What is more likely: That an American entrepreneur will look for an early exit strategy to live the good life in Europe or that a French impresario will consider giving up a dinner invitation to Pierre Gagnaire (one of the World’s best restaurants) for a meeting with potential investors?
As absurd as the question seems, that is the tone of the debate going on among the readers of celebrity-entrepreneurs Michael Arrington (Joie De Vivre: The Europeans Are Out To Lunch) and Loic Le Meur (Should Michael Arrington Be Invited At LeWeb Next Year). The word battle, taking place across blogs posts, comments, twitter messages continues to scale as people are quick to join sides and it seems there are only two ways of being an entrepreneur: you either kill yourself building a company and sacrifice all immediate personal satisfaction or give up trying to be successful in the business world but discover the joys of life.
What most people engaged in this debate are not recognizing (and I’ll admit I haven’t finished reading all comments/posts) is that everyone is really advocating the liberal ideology, where individual success is what matters the most. One could even judge from recent events, that individuals may feel entitled to succeed at the expense of others.
The American entrepreneurial spirit, driven by hyper-competition will not hesitate to take every opportunity to grow a business, which would be great if the ultimate objective of such business was to enhance the life of all the people that depend on it. But too many times we’ve seen greed triumph over the high ideals of the early capitalists, leading to an early sell without concern (more on this from Matthew Ingram) for long term prosperity. However, a life style without such ambition may lead to stagnation. Feeling entitled to long lunches, 35-hour weeks without producing the output that the world needs to overcome the current crisis, may be just as damaging, though.
In past posts I’ve explored the relationship between growing cities and their hunger for an accelerated rhythm. I’ve also quietly considered what is it that everyone wishes in the long term. Why are people attracted to quiet, relaxed retreats away from the fast-lived scene of the big cities?
It seems to me that putting the individual ahead of the collective is the cause of problems in any case. If the entrepreneur was every bit as considered when selling the business as he was while building the business, accounting not only for individual pay-out but overall society impact… and every citizen just as concerned for overall output, even at the expense of personal gratification we may have a new entrepreneurial spirit for our post-bonanza era.
The latest book from Benjamin R. Barber, “Consumed: How Markets Corrupt Children, Infantilize Adults, and Shallow Citizens Whole” presents a timely critic to capitalism, not as an economic theory, but as a flag to incite mass consumption where there are no real needs. Barber explains about capitalism:
…in the beginning of capitalism — in the 15th and 16th century — capitalism was focused on production, on hard work, on deferred gratification, on altruism. People investing and saving and capitalists acquiring wealth and keeping it in order to do further investments. All in the name of producing goods for people with very real needs and down the line making some profit from it as well. The problem is, today we have not a productivist economy but a consumer economy. And the emphasis today is not on production, but on consuming. And you’ve got a capitalism which is producing an awful lot of goods which are chasing very few needs, while real needs are going unmet around the world.
Very much in line with the previous post on the story of stuff, it seems that fixing the problem has nothing to do with a radical change of economic system but a fundamental shift in our attitudes as consumers.
The greatest documentary I’ve seen since “The Corporation” is delivered by Annie Leonard, an expert in sustainability, in a video.
The Story of Stuff is a 20-minute, fast-paced, fact-filled look at the underside of our production and consumption patterns, with a special focus on the United States. All the stuff in our lives, beginning from the extraction of the resources to make it, through its production, sale, use and disposal, affects communities at home and abroad, yet most of this is hidden from view. The Story of Stuff exposes the connections between a huge number of environmental and social issues and calls for all of us to create a more sustainable and just world. It’ll teach you something. It’ll make you laugh, and it just may change the way you look at all the stuff in your life forever.
After watching the full video you’ll be itching to do something about it. Here is a quick summary of 10 things she suggests you can do: Power down, Waste less, Spread the word, DeTox your life, Unplug from media and Plug In the community, Drive less, Recycle, Buy Green, Buy Fair, Buy Local, Buy Used, and most importantly, Buy Less.
Do you think that foreign nations should participate in the election of American presidents?
Writer David Usborne writes Outside Influence – USA in the February 2008 issue of Monocle:
Look beyond the cliché of hidebound insularism and you quickly see that just as the rest of the world is not immune to American influences, America is not immune to the rest of the world, even in its domestic affairs.
I had already explored the cultural influence that the world exercises on the United States, but given the political strength of the super power, it would seem absurd to expect that the United States would open up to the point of allowing foreigners to exercise any kind of influence on the outcome of their elections. Nevertheless the fact is that such influence is not gained in the form of votes (at least not of the popular kind), but through lobbyists that represent the most diverse interests, from foreign countries to global corporations trying to advocate their private causes. Somehow the idea of a few global corporations paying the salaries of lobbyist that work side by side with the most influential politicians of the United States doesn’t seem as crazy as gathering a open forum of global citizens speaking their mind about who should be the leader of the United States.
However, since money is the one language that the American system understands well, let’s hope that a growing number of concerned global citizens will be able to influence their business peers in the United States and eventually state the higher goals that may lead to benefits abroad. The following table shows some of the countries already making an impact on specific regions of the United States through business deals in most cases:
The Toronto Star has been running a series entitled War on Poverty. Although the focus of the series is on the local problem (as it should be), the issues and ideas are likely to be global. To the main question as to Why is the gap between rich and poor widening, the newspaper suggests:
Part of the explanation is that the share of corporate profits as a percentage of GDP has increased at the expense of wages. According to the Bank for International Settlements, wages as a share of national income in the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, the Netherlands, Belgium, Sweden and Switzerland declined from 63 per cent in 1980 to less than 59 per cent last year. In the same period, corporate profits as a share of GDP in those countries increased from around 11 per cent to more than 15 per cent. That means a greater financial share wound up in the hands of corporate owners and less in the hands of workers.
The top 300,000 Americans collectively made as much income as the bottom 150 million Americans
The top 1% received 21.8% of all reported income, a record only behind 1928 when they received 23.9%. A year before the Great Depression
The top 0.1% reported an average income of US$5.6 million, an increase of almost one million thanks to rising stock markets and business profits.
Critics will say that the people doing well are the ones moving the economy, therefore they need all kinds of incentives and protection to keep things in order, but one argument that I haven’t seen used too often is related to the hidden costs of their success. If a particular oil company has record profits at the expense of environment degradation, poor work conditions or bullish pricing of their end product we must calculate the cost of restoring nature and dealing with generations of unhealthy people. Or think about some huge global merchant deciding to compensate its shareholders at the expense of an aggressive salary policy which leaves thousands of families just above the poverty line. A poor diet resulting from these conditions will likely have a permanent effect on the ability of their children to learn, therefore to get better jobs when they grow. I’m sure if we were to compare the savings from not paying the proper salary versus the cost of opportunity lost as a result of a less productive individual, the problem would be a no-brainer to any economist. All those costs are diluted over millions of people and eventually paid in the form of sacrifices, hunger, medical bills & frustration. The fact that these costs are not passed to the corporations is a flaw of the system. In principle any resource taken in the creation of a product should be paid for.
The more I think about his, the more I realize there is nothing wrong with the economic model we use, except for the fact that our accounting has been careless to say the least and we’ve been hiding way too many costs in the form of poverty. Maybe it would be possible for people to determine what costs they are carrying on behalf of irresponsible corporations and organize class action lawsuits to recup part of those costs, or maybe convince the government to install the necessary taxes to make sure that money goes back to where it belongs. I’m sure the gap would stop widening then.
A new take on the old debate of homogenization of culture in hands of global corporations is brought by the Global Politician with an article by Trish Hallmark. Exploring the usual argument about how deep american culture has penetrated other countries and whether or not this has had a positive influence on them is nothing new, maybe just interesting for a few key facts:
Through “good old fashioned capitalism” America came to the forefront of global culture. McDonalds owns over 30,000 restaurants world-wide, in 113 countries. Starbucks sells coffee-on-the-go in 40 overseas markets, operating 12,000 stores and plans to open new stores in Brazil, India, Egypt and Russia. Nike has stores on six continents. Wal-Mart has 2,700 global retail units employing 500,000 and according to FLOW reports authored by Michael Strong (CEO) and co-founder of FLOW, ‚”WalMart might well be single-handedly responsible for bringing about 38,000 people out of poverty in China each month, about 460,000 per year.” (Global Envision website article, October 6, 2006.)
I have explored this argument with the posts jazz & macdonald’s, misunderstanding globalization and is far coast cool?. But I find the suggestion that corporate social responsibility is now becoming part of the mainstream american culture and is gradually finding its way into the very same corporations that have extended their arms around the globe a rather important one. Sharing the obvious benefits of this new attitude may be more than just a PR stunt and is already showing signs of both better business and better integration into the target culture:
following questions about labor practices in El Salvador, Gap constructed a Code of Vendor Conduct that is monitored in its worldwide operations. Nike contributed 7.7 million dollars to the International Youth Foundation after controversies arose around child labor practices [...] Wal-Mart, for example, sells indigenous crafts via ninety-four Wal-Mart Superstores and all proceeds go directly back to the Mexican community from which they were generated. This requires developing systems and training staff to initiate and sustain this type of program; it’s more than PR. McDonalds has a strict code of ethics for their suppliers. It’s not enough to simply provide lettuce to the local restaurant, the conduct code is enforced or vendors loose contracts.
If we consider that this type of social responsibility is not cheap to implement, let alone enforce succesfully, these global corporations may be leading the way to soften the impact of ruthless capitalism to ensure long term success by appealing to the sense of goodness that better informed consumers are developing. Already the premise of social responsibility is becoming core to some business models.
Since I posted my own comentary about the IPCC report about a month ago, in the spirit of facing the critics I wanted to give some space to the arguments being used by Reisman to discredit this global initiative.
At the core of his argument, the main premise is that it would be more damaging to society to halt progress in the name of controlling the warming of the planet:
global warming should simply be accepted as a byproduct of economic progress and that life should go on as normal in the face of it.
Citing the fact that industrial civilization has enabled growth to the point where the average person has a better life today than the most wealthy a few generations ago, he cautions the stakes are high. To keep the industrial civilization running as we know it, we have no alternative but to continue the use of fossil fuels.
If we assume that everyone accepts global warming as a fair price to pay for our life styles, these are some of his arguments to feel good about it:
Central Canada and large portions of Siberia will become similar in climate to New England today. So too, perhaps, will portions of Greenland. The disappearance of Arctic ice in summer time, will shorten important shipping routes by thousands of miles. Growing seasons in the North Temperate Zone will be longer. Plant life in general will flourish because of the presence of more carbon dioxide in the atmosphere.
I find it particularly ironic that someone who is defending the unrestricted advance of industrialization uses the fact that plants will flourish as a positive aspect to consider. But he continues to illustrate the simple way forward, even in the face of rising sea levels:
the portion of the world not threatened with rising sea levels would accept the people who are so threatened. In other words, instead of responding to global warming with government controls, in the form of limitations on the emission of carbon dioxide and other greenhouse gases, an alternative response would be devised that would be a solution in terms of greater freedom of migration.
From this point on, Reisman goes on an attack of the environmental movement (if you can call the IPCC a bunch of environmentalists). It tries to establish the premise that the only progress possible is the one based on the technologies we know today. But in doing so, he is talking more like a CFO worried about shareholders and board of directors, than an economist. With the right incentives applied to the right fields, innovation will surely blossom. Putting a cap on greenhouse gases may be just the right incentive for some enterpreneurs to take the risk and push forward that one idea that will turn our civilization to a more sustainable future. I’m sure that for every corporation currently doing business at the cost of the environment, there are 100 small businesses ready to overtake and do things right, shifting growth from bad business to good business.
Even if it means to take a couple of steps back in terms of our degree of civilization the right solution must be the one that can preserve life on the planet as we know it. Even without global warming, I believe there is a certain agreement that a few bad corporate citizens are playing dangerous games and it would be in our best interest to stop them now. This agreement is implicit in the definition of a new Global Culture. Call it a renewed global conscience or awareness.