very limited. I don’t believe it.
Bush could have (I don’t mean him, I mean “a president”) said.
“We come here to talk about business and the economy. Business is society’s way of meeting most human material needs. Any imaginable future requires good business. The role of government is to create the necessary conditions – to the extent that just staying out of the way is not sufficient – to encourage a good business future that meets society’s needs. We need to start with energy and move towards self-sufficiency. And that means thinking through options for sustainability. Beyond energy we need to think about business markets that can afford conservation, zero pollution, broadly distributed jobs and responsibilities, and the high morale knowledge that the work that each of us as an individual is doing is helping, not hurting, our fellow citizens and the environment. I know we can do this. Shifting conditions in the world suggest that we must do this.
“I know moreover that as the world markets get this, it will shift the way people, organizations and governments spend money. It will be for things that are environmentally and humanly of real value. This is of course as true –maybe even more – if you look at our imports – of American buyers – who too often for our own industrial health, are buying quality from other countries. This would be OK of our exports matched. It might not seem obvious at first, but it turns out that those countries with the toughest regulations – or as I prefer – incentives – to move in this direction will be the ones to really benefit. Meeting internal requirements, they will find themselves in the best position to be chosen by external markets as the preferred supplier.”
“I hope in today’s discussions you help me think through how to create business that matters, business that is ethical, enjoyable and even heroic to work for, that creates wealth for its employees and customers as well as those who invested in them. Business that is encouraged by all of us to take risks, be creative, rethink basic ideas. Let’s get to work.”
I think even in this political climate this speech would have been well received. Some of Bush’s own constituent corporations, like BP, Shell, and many others, are deep into recognizing that their survival requires that they got ahead of the curve on sustainability and low or non-pollution.
Bt, as Paul Krugman said in the New York Times, “Clueless in Crawford “
http://www.nytimes.com/2002/08/13/opinion/13KRUG.html
"They really don't get it, do they?
What would "getting it" in any politically viable way look like? It would take an understanding that business is a societal strategy for meeting human needs. Both Clinton and Bush have grown up in a culture where business is a private strategy for maximizing wealth whether or not it benefits or undermines the larger society, "where (we can imagine them saying) everyone else should be an individualist and if not, its their fault."
With this brief background let’s go directly to the scenarios.
Using the old quick and dirty two-axis method..
The first major uncertainty is, will we solve our major problems: peace, terrorism, pollution, environmental degradation and loss, food, health, climate, education – and viable forms of governance that support individual freedom.
Major problems solved Major problems not solved
That gives us
The second major uncertainty is, how will we do this? By large organizations: multinationals, states, UN, WTO? Or by small organizations and regional efforts; smaller corporations, state and country and town governments, NGO’s, even individual initiatives? That gives us a second dimension, of large or small, and putting the two together we get
Problems solve or not
by large organizations major problems solved by regional local small organizations
In the upper right, we have the official scenario: with large government and multinationals, the problems will be engaged, handled (some say Ignored). This gives us what I call the Versailles scenario, the rich and powerful in commanding control. We might call it the “Court Scenario.”
In the lower right we have problems being solved – or handled – by smaller efforts at a more local level. This I call the Jeffersonian democracy scenario.
On the left side we have what happens if we fail. If we fail but large organizations remain in control, we get some kind of state/business control – a fascism scenario. Think of Mussolini and the rationalization of state, business, technology and peoples’ communities.
If we fail and things break apart, we will get local mafias scenario, the lower left. Here is the picture so far.
by larger organizations by regional local small organizations
Most professionals are working to help the Versailles scenario happen. Even if they are in smaller organizations they are aligned with the polices and regulatory environment – banking, law, etc, that support the movement of power and money upward in exchange for being allowed to participate at the margin.
The first thing to point out however is that those folks trying to make Versailles happen, for the very largest part, actually have the values of Jeffersonian democracy. From East Hampton, Carmel, Sausalito, Bainbridge – even the tree-centered Park Avenue in New York with its village “intimacy” around the corner on Lexington avenue, the people want small town – community values. Look at the ads that appeal to them – or the houses in Architectural Digest. All versions of rural intimacy.
This says that the people making Versailles happen would really rather be in the lower quadrant!!
There are immediate implications. If those who are more directly involved with Jeffersonian initiatives polarize with the Versailles folks, they will build conflict, Just as if the people who want Versailles continue to crush the JD folks, there will be conflict. But both lose, because conflict will tend to shift the emergent reality towards the left side, where violence will mean more police, military budgets, surveillance and violations of rights under the banner of state – or community – necessity.
What this suggests is that what we really want is a social strategy that wiggles down the middle between the two right side scenarios – a social approach that helps the Versailles folks find ways, small or large, to express here JD values. Those who ignore this advice – if the scenarios are correct, will push things to the left side. At the same time it requires that the Jeffersonian advocates become more aware of the dangers of being unilateral and pushing for actions which destabilize a very subtle and somewhat fragile larger system of interdependencies.
This requires thoughtful balance in our responses, taking into account the existing balance of forces that are tending towards courtly globalization and violence.
Put strategically we get the following
And here is a proposition to the Multinationals: lets declare to perhaps ten of them – obvious ones, energy, banking, and transportation cartels – “OK, you have won. You are now effective monopolies. But you are dependent on enabling legislation from the Nations in which you operate. We will let you operate as globalized monopolies providing that you remain ethical, and create a global commons of security free from violence in order that the rest of the regional and local economies may function in more free market ways consistent with environmental and open competitive practices. You can sponsor tennis matches and operas, wear Armani suits, fly fist class. But you must do it in a fully responsible way, not for further concentrations or self enhancement.”
In fact the regional and local efforts must have a sane global commons in order to prevent local wars that are just too dangerous.
Meanwhile the activity of the rest of us goes to creating regional and local economic and political activity that actually creates the towns, city centers and countrysides most people seem to want – if we gave up the economic greed and opt for real health.
There are several important issues that re important but not explicit in the scenarios.
First is the significance of social solidarity. We saw with y2k that – I believe because responsibility could be pinpointed – people worked hard behind the scenes to prevent problems. But they also spent vast amounts of money on new systems – made easier by Congress which allowed write-offs of new computers as y2k maintenance expense, and by the fed which, by making large amounts of cash available, supported the lower interest rates that fueled the IT buying in 98-99. As soon as January 1 was past, companies cut IT spending except for equipment and software that helped them fill gaps in the rapid purchasing in 99. Bloomberg’s five year chart at
shows how the Nasdaq peaked then and started its impressive downward side. If IT spending had stayed high – which it might have – then Enron and Global Crossing and others would have continued to look like heroes. A friend, David Isenberg, suggests that the Napster decision undermined broadband expectations which affected switch buying which… The point here is that the very social solidarity that got us past y2k also produced the distortion in IT spending that led to the subsequent fall. Social solidarity did not work on the downside. If everyone had kept their budgets lowing, there would have materialized the business to support the spending. In the same way the “social solidarity” of 9/11 produced a spasm of security mindedness that costs much more than any conceivable direct damage. If we had called for a police action instead of a war, costs could have been contained. Just for example, if 50,000 people a day spend two extra getting through security in Denver, that amounts to about … you can work out the multiple implications in dollars and wasted time life equivalents.
That raises the second issue. Infrastructure costs, through security and war buildup continue to rise faster than the economy. I should say again that many in congress will say “American productivity is rising”. The implication is we are producing more. Not necessarily true. Productivity is unfortunately defined as *output per man hour * , which means that output can jump by firing people – which is much of what has happened. Note too that income increases include the rapid rise at the top, which hides the decreases at the bottom.
Infrastructure costs are known to do in Empires (see that favorite of mine The Collapse of Complex Societies by Joseph Taintor). An awareness that large infrastructures are costly may have an impact on policy, but it may take system failures to create the awareness that we cannot pay for increased infrastructure costs in a number of areas simultaneously.
I believe that a judicious use of a design mentality, technology, markets, and corporate structures can create a thriving society. Individuals, as themselves and as organizational representatives, making buying decisions that support that are crucial, as is creating the regulatory environment that leans towards environmental and humane business practices. I question whether the laws of incorporation, which cut people off from felt responsibility, can remain as they are and still allow a more positive future to emerge. But subtle shifts that cause many people to act differently amount to real change. Increased awareness of design and systems, and the burdens for most of us of complexity that supports the careers of some of us will create painful but rewarding consciousness.
Which raises a third question: culture. I think we will have more people looking at what the West, India, China and Islam have to offer that may be parts of the solution. There is also a potential culture of science that includes rather than excludes human nature. My guess is that the future will be a complex blend of all of these. Debates about monotheism and polytheism, projection and revelation, families, art, dreams, and hopes – and the meaning of civilization and community, can be enlivening – and there is plenty to listen to, much good thinking to be done, while we learn to carry ourselves as our own best guess of what a good human life can look like.. (See Martha Nussbaum The Therapy of Desire, for a deep look at this last question).
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There is no death in death
There is no death in death
but there is death in life
the turnings away, the missed moment
when he this and she that
a child in horror heard a parent
not hear see sense
a cat dog fish in the bowl
crying out
for the most essential
as if from Pluto
in the same room.
We forget who is with us
turn to late
or too early
miss a grasping or helping hand
or startle as they
are closing in on us
for a look
for the chance to let
caution
be replaced
by acceptance.
children!
young people
lovers
workers
citizens
wizened instead of wise
mortified
deaths before
disappearances
shutdown
shutoff
unplugged
Let’s make up for lost time, fill space not with more people and things, but with relationships, art, education, supported by a material culture and governance that is truly enhancing, not just space and time fillers and killers..
References
Joseph Taintor The Collapse of Complex Societies
http://www.amazon.com/exec/obidos/ASIN/052138673X/dougcarmichae-20
Martha Nussbaum The Therapy of Desire
http://www.amazon.com/exec/obidos/ASIN/0691000522/dougcarmichae-20