Posts tonen met het label English. Alle posts tonen
Posts tonen met het label English. Alle posts tonen
Telkens men tegen internationale jurisdicties durft pleiten, lijkt het meteen alsof de criticus in kwestie wel een aanhanger moet zijn van onfrisse figuren zoals een Omar Al-Bashir of een Radovan Karadzic. Toch waagt het Britse EP-lid Daniel Hannan zich vandaag op zijn blog aan zo'n pleidooi. Vorige week gaf hij over dit thema - in de nasleep van de gênante aanklacht in het VK tegen oud-premier van Israël Tzipi Livni - trouwens ook al een lezing voor het "Jerusalem Institute for Market Studies". Hannan viel in die lezing de internationalistische idee aan dat monsters die in hun eigen land niet vervolgd worden, toch elders - en bij voorkeur door internationale bureaucratieën - berecht zouden moeten kunnen worden. Over de affaire-Livni zei Hannan het volgende: "We zien hier exact wat er mis is met het alsmaar groeiende corpus van internationaal afdwingbare mensenrechtenwetten: dictators en terroristen negeren die en worden met rust gelaten, democratisch verkozen politici willen ze eren maar worden desondanks gestraft."
Daniel Hannan haalde in zijn lezing de volgende zeven ideeën aan.
Dit opiniestuk verscheen oorspronkelijk op Daniel Hannans weblog.
Meer teksten van deze Europarlementariër op www.hannan.co.uk.
Daniel Hannan haalde in zijn lezing de volgende zeven ideeën aan.
1. Territorial jurisdiction has been a remarkably successful concept. Ever since the Treaty of Westphalia in 1648, it has been broadly understood that crimes are the responsibility of the state where they are committed. Untune that string and hark what discord follows! Western liberals might say: “Since Karadzic won’t get justice in Serbia, he should get it at The Hague.” But an Iranian judge might apply precisely the same logic and say: “Adulterers in Western countries are going unpunished: we must kidnap them and bring them to a place where they will face consequences”.En ook in de conclusie op zijn blog kan ik best inkomen.
2. International jurisdiction breaks the link between legislators and law. Instead of legislation being passed by representatives who are, in some way, accountable to their populations, laws are generated by international jurists. We are, in other words, reverting to the pre-modern notion that law-givers should be accountable to their own consciences rather than to those who must live under their rulings.
3. In consequence, as Robert Bork has argued in Coercing Virtue: The Worldwide Rule of Judges, an agenda is being advanced which has been rejected at the ballot box. Courts make tendentious and expansive interpretations of human rights codes which go well beyond what any reasonable person would take the text to mean.
4. With no meaningful scrutiny, international lawyers are able to suit themselves, meandering their way through gargantuan budgets, changing their own rules when they become inconvenient. As John Laughland showed in his study of the Milosevic trial, the International Criminal Tribunal on Yugoslavia admitted hearsay evidence, repeatedly amended its rules of procedure and, when the old brute proved surprisingly eloquent in his own defence, took the extraordinary step of imposing counsel on him. Eight years and $200 million later, with the court no closer to a verdict, both judge and defendant were dead.
5. Indicting a head of state – as the ICC did last year when it served a writ against the Sudanese President – amounts to declaring a war which one has no intention of fighting. The only way to bring President Bashir to trial would be to conquer his country and transfer sovereignty from him to the occupying powers: the basis of the Allies’ jurisdiction at the Nuremberg trials. Without such a determination, international arraignments are declamatory: a way for those who serve them to feel good about themselves, even though their practical effect is to make tyrants dig in more deeply.
6. Which brings us back to the main objection. While tyrants ignore international rulings, democracies – or, more precisely, judges within democracies – don’t. Courts in Western countries increasingly use international conventions to challenge the decisions of their elected governments. Four successive Labour Home Secretaries have tried unsuccessfully to repatriate the Afghan hijackers who diverted a flight at gunpoint to Stansted. Despite the nature of their crime, and despite the removal of the Taliban regime from which they claimed to be fleeing, they have been granted leave to remain in the UK through, in effect, judicial activism.
7. The politicisation of international jurisprudence seems always to come from the same direction: a writ was served against Sharon, but not Arafat. Pinochet was arrested, but Fidel Castro could attend international summits. Donald Rumsfeld was indicted, but not Saddam Hussein.
The answer is not to politicise these wretched rules, but to return to the well-tried and understood concept of state sovereignty, which operated effectively enough between 1648 and the 1990s. When was the internationalisation of jurisdiction agreed? When was it even discussed? To quote Judge Bork again: “What we have wrought is a coup d’état: slow-moving and genteel, but a coup d’état none the less.”
Dit opiniestuk verscheen oorspronkelijk op Daniel Hannans weblog.
Meer teksten van deze Europarlementariër op www.hannan.co.uk.
In the aftermath of the Senate election in Massachusetts, the focus of attention is inevitably on what it means for Barack Obama. The impact on the Democratic president of the loss of the late Ted Kennedy’s seat to the Republicans will, no doubt, be significant. Yet the result could be remembered as a message more profound than the disparate mutterings of a grumpy electorate that has lost faith in its leader -- as a growl of hostility to the rising power of the state. America’s most vibrant political force at the moment is the anti-tax tea-party movement. Even in leftish Massachusetts people are worried that Mr Obama’s spending splurge, notably his still-unpassed health-care bill, will send the deficit soaring. In Britain, where elections are usually spending competitions, the contest this year will be fought about where to cut. Even in regions as historically statist as Scandinavia and southern Europe debates are beginning to emerge about the size and effectiveness of government.
There are good reasons, as well as bad ones, why the state is growing; but the trend must be reversed. Doing so will prove exceedingly hard -- not least because the bigger and more powerful the state gets, the more it tends to grow. But electorates, as in Massachusetts, eventually revolt; and such expressions of voters’ fury are likely to shape politics in the years to come. The immediate reason for the rise of the state is the financial crisis. Governments have spent trillions propping up banks and staving off depression. In some countries they now play a large role in the financial sector; and thanks to bail-outs, stimulus and recession, the proportion of GDP made up by state spending and public deficits has rocketed.
But the rise of Leviathan is a much longer and broader story. Long before AIG and Northern Rock ended up in state custody, government had been growing rapidly. That was especially true in Britain and America, the two countries in which “the end of big government” had been declared in the 1990s. George Bush pushed up spending more than any president since Lyndon Johnson. Britain’s initially frugal Labour government went on a splurge: the state’s share of GDP has risen from 37% in 2000 to 48% in 2008 to 52% now. In swathes of northern Britain the state now accounts for a bigger share of the economy than it did in communist countries in the old eastern bloc. The change has been less dramatic in continental Europe, but in most of those countries the state already made up around half of the economy. Demography is set to push state spending up further. Ageing populations will consume ever more public health care and ever bigger pensions. Unless somebody takes an axe to them, entitlements will consume a fifth of America’s GDP in 15 years, compared with 9% now.
Rising government spending is not the only manifestation of growing state power. The spread of regulation is another. Conservatives tend to blame the growing thicket of rules on unwanted supranational bodies, such as the European Union, and on the ever growing industry of public-sector busybodies who supervise matters like diversity and health and safety. They have a point. But voters, including right-wing ones, often demand more state intrusion: witness the “wars” on terror and drugs, or the spread of CCTV cameras. Mr Bush added an average of 1,000 pages of federal regulations each year he was in office. America now has 250 million people devising and implementing federal rules.
Globalisation, far from whittling away the state, has often ended up boosting it. Greater job insecurity among the voting middle classes has increased demand for safety nets. Confronted by global market failures, such as climate change, voters have demanded a public response. And the emergence of new economic powers, especially China, has given fresh respectability to the old notion of state capitalism: more and more of the world’s biggest companies are state-owned, and more and more of its biggest investors are now sovereign-wealth funds. Many difficulties present themselves to those who would reform the state. One is the danger posed by the fragility of the world economy. Government stimulus may still be needed to ward off a new slump. But even in the most vulnerable countries, governments need to be planning for withdrawal.
Dit artikel verscheen oorspronkelijk in The Economist.
Meer artikelen tegen Big Government op www.economist.com.
There are good reasons, as well as bad ones, why the state is growing; but the trend must be reversed. Doing so will prove exceedingly hard -- not least because the bigger and more powerful the state gets, the more it tends to grow. But electorates, as in Massachusetts, eventually revolt; and such expressions of voters’ fury are likely to shape politics in the years to come. The immediate reason for the rise of the state is the financial crisis. Governments have spent trillions propping up banks and staving off depression. In some countries they now play a large role in the financial sector; and thanks to bail-outs, stimulus and recession, the proportion of GDP made up by state spending and public deficits has rocketed.
But the rise of Leviathan is a much longer and broader story. Long before AIG and Northern Rock ended up in state custody, government had been growing rapidly. That was especially true in Britain and America, the two countries in which “the end of big government” had been declared in the 1990s. George Bush pushed up spending more than any president since Lyndon Johnson. Britain’s initially frugal Labour government went on a splurge: the state’s share of GDP has risen from 37% in 2000 to 48% in 2008 to 52% now. In swathes of northern Britain the state now accounts for a bigger share of the economy than it did in communist countries in the old eastern bloc. The change has been less dramatic in continental Europe, but in most of those countries the state already made up around half of the economy. Demography is set to push state spending up further. Ageing populations will consume ever more public health care and ever bigger pensions. Unless somebody takes an axe to them, entitlements will consume a fifth of America’s GDP in 15 years, compared with 9% now.
Rising government spending is not the only manifestation of growing state power. The spread of regulation is another. Conservatives tend to blame the growing thicket of rules on unwanted supranational bodies, such as the European Union, and on the ever growing industry of public-sector busybodies who supervise matters like diversity and health and safety. They have a point. But voters, including right-wing ones, often demand more state intrusion: witness the “wars” on terror and drugs, or the spread of CCTV cameras. Mr Bush added an average of 1,000 pages of federal regulations each year he was in office. America now has 250 million people devising and implementing federal rules.
Globalisation, far from whittling away the state, has often ended up boosting it. Greater job insecurity among the voting middle classes has increased demand for safety nets. Confronted by global market failures, such as climate change, voters have demanded a public response. And the emergence of new economic powers, especially China, has given fresh respectability to the old notion of state capitalism: more and more of the world’s biggest companies are state-owned, and more and more of its biggest investors are now sovereign-wealth funds. Many difficulties present themselves to those who would reform the state. One is the danger posed by the fragility of the world economy. Government stimulus may still be needed to ward off a new slump. But even in the most vulnerable countries, governments need to be planning for withdrawal.
Dit artikel verscheen oorspronkelijk in The Economist.
Meer artikelen tegen Big Government op www.economist.com.
“The government who robs Peter to pay Paul can always count on the support of Paul,” George Bernard Shaw once said. For a socialist Shaw demonstrated good sense with this citation Unfortunately, our Western countries have become a laboratory in which Shaw's hypothesis is being tested. The theory of government I was taught says that government provides benefits, primarily security, to the entire populus. In return we pay taxes. But lately the government has been a distributor of special privileges, taking money from some and giving it to others. America is now about evenly split between those who pay income taxes and those who consume them. The Brookings Tax Policy Center (BTPC) recently disclosed that close to half of all households in the U.S. will pay no income tax this year. Some will even pay less than zero -- that is, they will get money from those of us who do pay taxes.
The BTPC adds that this year the average income-tax rate for the bottom 40 percent of earners will be negative and that their cash subsidy will equal 10 percent of the total amount the income tax brings in, thanks to the Earned Income Tax Credit and U.S. President Barack Obama’s “Making Work Pay” program. The view from the top also shows the lopsidedness of the tax system. The top 20 percent of earners make about 53 percent of the income in America but pay 91 percent of the income tax. The top 1 percent pay 36 percent. The IRS says the bottom half of earners pay less than 3 percent… This presents a serious problem because government has such vast powers to dispense favors. As Shaw suggested, people who pay no tax will vote for politicians who promise big spending. Why not? They get stuff without having to pay for it.
Yes, working people who pay no income tax still pay taxes: sales tax and payroll taxes. But the income tax is big and visible, so it’s a problem that a growing number of people don’t pay but get benefits from those who do. Frederic Bastiat, the great 19th-century French economist, defined the State as “that great fiction by which everyone tries to live at the expense of everyone else.” I don’t know if he envisioned one half of the population living off the other half. It is important not to confuse the interests of the taxpayers with the interests of the politicians and other tax consumers. Yet that is done all the time. When the government bought toxic assets (of zero market value) from the banks, it said taxpayers would profit when the economy recovered and the assets once again commanded a positive price in the market. Even if we make the dubious assumption that the government is savvy enough to buy low and sell high, it’s not the taxpayers who would benefit from any profits. The politicians will spend every penny rather than cut taxes.
To put it bluntly, we are not the government. The built-in unfairness of the tax system has prompted a range of tax-reform proposals, such as a flat tax and replacing the income tax with a sales tax. These alternatives are better, but they have their drawbacks, too. For that reason, there is something more urgent than tax reform: spending reform. The true burden of government, the late Milton Friedman said, is not the tax level but the spending level. Taxation is just one way for the government to get money. The other ways - borrowing and inflation - are also burdens on the people. The best way to lighten the tax burden is to lessen the spending burden. If government spends less, it takes less. And if it takes less, the tax system will weigh less heavily on us all. Once again, we find wisdom in Adam Smith's book The Wealth of Nations: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
Deze column van John Stossel verscheen eerst in "The Freeman".
Meer columns van deze libertariër op www.thefreemanonline.org.
The BTPC adds that this year the average income-tax rate for the bottom 40 percent of earners will be negative and that their cash subsidy will equal 10 percent of the total amount the income tax brings in, thanks to the Earned Income Tax Credit and U.S. President Barack Obama’s “Making Work Pay” program. The view from the top also shows the lopsidedness of the tax system. The top 20 percent of earners make about 53 percent of the income in America but pay 91 percent of the income tax. The top 1 percent pay 36 percent. The IRS says the bottom half of earners pay less than 3 percent… This presents a serious problem because government has such vast powers to dispense favors. As Shaw suggested, people who pay no tax will vote for politicians who promise big spending. Why not? They get stuff without having to pay for it.
Yes, working people who pay no income tax still pay taxes: sales tax and payroll taxes. But the income tax is big and visible, so it’s a problem that a growing number of people don’t pay but get benefits from those who do. Frederic Bastiat, the great 19th-century French economist, defined the State as “that great fiction by which everyone tries to live at the expense of everyone else.” I don’t know if he envisioned one half of the population living off the other half. It is important not to confuse the interests of the taxpayers with the interests of the politicians and other tax consumers. Yet that is done all the time. When the government bought toxic assets (of zero market value) from the banks, it said taxpayers would profit when the economy recovered and the assets once again commanded a positive price in the market. Even if we make the dubious assumption that the government is savvy enough to buy low and sell high, it’s not the taxpayers who would benefit from any profits. The politicians will spend every penny rather than cut taxes.
To put it bluntly, we are not the government. The built-in unfairness of the tax system has prompted a range of tax-reform proposals, such as a flat tax and replacing the income tax with a sales tax. These alternatives are better, but they have their drawbacks, too. For that reason, there is something more urgent than tax reform: spending reform. The true burden of government, the late Milton Friedman said, is not the tax level but the spending level. Taxation is just one way for the government to get money. The other ways - borrowing and inflation - are also burdens on the people. The best way to lighten the tax burden is to lessen the spending burden. If government spends less, it takes less. And if it takes less, the tax system will weigh less heavily on us all. Once again, we find wisdom in Adam Smith's book The Wealth of Nations: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
Deze column van John Stossel verscheen eerst in "The Freeman".
Meer columns van deze libertariër op www.thefreemanonline.org.
Managers en 'consultants' lijken soms wel de laatste helden van onze tijd. Maar kijk uit, de keizer draagt geen kleren. Matthew Stewart, die zelf tien jaar consultant was, schiet gaten in de overspannen eigendunk van de MBA-boys in zijn laatste bestseller “The Management Myth”. Het leven kan gekke sprongen maken. Stewart studeerde in 1988 aan Oxford af als filosoof met 19de-eeuwse Duitse denkers als specialiteit en werd tot zijn eigen verbazing direct gerekruteerd door een gerenommeerd internationaal managementadviesbureau met een startsalaris van 75,000 dollar. 'Een idioot bedrag voor een voor de arbeidsmarkt ongeschikt filosoof, die geen flauw benul van zaken heeft'. In geen tijd groeit hij uit tot een overbetaalde expert die eersteklas rond de wereld vliegt en leeft in hotels terwijl hij managers met honderd keer meer ervaring de les spelt. Tot het bureau dat hij zelf mee heeft opgericht door een interne machtsstrijd crasht en de desillusie niet meer te harden blijkt. Zijn boek “The Management Myth”, een aanklacht tegen de almachtswaan van de huidige generatie managers en consultants, is een hilarisch verslag van tien jaar carrière in de 'buik van het beest'.
PARASIETEN
Alle truken van de foor passeren de revue. Om een cliënt binnen te halen, jaag je hem eerst de stuipen op het lijf. Maak jezelf daarna zo onmisbaar dat hij niet meer autonoom kan denken, en pers de citroen geduldig uit. Consultants kun je nog het best vergelijken met parasieten. ‘Ik praatte en praatte, en intussen liep de meter', zegt Stewart. ‘In al die jaren heeft de sensatie dat ik alles uit mijn duim zoog mij nooit verlaten.' Bruce Henderson, de oprichter van de Boston Consulting Group, beschreef ooit het consultantschap als ‘de meest onwaarschijnlijke business op aarde': ‘Kun je je iets onwaarschijnlijkers voorstellen dan succesvolle en toonaangevende ondernemingen die schoolverlaters inhuren om hun te vertellen hoe ze moeten worden gerund? En dat die ondernemingen bovendien bereid zijn miljoenen voor die adviezen neer te tellen?' ‘Moderne sjamanen' noemt Stewart de wijsneuzen van McKinsey & co: in de hoogst onzekere wereld van de mondiale concurrentiestrijd verdrijven ze de angst met de magie van hun spreadsheets en grafieken. ‘Als je het niet kunt managen, meet het dan', schrijft Stewart, een wel zeer venijnige sneer naar het huismotto van de McKinsey-adviesgroep.
Ook in deze crisistijden boomt de sector van het managementadvies als nooit tevoren, alleen al in 2008 studeerden wereldwijd 140.000 nieuwe MBA'ers, specialisten bedrijfskunde, van de business-scholen af, maar onze bedrijven worden daar niet beter van, want de keizer is naakt, betoogt Stewart. Van de meest succesvolle CEO’s van de Fortune 500 heeft nog geen kwart een MBA-titel. Succes in ondernemen is nu eenmaal geen harde wetenschap. Grofweg draait het om drie dingen: geluk hebben, je kansen grijpen en hard werken. Zelfs dan kan het nog misgaan. Maar met dat soort boerenwijsheden verdient een managementexpert de kost niet. Hij belooft geplaagde CEO's meer: een totaal gemanagede ideale wereld, vrij van de turbulenties van de markt. Neem Michael Porter, de uitvinder van het populaire maxime dat bedrijven eerst en vooral moeten streven naar ‘een duurzaam concurrentievoordeel'. ‘Monopolies zijn de beste manier om veel winst te maken zonder een beter product af te leveren, hard te werken of slim te zijn', spot Stewart. Zo werd ook Bill Gates de rijkste man op aarde.
“The Management Myth” neemt alle grote managementdenkers van de voorbije eeuw op de korrel, van de doelmatigheidsneuroot Frederick Taylor tot de hystericus Tom Peters. Alleen een filosoof heeft de zwier om theorieën zo geestig vol gaten schieten. Je kan anders wel blijven citeren uit dit boek. In de hoogdagen van het kapitalistische ondernemen was niemand met strategie bezig, maar vandaag is dat het toverwoord in de bestuurskamers geworden. Het legitimeert de exorbitante salarissen van CEO's die als superbesluitvormers bijna een heldenstatus in de media hebben gekregen. ‘Bedrijfsplanning is voor een groot deel als een rituele regendans: er is geen duidelijk effect op het weer, alleen de dansers vinden van wel', schrijft de scepticus Stewart. En: ‘Bedrijven beginnen maar te tobben over strategie als ze niet goed meer weten waarheen.'
NATTEVINGERWERK
Nog een hedendaags toverwoord, maar dan voor de slaven van het middenmanagement, is ‘excellentie'. Tom Peters, ex-McKinsey, formuleerde in 1979 in zijn bestseller “In Search of Excellence” acht kenmerken van succesvolle bedrijven. Tot vandaag zijn er zes miljoen exemplaren van zijn managementbijbel verkocht en Peters reist nog altijd als ‘goeroe van de managementgoeroes' de wereld af. Toch is zijn boek niet meer dan nattevingerwerk. Twee derde van zijn voorbeeldbedrijven bleken al vijf jaar na verschijnen ondermaats te presteren. ‘Een blik werpen op de ondernemingen die de afgelopen 25 jaar bij de goeroes favoriet waren, is als kijken naar een parade van schoonheidskoninginnen uit vervlogen tijden', noteert Matthew Stewart fijntjes. Managementgoeroes zoals Peters en Jim Collins van “Good to Great” poseren graag als profeten, maar bij nader toezien blijken het vooral specialisten van het verleden te zijn. Ze promoten experiment en “out of the box thinking”, terwijl hun bestsellers alleen maar over platgetreden paden gaan. Een goed advies: wil je geld verdienen, doe dan net het omgekeerde van wat managementgoeroes zeggen.
Eigenlijk lijken managementgoeroes nog het meest op religieuze predikanten. De wereld die zij schilderen is onveranderlijk chaotisch en onzeker, want angst verkoopt. Bureaucratie is het grote Kwaad en ze roepen op tot een witteboordenrevolutie om die omver te werpen. Bekeert u, vertellen ze de arme donders van het middenkader, want ‘u hebt de macht'. Succes gaat over passie, verbeeldingskracht en volharding. Alsof we allemaal bedrijfsleiders zijn, minus de bonussen uiteraard. De werkelijkheid is natuurlijk anders. In de drie decennia dat Peters het management naar de massa bracht, is de Amerikaanse middenklasse er niet echt op vooruitgegaan. Overheid en bedrijfsleven laten het steeds meer afweten, de gezinnen staan er alleen voor, maar Peters ziet die wending gek genoeg als het begin van een tijdperk van ‘vernieuwde individuele verantwoordelijkheid' en ‘zelfverwerkelijking'.
Met zijn pleidooi voor excellentie effent de goeroe echter vooral het pad van een dolgedraaide arbeidsmoraal, vindt Matthew Stewart: ‘Het begint met de gedachte dat werk betekenisvol kan zijn, en die gedachte wordt opgerekt tot het punt waar er buiten werk geen enkele betekenis meer is'. Terwijl de meeste mensen alleen werken om een beetje goed te kunnen leven. Maar die opvatting is vreemd aan de genieën van de managementtheorie, vervreemd als ze zijn van de maatschappelijke werkelijkheid en geobsedeerd door aandeelhouderswaarde en begrippen als “working money” en “non working money”. Vandaar het opmerkelijk advies van Matthew Stewart aan jongelui die een MBA willen halen: ‘Blijf weg van de business-scholen, studeer liever filosofie om het echte leven te leren kennen. In de zakenwereld is ervaring de grote leraar. We bedriegen onszelf als we denken dat een MBA je een daadkrachtig manager maakt. Managers leren managen verschilt niet zo heel erg van mensen leren hoe ze moeten leven in een beschaafde wereld. Managers hebben geen training nodig, ze hebben educatie nodig.'
Dit artikel van Phile Deprez verscheen op het VRT-nieuwsportaal.
Meer besprekingen van dit boek op www.theatlantic.com.
PARASIETEN
Alle truken van de foor passeren de revue. Om een cliënt binnen te halen, jaag je hem eerst de stuipen op het lijf. Maak jezelf daarna zo onmisbaar dat hij niet meer autonoom kan denken, en pers de citroen geduldig uit. Consultants kun je nog het best vergelijken met parasieten. ‘Ik praatte en praatte, en intussen liep de meter', zegt Stewart. ‘In al die jaren heeft de sensatie dat ik alles uit mijn duim zoog mij nooit verlaten.' Bruce Henderson, de oprichter van de Boston Consulting Group, beschreef ooit het consultantschap als ‘de meest onwaarschijnlijke business op aarde': ‘Kun je je iets onwaarschijnlijkers voorstellen dan succesvolle en toonaangevende ondernemingen die schoolverlaters inhuren om hun te vertellen hoe ze moeten worden gerund? En dat die ondernemingen bovendien bereid zijn miljoenen voor die adviezen neer te tellen?' ‘Moderne sjamanen' noemt Stewart de wijsneuzen van McKinsey & co: in de hoogst onzekere wereld van de mondiale concurrentiestrijd verdrijven ze de angst met de magie van hun spreadsheets en grafieken. ‘Als je het niet kunt managen, meet het dan', schrijft Stewart, een wel zeer venijnige sneer naar het huismotto van de McKinsey-adviesgroep.
Ook in deze crisistijden boomt de sector van het managementadvies als nooit tevoren, alleen al in 2008 studeerden wereldwijd 140.000 nieuwe MBA'ers, specialisten bedrijfskunde, van de business-scholen af, maar onze bedrijven worden daar niet beter van, want de keizer is naakt, betoogt Stewart. Van de meest succesvolle CEO’s van de Fortune 500 heeft nog geen kwart een MBA-titel. Succes in ondernemen is nu eenmaal geen harde wetenschap. Grofweg draait het om drie dingen: geluk hebben, je kansen grijpen en hard werken. Zelfs dan kan het nog misgaan. Maar met dat soort boerenwijsheden verdient een managementexpert de kost niet. Hij belooft geplaagde CEO's meer: een totaal gemanagede ideale wereld, vrij van de turbulenties van de markt. Neem Michael Porter, de uitvinder van het populaire maxime dat bedrijven eerst en vooral moeten streven naar ‘een duurzaam concurrentievoordeel'. ‘Monopolies zijn de beste manier om veel winst te maken zonder een beter product af te leveren, hard te werken of slim te zijn', spot Stewart. Zo werd ook Bill Gates de rijkste man op aarde.
“The Management Myth” neemt alle grote managementdenkers van de voorbije eeuw op de korrel, van de doelmatigheidsneuroot Frederick Taylor tot de hystericus Tom Peters. Alleen een filosoof heeft de zwier om theorieën zo geestig vol gaten schieten. Je kan anders wel blijven citeren uit dit boek. In de hoogdagen van het kapitalistische ondernemen was niemand met strategie bezig, maar vandaag is dat het toverwoord in de bestuurskamers geworden. Het legitimeert de exorbitante salarissen van CEO's die als superbesluitvormers bijna een heldenstatus in de media hebben gekregen. ‘Bedrijfsplanning is voor een groot deel als een rituele regendans: er is geen duidelijk effect op het weer, alleen de dansers vinden van wel', schrijft de scepticus Stewart. En: ‘Bedrijven beginnen maar te tobben over strategie als ze niet goed meer weten waarheen.'
NATTEVINGERWERK
Nog een hedendaags toverwoord, maar dan voor de slaven van het middenmanagement, is ‘excellentie'. Tom Peters, ex-McKinsey, formuleerde in 1979 in zijn bestseller “In Search of Excellence” acht kenmerken van succesvolle bedrijven. Tot vandaag zijn er zes miljoen exemplaren van zijn managementbijbel verkocht en Peters reist nog altijd als ‘goeroe van de managementgoeroes' de wereld af. Toch is zijn boek niet meer dan nattevingerwerk. Twee derde van zijn voorbeeldbedrijven bleken al vijf jaar na verschijnen ondermaats te presteren. ‘Een blik werpen op de ondernemingen die de afgelopen 25 jaar bij de goeroes favoriet waren, is als kijken naar een parade van schoonheidskoninginnen uit vervlogen tijden', noteert Matthew Stewart fijntjes. Managementgoeroes zoals Peters en Jim Collins van “Good to Great” poseren graag als profeten, maar bij nader toezien blijken het vooral specialisten van het verleden te zijn. Ze promoten experiment en “out of the box thinking”, terwijl hun bestsellers alleen maar over platgetreden paden gaan. Een goed advies: wil je geld verdienen, doe dan net het omgekeerde van wat managementgoeroes zeggen.
Eigenlijk lijken managementgoeroes nog het meest op religieuze predikanten. De wereld die zij schilderen is onveranderlijk chaotisch en onzeker, want angst verkoopt. Bureaucratie is het grote Kwaad en ze roepen op tot een witteboordenrevolutie om die omver te werpen. Bekeert u, vertellen ze de arme donders van het middenkader, want ‘u hebt de macht'. Succes gaat over passie, verbeeldingskracht en volharding. Alsof we allemaal bedrijfsleiders zijn, minus de bonussen uiteraard. De werkelijkheid is natuurlijk anders. In de drie decennia dat Peters het management naar de massa bracht, is de Amerikaanse middenklasse er niet echt op vooruitgegaan. Overheid en bedrijfsleven laten het steeds meer afweten, de gezinnen staan er alleen voor, maar Peters ziet die wending gek genoeg als het begin van een tijdperk van ‘vernieuwde individuele verantwoordelijkheid' en ‘zelfverwerkelijking'.
Met zijn pleidooi voor excellentie effent de goeroe echter vooral het pad van een dolgedraaide arbeidsmoraal, vindt Matthew Stewart: ‘Het begint met de gedachte dat werk betekenisvol kan zijn, en die gedachte wordt opgerekt tot het punt waar er buiten werk geen enkele betekenis meer is'. Terwijl de meeste mensen alleen werken om een beetje goed te kunnen leven. Maar die opvatting is vreemd aan de genieën van de managementtheorie, vervreemd als ze zijn van de maatschappelijke werkelijkheid en geobsedeerd door aandeelhouderswaarde en begrippen als “working money” en “non working money”. Vandaar het opmerkelijk advies van Matthew Stewart aan jongelui die een MBA willen halen: ‘Blijf weg van de business-scholen, studeer liever filosofie om het echte leven te leren kennen. In de zakenwereld is ervaring de grote leraar. We bedriegen onszelf als we denken dat een MBA je een daadkrachtig manager maakt. Managers leren managen verschilt niet zo heel erg van mensen leren hoe ze moeten leven in een beschaafde wereld. Managers hebben geen training nodig, ze hebben educatie nodig.'
Dit artikel van Phile Deprez verscheen op het VRT-nieuwsportaal.
Meer besprekingen van dit boek op www.theatlantic.com.
Each year I take part in a reunion dinner of old school classmates. The talk often turns to politics, as my friends know my interests all too well. This reunion, after a bout of banker bashing, one friend stated thet “capitalism is dead.” Admittedly, by this time my classmates had consumed a few drinks, but it startled me to see others nodding their heads. But upon reflection, who can blame them? That is what they have seen. We have nationalised our banking industry. Government spending has rocketed. Taxes are up. Regulation is back. Class war is encouraged. Capitalism is in a great deal of trouble. Government intervention, command control and state ownership -- in the whole of Europe and beyond -- are back in fashion. But over the past 150 years, capitalism has more than proved its worth. The parts of the world where it has been let loose have flourished; the parts where it has been held back have languished.
The importance of capitalism is not just driven by economics. A critical reason why capitalism has been such a success is that its sits well with human nature -- our desire for liberty and prosperity. Communism eventually collapsed because it relied on a total restriction of individual freedom to survive. It murdered millions just to avoid criticism. As long as people want to improve their living conditions, earn more than their parents did, own their own home and car, go on holiday, travel the world and buy cool, but perhaps even useless, things, they will need a mechanism that allocates scarce resources far more efficiently than a repressive state. Capitalism might not be perfect, but if you want real prosperity and genuine freedom, it is essential. And let me be clear about this, the recent crisis does not in any way denigrate capitalism or undo its achievements. Capitalism has always engendered crisis, and always will. Bubbles and busts are part of the “package”. You cannot have the fruits without the weeds.
What is critical is that we learn from each crisis, and that governments refrain from actions that are driven by short-term populism or rhetorical demagogy. A weak populist argument, as made by my friends that day, is that the capitalist model has failed. Critics of “Anglo-Saxon capitalism”, like French President Nicolas Sarkozy, claim that the Thatcher and Reagan reforms of deregulation and privatisation planted the seeds of the current crisis. If this idea continues to gain ground, it will become harder for us to sell the public sector reforms we need, in order to create choice in, for example, education and health. The reality is, of course, that it is these very reforms that led to 30 years of wealth and freedom on a huge scale. Even after accounting for the current recession, British and American people have left the last decade a lot wealthier than when they entered it.
More reasonably, critics can argue that modern finance contributed to the crisis. Some banks took extreme risks, and the balance of risk and reward was skewed throughout the financial chain. Yet, these failures can’t be blamed on deregulation at all. We all now know that the central banks deliberately kept interest rates too low for too long, leading to a boom in virtually all asset prices. Heavier regulation is definitely not the answer. Countries, such as Japan, with even more highly regulated financial systems than Western countries did not manage to avoid the crisis either. We all know that more regulation is not the solution, but for politicians that champion the free market, it may seem utterly mad to promote their views at this point in time. However, if we are to get out of this mess and avoid the slide towards more state intervention and less liberty, promote it, they must. The danger is one of over-correction. In an attempt to protect ourselves from the weeds that capitalism might produce, we risk stifling the ambitions and entrepreneurial activity we need for growth.
It is not surprising that when I speak with business people, they believe that 2010 will be a critical year in determining our economic direction for years to come. We need to cut wasteful government spending and get the budget deficit under control. We need to re-discover that cutting taxes and cutting red tape will lead to more prosperity and sustainable economic growth. Crucially, we need to take powers back from the European Union -- because if we don’t, we may find that no matter how hard a national government works to promote open markets and choice, we will find state intervention coming in through the back door. Whilst taking on board the lessons learned through this financial crisis, we would do well to recall the mission of the British Conservative government elected just over 30-years ago -- led by a virtually unknown daughter of a grocery store -- owner, and “to roll back the frontiers of the state” once again. It is the only way to guarantee the people the prosperity and liberty they are entitled to.
Dit opiniestuk van Sajid Javid verscheen oorspronkelijk op de liberaal-conservatieve Britse weblog "Conservative Home".
Meer teksten van deze ondernemer op www.conservativehome.com.
The importance of capitalism is not just driven by economics. A critical reason why capitalism has been such a success is that its sits well with human nature -- our desire for liberty and prosperity. Communism eventually collapsed because it relied on a total restriction of individual freedom to survive. It murdered millions just to avoid criticism. As long as people want to improve their living conditions, earn more than their parents did, own their own home and car, go on holiday, travel the world and buy cool, but perhaps even useless, things, they will need a mechanism that allocates scarce resources far more efficiently than a repressive state. Capitalism might not be perfect, but if you want real prosperity and genuine freedom, it is essential. And let me be clear about this, the recent crisis does not in any way denigrate capitalism or undo its achievements. Capitalism has always engendered crisis, and always will. Bubbles and busts are part of the “package”. You cannot have the fruits without the weeds.
What is critical is that we learn from each crisis, and that governments refrain from actions that are driven by short-term populism or rhetorical demagogy. A weak populist argument, as made by my friends that day, is that the capitalist model has failed. Critics of “Anglo-Saxon capitalism”, like French President Nicolas Sarkozy, claim that the Thatcher and Reagan reforms of deregulation and privatisation planted the seeds of the current crisis. If this idea continues to gain ground, it will become harder for us to sell the public sector reforms we need, in order to create choice in, for example, education and health. The reality is, of course, that it is these very reforms that led to 30 years of wealth and freedom on a huge scale. Even after accounting for the current recession, British and American people have left the last decade a lot wealthier than when they entered it.
More reasonably, critics can argue that modern finance contributed to the crisis. Some banks took extreme risks, and the balance of risk and reward was skewed throughout the financial chain. Yet, these failures can’t be blamed on deregulation at all. We all now know that the central banks deliberately kept interest rates too low for too long, leading to a boom in virtually all asset prices. Heavier regulation is definitely not the answer. Countries, such as Japan, with even more highly regulated financial systems than Western countries did not manage to avoid the crisis either. We all know that more regulation is not the solution, but for politicians that champion the free market, it may seem utterly mad to promote their views at this point in time. However, if we are to get out of this mess and avoid the slide towards more state intervention and less liberty, promote it, they must. The danger is one of over-correction. In an attempt to protect ourselves from the weeds that capitalism might produce, we risk stifling the ambitions and entrepreneurial activity we need for growth.
It is not surprising that when I speak with business people, they believe that 2010 will be a critical year in determining our economic direction for years to come. We need to cut wasteful government spending and get the budget deficit under control. We need to re-discover that cutting taxes and cutting red tape will lead to more prosperity and sustainable economic growth. Crucially, we need to take powers back from the European Union -- because if we don’t, we may find that no matter how hard a national government works to promote open markets and choice, we will find state intervention coming in through the back door. Whilst taking on board the lessons learned through this financial crisis, we would do well to recall the mission of the British Conservative government elected just over 30-years ago -- led by a virtually unknown daughter of a grocery store -- owner, and “to roll back the frontiers of the state” once again. It is the only way to guarantee the people the prosperity and liberty they are entitled to.
Dit opiniestuk van Sajid Javid verscheen oorspronkelijk op de liberaal-conservatieve Britse weblog "Conservative Home".
Meer teksten van deze ondernemer op www.conservativehome.com.
Taxpayers will be the main losers of Brown's premiership
8 Reacties Gepubliceerd door Vincent De Roeck
British Airways lost £300 million in the six months to the end of September and its pension fund has a £3.7 billion deficit. Its cabin crew responded by voting to strike over the Christmas period, alienating the millions of customers that pay their wages and fund those pensions. Similarly, London now risks losing its reputation as a hub of international finance, driving away mobile capital and taxpayers at a time when the government’s deficit is above 10% of GDP. There will be no immediate exodus. But the impression that tax policy is now designed to maximise the number of Labour votes rather than the state’s revenue should worry Britons as well as financiers. No single tax change has been decisive, though the levy on bank bonuses, announced on December 9th, has brought the issue into focus. This newspaper has argued that it is fair for the taxpayer to claw back the huge subsidy that all banks have enjoyed: the cheap money and guarantees were provided to help banks continue lending and build up their capital, rather than distributing the money to staff. A globally co-ordinated approach to this could have worked. But Gordon Brown’s rushed attempt to punish the rich seems ever more cackhanded.
The immediate worry is that it is not just banks that are being caught in his net. One British money-broker, Tullett Prebon, has responded by offering staff the chance to relocate overseas. And the levy came on top of a forthcoming 50% tax rate for high earners, changes to the rules for expats living in Britain and pension regulations that create the potential for marginal tax rates of over 100%. For a fund manager, insurer or indeed pretty much any rich foreigner, the overall effect has been to make British tax policy seem arbitrary and capricious. Good riddance, some British voters, egged on by Mr Brown, might say. They are tired of the whingeing of overpaid financiers, especially foreign ones, and believe the economy has become overexposed to the banking industry. It is time, they say, for finance to repay its debt to society. Yet if a hedge fund moves from London to Geneva, it does not reduce the risk of the British financial system one jot. That risk depends on the lending policies of the British banks which the government in effect guarantees, as the recent crisis has revealed. And the banks are not confined to lending to British residents; as the crisis has also shown, British banks are exposed to everything from subprime housing in Florida to office blocks in Dubai.
Moreover, if a wealthy Swede decides to move back to Stockholm or a French businessman returns to Paris -- with the encouragement of a tax deal from President Nicolas Sarkozy -- Britain can only be the loser in revenue terms. The same applies if a foreign bank switches all or part of its operations from London to New York or Zurich. Foreign financiers will simply pay their taxes elsewhere. Revenue from overseas citizens visiting, residing in, or doing business in Britain is a true “windfall tax” in the sense that it boosts tax revenues. Even if all the tax they pay is VAT on expensive meals in London restaurants or stamp duty on flats in Mayfair, it is still additional income for Mr Brown. If they leave, Britons will pay more tax. London’s status as a global financial centre is, in part, an historical accident driven by American regulations in the 1960s that created an offshore lending business -- the Euromarket -- in Britain. Over the years London built on that opportunity by welcoming foreign market-makers and by offering a regulatory structure that seemed more appealing than those on offer in Paris or Frankfurt.
Tax laws persuaded some of the global elite to spend at least part of the year in Britain. Wall Street banks moved a good chunk of their operations to the City and Canary Wharf; London became a hub in areas such as fund management and derivatives trading. These things can be done anywhere; Britain merely offered the best environment. Those banks and businessmen did not come to London because of the attractions of the rest of the British economy. If they want to be based in a huge market, they will go to America; if they are lured by a fast-growing economy, they will head for Asia. Nor have foreigners been brought to London by the weather or the creaking transport system. Of course, London will not lose its status as a leading financial hub overnight. Some European countries may be following its lead on bonus taxes, and in America Congress may well take advantage of popular anger to clamp down on Wall Street. But if London is to maintain its status as a financial hub, it needs to attract foreign financiers, not drive them away.
Dit editoriaal verscheen oorspronkelijk in "The Economist".
Meer economische analyses op www.economist.com.
The immediate worry is that it is not just banks that are being caught in his net. One British money-broker, Tullett Prebon, has responded by offering staff the chance to relocate overseas. And the levy came on top of a forthcoming 50% tax rate for high earners, changes to the rules for expats living in Britain and pension regulations that create the potential for marginal tax rates of over 100%. For a fund manager, insurer or indeed pretty much any rich foreigner, the overall effect has been to make British tax policy seem arbitrary and capricious. Good riddance, some British voters, egged on by Mr Brown, might say. They are tired of the whingeing of overpaid financiers, especially foreign ones, and believe the economy has become overexposed to the banking industry. It is time, they say, for finance to repay its debt to society. Yet if a hedge fund moves from London to Geneva, it does not reduce the risk of the British financial system one jot. That risk depends on the lending policies of the British banks which the government in effect guarantees, as the recent crisis has revealed. And the banks are not confined to lending to British residents; as the crisis has also shown, British banks are exposed to everything from subprime housing in Florida to office blocks in Dubai.
Moreover, if a wealthy Swede decides to move back to Stockholm or a French businessman returns to Paris -- with the encouragement of a tax deal from President Nicolas Sarkozy -- Britain can only be the loser in revenue terms. The same applies if a foreign bank switches all or part of its operations from London to New York or Zurich. Foreign financiers will simply pay their taxes elsewhere. Revenue from overseas citizens visiting, residing in, or doing business in Britain is a true “windfall tax” in the sense that it boosts tax revenues. Even if all the tax they pay is VAT on expensive meals in London restaurants or stamp duty on flats in Mayfair, it is still additional income for Mr Brown. If they leave, Britons will pay more tax. London’s status as a global financial centre is, in part, an historical accident driven by American regulations in the 1960s that created an offshore lending business -- the Euromarket -- in Britain. Over the years London built on that opportunity by welcoming foreign market-makers and by offering a regulatory structure that seemed more appealing than those on offer in Paris or Frankfurt.
Tax laws persuaded some of the global elite to spend at least part of the year in Britain. Wall Street banks moved a good chunk of their operations to the City and Canary Wharf; London became a hub in areas such as fund management and derivatives trading. These things can be done anywhere; Britain merely offered the best environment. Those banks and businessmen did not come to London because of the attractions of the rest of the British economy. If they want to be based in a huge market, they will go to America; if they are lured by a fast-growing economy, they will head for Asia. Nor have foreigners been brought to London by the weather or the creaking transport system. Of course, London will not lose its status as a leading financial hub overnight. Some European countries may be following its lead on bonus taxes, and in America Congress may well take advantage of popular anger to clamp down on Wall Street. But if London is to maintain its status as a financial hub, it needs to attract foreign financiers, not drive them away.
Dit editoriaal verscheen oorspronkelijk in "The Economist".
Meer economische analyses op www.economist.com.
Henry Hazlitt, one of the great popularisers of free-market thinking, once said that good ideas have to be relearned in every generation. This is certainly true of good ideas about business. A generation ago Margaret Thatcher and Ronald Reagan did an excellent job of making the case in favour of business. Today it looks as though the case needs to be made all over again. It is not surprising that business has fallen from grace in recent years. The credit crunch almost plunged the world into depression. The new century began with the implosion of Enron and other firms. Some bosses pay themselves like princes while preaching austerity to their workers. Business titans who once graced the covers of magazines have been hauled before Congress or carted off to prison.
Business people have been at pains to point out that it is unfair to judge all of their kind by the misdeeds of a few. The credit crunch was the handiwork of bankers -- who lent too much money -- and policymakers -- who fooled themselves into thinking that they had abolished boom and bust. Corporate criminals like WorldCom’s Bernie Ebbers and Tyco’s Denis Kozlowski were imprisoned for their crimes. Avaricious bosses like Angelo Mozilo, who pocketed more than $550m during his inglorious reign at Countrywide, are exceptions. The average American boss is actually paid less today than he was in 2000. This is all true enough but hardly sets the blood racing. More ambitious defenders of business have advanced two arguments. The first is that many firms are devoted to good works. They routinely trumpet their passionate commitment not just to their various stakeholders -- such as workers and suppliers -- but to the planet at large. Timberland puts “green index” labels on all its shoes. Pfizer and GlaxoSmithKline make HIV drugs available at cost to millions of Africans. Starbucks buys more Fairtrade coffee than all governments combined.
The second argument is more hard-headed: that businesses have done more than any other institutions to advance prosperity, turning the luxuries of the rich, such as cars a century ago and computers today, into goods for the masses. General Electric’s aircraft engines transport 660 million people a year and its imaging machines scan 230 million patients. Wal-Mart’s “everyday low prices” save Americans at least $50 billion a year. The problem with the first argument is that it smacks of appeasement. Advocates of corporate social responsibility suggest that business has something to apologise for, and thus encourage its critics to find ever more to complain about. Crocodiles never go away if you feed them. The problem with the second argument is that it does not go far enough. It focuses exclusively on material well-being, and so fails to engage with people’s moral qualms about business.
This is doubly regrettable. It is regrettable because it has allowed critics of business to dominate the discussion of corporate morality. For all too many people it is now taken as a given that companies promote greed, crush creativity and monopolise power. And it is regrettable because it has deprived the business world of three rather better arguments in its defence. The first is that business is a remarkable exercise in co-operation. For all the talk of competition “red in tooth and claw”, companies in fact depend on persuading large numbers of people -- workers and bosses, shareholders and suppliers -- to work together to a common end. This involves getting lots of strangers to trust each other. It also increasingly involves stretching that trust across borders and cultures. Apple’s iPod is not just a miracle of design. It is also a miracle of co-operation, teaming Californian designers with Chinese manufacturers and salespeople in all corners of the earth. It is worth remembering that the word “company” is derived from the Latin words “cum” and “pane” -- meaning “breaking bread together”.
Another rejoinder is that business is an exercise in creativity. Business people do not just invent clever products that solve nagging problems, from phones that can link fishermen in India with nearby markets to devices that can provide insulin to diabetics without painful injections. They also create organisations that manufacture these products and then distribute them about the world. Nandan Nilekani from Infosys put the case for business as well as anyone when he said that the computer-services giant’s greatest achievement was not its $2 billion in annual revenue but the fact that it had taught his fellow Indians to “redefine the possible”. A third defence is that business helps maintain political pluralism. Anti-capitalists are fond of arguing that companies account for half of the world’s 100 biggest economies. But this argument not only depends on the abuse of statistics, comparing corporate turnover with GDP. It also rests on ignorance of the pressures of business life.
Companies have a difficult enough job staying alive, let alone engaging in a “silent takeover” of the state. Only 202 of the 500 biggest companies in America in 1980 were still in existence 20 years later. Anti-capitalists actually have it upside down. Companies actually prevent each other from gaining too much power, and also act as a check on State power that would otherwise be running the economy. The proportion of the world’s governments that can reasonably be called democratic has increased from 40% in 1980, when the pro-business revolution began, to more than 60% today. Most hard-headed business people are no doubt reluctant to make these arguments. They are more concerned with balancing their books than with engaging in worthy debates about freedom and democracy. But they would do well to become a bit less reticent: the price of silence will be an ever more hostile public and ever more overbearing government.
Dit opiniestuk van Schumpeter verscheen eerst in "The Economist".
Meer columns van deze econoom op www.economist.com.
Business people have been at pains to point out that it is unfair to judge all of their kind by the misdeeds of a few. The credit crunch was the handiwork of bankers -- who lent too much money -- and policymakers -- who fooled themselves into thinking that they had abolished boom and bust. Corporate criminals like WorldCom’s Bernie Ebbers and Tyco’s Denis Kozlowski were imprisoned for their crimes. Avaricious bosses like Angelo Mozilo, who pocketed more than $550m during his inglorious reign at Countrywide, are exceptions. The average American boss is actually paid less today than he was in 2000. This is all true enough but hardly sets the blood racing. More ambitious defenders of business have advanced two arguments. The first is that many firms are devoted to good works. They routinely trumpet their passionate commitment not just to their various stakeholders -- such as workers and suppliers -- but to the planet at large. Timberland puts “green index” labels on all its shoes. Pfizer and GlaxoSmithKline make HIV drugs available at cost to millions of Africans. Starbucks buys more Fairtrade coffee than all governments combined.
The second argument is more hard-headed: that businesses have done more than any other institutions to advance prosperity, turning the luxuries of the rich, such as cars a century ago and computers today, into goods for the masses. General Electric’s aircraft engines transport 660 million people a year and its imaging machines scan 230 million patients. Wal-Mart’s “everyday low prices” save Americans at least $50 billion a year. The problem with the first argument is that it smacks of appeasement. Advocates of corporate social responsibility suggest that business has something to apologise for, and thus encourage its critics to find ever more to complain about. Crocodiles never go away if you feed them. The problem with the second argument is that it does not go far enough. It focuses exclusively on material well-being, and so fails to engage with people’s moral qualms about business.
This is doubly regrettable. It is regrettable because it has allowed critics of business to dominate the discussion of corporate morality. For all too many people it is now taken as a given that companies promote greed, crush creativity and monopolise power. And it is regrettable because it has deprived the business world of three rather better arguments in its defence. The first is that business is a remarkable exercise in co-operation. For all the talk of competition “red in tooth and claw”, companies in fact depend on persuading large numbers of people -- workers and bosses, shareholders and suppliers -- to work together to a common end. This involves getting lots of strangers to trust each other. It also increasingly involves stretching that trust across borders and cultures. Apple’s iPod is not just a miracle of design. It is also a miracle of co-operation, teaming Californian designers with Chinese manufacturers and salespeople in all corners of the earth. It is worth remembering that the word “company” is derived from the Latin words “cum” and “pane” -- meaning “breaking bread together”.
Another rejoinder is that business is an exercise in creativity. Business people do not just invent clever products that solve nagging problems, from phones that can link fishermen in India with nearby markets to devices that can provide insulin to diabetics without painful injections. They also create organisations that manufacture these products and then distribute them about the world. Nandan Nilekani from Infosys put the case for business as well as anyone when he said that the computer-services giant’s greatest achievement was not its $2 billion in annual revenue but the fact that it had taught his fellow Indians to “redefine the possible”. A third defence is that business helps maintain political pluralism. Anti-capitalists are fond of arguing that companies account for half of the world’s 100 biggest economies. But this argument not only depends on the abuse of statistics, comparing corporate turnover with GDP. It also rests on ignorance of the pressures of business life.
Companies have a difficult enough job staying alive, let alone engaging in a “silent takeover” of the state. Only 202 of the 500 biggest companies in America in 1980 were still in existence 20 years later. Anti-capitalists actually have it upside down. Companies actually prevent each other from gaining too much power, and also act as a check on State power that would otherwise be running the economy. The proportion of the world’s governments that can reasonably be called democratic has increased from 40% in 1980, when the pro-business revolution began, to more than 60% today. Most hard-headed business people are no doubt reluctant to make these arguments. They are more concerned with balancing their books than with engaging in worthy debates about freedom and democracy. But they would do well to become a bit less reticent: the price of silence will be an ever more hostile public and ever more overbearing government.
Dit opiniestuk van Schumpeter verscheen eerst in "The Economist".
Meer columns van deze econoom op www.economist.com.
Hedge funds are controversial these days. Though it is unlikely that the average citizen or parliamentarian could say just what hedge funds do, many are certain they must be reined in by additional regulation because they can cause widespread damage to our financial system and economy. Almost everyone takes it for granted that regulation of some sort is the solution, ignoring the possibility that at least some of the problems are actually caused by regulation. And what constitutes a hedge fund anyway? The name implies hedging, a strategy that reduces risk. If you bet on several horses in a race, you are hedging your bets, spreading your risk. You can buy gold to hedge against inflation. You can sell interest-rate futures to hedge the risk that rising interest rates would pose to your bond portfolio.
The first hedge fund was created in 1949 by Alfred Jones. He believed he could pick stocks that would outperform and those that would underperform the overall market. But Jones did not know where the overall market was going, so he would buy his expected outperformers and sell short the expected underperformers. He thereby insulated his portfolio from general market moves, which would affect about half his holding positively and half negatively. Most present-day hedge funds don’t do much hedging, but the name persists. Instead, they engage in a bewildering variety of trading methods, including buying on margin -- using borrowed funds -- and selling short -- selling borrowed assets so as to profit from a price drop. They trade stocks, bonds, options, currencies, commodity futures, and sophisticated derivatives thereof. Some try to anticipate global political or economic events, while others seek opportunities in specific industries or companies.
Hedge funds are like mutual funds in some ways. A mutual fund sells shares to investors and uses the proceeds to buy stocks or bonds (usually). A fund’s income and realized capital gains are distributed to shareholders, while unrealized capital gains are reflected in higher mutual fund share prices. Like mutual funds, hedge funds are typically open-ended, meaning they can sell shares to new investors from time to time or repurchase them from existing shareholders. There the resemblance ends. Anyone can buy mutual fund shares, but hedge fund shares are generally available only to “qualified investors,” defined by an annual income of at least $200,000 and financial assets of $1,000,000. Withdrawals of capital are only permitted at limited times. Shares cannot be offered or advertised to the general public, which can be an advantage because it may make investors feel that they are gaining entrée into an exclusive club.
Hedge fund managers are more lightly regulated than mutual fund managers. They are allowed to charge performance-based fees, for example, which is forbidden to mutual fund managers. Though management fees vary widely, hedge fund managers typically retain 20 percent of any gains. This gives them some “skin in the game,” which presumably motivates them to do well for their investors. However, they do not share in fund losses. Hedge funds typically charge short-term redemption fees to discourage short-term trading and maintain a stable asset base. Perhaps the biggest difference between the two fund classes is that hedge funds are free to take very large risks, while mutual fund managers are constrained against “excessive” risk-taking.
Long Term Capital Management (LTCM) was a hedge fund that collapsed in spectacular fashion in 1998. The immediate cause was the Russian bond default, but, more fundamentally, LTCM relied too much on sophisticated computer models and extreme use of leverage, meaning almost all its capital was borrowed. When the Russian government defaulted on its bonds, it set off a chain of events that LTCM’s models had indicated was essentially impossible. These events produced huge losses that took the fund to the brink of default, threatening big losses for its lenders, including some of the largest and most influential New York banks. So the Federal Reserve Bank of New York came to the rescue, arranging a $3.6 billion bailout, a sum that seems quaint by today’s bailout standards. The same “systemic risk” argument that we hear today went around then: A default on those loans, it was said, would be an intolerable shock to the financial system. “Too big to fail” was the reason; “too well-connected” was perhaps more accurate.
Even though the fund eventually recovered without losses to the bailout guarantors, the LTCM failure represents a missed -- and golden -- opportunity. Had the fund been allowed to fail, and had the big banks taken their losses, it would have struck some well-deserved fear into the hearts of fund managers, investors, and especially bankers. Our current financial crisis might have been less severe as a result. LTCM was very secretive about its strategies, and the bankers who loaned money to the fund likely knew next to nothing about what LTCM was doing with it until it was too late. They were awestruck by the reputations of the LTCM partners, two of whom had shared the 1997 Nobel Prize in economics. Had LTCM been allowed to go under, its example would have tempered risky behavior by others. If uninsured depositors at these banks had also lost money, they too would have gotten a valuable wakeup call. Instead, a brick was added to the “Greenspan put.” It said: Go ahead and take risks. If you win you collect the profits. If you lose, we will cover you.
Is it wise to take high risks as hedge funds do? For most people, no. For those whose resources are large enough that they can afford to lose some capital and who enjoy the thrill of the chase, perhaps yes. We all have different temperaments and different circumstances. A free society respects these differences and does not stop its members from taking risks nor shield them from the consequences. As long as there is no fraud, hedge funds, like other market participants, produce social benefits. They provide market liquidity, the lubrication that makes markets work well. Successful funds help move capital to where it is most needed and help move prices in anticipation of future events. Unsuccessful funds go out of business sooner or later, and investors in failed funds learn to be more careful about whom they select to handle their money. But regulation brings unintended consequences, many of them harmful to the people they are supposed to protect. Absent regulation, no separate category called hedge funds, distinct from mutual funds, would exist.
Unfortunately, in January the President’s Economic Recovery Advisory Board, headed by Paul Volcker, called for registration of hedge funds and public disclosure of their holdings. Fund managers will likely resist disclosure, which can damage their mystique and invite free riders. The board report addressed not only hedge funds but also any other “systemically significant” financial institution of any type, and the criteria by which systemic significance is to be judged were left vague. To their credit the board members recognized that “a modest system of registration and regulation can create a false impression of lower investment risk.” The U.S. Hedge Fund Transparency Act was introduced shortly after the report was released. It has been in committee ever since. It would cover private equity funds and venture capital funds along with hedge funds. Market participants will very likely find ways to get around any new regulation or to co-opt it, as they generally do.
Business regulation almost invariably starts with wide popular support. Most people assume big business must be restrained lest it run roughshod over the little guy. But often, as in the Progressive Era a century ago, it is big business that actually promotes regulation, expecting it to put smaller competitors or would-be competitors at a disadvantage. Often regulators start out conscientiously dedicated to their jobs, but over time familiarity can transform them into advocates for those they regulate. Hedge fund regulation is no different. Why are people of modest means forbidden to buy hedge fund shares? The presumption is that they lack the knowledge and sophistication necessary for intelligent risk-taking. Common folk must be protected from themselves, lest they get in over their heads. After all, we can’t have people gambling their rent money. Unless, of course, they are gambling on state lottery tickets. The regulation that was supposed to protect small investors actually protects large investors by locking out their smaller competition.
The prohibition on advertising by hedge funds -- or other “private placements” -- blocks potentially useful information. It is harder for managers and investors to find each other when important information is, in effect, censored. Middlemen, such as financial planners or trust officers, are left to fill the gap, which they do relatively inefficiently. The rule forbidding mutual fund managers to charge performance-based fees again hurts the little guy by denying access to performance-motivated managers. It also drives up the fees that hedge fund managers can charge by shielding them from mutual fund competition in this respect. Thus both hedge fund investors and mutual fund investors come out on the short end of this regulation. Regulators sometimes fail to catch the bad guys, e.g. Bernie Madoff, but they often destroy good guys as well.
Art Samberg has enjoyed a long career as a successful stock-picker. By 2001 he and a colleague had built Pequot Capital Management into the largest hedge fund in the world, riding the technology wave up and later shorting it on the way down. In 2001 the Securities and Exchange Commission began investigating the firm for insider trading, but no charges were ever filed and Samberg strenuously denies any wrong-doing. Guilty or not, by last May the bad publicity had taken such a toll that Samberg announced he would shortly liquidate his fund—sell all its holdings and return cash to the shareholders. Whether insider trading is something that should really be forbidden is a subject for another time. Regulation has many other drawbacks. But a badly neglected one is that government-imposed minimum standards tend to become maximum standards. People take less care to understand what they are getting into with a regulated investment because they assume that regulators have diligently vetted the offerings. All firms getting a pass from the regulators tend to be treated alike. That is when trouble begins.
Dit artikel van economieprofessor Warren Gibson verscheen eerst in het FEE-maandblad "The Freeman - Ideas on Liberty".
Meer opinieteksten van deze auteur op www.thefreeman.org.
The first hedge fund was created in 1949 by Alfred Jones. He believed he could pick stocks that would outperform and those that would underperform the overall market. But Jones did not know where the overall market was going, so he would buy his expected outperformers and sell short the expected underperformers. He thereby insulated his portfolio from general market moves, which would affect about half his holding positively and half negatively. Most present-day hedge funds don’t do much hedging, but the name persists. Instead, they engage in a bewildering variety of trading methods, including buying on margin -- using borrowed funds -- and selling short -- selling borrowed assets so as to profit from a price drop. They trade stocks, bonds, options, currencies, commodity futures, and sophisticated derivatives thereof. Some try to anticipate global political or economic events, while others seek opportunities in specific industries or companies.
Hedge funds are like mutual funds in some ways. A mutual fund sells shares to investors and uses the proceeds to buy stocks or bonds (usually). A fund’s income and realized capital gains are distributed to shareholders, while unrealized capital gains are reflected in higher mutual fund share prices. Like mutual funds, hedge funds are typically open-ended, meaning they can sell shares to new investors from time to time or repurchase them from existing shareholders. There the resemblance ends. Anyone can buy mutual fund shares, but hedge fund shares are generally available only to “qualified investors,” defined by an annual income of at least $200,000 and financial assets of $1,000,000. Withdrawals of capital are only permitted at limited times. Shares cannot be offered or advertised to the general public, which can be an advantage because it may make investors feel that they are gaining entrée into an exclusive club.
Hedge fund managers are more lightly regulated than mutual fund managers. They are allowed to charge performance-based fees, for example, which is forbidden to mutual fund managers. Though management fees vary widely, hedge fund managers typically retain 20 percent of any gains. This gives them some “skin in the game,” which presumably motivates them to do well for their investors. However, they do not share in fund losses. Hedge funds typically charge short-term redemption fees to discourage short-term trading and maintain a stable asset base. Perhaps the biggest difference between the two fund classes is that hedge funds are free to take very large risks, while mutual fund managers are constrained against “excessive” risk-taking.
Long Term Capital Management (LTCM) was a hedge fund that collapsed in spectacular fashion in 1998. The immediate cause was the Russian bond default, but, more fundamentally, LTCM relied too much on sophisticated computer models and extreme use of leverage, meaning almost all its capital was borrowed. When the Russian government defaulted on its bonds, it set off a chain of events that LTCM’s models had indicated was essentially impossible. These events produced huge losses that took the fund to the brink of default, threatening big losses for its lenders, including some of the largest and most influential New York banks. So the Federal Reserve Bank of New York came to the rescue, arranging a $3.6 billion bailout, a sum that seems quaint by today’s bailout standards. The same “systemic risk” argument that we hear today went around then: A default on those loans, it was said, would be an intolerable shock to the financial system. “Too big to fail” was the reason; “too well-connected” was perhaps more accurate.
Even though the fund eventually recovered without losses to the bailout guarantors, the LTCM failure represents a missed -- and golden -- opportunity. Had the fund been allowed to fail, and had the big banks taken their losses, it would have struck some well-deserved fear into the hearts of fund managers, investors, and especially bankers. Our current financial crisis might have been less severe as a result. LTCM was very secretive about its strategies, and the bankers who loaned money to the fund likely knew next to nothing about what LTCM was doing with it until it was too late. They were awestruck by the reputations of the LTCM partners, two of whom had shared the 1997 Nobel Prize in economics. Had LTCM been allowed to go under, its example would have tempered risky behavior by others. If uninsured depositors at these banks had also lost money, they too would have gotten a valuable wakeup call. Instead, a brick was added to the “Greenspan put.” It said: Go ahead and take risks. If you win you collect the profits. If you lose, we will cover you.
Is it wise to take high risks as hedge funds do? For most people, no. For those whose resources are large enough that they can afford to lose some capital and who enjoy the thrill of the chase, perhaps yes. We all have different temperaments and different circumstances. A free society respects these differences and does not stop its members from taking risks nor shield them from the consequences. As long as there is no fraud, hedge funds, like other market participants, produce social benefits. They provide market liquidity, the lubrication that makes markets work well. Successful funds help move capital to where it is most needed and help move prices in anticipation of future events. Unsuccessful funds go out of business sooner or later, and investors in failed funds learn to be more careful about whom they select to handle their money. But regulation brings unintended consequences, many of them harmful to the people they are supposed to protect. Absent regulation, no separate category called hedge funds, distinct from mutual funds, would exist.
Unfortunately, in January the President’s Economic Recovery Advisory Board, headed by Paul Volcker, called for registration of hedge funds and public disclosure of their holdings. Fund managers will likely resist disclosure, which can damage their mystique and invite free riders. The board report addressed not only hedge funds but also any other “systemically significant” financial institution of any type, and the criteria by which systemic significance is to be judged were left vague. To their credit the board members recognized that “a modest system of registration and regulation can create a false impression of lower investment risk.” The U.S. Hedge Fund Transparency Act was introduced shortly after the report was released. It has been in committee ever since. It would cover private equity funds and venture capital funds along with hedge funds. Market participants will very likely find ways to get around any new regulation or to co-opt it, as they generally do.
Business regulation almost invariably starts with wide popular support. Most people assume big business must be restrained lest it run roughshod over the little guy. But often, as in the Progressive Era a century ago, it is big business that actually promotes regulation, expecting it to put smaller competitors or would-be competitors at a disadvantage. Often regulators start out conscientiously dedicated to their jobs, but over time familiarity can transform them into advocates for those they regulate. Hedge fund regulation is no different. Why are people of modest means forbidden to buy hedge fund shares? The presumption is that they lack the knowledge and sophistication necessary for intelligent risk-taking. Common folk must be protected from themselves, lest they get in over their heads. After all, we can’t have people gambling their rent money. Unless, of course, they are gambling on state lottery tickets. The regulation that was supposed to protect small investors actually protects large investors by locking out their smaller competition.
The prohibition on advertising by hedge funds -- or other “private placements” -- blocks potentially useful information. It is harder for managers and investors to find each other when important information is, in effect, censored. Middlemen, such as financial planners or trust officers, are left to fill the gap, which they do relatively inefficiently. The rule forbidding mutual fund managers to charge performance-based fees again hurts the little guy by denying access to performance-motivated managers. It also drives up the fees that hedge fund managers can charge by shielding them from mutual fund competition in this respect. Thus both hedge fund investors and mutual fund investors come out on the short end of this regulation. Regulators sometimes fail to catch the bad guys, e.g. Bernie Madoff, but they often destroy good guys as well.
Art Samberg has enjoyed a long career as a successful stock-picker. By 2001 he and a colleague had built Pequot Capital Management into the largest hedge fund in the world, riding the technology wave up and later shorting it on the way down. In 2001 the Securities and Exchange Commission began investigating the firm for insider trading, but no charges were ever filed and Samberg strenuously denies any wrong-doing. Guilty or not, by last May the bad publicity had taken such a toll that Samberg announced he would shortly liquidate his fund—sell all its holdings and return cash to the shareholders. Whether insider trading is something that should really be forbidden is a subject for another time. Regulation has many other drawbacks. But a badly neglected one is that government-imposed minimum standards tend to become maximum standards. People take less care to understand what they are getting into with a regulated investment because they assume that regulators have diligently vetted the offerings. All firms getting a pass from the regulators tend to be treated alike. That is when trouble begins.
Dit artikel van economieprofessor Warren Gibson verscheen eerst in het FEE-maandblad "The Freeman - Ideas on Liberty".
Meer opinieteksten van deze auteur op www.thefreeman.org.
The bit of Brussels where I work, the concrete-canyoned EU quarter, stands out for many things, such as its hordes of well-dressed, multi-lingual Eurocrats, and for never-ending protests by people wanting EU money for something or other. Today, these two features were neatly combined as thousands of the Eurocrats staged a demonstration over pay. Much of the press commentary has been a bit harsh, noting that the EU civil servants threatening strike action have some of the safest jobs in Europe, and enjoy more generous pay and conditions than they would in most national civil services. The counter-argument here inside the Brussels bubble is that the pay of EU officials is fixed against a reference basket of eight countries, and it is this mechanism that has produced the recession-defying pay rise of 3.7% for next year that is causing a fuss.
I must admit, I can see both sides. Given that national governments agreed the pay system years ago, it does look legally dodgy to challenge it now. On the other hand, given that civil servants in some countries, like Ireland or Latvia, are having vast chunks cut from their pay packets, it does seem a bit rich for the EU’s finest to award themselves an above-inflation rise, especially as they enjoy all sorts of other perks, ranging from tax-free salaries (they pay special levies to the EU instead), child allowances, household allowances, subsidised places at the European Schools for their children and handsome “expatriation allowances” to offset the costs of living in Brussels, which -- judging by my own observation -- are available even to people who have lived in Brussels for many years.
Most of all, I think the carping about the pay and conditions of EU officials is missing a much bigger point. In my experience, if the life of many Eurocrats looks gold-plated, the lustre is that of a gilded cage. I cannot put a statistical percentage on it, but after years of Brussels dinner parties, I would say that roughly “lots and lots” of EU officials are bored and rather miserable with their jobs. Getting a full-time job at the EU institutions is hard: you have to pass a strange, French-inspired test or “concours” which to date have included a whole series of questions designed to test the ability to cram Euro-facts into your head, such as: what was the “Barnier Proposal”, what is the “Helsinki Action Group”, how many commission presidents there have been or Jean Monnet’s shoe size (ok, I made that one up).
Most people who get into the services are well-educated and rather idealistic about Europe. They then rapidly discover that promotion is often less about merit than about years of service, politics and (irony of ironies in a European institution) your nationality. Some land jobs in policy areas that enjoy support from the national governments, so actually produce legislation. Others find themselves working on a proposed directive that has barely moved an inch in 10 years, and is slowly being talked to death in committee meetings to which only Kafka could do justice. There are also lots of grudges. Younger officials have less generous pay packages than those who joined before staff reforms a few years ago, so resent their older colleagues. Lots of officials from old member countries privately carp and grumble about those from new member countries, who they accuse of being out for themselves and shockingly un-European in their thinking. The easterners think the old-timers snooty and lazy. And everybody sighs and dreams about the supposed heyday of the institutions when Jacques Delors was commission president, and told national governments who was boss.
I would have more time for this argument, were it not for the (rather unlikely) fact that I briefly tasted life inside the European Commission as a “stagiaire” or intern in 1993, ie, the Delors era. I worked in one of the more glamorous bits of the machine, DG1 (now the External Relations bit of the commission), and my boss had an interesting job, on paper. But in reality, my whole unit seemed to spend its life writing reports for the bin, or at best the filing cabinets of other units. Everyone spent a lot of time on the telephone, and the focus of life seemed to be lunch, long weekends, gossip about extra-marital affairs, things like choirs and amateur dramatic societies, and lunch. Also, though nobody seemed to be exactly flat-out busy, a lot of ingenuity went into hiring new staff: one earnest man who had been hanging about for ages on a temporary contract was sucked into complex negotiations with an outside contractor based in another country, which at one point was going to hire him and contract him back to our unit. I don’t think it worked out: the poor man fell into the gulf that divides “temporary agents” in the commission from “fonctionnaires” or permanent officials who have passed the concours. The two tribes are even separated by a visible mark: temps carry a large T on their identity badges, while fonctionnaires have an F on theirs.
Years later, while working in Beijing, I read about the lives of imperial mandarins in Ming or Qing dynasty China, and was struck by a pang of recognition. There it all was: the gilded paranoia, the politicking, the strange entrance exams (would-be officials had to memorise great screeds of Confucius rather than Robert Schuman’s knicker size, but the theory was the same), and the obsession with rank. In China, it was all about whether you had a crane embroidered on your robes, or a jade or coral bead atop your tasselled hat. In Brussels, it is about being an AD 12 or 13 (and then which seniority step you enjoy). It could be worse, of course. The innermost sanctums of the Forbidden City were staffed by eunuchs. Some sacrifices, even the EU balks at.
Dit commentaarstuk verscheen oorspronkelijk in "The Economist".
Meer teksten van columnist Charlemagne op www.economist.com.
I must admit, I can see both sides. Given that national governments agreed the pay system years ago, it does look legally dodgy to challenge it now. On the other hand, given that civil servants in some countries, like Ireland or Latvia, are having vast chunks cut from their pay packets, it does seem a bit rich for the EU’s finest to award themselves an above-inflation rise, especially as they enjoy all sorts of other perks, ranging from tax-free salaries (they pay special levies to the EU instead), child allowances, household allowances, subsidised places at the European Schools for their children and handsome “expatriation allowances” to offset the costs of living in Brussels, which -- judging by my own observation -- are available even to people who have lived in Brussels for many years.
Most of all, I think the carping about the pay and conditions of EU officials is missing a much bigger point. In my experience, if the life of many Eurocrats looks gold-plated, the lustre is that of a gilded cage. I cannot put a statistical percentage on it, but after years of Brussels dinner parties, I would say that roughly “lots and lots” of EU officials are bored and rather miserable with their jobs. Getting a full-time job at the EU institutions is hard: you have to pass a strange, French-inspired test or “concours” which to date have included a whole series of questions designed to test the ability to cram Euro-facts into your head, such as: what was the “Barnier Proposal”, what is the “Helsinki Action Group”, how many commission presidents there have been or Jean Monnet’s shoe size (ok, I made that one up).
Most people who get into the services are well-educated and rather idealistic about Europe. They then rapidly discover that promotion is often less about merit than about years of service, politics and (irony of ironies in a European institution) your nationality. Some land jobs in policy areas that enjoy support from the national governments, so actually produce legislation. Others find themselves working on a proposed directive that has barely moved an inch in 10 years, and is slowly being talked to death in committee meetings to which only Kafka could do justice. There are also lots of grudges. Younger officials have less generous pay packages than those who joined before staff reforms a few years ago, so resent their older colleagues. Lots of officials from old member countries privately carp and grumble about those from new member countries, who they accuse of being out for themselves and shockingly un-European in their thinking. The easterners think the old-timers snooty and lazy. And everybody sighs and dreams about the supposed heyday of the institutions when Jacques Delors was commission president, and told national governments who was boss.
I would have more time for this argument, were it not for the (rather unlikely) fact that I briefly tasted life inside the European Commission as a “stagiaire” or intern in 1993, ie, the Delors era. I worked in one of the more glamorous bits of the machine, DG1 (now the External Relations bit of the commission), and my boss had an interesting job, on paper. But in reality, my whole unit seemed to spend its life writing reports for the bin, or at best the filing cabinets of other units. Everyone spent a lot of time on the telephone, and the focus of life seemed to be lunch, long weekends, gossip about extra-marital affairs, things like choirs and amateur dramatic societies, and lunch. Also, though nobody seemed to be exactly flat-out busy, a lot of ingenuity went into hiring new staff: one earnest man who had been hanging about for ages on a temporary contract was sucked into complex negotiations with an outside contractor based in another country, which at one point was going to hire him and contract him back to our unit. I don’t think it worked out: the poor man fell into the gulf that divides “temporary agents” in the commission from “fonctionnaires” or permanent officials who have passed the concours. The two tribes are even separated by a visible mark: temps carry a large T on their identity badges, while fonctionnaires have an F on theirs.
Years later, while working in Beijing, I read about the lives of imperial mandarins in Ming or Qing dynasty China, and was struck by a pang of recognition. There it all was: the gilded paranoia, the politicking, the strange entrance exams (would-be officials had to memorise great screeds of Confucius rather than Robert Schuman’s knicker size, but the theory was the same), and the obsession with rank. In China, it was all about whether you had a crane embroidered on your robes, or a jade or coral bead atop your tasselled hat. In Brussels, it is about being an AD 12 or 13 (and then which seniority step you enjoy). It could be worse, of course. The innermost sanctums of the Forbidden City were staffed by eunuchs. Some sacrifices, even the EU balks at.
Dit commentaarstuk verscheen oorspronkelijk in "The Economist".
Meer teksten van columnist Charlemagne op www.economist.com.
A close friend recently invited me over to see a private screening of Michael Moore’s new film, Capitalism: A Love Story. I was excited to see a “mainstream” film that was backed by big Hollywood bucks conclude capitalism is “evil.” Arguably the most successful documentarian ever -- a man who has made millions of dollars -- was going to legitimately make the case that there was an alternative to capitalism. I sat down in a packed theatre, eager to see how his vision could possibly flesh out. Moore is a rather simple guy. He is likable. He sees the world as good guys (people with no money) and bad guys (people with money). His Flint, Michigan, union-worker upbringing is at the heart of his perverted worldview. If you did not have that upbringing or if your life started less severe than his, you are an evil capitalist. If, on the other hand, you are a laid-off factory worker with a sixth-grade education, you are a true hero.
I don’t care one way or the other that he has that view and I am not knocking union workers, but Moore sees the world through a class-warfare lens resulting in a certain agenda: force wealth to be spread amongst everyone regardless of effort. Within minutes it was clear where Capitalism: A Love Story was headed. We listen to heartbreaking stories of foreclosed families across America -- but we don’t learn why the foreclosures happened. Did these people treat their homes as piggy banks? Was there refinancing on top of refinancing just to keep buying mall trinkets and other goodies with no respect to risk or logic? We don’t find out. We meet one family that is so desperate for money that they were willing to accept $1,000 for cleaning out the house that they were just evicted from. Was it sad? Yes. But should we end capitalism due to this one family in Peoria, Illinois?
We are introduced to a guy whose company, called Condo Vultures, is buying and selling foreclosed properties. Since he acted like a used car salesman, the implication was that he was an evil capitalist. However, Moore doesn’t tell us if his buyers were “working-class” people making smart buying decisions after prices had dropped. We listen to Catholic priests who denounce capitalism as an evil to be eradicated. What would they put in its place and how would the new system work? The priests don’t tell us. We learn that Walmart bought life insurance policies on many workers. We are then told to feel outrage when Walmart receives a large payout from an employee death while the family still struggles with bills. I saw where Moore was heading here, but is this a reason to end capitalism?
We hear a story from a commercial pilot so low on money that he has to use food stamps. Moore points out that many pilots are making less than Taco Bell managers and then attributes a recent plane crash in Buffalo to underpaid pilots. This one crash is extrapolated as yet another reason to end capitalism. I was pleasantly surprised at Moore’s attempt at balance. For example, he included a carpenter who, while boarding up a foreclosed home, says, “If people pay their bills, they don’t get thrown out.” There is also a dressing-down of Senator Chris Dodd by name. Moore called out a top Democrat? He sure did. He nailed him. There is a lengthy dissertation on the evils of Goldman Sachs. He rips Robert Rubin and Hank Paulson big time, and I agree with him. In fact, I said to myself, “Moore, you should have done your whole film on Goldman Sachs!” Throughout the various stories and interviews he also weaves a conspiracy theory (all Moore films do this).
The plot goes something like this: America won World War II and quickly dominated because there was no competition (Germany and Japan were destroyed). We had great postwar success where everyone lived in union-like equality. Jobs were plentiful and families were happy. However, things started to go bad in the 1970s -- here Moore uses a snippet of President Carter preaching about greed. This clip was predictably building to Moore’s big reason for all of today’s problems: the Reagan Revolution. Moore sees Reagan entering the scene as a shill for corporate-banking interests. However, everyone is happy as the good times roll all the way through into the Clinton era. Moore does take subtle shots at President Clinton, but nails his right-hand economic man, Larry Summers, directly as a primary reason for the banking collapse. While Moore sees Japan and Germany today as socialistic winners where corporations benefit workers more than shareholders, he sees America sinking fast. So is that it? That was the proof that capitalism is an evil to eliminate? Essentially, yes, that’s Moore’s proof.
What is his solution? Tugging on your idealistic heartstrings of course! Moore ends his film with recently uncovered video of FDR talking to America on January 11, 1944. Looking into the camera, a weary FDR proposed what he called a second Bill of Rights—an economic Bill of Rights. As FDR concluded and the film ended, I was shocked at the reaction. The theater of 400-plus spectators stood and cheered wildly at FDR’s 1944 proposal. The questions running through my head were immediate: how does one legislate words like useful, enough, recreation, adequate, decent, and good? Who decides all of this and to what degree? Interestingly, during the Q&A, Adriana Huffington and Michael Moore discussed bank-failure fears during the fall of 2008. They asked for a show of hands of how many people moved money around or attempted to protect against a bank failure.
I had the only hand that went up. Figuring someone else must see the problems with this film, I started poking around the net for other views. One critic declared that the value of the film was not in the moviemaking, but in its message that hits you in the gut and makes you angry. This film did not make me angry, but it did punch me in the gut. The people in that theater, including Moore, were not bad people. They just seem to all have consumed a lethal dose of Kool-Aid. At the end, Moore pushed the audience to understand that while they don’t have the money, they do have the vote. He implored them to use their vote to take money from one group to give it to another group. Did he really say that openly with no ambiguity? Yes, sadly.
Deze recensie van Michael Covel verscheen oorspronkelijk in het maandblad "The Free Market" en werd ook elders overgenomen.
Meer recensies van hem op www?thefreemarket.org.
I don’t care one way or the other that he has that view and I am not knocking union workers, but Moore sees the world through a class-warfare lens resulting in a certain agenda: force wealth to be spread amongst everyone regardless of effort. Within minutes it was clear where Capitalism: A Love Story was headed. We listen to heartbreaking stories of foreclosed families across America -- but we don’t learn why the foreclosures happened. Did these people treat their homes as piggy banks? Was there refinancing on top of refinancing just to keep buying mall trinkets and other goodies with no respect to risk or logic? We don’t find out. We meet one family that is so desperate for money that they were willing to accept $1,000 for cleaning out the house that they were just evicted from. Was it sad? Yes. But should we end capitalism due to this one family in Peoria, Illinois?
We are introduced to a guy whose company, called Condo Vultures, is buying and selling foreclosed properties. Since he acted like a used car salesman, the implication was that he was an evil capitalist. However, Moore doesn’t tell us if his buyers were “working-class” people making smart buying decisions after prices had dropped. We listen to Catholic priests who denounce capitalism as an evil to be eradicated. What would they put in its place and how would the new system work? The priests don’t tell us. We learn that Walmart bought life insurance policies on many workers. We are then told to feel outrage when Walmart receives a large payout from an employee death while the family still struggles with bills. I saw where Moore was heading here, but is this a reason to end capitalism?
We hear a story from a commercial pilot so low on money that he has to use food stamps. Moore points out that many pilots are making less than Taco Bell managers and then attributes a recent plane crash in Buffalo to underpaid pilots. This one crash is extrapolated as yet another reason to end capitalism. I was pleasantly surprised at Moore’s attempt at balance. For example, he included a carpenter who, while boarding up a foreclosed home, says, “If people pay their bills, they don’t get thrown out.” There is also a dressing-down of Senator Chris Dodd by name. Moore called out a top Democrat? He sure did. He nailed him. There is a lengthy dissertation on the evils of Goldman Sachs. He rips Robert Rubin and Hank Paulson big time, and I agree with him. In fact, I said to myself, “Moore, you should have done your whole film on Goldman Sachs!” Throughout the various stories and interviews he also weaves a conspiracy theory (all Moore films do this).
The plot goes something like this: America won World War II and quickly dominated because there was no competition (Germany and Japan were destroyed). We had great postwar success where everyone lived in union-like equality. Jobs were plentiful and families were happy. However, things started to go bad in the 1970s -- here Moore uses a snippet of President Carter preaching about greed. This clip was predictably building to Moore’s big reason for all of today’s problems: the Reagan Revolution. Moore sees Reagan entering the scene as a shill for corporate-banking interests. However, everyone is happy as the good times roll all the way through into the Clinton era. Moore does take subtle shots at President Clinton, but nails his right-hand economic man, Larry Summers, directly as a primary reason for the banking collapse. While Moore sees Japan and Germany today as socialistic winners where corporations benefit workers more than shareholders, he sees America sinking fast. So is that it? That was the proof that capitalism is an evil to eliminate? Essentially, yes, that’s Moore’s proof.
What is his solution? Tugging on your idealistic heartstrings of course! Moore ends his film with recently uncovered video of FDR talking to America on January 11, 1944. Looking into the camera, a weary FDR proposed what he called a second Bill of Rights—an economic Bill of Rights. As FDR concluded and the film ended, I was shocked at the reaction. The theater of 400-plus spectators stood and cheered wildly at FDR’s 1944 proposal. The questions running through my head were immediate: how does one legislate words like useful, enough, recreation, adequate, decent, and good? Who decides all of this and to what degree? Interestingly, during the Q&A, Adriana Huffington and Michael Moore discussed bank-failure fears during the fall of 2008. They asked for a show of hands of how many people moved money around or attempted to protect against a bank failure.
I had the only hand that went up. Figuring someone else must see the problems with this film, I started poking around the net for other views. One critic declared that the value of the film was not in the moviemaking, but in its message that hits you in the gut and makes you angry. This film did not make me angry, but it did punch me in the gut. The people in that theater, including Moore, were not bad people. They just seem to all have consumed a lethal dose of Kool-Aid. At the end, Moore pushed the audience to understand that while they don’t have the money, they do have the vote. He implored them to use their vote to take money from one group to give it to another group. Did he really say that openly with no ambiguity? Yes, sadly.
Deze recensie van Michael Covel verscheen oorspronkelijk in het maandblad "The Free Market" en werd ook elders overgenomen.
Meer recensies van hem op www?thefreemarket.org.
The greens are not just treehuggers anymore. They've been browbeating us to recycle, eat soy, save energy, drive less, ride the bus, and a thousand other ways to "act local" for many years now. Now they've even got a hip new huckster on the big screen: "No Impact Man," your conductor on a first-class guilt trip to ecoland. Despite the mass popularity of their cause, I don't think they're satisfied. They want to control us. If we don't watch out, these people hell-bent on saving the planet are going to end up micromanaging our daily lives. The idea of sustainability itself sounds pretty benign -- it merely implies that people ought to be forward thinking, prudent, and thrifty in their use of economic resources. And I'm OK with this basic idea -- on the surface, it sounds like simple wisdom, in league with similarly bland and benevolent values like responsibility and generosity.
But deep down, there's something unsettling about the basic premise of sustainability. Sustainability advocates -- let's call them "sustainists" -- are damning in their fervor, poise, and rhetoric. Their ideology is pregnant with an accusation that the way things currently are is somehow unsustainable. There's an alarmism here which essentially claims, "there's a crisis, it's your fault for being ignorant, irrational, and greedy. You must do as we say to fix it, or we'll all die." This alarmist crusade, which underlies the sustainability movement, should rankle people with an economic understanding of the world. A basic tenet of economics is that markets are self-correcting and orderly; prices indicate resource constraints and guide people in economizing on their use. Prices change as underlying supply and demand conditions change, inducing appropriate adjustments in consumption and production patterns. Prices channel the profit motive -- a natural aspect of the human condition -- into productive and innovative activities. In short, prices work. Sustainists are either ignorant or in denial of this basic lesson. Either way, we economists have our work cut out for us.
The sustainists' lament
The gist of the problem, as the sustainists see it, is that people are using resources irresponsibly -- either using them up too fast, using too much of them, or using them in a way that will have negative long-term ramifications. In brief, sustainists disapprove of other peoples' actions, and are taking steps to correct their wayward brethren. Because these wasteful others, through either ignorance, laziness, or stubbornness, will not wake up and adopt sustainable practices on their own, sustainists see the need for a self-conscious effort -- organized campaigns, eco–guilt trips, and yes, even laws -- to correct this misuse of resources. We need to change our patterns of action; we need a motivating force beyond mere "economic self-interest" (the profit motive). Sustainability then became a full-fledged crusade to "save the planet" and if you're no part of the solution, you're part of the problem.
Let's interpret this through the lens of economics. Sustainability arguments fall under one of two broad categories: (1) the nonrenewable resources argument that the supplies of certain important resources are shrinking; by the time people realize this it will be "too late" -- resource shortages will strain the capitalist economies to the breaking point; (2) the climate-change argument that there are large, though delayed, negative externalities to current patterns of resource use. Whatever their type, sustainability arguments invoke market failure. Indeed, the very practices cited as unsustainable arise on the free market. Therefore some outside corrective, whether aggressive moral suasion or economic regulation, is needed to prevent the impending catastrophe of unsustainable resource use.
Are prices not sufficient?
I don't want to dwell on the particulars of the sustainability movement. There are dozens of manifestations, from green building to organic farming to mandatory recycling to decarbonization — indeed, the sustainability bandwagon (which of course is painted green and powered by renewable energy) seems infinitely expandable to include every industry and interest group under the sun. Instead, I want to draw out the essential implications of the sustainability movement. The sustainability movement is an assault on economics. It claims at its core that prices don't operate through time to direct consumption and production decisions in a sustainable way. A lesson in basic economics should suffice to defend against the sustainists' attack. Prices arise in the market economy as a concomitant of mutually beneficial exchange. People want things that improve their lives -- we call this value. Some valuable things are more scarce than others; take the classic case of water and diamonds. In absolute terms, water is more valuable than diamonds: you don't need diamonds to live.
Yet water is, pound for pound, far cheaper. Why? Although it's valuable, it is also relatively abundant; in many parts of the world, it literally does fall from the sky. The price of any good reflects this combination of value and scarcity. We're willing to pay more for valuable things as they become relatively scarce (e.g., oil); and we needn't pay as much for valuable things as they become more abundant (e.g., grain). Likewise, as scarce things lose their value, people are no longer willing to pay for them (e.g., typewriters), and people must pay more for scarce things that suddenly become sought after (e.g., vintage Michael Jackson records). The awesome thing about prices is that they seamlessly convey this combination of facts about an item's value (demand) and it's scarcity (supply). Prices, of course, are subject to change — prices of certain goods fluctuate every day. But this is a good thing; discernable trends in prices over time indicate relative changes in the "market fundamentals" of supply and demand.
In this sense, prices reliably guide individuals, both consumers and producers, toward a rational use of resources. Savvy consumers listen to the prices; a rising price trend tells them to cut back on that particular item, and a falling price tells them to go ahead and use a little more of it. The same basic logic applies on the production side. Entrepreneurs, driven by the profit motive, are like bloodhounds sniffing out these price trends in search of profit opportunities -- chances to create value through exchange. If the price of a good trends strongly upwards over time (indicating it has become scarcer and/or more valuable), they rush to find cheaper substitutes. The cheaper the substitutes, the higher the profits to be had, especially if you're the first to market. If prices trend downwards over time (indicating that the resource is becoming more abundant relative to its usefulness), entrepreneurs devote their efforts elsewhere.
The general outcome of these economic processes is captured by the statement "prices coordinate." In other words, the price system acts as an "invisible hand," guiding people -- both consumers and producers -- in their economic actions. The real beauty of this free-market price system is that it brings about its own kind of sustainability. This is not so much sustainability in the use of particular resources — for particular goods fall in and out of favor according to supply and demand factors -- but sustainability of high economic growth and high standards of living in the economically developed, capitalist economies.
Take, as an example, the transition in the market for interior illumination: tallow candles were replaced by whale-oil lamps, which were replaced by kerosene lamps, which were replaced by incandescent bulbs powered by electricity. There was no social or political pressure needed to accomplish this evolution; there was no "peak whale oil" movement, no kerosene conservationists, no sustainability crusade of yore. All it took was a functional price system, combined with the ever-present entrepreneurial drive for profits under a competitive, free-market order. Likewise, while sustainists and other worrywarts fret about resource depletion, the price system remains functional, quietly yet assuredly guiding individuals to economize on resources, search out profitable substitutes, and anticipate future trends. All this happens without preaching, without crusades, and without activism.
Is the sustainability crusade sustainable?
How long will sustainists be able to beat their drum, simultaneously trumpeting their greener-than-thou self-image and attempting, with varying degrees of coercion, to make the rest of us act "sustainable" too? With the global warming scare losing credibility by the day, the likelihood of sustainists being able to claim even a moral victory is fading. Barring the earth melting down from a little bit of smoke, I'm not too worried about sustainists having much of a long-run impact. Hardcore sustainists are asking for a radically disruptive change from the natural order of the free-market economy. They're asking us to forego wealth and embrace privation in the name of their cause. Although citizens of the Western democracies have seemingly become easy marks for anything green, we will only go so far toward saving the planet, especially when it becomes apparent that sustainability requires a march toward poverty and a deeply regimented and regulated society (and that the planet's not really in peril, after all).
Also, and perhaps more importantly, people in developing countries will be increasingly turned off by the sustainists' demands for sacrifice. Having just arrived at the high living standards that long-term capitalist development yields, my sense is that they will turn a cold shoulder to the idea of ratcheting down their development. The current resurgence of the classical-liberal tradition in economics will also reduce the appeal of sustainability. The idea of imposed or centrally planned sustainability will crumble under the realization that the spontaneous order wrought by the invisible hand of the free-market price system is amazingly sustainable. Add to the mix the hardships of the current recession, and it won't be long before enough people, even sustainist crusaders come crawling back, box of chocolates in hand, to the free-market economy.
Dit artikel van Tyler Watts verscheen oorspronkelijk in de VS bij het "Ludwig von Mises Institute" en de "George Mason University".
Meer teksten van deze Amerikaanse econoom op www.mises.org.
But deep down, there's something unsettling about the basic premise of sustainability. Sustainability advocates -- let's call them "sustainists" -- are damning in their fervor, poise, and rhetoric. Their ideology is pregnant with an accusation that the way things currently are is somehow unsustainable. There's an alarmism here which essentially claims, "there's a crisis, it's your fault for being ignorant, irrational, and greedy. You must do as we say to fix it, or we'll all die." This alarmist crusade, which underlies the sustainability movement, should rankle people with an economic understanding of the world. A basic tenet of economics is that markets are self-correcting and orderly; prices indicate resource constraints and guide people in economizing on their use. Prices change as underlying supply and demand conditions change, inducing appropriate adjustments in consumption and production patterns. Prices channel the profit motive -- a natural aspect of the human condition -- into productive and innovative activities. In short, prices work. Sustainists are either ignorant or in denial of this basic lesson. Either way, we economists have our work cut out for us.
The sustainists' lament
The gist of the problem, as the sustainists see it, is that people are using resources irresponsibly -- either using them up too fast, using too much of them, or using them in a way that will have negative long-term ramifications. In brief, sustainists disapprove of other peoples' actions, and are taking steps to correct their wayward brethren. Because these wasteful others, through either ignorance, laziness, or stubbornness, will not wake up and adopt sustainable practices on their own, sustainists see the need for a self-conscious effort -- organized campaigns, eco–guilt trips, and yes, even laws -- to correct this misuse of resources. We need to change our patterns of action; we need a motivating force beyond mere "economic self-interest" (the profit motive). Sustainability then became a full-fledged crusade to "save the planet" and if you're no part of the solution, you're part of the problem.
Let's interpret this through the lens of economics. Sustainability arguments fall under one of two broad categories: (1) the nonrenewable resources argument that the supplies of certain important resources are shrinking; by the time people realize this it will be "too late" -- resource shortages will strain the capitalist economies to the breaking point; (2) the climate-change argument that there are large, though delayed, negative externalities to current patterns of resource use. Whatever their type, sustainability arguments invoke market failure. Indeed, the very practices cited as unsustainable arise on the free market. Therefore some outside corrective, whether aggressive moral suasion or economic regulation, is needed to prevent the impending catastrophe of unsustainable resource use.
Are prices not sufficient?
I don't want to dwell on the particulars of the sustainability movement. There are dozens of manifestations, from green building to organic farming to mandatory recycling to decarbonization — indeed, the sustainability bandwagon (which of course is painted green and powered by renewable energy) seems infinitely expandable to include every industry and interest group under the sun. Instead, I want to draw out the essential implications of the sustainability movement. The sustainability movement is an assault on economics. It claims at its core that prices don't operate through time to direct consumption and production decisions in a sustainable way. A lesson in basic economics should suffice to defend against the sustainists' attack. Prices arise in the market economy as a concomitant of mutually beneficial exchange. People want things that improve their lives -- we call this value. Some valuable things are more scarce than others; take the classic case of water and diamonds. In absolute terms, water is more valuable than diamonds: you don't need diamonds to live.
Yet water is, pound for pound, far cheaper. Why? Although it's valuable, it is also relatively abundant; in many parts of the world, it literally does fall from the sky. The price of any good reflects this combination of value and scarcity. We're willing to pay more for valuable things as they become relatively scarce (e.g., oil); and we needn't pay as much for valuable things as they become more abundant (e.g., grain). Likewise, as scarce things lose their value, people are no longer willing to pay for them (e.g., typewriters), and people must pay more for scarce things that suddenly become sought after (e.g., vintage Michael Jackson records). The awesome thing about prices is that they seamlessly convey this combination of facts about an item's value (demand) and it's scarcity (supply). Prices, of course, are subject to change — prices of certain goods fluctuate every day. But this is a good thing; discernable trends in prices over time indicate relative changes in the "market fundamentals" of supply and demand.
In this sense, prices reliably guide individuals, both consumers and producers, toward a rational use of resources. Savvy consumers listen to the prices; a rising price trend tells them to cut back on that particular item, and a falling price tells them to go ahead and use a little more of it. The same basic logic applies on the production side. Entrepreneurs, driven by the profit motive, are like bloodhounds sniffing out these price trends in search of profit opportunities -- chances to create value through exchange. If the price of a good trends strongly upwards over time (indicating it has become scarcer and/or more valuable), they rush to find cheaper substitutes. The cheaper the substitutes, the higher the profits to be had, especially if you're the first to market. If prices trend downwards over time (indicating that the resource is becoming more abundant relative to its usefulness), entrepreneurs devote their efforts elsewhere.
The general outcome of these economic processes is captured by the statement "prices coordinate." In other words, the price system acts as an "invisible hand," guiding people -- both consumers and producers -- in their economic actions. The real beauty of this free-market price system is that it brings about its own kind of sustainability. This is not so much sustainability in the use of particular resources — for particular goods fall in and out of favor according to supply and demand factors -- but sustainability of high economic growth and high standards of living in the economically developed, capitalist economies.
Take, as an example, the transition in the market for interior illumination: tallow candles were replaced by whale-oil lamps, which were replaced by kerosene lamps, which were replaced by incandescent bulbs powered by electricity. There was no social or political pressure needed to accomplish this evolution; there was no "peak whale oil" movement, no kerosene conservationists, no sustainability crusade of yore. All it took was a functional price system, combined with the ever-present entrepreneurial drive for profits under a competitive, free-market order. Likewise, while sustainists and other worrywarts fret about resource depletion, the price system remains functional, quietly yet assuredly guiding individuals to economize on resources, search out profitable substitutes, and anticipate future trends. All this happens without preaching, without crusades, and without activism.
Is the sustainability crusade sustainable?
How long will sustainists be able to beat their drum, simultaneously trumpeting their greener-than-thou self-image and attempting, with varying degrees of coercion, to make the rest of us act "sustainable" too? With the global warming scare losing credibility by the day, the likelihood of sustainists being able to claim even a moral victory is fading. Barring the earth melting down from a little bit of smoke, I'm not too worried about sustainists having much of a long-run impact. Hardcore sustainists are asking for a radically disruptive change from the natural order of the free-market economy. They're asking us to forego wealth and embrace privation in the name of their cause. Although citizens of the Western democracies have seemingly become easy marks for anything green, we will only go so far toward saving the planet, especially when it becomes apparent that sustainability requires a march toward poverty and a deeply regimented and regulated society (and that the planet's not really in peril, after all).
Also, and perhaps more importantly, people in developing countries will be increasingly turned off by the sustainists' demands for sacrifice. Having just arrived at the high living standards that long-term capitalist development yields, my sense is that they will turn a cold shoulder to the idea of ratcheting down their development. The current resurgence of the classical-liberal tradition in economics will also reduce the appeal of sustainability. The idea of imposed or centrally planned sustainability will crumble under the realization that the spontaneous order wrought by the invisible hand of the free-market price system is amazingly sustainable. Add to the mix the hardships of the current recession, and it won't be long before enough people, even sustainist crusaders come crawling back, box of chocolates in hand, to the free-market economy.
Dit artikel van Tyler Watts verscheen oorspronkelijk in de VS bij het "Ludwig von Mises Institute" en de "George Mason University".
Meer teksten van deze Amerikaanse econoom op www.mises.org.
Climate change and the suppression of scientific debate
6 Reacties Gepubliceerd door Vincent De Roeck
As the U.N. Conference in Copenhagen gathers momentum, we can anticipate an increase of finger-pointing and awareness-raising. What is the motivation of this behaviour, and why is the volume of climate campaigning increasing? What is often overlooked is how the money tied into launching the green economy has led to a cosy relationship between governments, (state-funded) NGOs, some scientists and alert industrial lobby groups. This advantageous relationship can only continue to thrive so long as the public remains afraid of impending climate catastrophe and is made willing to sacrifice economic resources and personal comforts for this shared quest. Is history repeating itself? In 1961, U.S. President Dwight D. Eisenhower gave an alarming farewell address warning that the political-military-industrial (Congressional) complex was threatening democracy and leading to a disastrous rise of misplaced power.
In the 1950s, a cosy relationship had developed between arms manufacturers, the military, government procurement and the congressional districts benefiting from the increased jobs brought in via the weapons industry. The key to keeping the money and power flowing through these channels was to ensure that the public fear of the imminent threat of Communism was kept at a hysterical level. Kennedy tried with limited success to undo this “internal threat to democracy”. With the public fear of the imminent threat of global warming, we have today the formation of an environmental-industrial complex, made up of NGOs, legislators, scientists and industries involved in developing the green economy. Open debate and democratic choices are getting more difficult as money and interests take over, and use public fear as a means to generate opportunity. Fear is a very useful political tool. It provides governments with legitimacy, NGOs with fundraising opportunities and companies with potential new markets. Some would argue that societies need a generalized fear to thrive (part of an Armageddon complex deeply rooted in our DNA).
Climate change fears have been stoked for more than a decade, to the point that it has, echoing Eisenhower, an “economic, political and spiritual influence” on humanity. Climate concern has crept into every day conversations, shopping decisions and moral valuations. When it rains, or snows, or if the wind blows, weather is part of the climate narrative, as is debates on energy, transportation and food. Like the threat of Communism in the 1950s, climate today purveys culture. Fear can also become irrational; something that can be a very dangerous political tool should the juggernaut get out of control. The need to tackle climate change has been championed by anti-globalisation activists, vegetarians, forest campaigners, scientists, corporate CEOs, Hollywood actors … pretty well everyone. It has been presented as a spontaneous global movement to save the world: a war on climate where we are all enlisted as soldiers. Those who disagree or feel that resources should be directed elsewhere are branded as traitors.
The Green Economy
The main solution for us to save the world is to change the way we do things: to decarbonise, which in a carbon-based global economy, implies a radical revolution. The call for a revolution was sounded by an influential American technology activist and critic, Jeremy Rifkin. At an EU Open Days event in October 2009, Rifkin called to change how energy is to be produced and distributed: no longer from large-scale carbon-based energy generators leaving energy to waste on a large grid, but rather from a distributive system of small, locally produced (green, renewable) roof-top generators put onto a smart grid. A smart grid would be complemented by appliances that would only switch on when energy supply was more abundant and less expensive (evidently solving our problem of irregular supply from green-energy sources). With this revolutionary distributive energy, we could remove our dependence on carbon-based and nuclear energy in the coming decade.
His arguments echo, almost word for word, a press release from General Electric on 14 July 2009, after a GE scientific conference on the smart grid at its research centre in upstate New York. GE has been developing smart appliances, domestic energy management systems and small scale renewable generators in preparation for this revolution. For GE, the motivation is clear. Its Eco-Imagination strategy has bet the firm's future on the continued growth of green energy and smart-grid integration (as well as stimulus cash and green subsidies). They are working cross-stakeholder with scientists and NGOs to communicate the urgency of this need to revolutionize energy.
Other “green energy” companies have become dependent on the continued funding from governments. Smart grids are going to cost a lot, renewable energy may never turn a profit without subsidies, the research costs are going to be enormous. The money has to keep on flowing, we are told, otherwise the planet will burn and future generations will look at our present-day leadership and mutter what a disaster these minnows were. Nobody seems to be standing up to say: “Stop this madness!” Unfortunately, there is no money and no incentive for anyone to take the courage to do so. The only thing they would do is open themselves up to personal attack from the environmental-industrial complex already at the trough of subsidies, incentives and stimulus measures.
The War on Climate: not the place for open debate
Truth is the first casualty of war. Scientists who feel that the models are inaccurate or that the perceived and predicted warming is not necessarily due to human activity (that the sun or oceans could possibly play more of a role in climate than man) have been branded sceptics, contrarians or in the paid pocket of industry. Some have been excluded from scientific bodies given that their thinking is contrary to the prevailing consensus. Consensus-making is a political act, not a scientific one. Science encourages disputes and testing to see if theories can resist falsification. Limiting or denying free and open scientific debate because of political impetus for consensus does not improve the reputation of science. When motives and reputation come in (this is the first open scientific dispute of the Internet age), scientific methodology is compromised – science is compromised. The emails that were recently leaked from the University of East Anglia (one of the leading climate science institutions) showed climatologists expressing personal views about climate skeptics and admitting that their data was not sound enough (and needed some “tricks”). This is a crisis of credibility and the evidence of “climate spin” shows just how far science has fallen from the level of offering objective expertise.
The present leadership of the IPCC has not done much to restore the reputation of scientific validity and evidence-based advice. IPCC chairman, Rajendra Pachauri, has publicly declared that rich countries will have to pay reparations to poor countries, he moonlights as a member of the Indian Prime Minister’s advisory council on climate change, and declares at a vegetarian conference inflated numbers of the amount of CO2 produced by the beef industry. He does not seem to recognise any conflict of interest in these activities, or that he has become more politician than scientist. After Copenhagen, Pachauri should be fired; instead he has a Nobel Prize hanging on his wall.
The NGOs are also rather aggressive when it comes to protecting environmental information from any open discussion or dialogue with people who might be questioning their evidence. Greenpeace members have been particularly severe on one of their founders, Patrick Moore, for considering nuclear energy as a viable energy source. When Bjorn Lomborg published his book, The Skeptical Environmentalist, suggesting that money could be better spent on other pressing needs than the hopeless task of reversing global warming, NGOs took to the offence and ensured that the Danish academy no longer considered him as a scientist (he was a statistician after all!). Arguments against green positions are often met with rancour and insult rather than facts and rational debate. I am curious as to what the Green-shirts will do to poor James Lovelock for recently referring to environmentalist arguments on renewable energy as “silly theories”.
Ecological Lifecycle Assessments
What is lacking in so many of the ‘green’ technology debates is a clear eLCA -- an ecological lifecycle assessment. Solutions are provided to perceived environmental problems without taking into account full environmental effects (especially real CO2 emissions). We have “ecological” washing products that demand that we wash our clothes at higher water temperatures. We insist on recycling certain materials (at a high energy and water cost) rather than recovering the product’s energy through incineration. We promote solar energy as a carbon-free source of energy without taking into account the amount of energy required to purify the silicon and other production costs. The only real eLCA that was performed recently was for the production of biofuels as a carbon-neutral fuel alternative after their real environmental impact was leading to serious global consequences (from food supply to increased CO2 to land distribution issues).
Like any religion, the environmental feel-good effects of saving the planet blind us from even wanting to look more closely at the facts of our lifestyle and real environmental consequences. These eco-solutions put off making harder choices. Rather than recycling, we should use less stuff. We don’t need to use so much energy. Green technologies promise us that we don’t have to make these choices and we can still feel good pretending that we are doing good (all we have to do is change a light-bulb). And governments are not shy to reinforce this perception with green incentives that put their own role in a benign light. The Rifkin-GE strategy of a micro-electricity power plant on every roof seems idealistic to the eco-religious, but how does it hold up under an eLCA? Economies of scale in energy production would suggest that a single nuclear site would produce more energy more ecologically efficiently than manufacturing and maintaining 300,000 generators (unless, of course, you are making and selling these little eco-pods).
What is more sinister is what this strategy will do to energy supply philosophy, where until now access to energy supply was considered a basic right in advanced economies. As only richer neighbourhoods will be able to afford these roof-top generators, we can expect non-stop energy stream to become a luxury item once we “make the switch” to renewables. The majority of the population will have to deal with a schedule of rotating “brown-outs” (UK officials are openly predicting this). The public is starting to become sensitised to this eventuality with such campaigns like WWF’s Earth Hour. The environmental-industrial complex is preparing for the next stage – as freezers risk becoming obsolete in the brown-out society, new appliances will be marketed to consumers with built in battery reserves. There is more money to be made from such consequences.
Policies for Clunkers
Perhaps the most blatant example of a lack of eLCA consciousness (and evidence of the environmental-industrial complex at work) can be found in the recent automotive policies. Faced with concern of the impact of our unsustainable automotive culture on the environment and the threatened demise of inefficient automakers: what was our solution? Build more cars! The various “cash for clunkers” programmes around the world seemed like a win-win for everyone: older, more polluting cars taken off the road, more jobs created throughout the supply chain, benign governments seen at work as environmental stewards … the only real loser seems to have been the environment.
A simple eLCA would indicate that around one third of the CO2 a car produces in its lifespan is from its production process (the smelting of steel, the tires, electronics, assembly …). Add in the costs of recycling the clunkers that were taken off the road well before the end of their productive lives, and we are looking at almost half of the CO2 released into the environment before you even fill up the tank. But wouldn’t that look better once we factor in more ecological cars like hybrids? The hybrid battery production (and producing a car with two motors!) is even more costly to the environment. So long as we defy the need to do eLCAs, hybrid drivers will continue to be looked upon as environmental demi-gods rather than mass polluters. Rather than governments giving cash to put new cars on the road (and create more CO2), there should have been a push to keep cars on the road longer and providing means for them to run cleaner. But this logical answer goes up against the mentality of the environmental-industrial complex so we can anticipate more environmental waste and little discussion of the real environmental issues.
Now governments are even using twisted data that suggests that eating beef is worse for the planet than driving a car (ergo, cars are good). Shouldn’t our watchdogs, the NGOs, be doing more to get cars off the road (not just for climate change, but to lower the road death statistics, noise pollution and air pollution levels that would make any toxics campaigner blush)? A scan of Greenpeace, Friends of the Earth and WWF would show them disturbingly silent here. The public is not prepared to contribute money to these organisations so that their cars could be restricted or taxed, and in any case it is fruitless to try to terrify car-owners about the risks of their cars.
What if we are wrong?
Before people jump to conclusions about my moral fibre, I agree there is a genuine societal worth in saving energy and planting trees and these practices must be encouraged whenever possible, just as we should encourage hygiene and politeness. But if we promote these virtues for political ends that affect other ends (global poverty, diseases, economic viability, societal progress), then we had better be right in our declarations. Evidence is emerging to suggest that our experts have been wrong. Last summer’s Antarctic ice melt was the lowest since satellite imaging began. This was not predicted in any modelling and suggests that the sea-level rise predictions have been exaggerated. But the publication of this information by Tedesco and Monaghan in Geophysical Research Letters, has been largely ignored by climatologists. Secondly, there has been a cooling trend since 1998 (global temperatures have been going down rather than up).
This evidence has been met with many explanations and dire warnings that although this may be true, once this oceanic cooling phase ends, it is going to get even hotter faster. (During the last ocean cooling phase that peaked in the 1970s, scientists were predicting an ice age.) Mother Nature is entering the climate debate, and rather than us celebrating having avoided the worst-case warming scenarios, the environmental-industrial complex is ratcheting up the fear index. The leaked emails from the University of East Anglia show that scientists have been playing “tricks” with the data for quite some time now. What would happen to all of the climate research funding UEA receives should there be less concern about global warming?
The precautionary principle as espoused by NGOs like Greenpeace and Friends of the Earth (and presently being lobbied on EU policy-makers and retail companies) does not accommodate responsibility for any consequences from needless avoidance. “Better safe than sorry” translates into an attitude of “never mind if, in the end, we were proven to be wrong”. Being wrong does not seem to matter if you are trying to save the planet. In any case, our emerging eco-religion, like all religions before it, keeps facts at arm’s length. It is not that NGOs and climate scientists are lying. Rather, enamoured by the benign nature of their mission, their decision-making process has perhaps been clouded by their high sense of urgency, emotion and ego. Someone should tell them that in the greater scheme of things, man is not so significant, not when compared to the climatic influence of oceans, our planet or the sun. Such is our hubris today to even think we are of the same stature and can affect climate in the same way as sun or sea.
We are in a world of finite resources (at a time of economic crisis) where all of our focus seems to be on this noble project of cooling our planet, with industry pulling in public funds to build cathedrals of ecological inutility. At the same time, every day almost 3000 people (mostly children and mostly in Africa) die from malaria; 2000 die from TB (once again, that is every day). Hunger rates are rising and experts are predicting dire consequences (although policy opportunists are trying to pin that on climate change rather than the evident lack of investment in agricultural technologies and development). Being wrong on climate matters (and reflects the irresponsibility of policy-makers – too weak to stand up to the environmental-industrial complex).
These daily silent deaths can easily be avoided with investments far less significant than that given to organisations to try to reverse our planetary and solar patterns as well as other stimulus-driven eco-follies. Unfortunately, children in Africa are not part of the strategy of the environmental-industrial complex so the only funds they receive seem to come from private charities -- enough to make some of us feel better, but certainly not enough to do anything concrete. And anyway, we keep telling ourselves that the potentially catastrophic consequences of climate change on children in Africa will be far worse than malaria, TB and starvation. So deeply have we been affected by this fear of climate change that even evidence of our being wrong cannot seem right. How can we break free of this environmental-industrial complex? Eisenhower could not. Nor could Kennedy. Obama is encouraging it. It seems our only hope is for Mother Nature to continue to confuse us and for contrarian scientists to continue to show courage.
Dit artikel van David Zaruk verscheen eerst in "New Europe".
Meer teksten van deze auteur op www.new-europe.eu.
In the 1950s, a cosy relationship had developed between arms manufacturers, the military, government procurement and the congressional districts benefiting from the increased jobs brought in via the weapons industry. The key to keeping the money and power flowing through these channels was to ensure that the public fear of the imminent threat of Communism was kept at a hysterical level. Kennedy tried with limited success to undo this “internal threat to democracy”. With the public fear of the imminent threat of global warming, we have today the formation of an environmental-industrial complex, made up of NGOs, legislators, scientists and industries involved in developing the green economy. Open debate and democratic choices are getting more difficult as money and interests take over, and use public fear as a means to generate opportunity. Fear is a very useful political tool. It provides governments with legitimacy, NGOs with fundraising opportunities and companies with potential new markets. Some would argue that societies need a generalized fear to thrive (part of an Armageddon complex deeply rooted in our DNA).
Climate change fears have been stoked for more than a decade, to the point that it has, echoing Eisenhower, an “economic, political and spiritual influence” on humanity. Climate concern has crept into every day conversations, shopping decisions and moral valuations. When it rains, or snows, or if the wind blows, weather is part of the climate narrative, as is debates on energy, transportation and food. Like the threat of Communism in the 1950s, climate today purveys culture. Fear can also become irrational; something that can be a very dangerous political tool should the juggernaut get out of control. The need to tackle climate change has been championed by anti-globalisation activists, vegetarians, forest campaigners, scientists, corporate CEOs, Hollywood actors … pretty well everyone. It has been presented as a spontaneous global movement to save the world: a war on climate where we are all enlisted as soldiers. Those who disagree or feel that resources should be directed elsewhere are branded as traitors.
The Green Economy
The main solution for us to save the world is to change the way we do things: to decarbonise, which in a carbon-based global economy, implies a radical revolution. The call for a revolution was sounded by an influential American technology activist and critic, Jeremy Rifkin. At an EU Open Days event in October 2009, Rifkin called to change how energy is to be produced and distributed: no longer from large-scale carbon-based energy generators leaving energy to waste on a large grid, but rather from a distributive system of small, locally produced (green, renewable) roof-top generators put onto a smart grid. A smart grid would be complemented by appliances that would only switch on when energy supply was more abundant and less expensive (evidently solving our problem of irregular supply from green-energy sources). With this revolutionary distributive energy, we could remove our dependence on carbon-based and nuclear energy in the coming decade.
His arguments echo, almost word for word, a press release from General Electric on 14 July 2009, after a GE scientific conference on the smart grid at its research centre in upstate New York. GE has been developing smart appliances, domestic energy management systems and small scale renewable generators in preparation for this revolution. For GE, the motivation is clear. Its Eco-Imagination strategy has bet the firm's future on the continued growth of green energy and smart-grid integration (as well as stimulus cash and green subsidies). They are working cross-stakeholder with scientists and NGOs to communicate the urgency of this need to revolutionize energy.
Other “green energy” companies have become dependent on the continued funding from governments. Smart grids are going to cost a lot, renewable energy may never turn a profit without subsidies, the research costs are going to be enormous. The money has to keep on flowing, we are told, otherwise the planet will burn and future generations will look at our present-day leadership and mutter what a disaster these minnows were. Nobody seems to be standing up to say: “Stop this madness!” Unfortunately, there is no money and no incentive for anyone to take the courage to do so. The only thing they would do is open themselves up to personal attack from the environmental-industrial complex already at the trough of subsidies, incentives and stimulus measures.
The War on Climate: not the place for open debate
Truth is the first casualty of war. Scientists who feel that the models are inaccurate or that the perceived and predicted warming is not necessarily due to human activity (that the sun or oceans could possibly play more of a role in climate than man) have been branded sceptics, contrarians or in the paid pocket of industry. Some have been excluded from scientific bodies given that their thinking is contrary to the prevailing consensus. Consensus-making is a political act, not a scientific one. Science encourages disputes and testing to see if theories can resist falsification. Limiting or denying free and open scientific debate because of political impetus for consensus does not improve the reputation of science. When motives and reputation come in (this is the first open scientific dispute of the Internet age), scientific methodology is compromised – science is compromised. The emails that were recently leaked from the University of East Anglia (one of the leading climate science institutions) showed climatologists expressing personal views about climate skeptics and admitting that their data was not sound enough (and needed some “tricks”). This is a crisis of credibility and the evidence of “climate spin” shows just how far science has fallen from the level of offering objective expertise.
The present leadership of the IPCC has not done much to restore the reputation of scientific validity and evidence-based advice. IPCC chairman, Rajendra Pachauri, has publicly declared that rich countries will have to pay reparations to poor countries, he moonlights as a member of the Indian Prime Minister’s advisory council on climate change, and declares at a vegetarian conference inflated numbers of the amount of CO2 produced by the beef industry. He does not seem to recognise any conflict of interest in these activities, or that he has become more politician than scientist. After Copenhagen, Pachauri should be fired; instead he has a Nobel Prize hanging on his wall.
The NGOs are also rather aggressive when it comes to protecting environmental information from any open discussion or dialogue with people who might be questioning their evidence. Greenpeace members have been particularly severe on one of their founders, Patrick Moore, for considering nuclear energy as a viable energy source. When Bjorn Lomborg published his book, The Skeptical Environmentalist, suggesting that money could be better spent on other pressing needs than the hopeless task of reversing global warming, NGOs took to the offence and ensured that the Danish academy no longer considered him as a scientist (he was a statistician after all!). Arguments against green positions are often met with rancour and insult rather than facts and rational debate. I am curious as to what the Green-shirts will do to poor James Lovelock for recently referring to environmentalist arguments on renewable energy as “silly theories”.
Ecological Lifecycle Assessments
What is lacking in so many of the ‘green’ technology debates is a clear eLCA -- an ecological lifecycle assessment. Solutions are provided to perceived environmental problems without taking into account full environmental effects (especially real CO2 emissions). We have “ecological” washing products that demand that we wash our clothes at higher water temperatures. We insist on recycling certain materials (at a high energy and water cost) rather than recovering the product’s energy through incineration. We promote solar energy as a carbon-free source of energy without taking into account the amount of energy required to purify the silicon and other production costs. The only real eLCA that was performed recently was for the production of biofuels as a carbon-neutral fuel alternative after their real environmental impact was leading to serious global consequences (from food supply to increased CO2 to land distribution issues).
Like any religion, the environmental feel-good effects of saving the planet blind us from even wanting to look more closely at the facts of our lifestyle and real environmental consequences. These eco-solutions put off making harder choices. Rather than recycling, we should use less stuff. We don’t need to use so much energy. Green technologies promise us that we don’t have to make these choices and we can still feel good pretending that we are doing good (all we have to do is change a light-bulb). And governments are not shy to reinforce this perception with green incentives that put their own role in a benign light. The Rifkin-GE strategy of a micro-electricity power plant on every roof seems idealistic to the eco-religious, but how does it hold up under an eLCA? Economies of scale in energy production would suggest that a single nuclear site would produce more energy more ecologically efficiently than manufacturing and maintaining 300,000 generators (unless, of course, you are making and selling these little eco-pods).
What is more sinister is what this strategy will do to energy supply philosophy, where until now access to energy supply was considered a basic right in advanced economies. As only richer neighbourhoods will be able to afford these roof-top generators, we can expect non-stop energy stream to become a luxury item once we “make the switch” to renewables. The majority of the population will have to deal with a schedule of rotating “brown-outs” (UK officials are openly predicting this). The public is starting to become sensitised to this eventuality with such campaigns like WWF’s Earth Hour. The environmental-industrial complex is preparing for the next stage – as freezers risk becoming obsolete in the brown-out society, new appliances will be marketed to consumers with built in battery reserves. There is more money to be made from such consequences.
Policies for Clunkers
Perhaps the most blatant example of a lack of eLCA consciousness (and evidence of the environmental-industrial complex at work) can be found in the recent automotive policies. Faced with concern of the impact of our unsustainable automotive culture on the environment and the threatened demise of inefficient automakers: what was our solution? Build more cars! The various “cash for clunkers” programmes around the world seemed like a win-win for everyone: older, more polluting cars taken off the road, more jobs created throughout the supply chain, benign governments seen at work as environmental stewards … the only real loser seems to have been the environment.
A simple eLCA would indicate that around one third of the CO2 a car produces in its lifespan is from its production process (the smelting of steel, the tires, electronics, assembly …). Add in the costs of recycling the clunkers that were taken off the road well before the end of their productive lives, and we are looking at almost half of the CO2 released into the environment before you even fill up the tank. But wouldn’t that look better once we factor in more ecological cars like hybrids? The hybrid battery production (and producing a car with two motors!) is even more costly to the environment. So long as we defy the need to do eLCAs, hybrid drivers will continue to be looked upon as environmental demi-gods rather than mass polluters. Rather than governments giving cash to put new cars on the road (and create more CO2), there should have been a push to keep cars on the road longer and providing means for them to run cleaner. But this logical answer goes up against the mentality of the environmental-industrial complex so we can anticipate more environmental waste and little discussion of the real environmental issues.
Now governments are even using twisted data that suggests that eating beef is worse for the planet than driving a car (ergo, cars are good). Shouldn’t our watchdogs, the NGOs, be doing more to get cars off the road (not just for climate change, but to lower the road death statistics, noise pollution and air pollution levels that would make any toxics campaigner blush)? A scan of Greenpeace, Friends of the Earth and WWF would show them disturbingly silent here. The public is not prepared to contribute money to these organisations so that their cars could be restricted or taxed, and in any case it is fruitless to try to terrify car-owners about the risks of their cars.
What if we are wrong?
Before people jump to conclusions about my moral fibre, I agree there is a genuine societal worth in saving energy and planting trees and these practices must be encouraged whenever possible, just as we should encourage hygiene and politeness. But if we promote these virtues for political ends that affect other ends (global poverty, diseases, economic viability, societal progress), then we had better be right in our declarations. Evidence is emerging to suggest that our experts have been wrong. Last summer’s Antarctic ice melt was the lowest since satellite imaging began. This was not predicted in any modelling and suggests that the sea-level rise predictions have been exaggerated. But the publication of this information by Tedesco and Monaghan in Geophysical Research Letters, has been largely ignored by climatologists. Secondly, there has been a cooling trend since 1998 (global temperatures have been going down rather than up).
This evidence has been met with many explanations and dire warnings that although this may be true, once this oceanic cooling phase ends, it is going to get even hotter faster. (During the last ocean cooling phase that peaked in the 1970s, scientists were predicting an ice age.) Mother Nature is entering the climate debate, and rather than us celebrating having avoided the worst-case warming scenarios, the environmental-industrial complex is ratcheting up the fear index. The leaked emails from the University of East Anglia show that scientists have been playing “tricks” with the data for quite some time now. What would happen to all of the climate research funding UEA receives should there be less concern about global warming?
The precautionary principle as espoused by NGOs like Greenpeace and Friends of the Earth (and presently being lobbied on EU policy-makers and retail companies) does not accommodate responsibility for any consequences from needless avoidance. “Better safe than sorry” translates into an attitude of “never mind if, in the end, we were proven to be wrong”. Being wrong does not seem to matter if you are trying to save the planet. In any case, our emerging eco-religion, like all religions before it, keeps facts at arm’s length. It is not that NGOs and climate scientists are lying. Rather, enamoured by the benign nature of their mission, their decision-making process has perhaps been clouded by their high sense of urgency, emotion and ego. Someone should tell them that in the greater scheme of things, man is not so significant, not when compared to the climatic influence of oceans, our planet or the sun. Such is our hubris today to even think we are of the same stature and can affect climate in the same way as sun or sea.
We are in a world of finite resources (at a time of economic crisis) where all of our focus seems to be on this noble project of cooling our planet, with industry pulling in public funds to build cathedrals of ecological inutility. At the same time, every day almost 3000 people (mostly children and mostly in Africa) die from malaria; 2000 die from TB (once again, that is every day). Hunger rates are rising and experts are predicting dire consequences (although policy opportunists are trying to pin that on climate change rather than the evident lack of investment in agricultural technologies and development). Being wrong on climate matters (and reflects the irresponsibility of policy-makers – too weak to stand up to the environmental-industrial complex).
These daily silent deaths can easily be avoided with investments far less significant than that given to organisations to try to reverse our planetary and solar patterns as well as other stimulus-driven eco-follies. Unfortunately, children in Africa are not part of the strategy of the environmental-industrial complex so the only funds they receive seem to come from private charities -- enough to make some of us feel better, but certainly not enough to do anything concrete. And anyway, we keep telling ourselves that the potentially catastrophic consequences of climate change on children in Africa will be far worse than malaria, TB and starvation. So deeply have we been affected by this fear of climate change that even evidence of our being wrong cannot seem right. How can we break free of this environmental-industrial complex? Eisenhower could not. Nor could Kennedy. Obama is encouraging it. It seems our only hope is for Mother Nature to continue to confuse us and for contrarian scientists to continue to show courage.
Dit artikel van David Zaruk verscheen eerst in "New Europe".
Meer teksten van deze auteur op www.new-europe.eu.
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