Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

10 January 2014

Reasoning and Beliefs

In a desultory way I have been articulating a theory about religious belief over the last few years. As someone interested in factual accounts; as someone who's worldview has been changed by new facts on several occasions; and as someone who regularly spends a fair amount of time amongst credulous religious believers, I've been fascinated by the relationship between reason, factual information, and beliefs.

So for example, following Mercier and Sperber, I understand reasoning to be a function of groups seeking optimal solutions to problems. M & S argued that reasoning has confirmation bias as a feature when putting forward solutions to problems and that critical thinking, generally speaking, only works well when criticising someone else's proposed solution. The individual working in isolation to try to find the truth using reason is at a considerable disadvantage. Similarly, others have found that reason does not operate as predicted by mainstream accounts of it: "We’re assuming that people accept something or don’t accept it on a completely rational basis. Or, they’re part of a belief community that as a group accept or don’t accept. But the findings just made those simple answers untenable." (When it Comes to Accepting Evolution, Gut Feelings Trump Facts)

Furthermore I apply results published by Antonio and Hanna Damasio which suggest that emotions play a key role in decision making. (I outlined this idea in a blog called Facts and Feelings). Most real world problems are complex and making decisions about them, including deciding what we think is true, requires us to sift and weigh up a broad range of information. Before we can make a decision we have to assess the relevance of the information or category of information to the decision at hand, i.e. what is salient. Most of this process is unconscious and is based on emotional responses. Or in other words emotions function to help us decide what is important in any decision making situation. Decisions are then made by comparative weighing up of our emotional responses to the solutions we are aware of and have judged to be salient. Once a decision is made it is then rationalised to fit an existing personal narrative. This insight was also outlined at a library marketing seminar I attended almost 20 years ago.

The ability to unconsciously determine salience is what we often call our "gut feeling" or "intuition". This type of unconscious information processing seems to rely on pattern recognition and considering many options at once (parallel processing). The end result is decisions made with no conscious awareness of the process of thinking it through. Indeed the result often comes to us in a flash or after a period of sleep. The speed of this type of processing seems to contraindicate the usual cognitive processes of conscious problem solving, so that the answers that come via this route may not be fully integrated into the sense of self - spatially the answer comes from nowhere, or from outside us. Thus this kind of information process can coupled with views about metaphysical self that is not tied to the body and become "divine inspiration". (See Origin of the Idea of the Soul which relies on work by Thomas Metzinger).

The cognitive gap that opens up when we set aside information as non-salient is often filled by what neuroscientists call confabulation. Oliver Sachs poignantly described a man with no ability to make or retrieve memories (see Oliver Sach's Confabulating Butcher). Asked why he is present in the hospital or engaged in an activity he cannot say, but instead confabulates - he produces a plausible story and presents it as truth. There is no conscious lie, and the patient is not trying to deceive his interlocutors. He is presenting the most plausible account of himself that he has, despite being aware of inconsistencies, because he has no other account and the state of not being able to account for himself seems to be unacceptable at an unconscious level. Something similar happens whenever we have a flash of insight or intuition. The thought pops fully formed into our heads and then we confabulate a story about how it got there, and this generally speaking has nothing to do with how the mind or the brain works. Thus conscious thought is not a good paradigm for how the mind works. It is the just the tip of the iceberg.

Now this theory is still rather nascent and a bit vague. I'm still getting up to speed with the literature of evolutionary approaches to religion, though my views seem to have much in common with scholars like Ara Norenzayan. The theory does make an interesting prediction. It predicts that where people have strong existing views they will treat new contradictory information in a limited number of ways depending on how they feel about it. Where a view entails a major investment of identity and social status (e.g. a religious view) a person will tend to judge contradictory information as not salient and reason in such a way as to set aside the new information without having to consider the real implications of it. My idea was that this could be tested at some point on people with religious beliefs. On paper it does seem to account for some behaviours of religious people with respect to new information, for example the Christian fundamentalist confronting the facts of evolution.

With all this in mind I was fascinated to read an article by Steve Keen describing something very similar in the field of economics. Keen highlights a paper by Dan M. Kahan et al. "Motivated Numeracy and Enlightened Self-Government" Yale Law School, Public Law Working Paper No. 307. Keen, formerly Professor of Economics & Finance at the University of Western Sydney, is best known for his vehement polemics against the Neoclassical consensus in economics, epitomised in his book Debunking Economics. Neoclassical economics is what is taught to virtually all economics students at all levels across the world and has a monopoly over economics discourse that is disproportionate to its success as a body of theory.

Keen is one of a small number of economists who predicted the economic crisis that began in late 2007, and probably the only one who did so on the basis of mathematical modelling. One of his main criticisms of Neoclassical economists is that they ignore debt in their macro-economic models because aggregate debt cancels out: if I borrow £1 and a bank lends me £1 then the balance is zero. On the face of it this seems reasonable because our view of banks is that they lend out deposits. But in fact banks lend orders of magnitude more money than their actual deposits. When they lend they, in effect, create money at the same time. Problems occur when too much debt builds up and the repayments become a burden. For example private debt in the UK soared to 500% of GDP or five times the annual economic output of the whole country. Conditions may change and render debtors incapable of repaying the debt, which is what happened on a huge scale in 2007 and the sub-prime mortgage scandal. The levels of debt at that point meant that banks started to become insolvent as their income from interest payments plummeted and their own ability to service debts was compromised. From their the crisis spread like toppling dominoes.

Thus banks and debt are far from neutral in the economy. Perhaps in a post-crash world in which the role of banks in creating the crisis through a massive over-expansion of the money supply is public knowledge, the theory might be expected to change? But it has not. A global economic crisis has not caused any great soul searching amongst macro-economists who did not see it coming. Tweaking is the main result. 


Keen predicted the crash on the basis of the rate of change of debt. As we take on debt (private rather than public debt) growth ensues and , for example, employment levels grow. As shown in this graph there is a tight correlation (0.96) between changes in debt and the employment rate. 

Thus when the rate of change of debt began to fall sharply in 2006 it was a harbinger of collapse in the economy. In the USA employment levels fell from 95% to 90% and have yet to fully recover. 

This mathematical analysis ought to have been of interest to people trying to predict the behaviour of economies. Especially in post-crash hindsight it ought to be interesting to those whose job was to predict how the economy would perform and utterly failed to see the worst economic disaster in a century coming. As late as mid-2007, just months before sub-prime began to kick off, the OECD were still predicting strong economic performance in their member countries for the foreseeable future. However Keen's work, and the work of other economists who were successful in predicting a major recession/depression has been roundly ignored. Keen also argues that mainstream economic models are incapable of predicting a recession because it is not a possible state in those models, whereas his models do allow for recession. 

Not a man to mince words, Keen has been highly critical of the mainstream of economics. But now he puts that failure to react in the context of a theory of belief and decision making similar to the one outlined above. In the paper by Kahan et al, the participants were given tasks to assess their "ability to draw valid causal inferences from empirical data." The results were counter-intuitive and surprising. Numeracy – skill in understanding numbers – was a negative predictor of performance on these tasks if they conflicted with existing beliefs.
"It seems that when an issue is politically neutral, a higher level of numeracy does correlate with a higher capacity to interpret numerical data correctly. But when an issue is politically charged – or the numerical data challenges a numerate person’s sense of self – numeracy actually works against understanding the issue. The reason appears to be that numerate people employed their numeracy skills to evade the evidence, rather than to consider it." Steve Keen (emphasis in the original)
This is consistent with Mercier & Sperber's account of confirmation bias as a feature of reasoning. And it is consistent with my Damasio derived theory about the role of emotion in decision-making, if we read "politically charged" as signifying strongly held political beliefs, and associate that in turn with strong emotional responses to the issue. The authors tied this in with personal and social psychology:
Individuals, on this account, have a large stake – psychically as well as materially – in maintaining the status of, and their personal standing in, affinity groups whose members are bound by their commitment to shared moral understandings. If opposing positions on a policy-relevant fact – e.g., whether human activity is generating dangerous global warming – came to be seen as symbols of membership in and loyalty to competing groups of this kind, individuals can be expected to display a strong tendency to conform their understanding of whatever evidence they encounter to the position that prevails in theirsSteve Keen (emphasis added).
Kahan et al. extend the problem of salience of information to the social setting. Professed beliefs are often explicit markers of group membership and being well versed in group jargon and able to articulate group beliefs is part of what determines one's status in the group. In an economic setting, mainstream economists are able to ignore facts (such as a very high correlation of the rate of change of debt to the employment rate) that might change their worldview (particularly the way they view the role of debt in economics) because their status as members of a group requires them to conform to norms which are in part defined by holding a particular worldview. They are blind to facts which challenge their views. Keen points out that this is not a new observation and that some years ago that the great physicist Max Planck, who had struggled to have his work accepted by his peers, quipped that knowledge progresses "one funeral at a time".

This result reinforces the limitations of thinking of human beings in terms of individual psychology. It's a hard habit to break in the West. We are influenced by Freud, the Romantics, and the various revolutionary thinkers who championed the rights of individuals. Of course to some extent we are individuals, but not as much as we make out. Much of the inner life that appears to make up our individuality, is in fact determined by conditioning in various groups (family, peers, nation, religion, education) and by our place within these groups. We simply do not exist in isolation. 

Any philosophy of consciousness, mind, or morality which sees individuals as the main subject for study is of limited value. And the practice of trying to make valid inferences from the individual to the group is less likely to be accurate than the other way around. At the very least individuals exist in a series of overlapping gestalts with various groups. 

This view of people will most likely conflict with what we know. Most of us are convinced that we are individuals, who make our own decisions and think our own thoughts. We live in a society which highly values a narrative about "reason" and about what a reasoning individual is capable of. However, very few people are convinced by facts because that's not how reasoning works. That view of reason is isolated from other aspects of humanity such as emotions and our behaviour as social primates.

Those people who bombard us with facts fail to convince. By contrast the advertising profession has long understood that in order to change minds and behaviour one must change how people feel about the facts. Half the ads I see nowadays have almost no intellectual or factual content. It's all about brand recognition (familiarity) and a positive emotional response. One might say that for advertising the facts are now irrelevant. And so, liberals campaigning for protection of the environment, say, often fail to convince a sizeable proportion of the population or indeed anyone that disagrees with them to start with. Meanwhile advertising is a multi-billion pound industry, consumerism is rampant, and the environment is daily degraded in the direction of being unable to sustain human life.

Most people cannot be reasoned with, because neither people nor reason work the way they are popularly conceived to work. Those of us who want to make the world a better place must pay close attention to these issues of how people's minds actually work. If we want to convince people that we have a better solution it cannot be through facts alone. They must feel that what we say is salient in the context of their existing values. And even then, if what we say conflicts with strongly held beliefs then we can expect to be ignored. We tend to get so carried away in our enthusiasm for our own values that we fail to empathise with those whose minds we really need to change in order to change the world: i.e. political, military and business leaders. 
.

~~oOo~~

06 December 2013

The Ethics of Amazon UK

One of my friends posed an ethical question last week regarding the online retailer Amazon UK. Should we boycott them because of what's been in the news. This is the (very) long version of my answer.

Most people know the story of the world's largest online retailer. Amazon.com went line in 1995 selling books, and was able to undercut the prices of traditional bricks and mortar stores precisely because it did not have to pay rent, salaries etc associated with physical stores. All they needed was a warehouse and a bunch of minimum wage drones to fill orders. Part of the reason Amazon succeeded what excellent customer service. Amazon became the success story of online retailing. In fact it took a longish while for the company to start making profits, but it was obvious from the outset that they had a "killer app" and they went from strength to strength. 

I'm a long time customer of Amazon in several countries and have sent books to friends and family around the world using Amazon. On very few occasions have I had any trouble with items arriving and then I've had excellent customer service from them. I'd have no trouble recommending buying from them on that basis. But in recent times Amazon in the UK have been in the news for other reasons.


Bad News from Amazon

Earlier this year (May 16) the BBC reported that "Amazon's UK subsidiary paid £2.4m in corporate taxes last year, the online retailer's accounts show, despite making sales of £4.3bn." Now there's a big difference between sales and profits. And one of the major deficiencies of financial reporting throughout the UK media is making precisely this distinction between turnover and profit. The question we need to know the answer to is what was Amazon's profit margin. Figures on this are a bit confusing, but what I found was this.

In April this year Amazon worldwide  reported a 37% drop in profits. Amazon made a loss of $39m, for the year 2012, even as it had sales totalling $61bn. On paper Amazon UK is simply not very profitable despite turning over tens of billions of pounds. How can a company with such high turn-over, with low overheads built into the structure of the business model (i.e. no shops or shop staff) make such dismal profits?

The reduction in profits is put down to "aggressive expansion plans and investment in new products." Profit ploughed back into expanding the company is not taxable. However they are also losing a lot from selling at a loss. By cutting prices they gain market share and in tough economic times their competitors may well go to the wall, like Borders did in 2011 (2009 in the UK) and has many independent book retailers have done. I'm not sure about Amazon as such but we know that generally speaking senior managers of corporations are receiving salaries and benefits in the millions, with well above inflation rises right through the recession years.

We also know that these big companies use management accounting strategies to hide profits. Starbucks UK for example pays royalties on the brand to a Starbucks company based in Holland where they gets huge tax breaks from the Dutch government. Starbucks also buys all it's coffee from a subsidiary in Switzerland which adds a mark up of 20% on the wholesale price and pays much lower taxes than it would in the UK. Thus the amount of taxable profit in the UK, which has relatively high rates of corporation tax, is diminished by bogus overheads, but the amount of profit available to pay to Starbucks shareholders is augmented by avoiding UK taxes. And of course those shareholders no doubt also avoid taxes in a variety of ways.

In the case of Amazon they pretend to operate from Luxembourg to avoid paying UK taxes. They also used a base in the Channel Islands to distribute CDs and DVDs to avoid paying VAT on them. though this loophole was recently closed. Clearly Amazon's sales here are enormous, billions of pounds, but the tax laws of various countries allow them to funnel profits through tax havens in such a way as to avoid paying tax in the UK.

Keep in mind also that Amazon received £2.5m in government grants to help them do business in the UK, which is £100k more than they paid in corporation tax. And this is a twist of the knife for the public who see themselves are subsidising Amazon shareholders. 

However it gets worse. As one would expect from a company with squeezed profit margins Amazon are trying to minimise costs - the highest cost in any business is always labour. As I write the BBC are running with this headline: Amazon workers face 'increased risk of mental illness'. The story is based on observations by an undercover reporter and commentary provided by Prof Michael Marmot a "stress expert". The reporter worked for just over the minimum wage and his performance was closely monitored using electronic surveillance - his movements between picking jobs was timed for example. Statistics are collected and can be used as the basis of disciplinary action. Every moment is monitored and there is no time to relax. As with every unskilled job, there people lining up to replace you. To be fair Amazon have responded that: "official safety inspections had not raised any concerns and that an independent expert appointed by the company advised that the picking job is 'similar to jobs in many other industries and does not increase the risk of mental and physical illness'." This was followed up by another undercover reporter from the Guardian which covers a broad range of topics similar to this essay. One wonders just how many journalists are moonlighting as Amazon employees at present? (And if they keep the money they'd paid, and if they pay the proper tax on it?) If you search for news on Amazon and employee pay and conditions you'll see that this kind of thing is not just a UK problem. There are widespread complaints about the way Amazon treat their lower level staff.

So Amazon are pushing the boundaries of tax and employment law, possibly at the expense of the country and their employees, though they are not breaking it. Is there a moral issue here that would, for example, make us stop giving Amazon our business, like MP Margaret Hodge? (Leaving aside the issue of grandstanding MPs). As Frankie Boyle recently discovered. He was trying to recommend an ethical online retailer for the book he's flogging at the moment to his Twitter followers, and they kept coming up with objections to the alternatives. It seemed to boil down to this: big business is owned and run by big business and ethics are well down their agenda.


Not An Isolated Case

This problem of large, often multi-national, companies exploiting loopholes to dupe the UK out of the taxes they owe is not a small or localised problem. Most developed countries face something similar. It's partly a side-effect of the new Libertarian ideology, sometimes called Neoliberalism, though it seems highly illiberal to me. This ideology can be traced back to the late 1960s and early 1970s (see for example the Lewis Powell Memo), but has much deeper roots in British philosophers such as Jeremy Bentham and John Stuart Mill. Recently Andrew Simms, writing in the Guardian, placed the beginning of this movement in April 1947, at a conference in Mont-Pèlerin where:
"Philosophers, academics and historians gathered at the Hotel du Lac to discuss how to halt the spread of ideas that emphasised common purpose and governments acting directly in the public interest." 
Neolibertarianism, as it ought to be called, argued for no controls on the movement of capital in and out of nation states and for the reduction of all kinds of trade and financial restrictions. Within Europe we also have the free movement of "labour" (which means people). The rationale was that impersonal markets would function better (that is allow businesses free reign to make profits) when allowed to operate on a global scale without regulatory interventions by governments. The rhetoric was that free markets would deliver fair prices to consumers and more profit to shareholders. And part of the theory was that by allowing the rich and powerful to prosper it would, by so-called "trickle down effects" benefit the whole economy.

Of course the promise of a free market utopia has turned out to be a lie. Since the early 1970s a series of recessions in the developed world has been paralleled by a series of outright economic crises in Africa, then South America, then South East Asia and Japan, and now in Europe. Things came to a head in the developed world in 2007 with the collapse of so-called subprime mortgages. Not only had mortgages been sold to people who could not afford them, but such non-viable loans had been packaged as investment opportunities (rated as gilt by rating agencies when they ought to have been junk) and sold on by financial institutions across the globe. Some particularly malfeasant companies also hedged against the failure of the loans meaning they would make a profit either way - since the failure of gilt rated investments is very rare, betting against failure was very profitable when they did fail. And so the financial system itself began to topple, starting with Lehman Brothers' Bank. With the finance system in trouble the sheer scale of private sector debt (reaching 500% of GDP in the UK) became and remains a serious hindrance to economic activity. Though debt is largely ignored by mainstream economists. We're still in a situation of low investment, high (and rising) private debt which is likely to affect us the way it affected Japan from 1990 onwards - with overall stagnation for decades.

The pursuit of free market economics has enriched the 1% at the expense of everyone else. Free market ideology has left disaster in its wake across the globe. But because the 1% and government overlap considerably the possibility of getting substantial change - even in the face of a global economic crisis - is minimal. Even now UK politicians are claiming credit for having saved the day when they have simply plastered over the cracks and pretend that it's business as usual. The fact that almost no politician or economist saw the worse economic crisis in history coming has not given most of them pause to consider that they might be going about things the wrong way. A few heterodox economists now have a slightly higher profile: Steve Keen, Nouriel Roubini, Ann Pettifor and Ha-Joon Chang for example. A group of economics students in Manchester has demanded that their syllabus reflect the post-crash reality. But law makers rarely target their own activities, so any change is minimal and slow. 

Trickle down also turned out to be a lie. When workers are receiving pay increases less than inflation and senior bankers receive bonuses of four time their salary and pay increases of 1000% above inflation (in 2012) then we know that the Neolibertarian doctrines are not just operating at the national level. It is individuals with wealth and power who are changing the business environment in this way, and it is individuals who are willing participants in the implementation of such doctrines. In recent times the Occupy Movement coined the distinction between the 1% who are benefiting from free market economic and libertarian social policies and the 99% who are paying for it. Not only does wealth not trickle down, but it tends to flow upwards, enriching the wealthy at the expense of the middle and poor. And the policy result of hardship is to crack down on the needy and allow continuing free reign for the greedy.

To some extent we're still dealing with the outcomes of late Victorian thinking. Victorian thinkers were partly concerned with justifying British domination of the world through military power. The Empire asset stripped the colonies and massive enriched Britain, though then as now most of the wealth concentrated in the hands of the 1%. But ideas such as "survival of the fittest" became the guiding light. Britain dominated because it was better, fitter, stronger, and thus had an "evolutionary" advantage.  As theology was undermined by science, this kind of thinking replaced the divine-right thinking to some extent. The upper class intellectuals in Britain characterised human beings as they saw themselves in the mirror - individualistic, selfish, and greedy. But also, with no hint of irony, human beings were supposed rational. In other words they rationalised their own emotional responses and called their arguments 'reason'. Other responses were then irrational and/or unreasonable. And various philosophers developed these ideas until we get to the present where humans are still seen in this distorted lens by politicians and economists. In fact science has disproved the Victorians and shown that humans are social, empathetic and altruistic as well as hierarchical and competitive. However libertarians won the argument back in the 1970s and began to re-engineer society away from liberal values.

Another aspect of the social change of recent decades was the de-horning of the labour unions. Unions had been very powerful in Britain up to the 1970s and that power had clearly gone to their head. Unions were frequently greedy and deeply conservative - and here is an irony. The so-called Conservative Party is actually a vehicle for Neolibertarian doctrines and has been seeking to radically alter the structure of society for decades, and the socialist (even at times outright communist) labour unions were conservative in the true sense of resisting such changes and preserving more traditional social and business structures. When Thatcher was voted in on the Neolibertarian wave (along with Reagan in USA and the Lange Government in my home country, New Zealand), one of the first tasks was to drastically reduce the power of the unions who were blocking much of the Neolibertarian reform program. Unions were divided and conquered and now play a much smaller role in life in the UK. And as a result of changing legislation, managers are now able to place pressure on workers to accept progressively poorer pay and conditions as they do in companies like Amazon. Real wages have fallen consistently for many years now, and the number of people tied into contracts (so-called "zero hours contracts") that offer no guaranteed hours of work and no "extras" like holiday and sick pay are on the rise. Amazon are by no means unique in using changes in labour laws to get more from their workers while offering much less. In fact it's the norm these days.

It might be argued that the new Libertarianism was a predictable response from business people, politicians and classes with hereditary privilege (in the UK the three often overlap considerably) whose interests were threatened by changes happening in our society in the post war years. Certainly the conditions that apply now are not specific or localised. Across the developed world the same conditions have been set up by business people who want to own everything, rather like the feudal lords of the past. Except in the past a feudal lord had duties to their dependants and these days there are no duties except to share-holders.

Amazon are simply one of many large companies exploiting the business and legal environment set up by libertarians (from both the left and the right of the political spectrum) in order to allow them to do just that. Amazon have broken no laws in any country so far as I know. The argument is that the way they exploit tax and labour laws is immoral, not illegal.. We can prosecute illegal behaviour by large companies, though it is very expensive to do so. We cannot prosecute for legal but immoral behaviour. We can only change the law. But the present representative are reluctant to change the law because they benefit personally from the status quo in most cases.


Tall Poppies And Scapegoats

Amazon are high profile and successful. Founder Jeff Bezos has a net worth in the 10's of billions and his own space program! Part of the reason the outcry focusses on companies like Amazon here is the UK's deep misgiving about people who are successful. If you inherit money and have no talent at all you can be prime minister (the present PM for example), but if you start from nothing and work your way up you have broken the unspoken rules of class that still lurk in the British unconscious. The term we used in New Zealand for our own version of this is "Tall Poppy Syndrome" - i.e. it's the tall poppy, sticking up above the wheat, that get's eaten or beheaded first. At it's best this can lead to genuine humility and at its worst to hateful media campaigns aimed at bringing stars down to earth (as I write the media are gorging on the salacious details of the private life of a celebrity chef, for example). I'm not sure how the British did not manage to come up with a word for Schadenfreude because they savour the failure of the successful like no other people I know. 

On the other hand because Amazon is successful and Bezos is now a billionaire with his own space-ship, that draws a certain amount of respect from the 1%. At the heart of the British conservative ideology is the notion that wealth equates roughly with morality. If, through business enterprise, one has become fabulously wealthy then one must ipso facto be morally worthy. Of course effortlessly inheriting wealth is an even stronger sign of one's inherent worth, but becoming a billionaire is also a positive sign. This is a relatively new accommodation by the upper classes to "new money".

What all of the wealthy seem to have in common is a desire to protect their wealth from taxation. The narrative of taxation is that it is the government getting something for nothing (undeserving) and spending it unwisely. That the private sector has caused a global financial crisis on more than one occasion in living history does nothing to dent this view that the government can't be trusted with money. Government, the libertarians believe, is inefficient. Thus they sell off national assets and companies to the private sector (and often to foreign owners). The upshot is that the wealthy, who make up the majority of the cabinet as well as sitting on the boards of large companies, are not in a hurry to force tax avoiders into compliance. Ironically arch Tory, Boris Johnson, has recently said we ought to be thankful to the rich for contributing so much of the tax take. It is true, but it's also true that they only pay a fraction of the tax owed. And if they paid what was owed we'd have no problem affording our health system for example. Poor people end up paying a much larger share of their income because they have fewer ways of hiding it in tax havens. 

Thus government is not in a hurry to punish tax avoiders and companies like Amazon are free to exploit the many loopholes that tax legislation leaves them. In the case of Amazon this includes the on-paper fiction that in fact they don't do business in the UK, but from Luxembourg and the Channel Islands (both well known tax havens). This does not affect their ability to attract subsidies for doing business in the UK mind you - and this is how we know the government is complicit. 

So in many ways Amazon are just a convenient target for a whole range of misgivings about the wages of Neoliberalism and the crossing of class boundaries. Like hundreds of other companies they exploit the letter of the law to avoid paying companies tax, to erode wages and working conditions, and generally to funnel money away from the government and the public and into the pockets of shareholders who apparently live in the Cayman Islands (for tax purposes). Unable to strike at the system we make a scapegoat to bear the weight of our anger and frustration. And the Neolibertarians will happily let us scapegoat Amazon because it distracts people from the system. If crippling Amazon is the cost of business as usual, then their attitude will be "so be it", as long as the system itself survives. There is no "honour amongst thieves".


Manufactured Consent

There is no doubt that the whole system is corrupt. Politicians and business people have colluded over decades to set up the world's economies in this way. Conspiracy is too strong a word I think, though there has been a collective vision and will, and collusion in implementing it. I see this as the true legacy of the baby boomers. Some people have no doubt set out to make the world a better place, sincerely believing that the economic lies of Neoliberalism would achieve this. They believe because their school teachers and university professors taught them economics and politics with this slant and because our public schools are designed, as much as anything, to encourage obedience to the will of authority. 

There has always been a quid pro quo for the masses. The Romans used to call it bread and circuses. We now get exquisite forms of entertainment that tickle and caress our senses. As the Buddha said, we are intoxicated with the pleasures of the senses. Only now the stimulants are like a refined form of Crack. In the Buddha's day pleasures must have been fairly basic: food, clothes, gold, booze, gambling and sex. Maybe some bhang or opium. Back then opium probably was the opium of the people. Nowadays we have 100s of media channels catering to every taste. We can shop till we drop on cheap imported goods produced by children and slaves and never leave the comfort of our homes. Even the poor can participate in undreamt of ways in this circus. We're all eating so much high calorie food that fatness is an "epidemic". But it's especially the poor who are fat in the Neolibertarian world because cheap food is laden with sugar and fat (and salt). Never before in history has fatness been a disease of the poor. And this fact alone separates us from any other time in history.

For most people life is perhaps less meaningful than at any time in history. Many of us are more focussed on parasocial relationships with fictional characters portrayed by actors than we are on friends and family. Sexual relations are wildly skewed by ubiquitous consumption of pornography and the encroachment of porn inspired imagery into everyday life. We eat more for pleasure and comfort than for nutrition. We seldom spend any time in nature. Religion has, partly through its own inept stupidity, become a source of fear and loathing rather than "tidings of comfort and joy" (as the Christmas carol would have it). The very things that might give us a sense of meaning and purpose have been turned into demons.

Amazon provides us with cheap and easy consumer goods and entertainment. At the click of a mouse. In return we're expected to look the other way when they avoid taxes and exploit workers. That's the Faustian pact. And most people have long ago tacitly signed up to this deal. I'm as much a part of that as anyone. The unspoken threat is that if we start complaining about all the cheap stuff and the ease of acquisition, then the supply of entertainment and consumer goods will dry up. We'll have to face out lives without any distraction.

Amazon are not special except they were the first to succeed in a big way online. Targeting Amazon becomes part of the circus. It feeds the media demon that sets out to over-stimulate the basic emotions of fear, hatred, disgust and lust. These are the emotions that are controlled by the parts of the brain that even reptiles have. The emotions we share even with reptiles. The lowest common denominator and the most powerful motivations for action. And yet we're helpless to act on these media stimulated emotions because it's all virtual. The media companies, who all act in just the same way, are happy to scapegoat Amazon because it takes the heat off them. The BBC as a publicly funded organisation need not participate in this economy of reptilian stimulation, but keeping up with the neighbours is fundamental to the British middle classes, so they do.

Another aspect of the media which Noam Chomsky has highlighted throughout his career as a political commentator is the manipulation of the information presented via news media in order to, in his words, "manufacture consent". In his documentary of the same name he shows how the media manipulated public opinion on various issues but particularly America's various wars in South East Asia in order to bolster nationalism and public support for foreign wars. Arguably they did the same for more recent wars in the Middle East.

I've already commented on the way that government has put almost no effort into pursuing the avoidance of tax as an issue, and yet since day one in office they have systematically attacked people who benefit from or rely on social welfare payments. A 35% pay rise for bankers does not bother them, but that someone might receive £1 extra in welfare is a cause for grave concern. A government run by privately educated, hereditary millionaires, spends millions of pounds each year on PR departments which pour out propaganda against the poor. And the poor are criticised for getting something for nothing and a culture of entitlement - which is a stroke of genius in a way, because the message comes from people who inherited millions, titles in some cases (Osborne is fittingly a Baron), and used their family connections to get into positions of power.


Ethics.

Amazon's modus operandi is merely symptomatic. They're a successful company selling people stuff they want at the best price, but accompanied by good customer service, and a lot of added value in the form of reviews and suggestions for other stuff you might like. They're a pleasure to do business with and while they exploit the tax and labour laws to the fullest extent (in these difficult times) they don't seem to break the laws as they stand. They are keeping to their side of the Faustian pact. Targeting Amazon won't change the legal framework in which they operate. Perhaps we ought to join with others in organisations like 38Degrees to campaign for them to be more straightforward in their business dealings with the UK (i.e. to admit that they do sell stuff here and to drop the fiction that they're not based where all their massive warehouses are). We can hope that in making an example of larger companies we make a point to all the others. However there is no guarantee that his helps, as the case of Starbucks seems to show (there has been no change in the tax laws for example). We ought also to ask pointed questions of our politicians on how they personally benefit from laws they pass (very many stand to benefit from privatising healthcare for example) and why they have not acted to close loopholes that only benefit the rich. The present government have enacted radical changes in welfare and education, but not in tax or finance. It's pretty obvious why that is. But since the advent of Neolibertarianism this is the norm from governments left and right.

All of us are complicit to some extent. Being a member of this society means participating in the circus to some extent. We all rely on money for example which ties us into systems of production and consumption that embody greed and hatred. Even making conscious ethical choices doesn't extricate us from the circus. In fact the idea of "outside the circus" might be purely theoretical. I can't write this without being plugged into the system in a number of ways - physically and metaphorically.

If there is a Buddhist angle on this then it is the injunction to look at and work on the conditions. One may feel that not doing business with Amazon is the right thing under the circumstances. But given that the vast majority of the population are part of the Faustian pact I doubt it will make much difference. Collective actions have had some success in individual cases, but they have yet to make any inroads into the system. The problem is systemic.

Do we opt for disengagement and withdraw from the system as much as possible? This certainly has merit, but again the vast majority are plugged into the Matrix and don't want to be unplugged. Dropping out certainly did not help in the 1960s and 1970s, it just cleared the field and made it easier for the Neolibertarians. As such it seems that making common cause with those who critique and attack the system would make more sense. How far to take it though? Do we join Al Qaeda? I don't think the Great Satan will be brought down by acts of brutality and murder - empires tend to be much better at brutality and murder in any case and we've shown that we can out compete Al Qaeda on that front because we can mount all out wars on a national scale as we did in Afghanistan and Iraq (against the public will!).  Who might we make common cause with? In ones and twos we make no difference. Even 10 or 20 thousand wouldn't make much difference. We need hundreds of thousands of people willing to take action, to march, to argue, to propose credible alternatives, and to donate money to fund it all. I don't see any such grouping. I see isolated individuals and small, ineffectual groups. If you join a political party all you get are constant invitations to fund raising events and requests for money, which is frankly depressing.


We're Doomed

In fact I believe that the outlook is bleak. If the global economic crisis did not rock the world of politics and economics off its axis, and it seems not to have, then what will it take to change things? A year or two back James Lovelock published another iteration of the Gaia theory in which he said he thought we were beyond the point of no return on the environment. I believe we're also over a tipping point economically and politically. The signs are already showing of another economic crisis down the road. Some were predicting it this year, but this has shown to be overly pessimistic. Now, however, we're far more aware of the causes of recessions and collapses: asset and commodity price bubbles for example, and yet we are deliberately building a house price bubble; or too much private sector debt, and yet today it was announced that household debt had reached an all time high. And so on. It cannot end well. And frankly, in this context, Amazon are the least of our worries.

Of course everyone must follow their own conscience.


~~oOo~~

20 January 2012

You say you want a revolution?

DemmingJohn Lennon asked this question and concluded that the way to have a revolution was not to change the world, but to "change your mind instead". In this he was probably influenced by his Hindu guru. Behind the idea that we should give up trying to change the world and focus solely on changing our mind lies a fatalism about the world on a larger scale, and indeed a fatalism about what any one individual could achieve. As it says in the Bhagavad Gita (3.35)
śreyān svadharmo viguṇaḥ,
paradharmat svanuṣṭitāt.

Your own duty performed badly is more auspicious,
Than the duty of another performed correctly.
i.e. don't mess with the order of things.

This is not a sentiment I share and in this essay I'm going to assume that some of us still want to change the world. If you don't then look away now. In 1991 I studied library management at Victoria University in New Zealand. In my studies I read about the quality "revolution" in industry especially in Japan in the 1970's. I went on to participate in quality circles in service organisations (mainly libraries) and even went through an ISO 9000 registration, so I saw the theory put into practice. In this essay I'm going to compare some observations about the so-called "quality revolution" in Japan in the 1950s, with some observations about the introduction of Buddhism to Japan in the 6th century. Finally I'll use these disparate case studies to try to illuminate a problem that Western Buddhists face. Inevitably this will be too large a task to do justice to in this format, and I'm relying on my memory of books read decades ago. But here goes...

In the aftermath of World War II, the USA poured money into Japan to rebuild its economic base. Some politicians had learnt the lesson of post-WWI Germany, and, despite having bombed Japan into submission with weapons of mass destruction, the Allies were keen not to leave a ticking bomb in Japan as they had in Germany in 1918. So they rebuilt Japan with a constitutional democracy and an economy based on manufacturing. This proved to be quite successful. However, Japanese goods initially had a deserved reputation for being shoddy. When I was growing up in New Zealand there was a certain amount of racism influenced by the bitterness of our parents after WWII (many of us had relatives who'd spent time in Japanese POW camps). We unselfconsciously referred to Japanese cars as "Jap crap". But the fact was that, despite our bias, their manufacturing standards were much lower than the Brits or the Americans at the time. Indeed in NZ in those days we prized British engineering, but that is another story, and one that did not end happily.

How the Japanese turned this around and became the world's leading manufacturer of automobiles, and in the process more or less destroyed the British, and crippled the US car industries is a fascinating story. I want to focus on the contribution of W. Edwards Deming. He was a management theorist and academic who thought a lot about how to improve manufacturing. His ideas initially received a lukewarm response in the USA. After all no bombs had fallen on the mainland and they did not need to rebuild. As Bill Bryson has observed they simply switched from making tanks and bombs to making cars and fridges over night and continued on at the same rate. The USA was enjoying the first of many post-war booms, and was milking it. So industry leaders would send their middle managers to Deming's seminars, while they themselves never got to hear his ideas directly. Without the involvement of senior management America's corporate culture could not and did not change.

However in Japan the situation was different. When Deming started going to Japan not long after the war, it was soul-searching chief executives, fresh from having lost a quest for world domination, who went to his seminars. This lead to a change of culture in Japanese companies, and by the late 1970's to the emergence of Japan as an industrial giant: they still have the 3rd largest economy in the world (after the USA and China) despite the vicissitudes of the last two decades. Deming's big idea was quality control. Building quality into the process, and using quality control meant that they created fewer defective items, and shipped fewer to their customers. In my lifetime the reputation of Japanese cars, for instance, went from execrable to excellent. In my childhood virtually all the cars on the roads where British or Australian made. By the time I was an adult one in four cars was a Toyota with a fantastic reputation for reliability, and most cars were Japanese.

Deming was not solely responsible for this transformation, but the way that Japanese business leaders took on his ideas and changed their organisations is in direct contrast to what happened in the USA. The Americans eventually caught on and took up his ideas, but the damage had been done to US industry by then. It is now a shadow of its former self, and will probably never recover. The British car industry just died, helped on by Victorian labour relations. Although some UK luxury brands are still in business they are no long British owned. Land Rover is now owned by India's Tata motors, and Bentley by Germany's Volkswagen Group! (Oh the irony!)

My other case study occurred in the same country, but many centuries earlier. In the 6th century the Japanese nation as we know it was still being forged. The Japanese national identity was in its formative stages and they still looked to China for the lead in cultural matters. The ruling elite were educated according to Chinese models: they studied Chinese language, classical Chinese poetry, and the works of Kǒngzǐ (aka Confucius). The conversations of the literati were peppered with allusions to Chinese poets. The Japanese court was modelled on the Tang Chinese Court, both in the layout and architecture of the building, and in the structure of the government. Government officials even dressed according to Chinese models.

In about 552 a Korean King presented the Japanese Emperor with a statue of the Buddha, and some monks who told him about Buddhism. While it was initially divisive Buddhism became the state religion with patronage from Empress Suiko (592-628) and her regent Prince Shōtoku (573-621). Japan was in crisis with loss of territory and allies on the Korean Peninsular along with a flood of Korean refugees. Behind this was the aggressive expansion of the Chinese who also threatened to invade Japan. Now the Buddhism being transmitted at this time was not a religion of personal salvation. Though they may have found it attractive personally, the aristocracy of Japan adopted Buddhism mainly for political reasons. In texts like the Golden Light Sutra and the White Lotus Sutra, Buddhism promised magical protection for rulers and nations that supported it by propagating the sutras.

In outlook the Japanese ruling class were distinctly Confucian. The Emperor was Emperor by divine right, hence his title (copied from the Chinese): Tenno 'Son of Heaven'. And in this worldview the physical world would be ordered only if the political world was: if the Emperor was good and just (by the standards of Kǒngzǐ) then the nation would be protected from natural disasters and the people would be happy. The Chinese imperialism of the day (and both Chinese and Japanese imperialism in modern times) was seen in terms of extending the benevolent order of the Son of Heaven to chaotic barbarians. Which is not so different from Western imperialism.

Order in the royal court equated to order in heaven, and therefore order on earth generally. Keep in mind that then, as now, Japan was particularly susceptible to natural disasters: earthquakes, volcanic eruptions, tsunami (itself a Japanese word), floods, and typhoons were (and still are) common. Added to this the Japanese were almost constantly at war with the aboriginal people of the islands, the Ainu, whom they were displacing from Honshu Island toward the far North. With the added threat of invasion they needed protection, and Buddhism promised it.

Anyone familiar with Mahāyāna texts will be familiar with the offers of protection in them for anyone who recites, copies, or upholds the sutra. And this is what the Buddhism of aristocratic Japan consisted of. The Buddhist monasteries were employed to recite and copy sutras. A later emperor more or less bankrupted the state with his temple building program following a series of famines and natural disasters, and the recovery took centuries.

The upshot of this was that Buddhism became a national religion with the Emperor as sponsor. To be sure it continued to co-exist and syncretise with Shinto, and Confucianism remained at the heart of their political philosophy. We know a lot less, in English publications anyway, about how Pure Land Buddhism became absorbed at the popular level, but by the 9th century it was common for the eclectic wandering holy-men and healers to include elements of Buddhism in their spiels. Had it only been a religion of individuals, making their own personal revolutions, and raising themselves beyond the circumstances of their birth, I have no doubt that the Japanese ruling classes would have ruthlessly stamped it out. Their idea of order was strictly and inflexibly hierarchical and everyone stayed in their place. One could only become a monk with state approval, and the clergy and monasteries were a government department from the beginning. I haven't space to explore it more fully, but the pattern was repeated when Kūkai and Saichō introduced esoteric Buddhism into Japan in the 9th century. It was the interest of the royal family which secured the place of esoteric Buddhism in Japanese history.

The moral I am seeking to illustrate is that by converting leaders rather than followers, both Deming and the Koreans who introduced Buddhism into Japan, ensured the successful establishment of Buddhism in new domains. My understanding of Buddhist history is that this story is repeated down the years in India, China, Tibet, Sri Lanka Thailand etc. Except in the last 200 years and the introduction of Buddhism into the West. Here Buddhism was introduced not to the ruling elite, but to an intellectual elite. It was subsequently spread to the middle classes, but has not made much impression either amongst the leaders and decision makers, nor amongst working class people. I've lived in the UK for the last 10 years so my view is particularly informed by this still class-ridden (and -riven) society, but I think this observation holds true in New Zealand as well, and from what I can gather something similar has happened in the USA, and across Europe.

The only place I know of that has been different is the reintroduction of Buddhism to India, initiated mainly by Dr Ambedkar and his followers, which has taken root in the lowest socio-economic groups: the Dalits. However in India Buddhism has remained largely a religion of the oppressed classes, making little headway outside that group. And they are largely dependent on help from Europe and Taiwan to fund their activities because they are typically amongst the 400 million Indians living in poverty.

So though Buddhism has steadily grown in Europe and America, and helped by the exiled Tibetan community generated lots of good publicity, the possibility of a Buddhist revolution seems as far off as it ever has. After 200 years just 0.3% of the British population called themselves Buddhist in the 2001 census (results of the 2011 census come out this year). Most of our politicians and economists still seem to be in the grip of neo-conservative ideologies, often inspired, directly or indirectly, by the mad ideas of Ayn Rand and her disciples who denied the good of altruism, and elevated self-interest to the status of a sacrament. They dressed their ideology up as 'rational' though clearly Rand herself was at times highly irrational. Neo-cons persuaded many leaders and decision makers that perusing self-interest leads to the greater good - a philosophy that tends to appeal to ruling elites. As a result the rich are certainly richer, but sadly the poor are poorer. There really is no sign that the self-interest of the rich benefits society as a whole, and plenty that it is detrimental.

Buddhists, practising Buddhists, remain a tiny minority in the west. Probably less than 1% of the population even with the explosion of interest in our techniques. We have very little influence. So when some of my colleagues say that they teach mindfulness in a corporate setting I am both cheered and suspicious. If we are going to make a difference to the world, then we must influence decision makers. But I suspect that those corporate settings are middle-management with influence down the chain and not up. Just as with Deming in American they probably won't make a difference. We need to be teaching CEOs not middle managers. And we do not have a successful competitor to spur us on.

There are those who recoil at the idea of politically engaged Buddhism. The arena of politics is one that seems to taint and corrupt everyone who enters it, or even watches from the sidelines. I am dismayed at the stupidity and self-interest of politicians across the spectrum of political ideologies. There is no politician I can think of that I do not see as part of the problem. And yet we Buddhists toil away teaching (on the whole) the middle-aged and middle-classes. Their concerns are typically: stability, financial security, family, career, and so on. By the time they come to our centres they are heavily encumbered with obligations related to these concerns. It is not that they are unworthy, or unwelcome, they aren't, but history shows that a vigorous core of unencumbered men and women is required to lead Buddhist movements lest they become overly concerned with stability and security (this appears to be true of monastics as well!)

One of the responses to this acknowledged problem is to try to reach out to "young people". Though I notice that the current definition of "young" is stretched to the point of near meaninglessness. In my mid-forties I only just don't qualify. The phrase puer aeternis keeps floating through my head. While I agree that the obvious response to an ageing saṅgha is to recruit youngsters, I think we have to take a wider perspective. Reaching out to youngsters (and I think of people younger than 30 at the outside) may well help us survive the inevitable decimation as the Baby Boomers generation fades away. But we want to do more than fill our meditation and Buddhism classes. We want to change the world, we want all living beings to be well and happy. Don't we? Buddhism in all it's forms is revolutionary and has transformed most of Asia (though the continued enthusiasm for Buddhism is not assured) so why not the world?

One question we might want to ask ourselves is why the children of Baby Boomers have not taken up Buddhism with the same enthusiasm as their parents did? In Britain the summer of love was replaced by the winter of discontent (and reading about it you wonder how we can not have learned the error of spending more than we earn!). Donovan gave way to Johnny Rotten. Vote buying Labour governments capitulated to Neo-conservatism. And so on.

I believe that we must change ourselves, that I must change myself. It is imperative that we make ourselves exemplars of the good life. But I'm not convinced that we will create a revolution this way. I may (at a pinch) inspire my little circle, but the reach of my influence is limited. I think we must learn from history and reach out to people with wide spheres of influence, people who make decisions, who create policy, who are widely trusted. We must make them aware of how our ideas can contribute to everyone's well being. Opposing leaders in the West is probably important, but ultimately it achieves little. What we need to do is convert our leaders, and we stand a better chance that other kinds of ideologues such as eco-activists because our interest is not limited to ideology or single issues. In 10 minutes of sitting quietly we can demonstrate that a different approach to life itself is possible.

This is not to say that popular movements aren't useful, though Buddhism is not that popular compared to say bird watching in the UK. We have a problem in that the compromises we make for Buddhism to appeal to a wider audience often strike serious practitioners as counter productive. There's a lot of criticism of "Buddhism lite" for instance, or "Consensus Buddhism" as David Chapman calls it. Buddhism at the popular level has always appealed to the concerns of the masses and focussed on virtue rather than transformation - though a (re)focussing on virtue would be a positive thing for contemporary British society! Buddhism as a practice leading to transformation and freedom has always appealed to a much smaller audience because it is so demanding - traditionally it has demanded renunciation for instance. In the West where everyone is an elite of one, we might have a chance of getting everyone to practice towards freedom with all of the benefits that accrue along the way. I think this would make the world a better place, and provide an environment where the more dedicated and determined practitioners would be supported to pursue liberation, and provide leadership.

Our predecessors sought audiences with kings and emperors and convinced them of the benefits of Buddhism. This more than any other factor is why Buddhism became established in Japan, and China, and Tibet. So every time I see a world leader meeting with the Dalai Lama, I smile. I'm not one of his followers; I don't always agree with his doctrines or his aims; I'm not particularly inspired by Tibetan forms of Buddhism. However he gets to meet presidents and prime ministers. And that is precisely what we need to be doing if we're going to change the world. Perhaps in Britain, since no one trusts politicians any more, we should be thinking in terms of talking to the monarchy about how we can improve the lives of their subjects?


~~oOo~~


My thinking in this essay is also influenced by Malcolm Gladwell's book The Tipping Point: How Little Things Can Make a Big Difference. And by the Adam Curtis's TV documentary All Watched Over by Machines of Loving Grace.

29 January 2010

The Economics of Abundance

Supply & Demand curvesEconomics is the study of to the production, distribution and consumption of goods and services. It is also a practical discipline in which the means of production, distribution and consumption are manipulated by agents in the economy to their benefit. Economists and their ideas dominate our society and have done for at least 100 years. The most fundamental assumption of economics - I recall from having studied it many years ago - is that resources are scarce. Economics seeks to show how dynamics like 'supply and demand' affect price and availability of scarce resources, and from them goods and services, and how markets can be manipulated to the benefit of some individuals or groups in the economy.

But is this fundamental assumption accurate? Are resources scarce? A few months ago I wrote that one of the benefits of 10,000 years of civilisation, as well as one of the draw-backs, is a generalised surplus of food. [1] Months before that I commented on attitudes to obesity in the Western World. [2] How can anyone suggest that resources are scarce in a country where obesity is supposed to be the number one health problem? In fact we have a vast surplus of food and most people, including me, I have to admit, eat more than they need to. Indeed we have so much excess food in the UK that some authorities reckon that as much as 1/3 of food produced is wasted. [3] A rather contradictory picture emerges.

Resources are generally only scarce in the developed world because some people have far more than their fair share, and because we waste so very much of what we do have. Again in my blog 'Why Do We Suffer?' I mentioned that we tend to feel no sense of allegiance to strangers, no need to share our prosperity with them, and most of the people around us are strangers. There is not a great deal we can do about this because we have a limited capacity for human relationships - research suggests that we can keep track of about 150 personal relationships (one of the Dunbar Numbers). Some of us live in cities of millions, and the odds of meeting someone we know by chance can be very small indeed. Somehow we manage this. It's no surprise that the new technologies which have been most successful are the ones that help link people to their friends - internet and cell phones; or that drown out the pressing masses such as TV and media.

On the up side several of my friends work for charities and they report that on the whole people are generous with their money if asked for a contribution. I count myself fortunate to have grown up in, and to now live in, countries with welfare systems for the needy. To some extent we all contribute to the welfare of the many through taxes and other compulsory measures, but also through voluntary work.

But economics is set up to promote competition for scarce resources. The idea that unregulated markets will determine a fair price received what should have a death blow in 2009, as the extent of greedy speculation has been exposed, and the consequences are coming home to roost. But the problems were not new and financial markets had been producing scandals for at least a decade before the credit crunch - think of Enron back in 2001 for instance. The credit crunch shouldn't have been a surprise to us and the reasons that it was are relatively simple - greed at many levels, and an unwillingness to hear negative feedback. As far as I can see there is no sign that anything has fundamentally changed, and at least in the UK the main measures to pay for the excesses of the rich seem to be aimed at the the middle and the poor: bankers will still get multi-million pound bonuses, and the former Prime Minister, Tony Blair, has set up an elaborate company structure to avoid paying tax on the millions he earns as an individual these days. It's not just that the rich are getting richer, but more fundamentally the greedy are getting greedier!

What would the world be like if instead of competing for scarce resources we focussed on meeting basic needs first? If there is such a huge food surplus in the west then ought we not do something about redistributing it? Is competition the most important driver of progress? I recently came across an interview with Professor Lynn Margulis on BBC Radio. Margulis collaborated with James Lovelock in providing a scientific foundation for what is called the Gaia Hypothesis. In the BBC interview she debunked the idea that competition is the driving force of evolution. On the contrary Margulis argued that competition has "nothing to do with evolution". Evolution is driven by symbiosis and cooperation in her view, and the idolisation of competition is "rooted in Victorian patriarchal values". That eminent Victorian, Charles Darwin, was fascinated by the idea of competition weeding out the weaker members of the species for instance, and writes about it repeatedly in The Origin of Species, but seldom mentions cooperation. And yet where would the human race be if we did not cooperate? Economics is surely rooted in the same world view: survival of the fittest, and competition for resources weeding out the weakest competitors, with just a whiff of the idea that being a weaker competitor makes one somehow morally unworthy.

Just because an idea is ubiquitous and widely held to be true by pundits, does not always make it true. Does this, then, mean that I advocate communism? No, I don't advocate any kind of political system - attempts to implement communism have all run into the same problems that capitalist governments have struck. The problems are related to the fundamental problems of greed and hatred. It is not so much that the system is at fault, but the values which underpin it. I note that Marx was also a Victorian. The problem is this view that resources are scarce and that competition is the best way to ensure fair distribution of them. Both premises are demonstrably false: I live in a country with massive surpluses of basic commodities; and competition has consistently encouraged the greedy to be more greedy to the detriment of everyone. The same is true, I think, in most of the developed world. Ironically the other great trend of Victorian times was philanthropy and I associate it particularly, because of my former profession, with free public libraries. Now there is a model for building an enlightened society!

  1. Director of the British Museum, Neil MacGregor, makes much the same point about the abundance of food post the last ice-age because of improvements in agriculture in one of series of vignettes from the A History of the World in 100 Objects "Bird-shaped Pestle". See http://www.bbc.co.uk/programmes/b00nrtd2
  2. see my essay: Who's in Charge?; Dayamati has recently written on obesity in the USA: The Empire Strikes Fat.
  3. On food wastage in the UK see: 'Food wastage on a staggering scale' BBC Website. 2008; 'Campaign launched to reduce UK's £8bn food waste mountain'. The Guardian, 2007.

image: supply and demand curve from www.debunkingeconomics.com.