The situation & what got us there

As identified in Ban Ki-moon’s address:

“For most of the last century, economic growth fuelled by what seemed to be a certain truth: the abundance of natural resources, mining our way to growth, burning our way to prosperity, believing in consumption without consequences. Climate change has rendered the current model extremely dangerous: a recipe for national disaster, a global suicide pact.”

Lack of systems thinking

• We don’t see the interconnectedness of world problems. Lack of appreciation or understanding of the consequences of what we do (or have done).
• [Environmental] issues affect so many disciplines, cross-disciplinary interaction is essential for developing robust environmental policies. Quite often, failure to account for these interactions has often just shifted undesired impacts from one domain to another, and resulted in unexpected surprises from well-intentioned actions.
• Doom fate, conspiracy theory and complexity theory misused allows us to avoid the intellectual and ethical dilemmas.
• Polarization, duality of the individual (parts) vs the group and the ecosystem (whole)
• All problems can not be fixed by systemic thinking though, sometimes only moral action by the participants will make it work…and you can not legislate morality..
• Solutions exist, but they are not considered as part of a whole, and are not implemented question of mindset. (see pegasus’ 7 sustainability blunders)
• Theoretical solutions are disconnected from application

Economy managed towards bankruptcy

• If households and corporations were managed as economies currently are, they would go bankrupt
• Corporations externalize costs (health, environment, social distress, depletion of resources) that are borne by society (tax payer or printed money –debt-).
• Free market western democracy governments -in particular the US- do not pass on these costs to those who make profits out of avoiding them. It is costs and not profits that trickle down.
• Reckless finance and reward system
• System benefits some parts and not the whole. It’s a political issue. And an abuse of power of issue
• The system functions on micro economy principles and behaviors that are toxic and destructive, but are widely accepted as desirable and admirable and have been promoted, and even radicalized through [bad] management theories and practices so as to become self fulfilling prophecies and self reinforcing behaviors. (Ghossal paper) http://journals.aomonline.org/amle/v4n1.html#
• Economy in its original sense is to “well manage the household and the resources, with reasonable and due care”… Where is the reasonable due care?

Economic principles to challenge

• The financial mathematical models of free markets have been proven to fail repeatedly…in no small part because having observed the past, we can no longer predict the future.
• Competitive theory of evolution by the gladiatorial evolutionists (Thomas Huxley) vs cooperative evolution (Stephen Jay Gould in “’Bully for Brontosaurus) & Geert Hoffstede
• Nature seen as a vast reservoir of energy and resources to tap into (tragedy of the commons, externality costs), reinforced by the biblical transcendence of man over nature
• The “right to consume” and “right to exploit”. Story of stuff exploiting along the whole chain (resources, people, minds, wallets) http://thelearningngo.wordpress.com/2011/02/04/the-story-of-stuff/
• The American idea that everything good comes from consumer spending: the key fallacy in America today.
• The need to grow the economy. Growth based on consumption. Free markets and green growth? Are they compatible?
• The overleveraging of the economy (growth based on debt), transfer of wealth through debt from consumer and states to corporations, intermediaries and shareholders
• The notion of accumulation of capital, resources, property and self-interest (Locke) – Now accumulation of intellectual property that may block innovation or usage. Concentration of wealth > power
• The shift in notion of ownership of enterprise: owners who know what they own care for it better… Now ownership is increasingly diluted: who owns what?
• Actual economic facts lost/disappeared in fragmentation, algorithms, complexity and black boxes
• Capital diverted from productive investment toward financial markets that are not efficient and based on advantage from unbalances and time adjustments with automated transactions, round trips in seconds that do not reflect conscious choices [not to mention long term strategic], based on micro variations that can be fabricated/influenced by mass communication favoring speculation, possibility to do all this on credit, rain making notation agencies, investment banks who work on both ends, derivatives and finance innovation the mechanism of which very few understand, masking risk and inducing volatility…
• Society viewed through an economic/financial prism. Epitomized in GDP that only takes into account flow. Not debt, real wealth, investments.
• Notion that only labor and capital inputs (variables), and later, only capital inputs (the “real” variable), matter statistically speaking, and the outputs, especially the undesired ones, simply ignored, destroying the concept of productivity, and then allowing it to destroy us…
• No accounting of “depreciation” of the commons for future reconstitution (such as in the “private” economy)
• Intangible elements of value created that are not measured consistently. Therefore, the model is partial and the outcome is biased. It describes and predicts the parts considered in the model and neglects the elements left aside that can be critical.
• At some future point this normal definition of “winning” (of the parts consuming the whole) results in everyone loosing and taking the system in question back to ground zero (The winner takes all)
• Adam Smiths theory of natural inclination towards self interest transformed into a social mechanism, embedded in and reinforced by the system.
• The system rewards bad behavior and introduces a feed forward bias that reinforces it.
• Finance & trade have been globalized, but not the value of work and human rights; leading to abuses of emerging work forces
• Globalization has produced more poverty than ever before by restricting tribes, villages, hamlets from designing a coherent way of living in modernity, because these ways of life are counter to the “global economic requirement of ROI capital”

Globalisation & Power

• Multinational corporations and international financial markets have somehow supplanted or impinged on the sovereignty of the state
• Risks inherent to the fact that wealth and class have always been aligned with a kind of military power and the willingness to use force.
• In order for any other new model to be implemented, some kind of significant external pressure must be exerted.
• Economic development requires the accumulation of capital and that, in turn, requires low wages and high savings rates. This is more easily accomplished under an autocratic government that is capable of imposing its will on the people than a democratic one that is responsive to the wishes of the electorate. Many claim that some kind of dictatorship is needed to get economic development going.
• “The US supported a Pentagon run industrial policy and an elaborate system of military Keynesianism. The determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it does not contribute to either production or consumption is now proving to be a form of slow economic suicide.” Chalmers Johnson, former CIA analyst ‘Dismantling the Empire: America’s Last Best Hope
• Our searching for a better truth in better “leaders” in the UN or WEF speakers, automated reliance on hierarchy
• Contradiction between need for being governed and refusal of regulation (David H)
• Global governance versus global government: Global government is a problem. Peaceful activism and constructive confrontation are the only tools to use at the moment.
• David Rothopf’s book Superclass deals with the new global elites and distribution of power and the current crisis and “dislocations” due to global “marketism”: http://bit.ly/hqseDY
• Both he and Parag Kanah author of ‘How to run the world’ call for a balancing counter power
• Further references:
• Lord Mark Malloch-Brown “The Unfinished Global Revolution” http://www.rahimkanani.com/2011/02/15/an-interview-with-lord-mark-malloch-brown-on-the-unfinished-global-revolution/
• “The Collapse of Globalism and the reinvention of the world” John Ralston Saul

Bad ethics/behaviors, imbedded in the system?

• People are parts in the system. Are their behaviors part of the system?
• Something in the ethics/ethos produced the side effects?
• Ethical and moral values of community have been demoted in favor of the certainty that humans are primarily driven by self-interest.
• Lost: the protestant ethics of northern Europe based on trust. Fewer people in communities are “self-accountable”
• Business no longer based on ethical principles. The seven deadly sins.
• Tied into a Faustian Fix (always the short term gain, with the costs always sent elsewhere, including the future).
• A small percentage of the people exhibit the majority of the bad behaviour: how do we bring in checks and balances to limit the effects of those bad actors on the system and break the feed forward bias so that behaviour is not rewarded and the majority of the people who are acting morally are not penalized by the few.
• Goal is to maximize gain and avoid any societal dues.
• Objectivism exacerbates Individualism through freedom of self achievement, it obliterates collective conscience and responsibility from interdependence as well as influence of context.
• Personal responsibility & responsible freedom vs our free right to be greedy?
• How do we define, create, nurture and sustain freedom without its side effects?
• How able are we to modify our lifestyle our behaviors? Need for mankind to always push the limits…
• Should we look at behavioral economics for a paradigm shift?.

Consciousness/Psyche

• Have we been “brainwashed”? “Evolution of our mindset” is the most important issue.
• Level of consciousness and evolution of the human psyche.
• Can an increased consciousness changes worldview and relationship to self-interest?
• How to bring back conscience and reasonable due care to economics, the free market and business?

What to do?
Isn’t the issue political by essence? In both senses: the living together and the power struggle…

UN call – Sustainability – Summary 3 – General Directions & Approach