Category Archives: Philosophy

Would you all please stop bickering.

It was never going to be easy.  Before it had begun important participants, like the US, had already turned up their noses.  The UN conference on racism had a patchy history and was bound to raise hackles.

It is unfortunate that “diplomats” walked out of a speech by a President, even if they have difficulty listening to his language.  It is obvious from the comments circulating that th views of Ahmadinejad are not unique, but are in fact held by millions of people.  And eit is preferable to discuss them with words than with guns, which is usually the case.  It would be a step in the right direction if the US and Europe would engage in the discussion.  Walking out just makes angry people, with guns, angrier.

The comments on this news report (and there were many) present a more balanced range of perspectives than the diplomats that were supposed to engage in discussion.

BBC report: Walkout at Iran leader’s speech

Dog Biscuits

Just a cute story …

Dog Biscuits

by David Rippe

(excerpted from Listen–The Sounds and Silences of Our Secret Lives)

Listen up. Lean in. I have a story to tell. One you will want to hear.

It’s a short trip between cool and fool–two letters actually, alphabetically speaking. You’ll have to decide which one am I. Sorry to be so brash. It is not my way. I’ve been shy all my life, barely inserting myself when necessary. I seldom speak up, preferring to allow others with more to say, stronger beliefs, to be the attraction. That doesn’t mean I’m a doormat, only that I favor the background. But I am too electric to let this pass. So here goes.

I woke with a revelation. One of those bright, dream-induced visions that solve all the problems of the world at once. It was a lucid dream brought about by weeks of financial anxiety and night after night of sleeplessness. We, my wife and I, didn’t weather the collapse of the financial markets any better than anyone else. Who could? With foreclosures through the roof, home prices through the floor, the stock market in the tank and banks stealing trillions with a capital “T” from taxpayers, no one is safe. Everyone’s nest egg is in danger of being carted off by greedy predators. Am I being too harsh? I think not.

Dreams have always been a fascination, a sleepy wonderment, the conscience quietly processing and organizing all hopes, thoughts, fears and disappointments. Worries go here, aspirations over there, that kind of thing. A massive filing system to keep one sane.

As I said, I woke with a revelation. Bursting with enthusiasm but tempered by grogginess I stumbled to the bathroom to perform the standard regimen of personal hygiene–expel waste, brush teeth to minty freshness, wash aging face, comb wildly ill behaved hair. All the while keeping the details of my dream vivid in my mind.

The sensual aroma of sausage, eggs and toast wafted upstairs. The wife was cooking. She’s a good cook. Despite our relationship having become one of utility some years prior during an unremembered period when things switched unnoticed from love to convenience, I was aching to tell her my news. I had figured out the entire world. It all made sense. It was too big, too glorious, and too brilliant to keep to myself. Someone needed to know.

I headed into the kitchen. She was standing over the sink doing dishes, her back to me. “I had the most profound vision last night, dear,” I said with the most enthusiasm I’d mustered since my first raise at work, twelve years ago. “I dreamed that people the world over decided that money was just paper and therefore was worthless. People had gone off it, didn’t care for it, making it useless. At the same time, everyone owned a nice dog or two. Man’s best friend and all that. We loved our pets. Were devoted to them. As such, we decided–me, you and every person on Earth–that dog biscuits were the most prized possession one could own. Dollars were confetti. Diamonds just clear hunks of coal. Gold became a shiny paperweight. People were oobie-scooby over dog biscuits. Overnight dog biscuits became the currency for all goods and services. People waited happily for hours outside PetSmart hoping to horde Beggin’ Strips, Rawhides and Milk-Bones.”

Water and soap sloshed off china and glassware. Steam rose from the sink as my wife labored on. I sat down to a warm breakfast and speared a sausage link. “The President, the Secretary of the Treasury, the Chairman of the Federal Reserve and the President of the World Bank were all on TV begging, imploring people to come to their senses.”

I took a swig of orange juice. It tasted sweeter, more full of life, the most delicious drink I’d ever tasted. “Don’t you see, honey? We’re all just jumping after dog biscuits. We’re a trained circus act. In real life, we’re chasing what doesn’t matter–money! We’re slaves to our passions–you to your shopping, and me to my work. And for what? To make more money to buy more stuff? To fill our attic and garage with crap we don’t even remember we have? We think we’re so sophisticated with all our meaningless trappings. But really we’re just baboons with credit cards and table manners.”

I dug into my scrambled eggs, warm, fluffy and wholesome. “It’s time we grasp a piece of reality. We’re all running around panting, sniffing for clues, yelling ‘Snausage!’ It’s insane. We’re in competition with our selves. We need to simplify. Uh huh, that’s the ticket. Simplify. Simplify. Simplify.”

She turned off the water, grabbed a dishtowel, dried her hands and turned to me. She stared at me her violet eyes twinkling, moist sapphires, searching mine. She said nothing.

“Isn’t it all so clear?” I smiled. “It’s what James Madison and the founding fathers warned against. Citizens so in debt, so driven by material goods, that they are too distracted to pay attention to what really matters. We’ve been brainwashed and converted from citizens to consumers. While we’re busy jumping after dog biscuits we’re being robbed blind. That’s my revelation. We’re all just jumping after dog biscuits! Doesn’t it all make sense? What do you think?”

My wife grinned wide and genuine. “Woof!”

A monumental failure of management.

Another piece by a respected analyst describing the cause of the economic crisis – moral hazard.

Of course, it is not just America’s failure, but one that has been made globally.

America’s monumental failure of management.

by Henry Mintzberg

in The Globe and Mail

“If you always do as you always did, you will always get what you always got.” So goes an old saying. And so goes the American economy.

The problem has become the solution. Americans are now getting from their government what they got from their corporations. The automobile companies are collapsing because of their short-term perspectives and so the government has provided one bailout projected to last a few weeks, and here comes another.

We call this a financial crisis or an economic one, but, at the core, it is a crisis of management. To understand this, consider the mortgage debacle.

How could these mortgages have come to exist in the first place and, worse, how could they have spread to so many of the bluest of blue-chip financial institutions? The answers seem readily apparent. Those who promoted these mortgages were intent on driving up sales as quickly as possible for the benefit of their own bonuses, the ultimate consequences be damned. In fact, they sold off these mortgages as quickly possible.
Related Articles

From the archives

* Managing our way out of this mess
* A top-down problem

The Globe and Mail

But how could any serious financial institution have bought this junk – or, more to the point, tolerated a culture of people too lazy or disinterested to realize it was junk? That, too, is simple: These companies were not being managed. They were being “led” – heroically, no doubt – for short-term spectacular performance. The executives didn’t know, and the employees didn’t care.

What we have here is a monumental failure of management. American management is still revered across much of the globe for what it used to be. Now, a great deal of it is just plain rotten – detached and hubristic. Instead of rolling up their sleeves and getting engaged, too many CEOs sit in their offices and deem: They pronounce targets for others to meet, or else get fired.

‘CASH FOR TRASH’

And the new U.S. administration? It rushes in with dramatic actions, paying out “cash for trash,” deeming the movement of massive amounts of money around the economy, much of it to prop up dying businesses in the short run. More quick fixes for an economy brought down by quick fixes.

The problem has been evident for a long time. Executive compensation, the most evident manifestation of this legal corruption of management, was labelled scandalous by Fortune magazine more than 20 years ago, and repeatedly ever since, to no avail. While America escalated its love affair with leadership, its corporate leaders singled themselves out for increasingly obscene pay packages, all the while extolling the virtues of teamwork and sustainable enterprise.

Alongside this came all that “downsizing”: Fail to make the targets, no matter how profitable the company remained, and out the door went thousands of employees, those “human resources.” So conveniently called, in fact, because while managers have to be careful about human beings, they can dispose of human resources like any other resources.

But at what cost? Rather high, because these people carried out much of the critical knowledge of their companies, as well as those companies’ hearts and souls. A robust enterprise is a community of human beings, not a collection of human resources.

We have been told how productive the American economy has been. Well, check the way productively is calculated: Firing great numbers of people, and expecting those left behind to carry the load before they burn out, is productive, indeed – until the longer-term consequences show up. They have been partly showing up in the massive U.S. trade deficits. The U.S. economy is collapsing because the American enterprises – and worse still, the country’s legendary sense of enterprise – have been collapsing.

To get bailed out yet again, the auto companies have to offer plans. No problem: American companies specialize in making plans. It’s the execution that’s been the problem. (Remember those grand auto shows, with all their exotic cars that never made it to market? That was “planned obsolescence.”) These companies couldn’t succeed by doing, so how are they supposed to succeed by planning? The only thing we know for certain is that these plans will result in many more layoffs. That’s some way to fix an economy.

What we have is a government that palliates: It provides geriatric medicine to its oldest, sickest enterprises in a country that requires pediatric and obstetric medicine for its young and vibrant enterprises, the ones that create the jobs, not eliminate them.

We hear now about “too big to fail.” “Too big to succeed” is more like it. General Motors has been going slowly and painfully bankrupt for decades, managerially as well as financially. The new money will only put off its demise. Americans will have to face this reality sooner or later.

From where I sit, management education appears to be a significant part of this problem. For years, the business schools have been promoting an excessively analytical, detached style of management that has been dragging down organizations.

Every decade, American business schools have been graduating more than a million MBAs, most of whom believe that, because they sat still for a couple of years, they are ready to manage anything. In fact, they have been prepared to manage nothing.

HUBRIS ON A MASSIVE SCALE

Management is a practice, learned in context. No manager, let alone leader, has ever been created in a classroom. Programs that claim to do so promote hubris instead. And that has been carried from the business schools into corporate America on a massive scale.

Harvard Business School, according to its MBA website, is “focused on one purpose – developing leaders.” At Harvard, you become such a leader by reading hundreds of brief case studies, each the day before you or your colleagues are called on to pronounce on what that company should do. Yesterday, you knew nothing about Acme Inc.; today, you’re pretending to decide its future. What kind of leader does that create?

Harvard prides itself on how many of its graduates make it to the executive suites. Learning how to present arguments in a classroom certainly helps. But how do these people perform once they get to those suites? Harvard does not ask. So we took a look.

Joseph Lampel and I found a list of Harvard Business School superstars, published in a 1990 book by a long-term insider. We tracked the performance of the 19 corporate chief executives on that list, many of them famous, across more than a decade. Ten were outright failures (the company went bankrupt, the CEO was fired, a major merger backfired etc.); another four had questionable records at best. Five out of the 19 seemed to do fine. These figures, limited as they were, sounded pretty damning. (When we published our results, there was nary a peep. No one really cared.)

How much discussion has there been at Harvard about the role it might have played in forming the management styles of graduates who, over the past eight years, have been running America and what used to be its largest company? The school is now reviewing its MBA program, but the dean has made it clear that questioning the case-study method will not be on the agenda.

In this, we have America’s problem in a nutshell: the utter absence of collective introspection, whether it be the current crisis, the relationship between the Vietnam and Iraq debacles, even what might have contributed to 9/11, as well as the way it has been compensating and educating its corporate “leaders.” The country seems incapable of learning from its own mistakes.

Put differently, the U.S. appears to be in social gridlock. Thanks to vested interests and their powerful lobbyists, as well as an economic, individualistic dogma that has been embraced so thoughtlessly, it is business as usual in America. And beyond: Our planet is becoming as sick as many of these corporations, yet we are being implored to get back to consumption. Fix the problem now; continue to forget about the future. Except this time, we may be consuming ourselves.

No country in the world has been more admired for its capacity to change, to learn with the times. This remains true of technological change; but, on the social front, America seems incapable of changing.

Will Barack Obama be able to change that? I hope so. I fear not. A huge infusion of money may merely stave off the financial crisis while the management crisis continues to fester, masked by this very money. The dean at Harvard said recently that “we must be involved … in fixing the problem.” The U.S. government thinks likewise. How are the perpetrators of this mess supposed to get us out of it? Maybe the rest of the world will have to wake up, finally, to the realization that continuing to follow America’s lead may be the worst possible strategy. Do we really need to continue to get what we already have?

Henry Mintzberg is Cleghorn professor of management studies at McGill University.

Morals and the Meltdown

A good perspective from Robert Skidelsky.  He writes well.  His language is a bit religious for me, but the analysis is all too accurate.  Here’s the link to his website and the article is copied below.  In our view, we are now confronting the limit to the growth of humanity he concludes with.

Morals and the Meltdown
Robert Skidelsky

London – After World War I, H.G. Wells wrote that a race was on between morality and destruction. Humanity had to abandon its warlike ways, Wells said, or technology would decimate it.

Economic writing, however, conveyed a completely different world. Here technology was deservedly king. Prometheus was a benevolent monarch who scattered the fruits of progress among his people. In the economists’ world, morality should not seek to control technology, but should adapt to its demands. Only by doing so could economic growth be assured and poverty eliminated. Traditional morality faded away as technology multiplied productive power.

We have clung to this faith in technological salvation as the old faiths waned and technology became ever more inventive. Our faith in the market – for the market is the midwife of technological invention – was a result of this. In the name of this faith, we have embraced globalization, the widest possible extension of the market economy.

For the sake of globalization, communities are de-natured, jobs off-shored, and skills continually re-configured. We are told by its apostles that the wholesale impairment of most of what gave meaning to life is necessary to achieve an “efficient allocation of capital” and a “reduction in transaction costs.” Moralities that resist this logic are branded “obstacles to progress.” Protection – the duty the strong owe to the weak – becomes Protectionism, an evil thing that breeds war and corruption.

That today’s global financial meltdown is the direct consequence of the West’s worship of false gods is a proposition that cannot be discussed, much less acknowledged. One of its leading deities is the “efficient market hypothesis” – the belief that the market accurately prices all trades at each moment in time, ruling out booms and slumps, manias and panics. Theological language that might have decried the credit crunch as the “wages of sin,” a come-uppance for prodigious profligacy, has become unusable.

But consider the way in which the term “debt” (the original sin against God, with Satan as the great loan shark) has become “leverage,” a metaphor from engineering that has turned the classical injunction against “getting into debt” into a virtual duty to be “highly leveraged.” To be in debt feeds the double temptation of getting what we want as quickly as possible as well as getting “something for nothing.”

Financial innovation has enlarged both temptations. Mathematical whiz kids developed new financial instruments, which, by promising to rob debt of its sting, broke down the barriers of prudence and self-restraint. The great economist Hyman Minsky’s “merchants of debt” sold their toxic products not only to the credulous and ignorant, but also to greedy corporations and supposedly savvy individuals.

The result was a global explosion of “Ponzi” finance – named after the notorious Italian-American swindler Charles Ponzi – which purported to make such paper as safe and valuable as houses. By contrast, the virtuous Chinese, who save a large proportion of their incomes, were castigated by Western economists for their failure to understand that their duty to humanity was to spend.

The key theoretical point in the transition to a debt-fueled economy was the redefinition of uncertainty as risk. This was the main achievement of mathematical economics. Whereas guarding against uncertainty had traditionally been a moral issue, hedging against risk is a purely technical question.

The main uncertainty in life – the destination of one’s immortal soul – nudges one toward morality. Even the existence of mundane uncertainty gives rise to conventions and rules of thumb that embody the best of human experience in dealing with the unknown. The abolition of uncertainty abolishes the need for moral rules.

Future events could now be decomposed into calculable risks, and strategies and instruments could be developed to satisfy the full range of “risk preferences.” Moreover, because competition between financial intermediaries steadily drives down the “price of risk,” the future became (in theory) virtually risk-free.

This monstrous conceit of contemporary economics has brought the world to the edge of disaster. Obviously, the traditional moral taboos surrounding money had to be loosened for capitalism to get going centuries ago. For example, the classical prohibition on usury was softened from a ban on charging interest on all loans to a ban on charging interest on loans for which the lender had no alternative use, i.e., for charging interest on “hoards” or cash balances.

Without the development of debt finance, the world would be a lot poorer than it is. Yet, in going from one extreme (keeping one’s spare cash under the bed) to the other (lending out money one does not have) is to cut out the sensible middle.

The prudential supervision regime initiated by the Bank of Spain in response to the Spanish banking crises of the 1980’s and 1990’s shows what a sensible middle way might look like. Spanish banks are required to increase their deposits in proportion to their lending and set aside capital against assets in their off-balance sheets.

With little incentive to manufacture “structured investment vehicles,” few Spanish banks created them, thereby avoiding excessive leverage. As a result, Spanish banks typically make provision to cover 150% of bad debts whereas British banks cover only 80-100%, and Spanish homebuyers must pay between 20% and 30% deposit on a house, whereas 100% mortgages have routinely been given in the United States and the United Kingdom in recent years.

H.G. Wells was only partly right: the race between morality and destruction encompasses not just war, but economic life as well. As long as we rely on technical fixes to plug moral gaps and governments rush in with rescue packages that enable the merry-go-round to start up again, we are bound to keep lurching from frenzy to frenzy, punctuated by intervals of collapse. But, at some point, we will confront some limit to growth.

The world says NO to the death penalty

The United Nations General Assembly has at last voted for a global moratorium on the death penalty. While the resolution is nonbinding and its symbolic weight was hardly mentioned in US media, for those who have been trying to move the world away from lethal revenge as government policy, this was a milestone.

The resolution had failed repeatedly in the 1990s, but this time the vote was 104 to 54, with 29 nations abstaining. Progress has come in Europe and Africa. Nations like Senegal, Burundi, Gabon, even Rwanda, shamed by genocide, have decided to reject the death penalty, as official barbarism. The United States, lined up on the other side, with Iran(!), China, Pakistan, Sudan(!) and Iraq(!). Together this blood brotherhood accounts for more than 90% of the world’s executions, according to Amnesty International. Finally global conscience is turning against execution as a criminal deterrent and an instrument of civilized justice. Peace.

Is ‘Do Unto Others’ Written Into Our Genes?

An article by the New York Times based on a series of recent articles and a book, “The Happiness Hypothesis” by Jonathan Haidt, a moral psychologist at the University of Virginia, who has been constructing a broad evolutionary view of morality that traces its connections both to religion and to politics.  Here’s an extract:

Of the moral systems that protect individuals, one is concerned with preventing harm to the person and the other with reciprocity and fairness. Less familiar are the three systems that promote behaviors developed for strengthening the group. These are loyalty to the in-group, respect for authority and hierarchy, and a sense of purity or sanctity.

The five moral systems, in Dr. Haidt’s view, are innate psychological mechanisms that predispose children to absorb certain virtues. Because these virtues are learned, morality may vary widely from culture to culture, while maintaining its central role of restraining selfishness. In Western societies, the focus is on protecting individuals by insisting that everyone be treated fairly. Creativity is high, but society is less orderly. In many other societies, selfishness is suppressed “through practices, rituals and stories that help a person play a cooperative role in a larger social entity,” Dr. Haidt said.

http://www.nytimes.com/2007/09/18/science/18mora.html?th&emc=th