Pithy summary of the problems faced by UK 16-30 year olds in an email sent round by the excellent Intergenerational Foundation:
Frustrated / voiceless / no future / sky-high rents / student debt / injustice / fear for future / unemployed / unpaid internships / living at home / climate change / no prospects / no jobs / jilted / sustainable pensions / tuition fee hike / disenfranchised / boomerang generation
They’re running a film competition, btw.
November 15, 2012 at 5:29 am | More on Economics and development, Influence and networks | 1 Comment
Such a great intro to a speech:
Business as usual died in 2008. Publics understand that. Elites, on the whole, do not. In Britain, our economy is now almost one sixth smaller than economists were saying five years ago it was going to be by now.
Young people in my country understand that they are the first generation for over 300 years since the beginning of the industrial revolution who, as they look at their future, see a prospect that might well be worse than the one their parents contemplated a generation ago. Progress – the betterment of our lives from one generation to the next – is no longer something we can afford to take for granted. People know that something has gone seriously wrong.
We need a new growth model that is less vulnerable to shocks; that rebalances from excessive debt and casino finance towards the creation of value in the real economy; and that greatly reduces the stress that a growing and increasingly affluent population puts on the resource base including the climate.
This is not a minor adjustment. It demands a substantial redesign of the economy and of the system of power relations that underpins the economy. That is the heart of the matter because the forces of incumbency will always start from the strongest position and they will always fight reform.
That is not how things look to many elites around the world. Some profit too much from the old system to countenance the thought of anything different. Others are imprisoned within an economic theory that under current conditions has lost its power to make useful predictions.
The struggle between incumbency elites and those who see the need for change will be the defining struggle of our times. It will demand a monumental effort to build a new consensus between those who govern and those who are governed; between the over 40s and the under 30s; between those who said “trust us” and those who are no longer willing to take it on trust that elites must know what they are doing, and that they are doing it for the best.
(That’s recently retired UK Foreign Office Special Representative on Climate Change John Ashton, pulling no punches. H/t Casper TK.)
October 25, 2012 at 9:50 am | More on Climate and resource scarcity, Cooperation and coherence, Economics and development, Global system, Influence and networks | Comments Off
Frederick Kaufman in the current edition of Nature:
Making money come out of the tap means that fresh water must be given a price anywhere it is traded — a global price that can be arbitraged across the continents. Those in Mumbai or midtown Manhattan who understand the increasing value of water in the world economy will speculate on this undervalued ‘asset’, and their investments will drive up the cost everywhere. A water calamity in China or India — and the food inflation, political instability and humanitarian crisis that will surely follow — will reverberate in price spikes from London to Sydney. This is how bankers will profit.
Economists have begun to model a global water-based futures market featuring financial puts, calls, shorts, longs, exchange-traded funds, indices of indices, options piled on top of options, and all sorts of opportunity for over-the-counter swaps. Flood-insurance companies will certainly want to buy stakes that could mitigate their financial risk. In fact, every corporation that conducts its business in a flood plain, anywhere, would probably participate. Farmers will want to hedge their bets that it will or will not rain, as will frackers and fishermen. As for the speculators, we know who they will be.
The reverberations of a global water futures market can hardly be imagined. This much is clear: a water betting game will leave crops thirsting and push the global price of food far beyond the peaks of the past five years.
The good news is that, unlike the failed attempts to regulate the derivatives markets in food, something can still be done in the case of water. There are plenty of examples of valuing water outside the realm of pure commodification. One of the best examples has been developed in the Ruhr basin in Germany. This riverine resource is managed not by the invisible hand of the market, but by a policy-creating body called the Ruhr Association. Cities, counties, industries and enterprises in the region are represented by associates and delegates. A total of 543 stakeholders negotiate water-abstraction fees and pollution charges. The politics may be messy, but it works. Unfortunately, that is the way with democracy.
There is no easy panacea for the world’s water needs, least of all the global derivatives business, which has proved that it is not to be trusted with mortgage-backed securities, much less our most precious resource. There is no need to initiate a futures market in water only to create yet more financial madness that seems to resist all attempts at regulation. This time around, let the business stop before it starts.
Worth reading the whole thing. He’s pretty scathing about Payments for Ecosystem Services (PES) and work on The Economics of Ecosystems and Biodiversity (TEEB).
October 25, 2012 at 9:32 am | More on Climate and resource scarcity, Economics and development | 1 Comment
Great post from Nils Gilman on Small Precautions:
October 25, 2012 at 6:56 am | More on Conflict and security, Economics and development | Comments Off
In 2006 RAND staged a wargame to think through the implications of a nuclear terorr incident. They created a specific scenario – a tactical nuclear device being detonated by a terrorist organization in the Long Beach harbor – and then staged a role-play to determine how key stakeholders would react and work together. The experience must have been incredible, because even the write-up is riveting. When I revisited this text today, however, what struck me with particular force was RAND’s assessment (this is in 2006, remember) of what the longer-term economic implications of such an event would be:
“The attack is likely to have dramatic economic consequences well beyond the Los Angeles area:
- Many loans and mortgages in Southern California might default.
- Some of the nation’s largest insurance companies might go bankrupt.
- Investors in some of the largest ﬁnancial markets might be unable to meet contract obligations for futures and derivatives.
“While exact outcomes are diﬃcult to predict, these hypothetical consequences suggest alarming vulnerabilities. Restoring normalcy to economic relations would be daunting, as would meeting the sweeping demands to compensate all of the losses.”
As some of you will no doubt observe, all of these consequences in fact did come to pass just two years after this report was issued - as a result of the Lehman Brothers default, the consequent collapse of AIG, and the cascade effects which are still creating malign reverberations throughout the global economy, above all in the Eurozone.
Usually when people say that something would be “like a nuclear bomb going off” they are exaggerating; but in the case of the Lehman default, it is accurate.
I like Change.org. Everyone likes Change.org. It’s about harnessing the power of the internet to empower citizens and help them push for stuff they mind about – everything, as they say, from “supporting curbside recycling programs to fighting wrongful deportation to protecting against anti-gay bullying”. So why is my Facebook feed suddenly full of people accusing them of (for example) “leaving behind values to chase the dollar bills”? Over to the Huffington Post:
Change.org, the online social movement company founded on progressive values, has decided to change its advertising policy to allow for corporate advertising, Republican Party solicitations, astroturf campaigns, anti-abortion or anti-union ads and other controversial sponsorships, according to internal company documents.
Change.org currently operates under a values-based client policy, only accepting advertisements from progressive organizations that share its values. The new policy will be closer to “a Google-like open advertising policy in which determinations about which advertisements we’ll accept are based on the content of the ad, not the group doing the advertising,” according to a company FAQ sent to staff.
So what gives? Has Change.org really just tipped overnight to inviting ads from corporate polluters, the National Rifle Association, puppy torturers and other undesirables?
Here’s how Change.org currently works. Most of its petitions are posted by individuals, using free tools. No money changes hands. Companies can use these tools to post petitions too, again for free – like this. But companies, NGOs and other organisations can also decide to pay for a petition. For this, they get profile on the site, through their petition popping up in front of users who’ve just signed a petition about something else. Today, the only organisations allowed to do that are ones that Change.org deems progressive. And that’s what’s about to change.
Here’s their CEO explaining the rationale for change in an email to staff (likewise leaked to Huffington Post – see also the full FAQ that Change.org produced for its staff):
“[W]e as an organization have transitioned from an American cause-based organizing network with a largely progressive agenda into a global platform open to a wider diversity of participants and perspectives. Yet the honest reality is that we haven’t fully made this transition. At least in the US, we still often see things through a traditional partisan progressive lens, and over the past couple months it’s become clear that we have a choice: we can continue to try to have it both ways and risk getting pigeonholed into being a partisan organization with a particular agenda and limited audience, or we can break out of this mold and aspire to something much bigger –- to true empowerment everywhere.”
OK. I can see why you’d want to empower all citizens, everywhere, without attempting to impose agendas on them from above. But the bit I struggle with is why it logically follows that Change.org should also want to empower any company or lobby group that wants to advertise on the site. These are, after all, two very different theories of change. Using the web to help citizens aggregate their voices is about people power; adverts are about dollar power. Free petitions are open to anyone who can energise and inspire; adverts are open to those that can afford them. You can want to empower the little guy, or you can want to empower everyone – but if you’re genuinely not fussed about who you empower or what they’re trying to achieve, then what is it that you actually stand for?
Change.org’s answer to this is that big companies or lobby groups are “powerful with or without us” – but that by taking their money, Change.org can spend it on things like its campaign support team, which is all about “helping the users of our free platform win, and highlighting examples of the most inspiring campaigns”. I think this is a cop-out. Change.org may not be able to change whether particular companies or lobby groups are powerful or not, but it can clearly make a decision about whether or not to sell them access to its users.
In the absence of a clearer explanation of the new policy (or what was wrong with the old one), many have concluded that it’s just about the money. Here for instance is US political blogger Aaron Krager:
You cannot offer people an effective tool for social change when opposing forces use it again you. Offering organizations this tool to fight against women’s rights and simultaneously keep a pro-choice group is beyond crazy. This is like giving a person a hammer to drive in a nail while giving another person that is trying to take the nail out a hammer as well. There is no theory of change with this newly proposed open platform. It is a money grab. Pure and simple. Progressive organizations should abandon Change.org just as the company abandoned them by selling out.
But actually, having spent several hours today and yesterday debating back and forth over Twitter, Facebook and email with Change.org staff, I’m inclined to give them more of the benefit of the doubt than that. I think they genuinely believe they’re doing the right thing. And they are adamant that it’s not about the money. Here’s an excerpt from an email they sent me yesterday:
We didn’t even consider the prospect of additional revenue when taking this decision … Money categorically didn’t drive this decision.
Of course, that assurance still leaves the question: in that case, why not simply drop paid-for adverts altogether, and only have free petitions on the site? Better still, why not say that only individuals (and not organisations) are allowed to post them? That would be a theory of change focused on the little guy.
Answer: because then Change.org would cease to exist. Here’s another excerpt from the same email:
We’re proud of our status as a mission-driven social enterprise, and our revenue model allows us to be financially self-sustaining and independent of foundations or corporations, while growing rapidly to serve tens of millions of users. It’s all explained in detail here. Obviously, we can’t just ditch our revenue model. Advertising in the form of sponsored petitions is how we generate our revenue. It’s what makes our core, free service possible, and it’s crucial to our sustainability and growth.
So while money may not have been the main driver of their decision, the paragraph above makes it clear that it must have been a factor in their thinking. Only a bunch of idiots would fail to think through what any new policy, especially one as far-reaching as this, would mean for their core business model.
With the benefit of hindsight, I think Change.org would have been much better off admitting to users that financial considerations were at least part of the calculus, though maybe not in the way cynics thought – and then having a frank conversation with them about the pros and cons of the proposed change, including whether the upside of having a campaigns support team is worth the downside of accepting paid-for content from anyone who can afford it.
Still, it’s not too late to start having that conversation – which is of course what they’ve ended up doing over the last 24 hours. And although I suspect that some of their staff probably feel a bit bruised by some of the invective hurled their way, they should take the heatedness of the debate as a big compliment too. It shows they’ve built something that people love.
October 24, 2012 at 1:14 pm | More on Influence and networks | 2 Comments
Did this really just happen?
Six Italian scientists and an ex-government official have been sentenced to six years in prison over the 2009 deadly earthquake in L’Aquila. A regional court found them guilty of multiple manslaughter. Prosecutors said the defendants gave a falsely reassuring statement before the quake, while the defence maintained there was no way to predict major quakes.
That is so obviously, totally and unbelievably stupid that I am for once lost for words. So I shall content myself with linking (again) to the literature on what makes for high-reliability organisations. Over to Karl Weick and Kathleen Sutcliffe in their classic book on the subject, Managing the Unexpected :
The best high reliability organisations increase their knowledge base by encouraging and rewarding error reporting, even going so far as to reward those who have committed them … researchers Martin Laundau and Donald Chisholm provide [the example of] a seaman on the nuclear carrier Carl Vinson who reported the loss of a tool on the deck. All aircraft aloft were redirected to land bases until the tool was found, and the seaman was commended for his action – recognizing a potential danger – the next day at a formal ceremony.
That is how you create a transparent organisational culture that displays what Weick and Sutcliffe call ”a preoccupation with failure”, that recognises that uncertainty and accidents are inherent parts of the real world, and that aims to learn from them when they happen.
If on the other hand your reaction to uncertainty and accidents is instead to imprison people for them, then you’re not only an idiot; you’re also contributing towards more of both. Judge Marco Billi, ladies and gentlemen. What an imbecile.
October 23, 2012 at 11:51 am | More on Cooperation and coherence | Comments Off
The FT’s Gillian Tett reports today on a conference presentation given by historical sociologist Dennis Smith, who’s been working on the question of how humiliation operates at the cultural / collective psychological level – and what this means for the Eurozone.
The whole article‘s worth reading, but here are a couple of highlights. First, on how humiliation works:
Psychologists believe the process of “humiliation” has specific attributes, when it arises in people. Unlike shame, humiliation is not a phenomenon which is internally driven, that is, something that a person feels when they transgress a moral norm. Instead, the hallmark of humiliation is that it is done by somebody to someone else.
Typically, it occurs in three steps: first there is a loss of autonomy, or control; then there is a demotion of status; and last, a partial or complete exclusion from the group. This three-step process usually triggers short-term coping mechanisms, such as flight, rebellion or disassociation. There are longer-term responses also, most notably “acceptance” – via “escape” or “conciliation”, to use the jargon – or “challenge” – via “revenge” and “resistance”. Or, more usually, individuals react with a blend of those responses.
So what does that mean for European politics? Well, Tett continues, the Eurozone’s periphery countries have indeed experienced “a loss of control, a demotion in relative status and exclusion from decision making processes (if not the actual euro, or not yet)” – and it’s interesting to observe how different European countries have used different coping strategies:
October 19, 2012 at 7:22 am | More on Economics and development, Europe and Central Asia, Influence and networks | Comments Off
National stereotypes are, of course controversial and dangerous. But Prof Smith believes, for example, that Ireland already has extensive cultural coping mechanisms to deal with humiliation, having lived with British dominance in decades past. This underdog habit was briefly interrupted by the credit boom, but too briefly to let the Irish forget those habits. Thus they have responded to the latest humiliation with escape (ie emigration), pragmatic conciliation (reform) and defiant compliance (laced with humour).“This tactic parades the supposedly demeaning identity as a kind of banner, with amusement or contempt, showing that carrying this label is quite bearable,” says Prof Smith. For example, he says, Irish fans about to fly off to the European football championship in June 2012 displayed an Irish flag with the words: “Angela Merkel Thinks We’re At Work”.
However, Greece has historically been marked by a high level of national pride. “During 25 years of prosperity, many Greek citizens had been rescued by the expansion of the public sector . . . they had buried the painful past in forgetfulness and become used to the more comfortable present (now the recent past),” Prof Smith argues. Thus, the current humiliation, and squeeze on the public sector, has been a profound shock. Instead of pragmatic conciliation, “a desire for revenge is a much more prominent response than in Ireland”, he says, noting that “politicians are physically attacked in the streets. Major public buildings are set on fire. German politicians are caricatured as Nazis in the press . . . the radical right and the radical left are both resurgent.”
Prof Smith’s research has not attempted to place Spain on the coach. But I suspect the nation is nearer to Greece in its instincts than Ireland; humiliation is not something Spain has had much experience of “coping” with in the past. Whether the Spanish agree with this assessment or not, the key issue is this: if Angela Merkel or the other strong eurozone leaders want to forge a workable solution to the crisis, they need to start thinking harder about that “H” word. Otherwise, the national psychologies could yet turn more pathogical.
An intriguing tweet from EU development commissioner Andris Piebalgs:
What could he possibly have said?
October 18, 2012 at 9:28 am | More on Economics and development, Global system | Comments Off
…courtesy of the World Bank’s 2013 World Development Report (which is on jobs, and definitely worth a read):
October 18, 2012 at 8:01 am | More on Economics and development | Comments Off
- 1.6 billion people work for a wage or salary, compared to 1.5 billion in farming or self-employment
- The average Mexican firm will grow to employ twice as many people over 35 years; in the US, it’s 10 times as many over the same period
- 21 million people are victims of forced labour
- Women’s labour force participation is 77% in Vietnam, but only 28% in Pakistan
- 600 million new jobs are needed over the next 15 years just to keep current global unemployment rates [6%, according to the ILO] at its current level
- The global total of NEETs (young people not in education, employment or training) is 621 million
- The number of international migrants as a share of world population is 3% – but in Kuwait, Qatar and the UAE, the foreign-born population is 60%
“Some dismiss inequality and focus instead on overall growth – arguing, in effect, that a rising tide lifts all boats. When a handful of yachts become ocean liners while the rest remain lowly canoes, something is seriously amiss.”
Um, that’s a group of IMF economists speaking (quoted in an NYT piece today).
Even more interesting is this little nugget:
“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.
Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the I.M.F. concluded.
Pretty arresting, when you stop to think about how long the IMF argued that inequality was in effect the price you had to pay for policies that would foster high growth rates.
October 17, 2012 at 4:10 pm | More on Economics and development | Comments Off