Archive for February 16th, 2015

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In the last post I began to share some thoughts about whether current economic theory could solve our problems. I had reached the point of beginning to look at whether capitalism can deliver us from the dangers we are drifting deeply into.

Possible Restraints?

Setting aside inequality, moderately rising living standards on their own can come with an excessively high price tag in terms of quality of life in general. An example that comes readily to my mind is that of China. Figures, as I remember them from about four years ago, indicated that economic growth had lifted 200 million Chinese people out of poverty, obviously a welcome development for all those who benefited. Part of what helped drive that growth was the building of coal fired power stations at the rate of roughly one per week. New cars were flooding onto the road in their thousands per week. During the same period nearly one million Chinese people were dying of pollution-related diseases per year, obviously not a welcome development for those affected. Yes, the Chinese economy is managed by a one-party state, but that does not devalue this as a good example of where untrammeled growth on a capitalist-style economic model can lead.

Therefore the question arises: ‘Do we have to exert ourselves to meet expectations of unsustainable living standards which have unacceptable consequences?’ Want is not the same as need.

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In their thought-provoking book Flourishing John Ehrenfeld and Andrew Hoffman put the matter bluntly (page 12):

“Humans have changed Earth’s ecosystems more in the past 50 years than in any comparable historical period.” We have increased species extinction rates up to a thousand times over rates typical for Earth’s history. Almost 25 per cent of the world’s most important marine fish stocks are depleted or over-harvested, while 44% are fished at their biological limit and vulnerable to collapse. As we extract the world’s riches, we contaminate its atmosphere, altering our global climate through the unabated emission of greenhouse gases.

And these impacts are not evenly distributed. According to the UN, the richest 20 per cent of the world’s population consumes over 75 per cent of all private goods and services, while the poorest 20 per cent and consume just 1.5 per cent. Of the 4.4 billion people in the developing world (more than half of the world’s population), almost 60 per cent lack access to safe sewers, 33 per cent have no access to clean water, 25 per cent lack adequate housing, and 30 per cent have no modern health services.

This inevitably leads to a consideration of the kinds of restraints that need to be placed upon a ‘free market.’ Basically how laissez faire can we afford to be about market forces?  Surely they have to be counterbalanced and constrained by other considerations including moral ones.

Even when we are at war, while we need to listen to the generals, we must also be aware of the need for the constraints we currently call the Geneva Convention. Just as war is clearly not a desirable permanent mode, the same may be true of capitalism and its attendant dependency upon growth. There has to be some kind of constraint on its operations. How tight would those measures be before advocates of the status quo ruled them out as an unacceptable dilution of capitalism?

A more radical shift?

Moreover, if evolutionary thinkers see us as capable of developing beyond revenge and competition, and see cooperation as equally wired in and more compelling perhaps, we can transcend what drives us to consume as well as what makes the idea of profit so irresistible.  If so, would capitalism be the only viable model still?

Even as it stands, there are models of economic activity that, within their own terms, operate on a somewhat different logic, for example distributing profits more equitably and giving some power to influence company decisions to workers and surrounding communities. Economics is evolving – natural resources are no longer treated in economic models as inexhaustible gifts that do not have to be taken into account when determining the long-term costs and viability of projects.

Jeremy Rifkin, whose book The Empathic Civilization I referred to last time, is advocating what he called ‘distributed capitalism.’ In brief he feels that (page 544):

. . . the simple reality is that distributed information technologies and a distributed communications and energy infrastructure are giving rise to distributed capitalism and necessitate a new type of management.

I will be returning to his thinking in far more detail in a later sequence of posts. Clearly socialism is not the only alternative to relatively unbridled capitalism.

There are, of course, those who contend that we must look beyond both socialism/communism and capitalism. John Fitzgerald Medina, for instance, in this thought-provoking book, Faith, Physics and Psychology, argues (page 230):

Both systems place undue importance on economics as the core of civilisation. . . . From a spiritual perspective, in spite of all their surface differences, capitalism and socialism, when applied in actual practice, have both been destructive to human beings, communities, and the environment.

He regards it as imperative that we develop an approach to economics that is rooted in moral and spiritual values. I will be revisiting his thinking in more detail at a later date.

Any attempt to suggest, as has been the case, that violence may have its roots in simple racism, with nothing added on from a divisive and competitive system, and that nothing does more to reduce violence and many other social ills than the rising standards of living that capitalism alone makes possible, is too simplistic. This is true even if we set aside how entangled the development of racism is with the slavery that made possible the rate of economic development America enjoyed. And also true even when we set aside the evidence that the current economic model in America, blended with its residual racism, is maintaining horrific levels of inequality and compromising the efficacy of the educational system to remedy that. I will be going into far more detail about that in a subsequent sequence of posts.

As hinted at last time, I have dealt at length on my blog with the sources of prejudice which include the disgust reflex (Hauser), the hive switch (Haidt), culture (Pettigrew), and there is more to group violence than prejudice as Zimbardo explains in The Lucifer Effect and Milgram suggested very early on in his repeatedly re-examined studies of obedience. So, violence is not reducible to racism, and racism is not simple.

I accept there are benefits to liberal democracy. However, there are reasons for believing that its party political divides may need to be transcended as no longer fit for purpose, and just as they were the result of evolutionary processes over long periods of time it seems likely that we are going to have to undergo similar processes to lift us further up the ladder of development, economic, political, and legal, to create structures and systems adequate to the world in which we now find ourselves. As the Bahá’í World Centre indicates, this will be the work of centuries. If we do not, we will find that our modes of operation are too simplistic for the global conditions that confront us just as other systems have been tested and found wanting in the past.

Whether the shift in economic systems will be one of degree or kind is not yet completely clear.  Certainly that a massive shift of some kind is required, is unarguable, in my view.

Emp Civil

Jeremy Rifkin sees his ideal of ‘distributed capitalism’ as being effective only in the context of ‘biosphere consciousness’ (pages 598-99):

Our dawning awareness that the Earth functions like an indivisible organism requires us to rethink our notions of global risks, vulnerability, and security. If every human life, the species as a whole, and all other life-forms are intertwined with one another and with the geochemistry of the planet in a rich and complex choreography that sustains life itself, then we are all dependent on and responsible for the health of the whole organism. Carrying out that responsibility means living out our individual lives in our neighbourhood communities in ways that promote the general well-being of the larger biosphere within which we dwell.

I will have more to say about the adequacy of that motivator when I look at Rifkin’s thinking in more detail in a later sequence of posts.

The Bahá’í view is that our civilisation is at a tipping point and a fundamental change of focus is demanded of us. It is not a question of replacing money as a driving force, nor even about efficiency in some narrow sense. It is to do with consciousness-raising. A statement from the Bahá’í World Centre on social action explains:

In addition to a sound financial system, the question of efficiency needs attention. What should be avoided are limited conceptions of efficiency, for instance, those that consider only the relation of output to material input, even when the latter includes some quantitative measure of effort. A more sophisticated understanding of efficiency seems to be required. With regard to input, for example, work that is motivated by a spirit of service and an inner urge to excel clearly has a different value than work that is used as a vehicle to advance one’s personal interests. As to results, to give another example, the accomplishment of a particular task—say, the construction of a small facility for a school—may be far less important than the development of the participants’ capacity to cooperate and engage in unified action.

Such a shift of consciousness, as Rifkin, Medina and the Bahá’í model fully recognise, has to be part of a wider shift in understanding. For Rifkin this is a secular shift still in terms of biosphere consciousness: for Bahá’ís there has to be a spiritual dimension that enables us to see that our connection with other human beings and with the life-world goes deeper and higher than biology alone.

But that will be the subject of longer and later sequences of posts.

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