Caught in the Web of Social Disintegration
I wrote this short paper and sent it to Bill Emmott the Editor of the Economist back in the early 1990’s. At the time I chose to experiment with a new style of writing essays that more flowed then was structured. It was actually a form of poetry within an essay process that reflected the substance of what I was writing about. Like nature we are in cycles and flows, I attempted to write in a flow, as indeed the ideas just flowed to me.
Not surprisingly Bill wrote back with the observation it had no beginning, middle or conclusion. Reading back over my analysis the issues are pertinent today, even more so. I would send the same paper again. I don’t have to conform to writing conventions, what matters most is the substance, what matters least is the format. Had he looked deeper or asked questions he may have discovered a philosopher. Did the Economist want philosophers or economists? I guess reading the articles today reveals the answer to that question. What I think we need today is more philosophical/poetic inquiry. In my experience the creativity of this type of inquiry leads us into deeper questions and insights beyond logic and conjecture, it takes us into awareness.
The structured approach in my view renders us stuck with existing models unable to move out of those structures, we become imprisoned by traditional thought and convention. Business structures and policies ensure we do not deviate from the norm. That was always the problem with economics as a school of thought, it dealt with inputs and outputs and essentially counting resources and ways to utilise resources efficiently, but didn’t understand the ecological and social context within which we exist. I recall speaking to my economics professor about the limits to thinking in economics, not unlike the notion of limits to (inner) growth. I see it as a abstract science imposed over a social psychology which was unable to look holistically at the big picture as a guiding hand to expanded social/material prosperity within ecological boundaries. Instead the logic reduced this organic/holistic natural order into manageable bite sizes that could be interpreted, linearly forecast as a form of guide to the real wealth of nations. I regard this type of thinking as reductionist, where we are going is expansive/creative feeling/thinking (in that order) where we create our world in harmony with our true nature and real needs and wants. Instead what we got was rational thinking that manufactured growth to expand economic growth and balance sheets (profit).
In the future we are going to access real needs and wants and that requires us to learn to go with the flow of our true life force. I am living this way now as I have broken out of fixed beliefs, fixed structures, job routines to allow nature to guide and nudge me through intuition and feeling about how I should follow the unfolding of my life. I am connecting to a higher intelligence which is not in models but in knowing and intuition, as I have moved from the detached doing to the integrated being. This is a whole new paradigm and way of seeing that goes beyond our current logic and western philosophies. I am sure in truth it is not new as the indigenous peoples across the world knew it. They were wise mystics that saw no separation or structures in their natural world, they had learned through trial and error how to live in harmony with nature and not destroy themselves by opposing it. That is how intelligent and robust has been the human species. Without this natural ability to adapt we cannot survive. The economic modelling is not about adaptation it is about structuring life to fit our boxes, it doesn’t work that way. Nature is the final arbiter not national governments or experts on CNN. Nature selects only organisms that are in harmony with the whole not the parts. We can only tune into this when we deeply listen to nature (our nature), are you listening…. to yourself? When you do a new way of being and seeing will open up and indeed our world will change.
So I didn’t get published by the Economist. I wondered about these papers on many occasions over the years. My mum recently posted me a red folder where she kept all my letters when in London. So it looks like my papers found me.
I will be self published by Peace is Our True Nature reflecting my own voice, independence and democracy which I claim wholeheartedly and enthusiastically.
My viewpoint has not changed all these years, other than expanding through maturity acquiring a deeper philosophical/spiritual dimension which I call my own book of wisdom. That is my filter.
CAUGHT IN A WEB
The financial ecosystem ebbs and flows in uncertain directions, instinctively fossicking and gathering in low lying habitats to then escape to the safe havens of high abundance, conducive to reproduction. In its present metamorphosis the financial cycle has become imperceptible to the naked eye. From its origin it is downloaded, camouflaged in transitory forms of digital to analogue and channelled around the earth in fractions of a second. This is the lifeblood of the world economic system. At its heart, the world’s accountants congregate monitoring the inflows and outflows to maximise profit. However, all parts are competing and there are fears of an impending stroke, the humble balance sheet is now a pacemaker, and that’s no joke!
The aftermath of prolific bank lending in the 1980’s produced a corporate refocus from raising funds by debt financing (bank loans) on the liability side of the balance sheet to equity financing (selling shares) on the asset side of the balance sheet. The admittance of a variety of often sophisticated shareholders into companies diluted the potency of executive decision making and exerted pressure to maximise profits in the short run. The scrutiny by shareholders ensured unwavering attention to continuing profit over loss and the encouragement of growth translating into dividends. Therefore to attract new capital, companies must earn a return on equity.
In the 1990’s the stakes are higher, the state of play has intensified. Forces such as the entry and dramatic evolution of new global competitors, debt burdened governments, and the formation of trading blocs has synthetically created a shrinking world market. The losses of global and domestic market shares have forced companies to focus on reducing costs. Additionally, the utilisation of technology and the growing attractiveness of being ‘lean and mean’ has unleashed an increasing displacement of labour for capital, as an input to production. Many senior managers consider labour shedding or harvesting as the most effective and necessary route to international competitiveness and prosperity.
In Britain over 1992/93, companies actively engaged in labour shedding including: BP, British Telecom, British Gas, J Sainsbury, WH Smith, Barclays, TSB, NatWest, Unilever, ICI, Tesco and Guinness. Universally this group transferred approximately 51,200 employees to the expenditure side of the government budget, and this is only the tip of the iceberg. In the last quarter, the number of employees made redundant was estimated to be 92,000 people. The changing attitude and relationship towards employees is highlighted in a statement by Alan Bowkett of Berisford International, contending that “…in any walk of life today you can never guarantee jobs in the future.”
The increasing power of multinational companies and the drive for international competitiveness to sustain profitability, outlines a familiar silhouette to the mercantilists of the 16th and 17th centuries. The mercantilists penchant for foreign trade and the belief that wealth could be attained through exporting, bodes uneasily in the over-populated, environmentally depleted world of today. Similarly, the present day resurgence of ecological ideas are congruent with the French Physiocrats of the 18th century who opposed mercantilism, asserting that true wealth was connected to agriculture and the land. Notably, the word ‘physiocracy’ actually meant ‘the rule of nature’.
The persistent pursuit of economic growth justified by international competitiveness coupled with cost assessment measures lies at the centre of our present day problems. The opportunity cost of the insuring social upheavals created by redundancies and persistent high levels of unemployment are evident all over the world. These market failures mask serious flaws in our current thinking. The profit motive and the endless energies directed into economic growth continue on, without any real acknowledgement of the finite limits within which we all live.
Economic growth is embedded in the values of self-assertion, expansion and competition and can be related to Newtonian physics. Growth is relentlessly pursued as if there is an assumption of no limits, being absolute and existing in infinite space and time. Notwithstanding, the Economics profession has long professed the virtues of continual growth. During human evolutionary stages of lower populations and economic isolation these ideas were justifiable, reinforced by the growing demand for goods and labour. However, even classical economists such as Adam Smith, David Ricardo and Thomas Malthus recognised there were limits to growth. Adam Smith went as far as to state that when the wealth of nations had grown to their natural limits, then economic progress would end.
The Worldwatch Institute advocates that policymakers should replace economic growth with sustainability as their central goal. Sustainability in part, requires the incorporate of social and environmental costs into the financial accounting equation on both the national and corporate levels. National per capital measures of Gross National Product (GNP) are static and deficient because of the linear focus on financial wellbeing rather than the ‘real’ human wellbeing of communities. New measures envisaged reflect environmental degradation and the quality of life issues. One such index, the Human Development Index (HDI) was devised by the United Nations and supplements GDP measures by accounting for factors such as longevity, knowledge and command over resources.
Corporate cost accounting cleanly dissects the business entity from the community. There are no visible provisions for pollution, environmental impacts or environmental depreciation. The price of a commodity as an input to production is set by the vagaries of demand and supply, rather than factoring in resource depletion and renewability criteria. Thus, the artificially low price of natural resources creates literally a false economy. Paradoxically, the low price indicates firstly, a low value and secondly, excessive supply.
Our generation has reached a juncture, it is obvious our present path will lead to serious social disintegration and threaten our very existence. The notions of wealth and progress are relatively recent aspirations in terms of human civilisation. However, the circle has turned and we are being challenged by ancient definitions of human enrichment and environmental co-existence. The Amazon Indian society is an example of the antithesis of our so-called civilised society. The Indians consider the accumulations of wealth and possessions as dysfunctional. One who accumulates obviously lacks social relations with others, and has no-one with which to share. Finally in the words of Goeth ‘the things that matter most must never be at the mercy of the things which matter least”.