Monday, June 25, 2012

Human Capital.

            Most of my attention on sustainability has thus far focused on natural resources, ranging from oil to the environment.  I now want to turn my attention to the most important resource; humans and their abilities.  We are an important resource indeed.  We create the value added to all the natural resources we consume.  The quality of the humans in an economy can best be seen in examples such as Switzerland, which is a country with relatively few natural resources, yet they have a very high standard of living compared to a country like Nigeria, which has valuable resources, but clearly the human resource is lacking.  The Swiss have a superior ability to not only cultivate the necessary individual skills, but also managed to create the cultural and legal institutions that can maximize the skills of the individual.  There is nothing more important for us in the developed world than guarding this precious resource, if we are to maintain our lifestyle.

Human capital in the developing world:

            The message that poor countries are constantly told is that if they want to advance, they need to invest in their people.  Many countries are doing just that, and it is reflected in their education rankings improving, together with the economy.  Most of these countries are not yet at the point where they can also afford to take care of the overall health of their workforce.  In fact, part of the strategy to get them to where they are now was a move to allow for the intense exploitation of the workforce and the environment, both of which lead to a less healthy population.  Countries that fit this category include China, India, Indonesia, Brazil, Vietnam, and many other fast growing economies around the world.  For these countries, the only way that they will ever achieve the level of development that we in the western world currently enjoy is if they will reach a point where they will shift the exploitation of their own people and environment to the rest of the world, while keeping the proceeds for themselves.

Human capital in the underdeveloped world:

            Countries that managed to get one aspect of the human resource equation right (education and skills) are able to advance to some extent as I mentioned.  There are however countries that despite being able to offer very cheap labor, and despite being willing to allow for their environment to be exploited intensively, cannot achieve a minimum level of human development to allow them to attract investment in some basic production facilities.  They are also unable to provide basic physical infrastructure, such as a reliable transport or power grid infrastructure.  These countries typically experience very high population growth rates, so they cannot increase their Capital per capita.  Such countries are most often found on the African continent, but not exclusively there.  There are also countries elsewhere, such as Haiti that fit this category.

Human capital in the developed word:

            Once upon a time, we were the ones preaching to the rest of the world that if they want to advance and join us in enjoying the good life, they better follow our example and start investing in their human capital.  Some western countries still follow their own advice, but there are many other countries where it was decided that it is an unnecessary investment.  Thanks to the process of globalization, companies can move abroad, and tap into the workforce of the developing world, in places like China and India, where even though the number of people relative to the population who are highly capable may not yet be comparatively high, given their large population, it is still possible to find the necessary brains to run their operations there.  We also figured out that given our comparatively high wages, we don’t have to invest in the future brains of our economies; we can just import them from elsewhere.  So in effect, we are not only net importers of manufactured products and services from Asia and elsewhere, we are now also importing our future elites.

            This fact has been confirmed by the latest data on US immigration.  The largest group of migrants comes from Asia, and the overwhelming majority of them have at least a bachelor’s degree.  They earn on average about 1/3 more than the average American, so in effect these are our new elites[i].  Fareed Zakaria made a show, praising this already long established trend in Canada, just a few weeks prior to this data coming out.  US presidential hopeful Mitt Romney also stated that he is for the concept of reforming immigration in a way that will encourage high skill immigration.  It is certainly hard to argue against the economic benefits of such a policy.  It most certainly benefits the local and global economy when the right person can be found for the right job.  Economies of scale are always more efficient and this process of globalization certainly helps do that.  As a result of the strong argument for this process to go ahead, as well as our cultural values that deem most challenges to this trend as taboo, any mention of the negative aspects of this process are deemed to be unacceptable in our public discourse.

            I do fear for the long term negative implications of this trend however, and I think we should be discussing them, even if it is frowned upon to do so.  Most people in the western world grew accustomed to seeing an improvement in the economic situation from a generation to the next.  That trend is clearly broken now, and there is no disputing it.  Who would have thought just two decades ago that there would be an explosion of young people not being able to cut it in the world and having to move back with their parents?[ii]  Who would have thought that half of all recent graduates will be unemployed or under-employed?[iii]  My parents were so proud when I finished University.  Yet they were so amazed to see me go off to working my first job as an undergrad in construction.  While working in construction, I met a few others who were in the same situation.  I also met a few people who I believe turned out to be wiser by not wasting their time, and dropping out early, to pursue a career in a trade instead.  Construction work pays very well at the moment in Canada.  I at least was one of the lucky ones who had some aptitude for it, so I could earn a decent wage, unlike many other recent graduates from my generation who were not lucky enough to have the ability or opportunity to “network” for a job (or win the affirmative action lottery, by virtue of gender or color of skin) after finishing university, and are thus now working at, or near minimum wage jobs in coffee houses, or at the supermarket.

            Clearly, we do not have the ability to prepare and maximize our people in the economy anymore.  Some countries still do it in Europe, but here in North America, we are failing the current and next generation.  We are the victims of the process of achieving the economies of scale through globalization.  The education system, as well as our cultural institutions, are not preparing us for the real world, because frankly, few of the ones with the power and ability to do so have an interest in it.  We are being discarded.  The only ones who can still escape this trap are the descendants of our elites, and a few of the very capable and lucky ones, who will still squeeze through.

What will happen to the North American human capital in the long-run?

            As I already mentioned, the countries that are now emerging as the strongest competitors to our former economic hegemony, are countries that have it within their model of economic expansion to exploit the environment and the workforce more intensively.  That can only take them so far in terms of being able to provide an ascending living standard for their constituents, so the next logical step will be to shift this exploitation to others.  The first ones on the pecking order are obviously people living in states that failed them completely.  We already see this trend emerging as we witness the expansion of China into Africa. 

            The above mentioned trend is rather obvious and easy for us to see and understand.  The part that people have a harder time understanding, especially because too many of us are foolish enough to buy into an ideology, through which we judge the events unfolding before us, is that the members of North America’s wing of the western world, are being set up for a trap that once finalized, there will be no escape from.  Social mobility is already more illusion than reality for most, thanks in large part to the fact that nepotism has now become a more important factor in whether someone gets his/her foot through the door than one’s value.  As I said however, we are increasingly importing our elites from Asia, so at some point, ethnic based nepotism will become something that for those who do not have those ethnic ties will become an impenetrable wall.  This trend is already observed in Canada to some extent, where in places like Vancouver, where Asians are increasingly dominant demographically as well as in the higher strata of power, many people are starting to feel increasingly marginalized if they do not belong to one of the dominant Asian ethnic groups[iv].

            So, what will be left to us, who will not be able to achieve social mobility, will be increasingly scarce, low level jobs, in retail, construction, manufacturing, and other fields with little chance of upwards mobility.  These jobs will pay increasingly poor wages, because this level of employment is being globalized in its pay scale, work conditions and benefits.  The basic social safety net comprised of health, and pensions in the US, is being dismantled gradually and other western countries are contemplating doing the same, so when it will come time for retirement, we will no longer have the benefit of a bit of comfort, like our parents and grandparents did.  So, basically the current misery of being exploited, imposed on the people in countries now emerging as economic superpowers is being shifted to the lower and middle class in the western world.  Education, which needs to be fixed and re-tooled to fit the needs of the labor market, is being gutted instead, so there is no doubt at this point that the basic model of building up the human resource and utilizing it, which I described as the path meant to provide prosperity for people is broken.  We will never see those days again, unless we are willing and wise enough to change direction and do it soon.                                     


Survey of Vancouver, showing clear trend of ethnic clustering, and a decrease in social cohesion, through a lack of desire to interact with those outside ethnic community

Monday, June 18, 2012

Fareed Zakaria, a big fan of Canada’s immigration policies. Should he be?

In a CNN special on immigration, Fareed Zakaria chose Canada as the model that he thinks is an example of success.

I want to join the conversation about immigration from a different angle, because while the discussion is fierce from both sides, it is highly ideological, and idealism, as well as emotion, seems to trump facts and logic.

            From an economic point of view, the supporters of immigration are clearly in the driving seat when it comes to justifying their position, based on conventional economic theory.  Usually, it is the political right that is blessed with an easy to explain position when it comes to economics.  On this one, it is in fact the left that has a rare opportunity to shine.

            The economic argument for having a robust inflow of immigrants, centers around demand side economics, which is in fact the most relevant side in our economy, despite what people on the right might claim.  Demand is the true driver of economic activity.  An inflow of immigrants can sustain demand for goods, especially where natural population growth is stunted as is the case in most of the western world.  A good example of the benefits to a local economy derived from immigration is Canada, since the 2008 crisis.  Demand for housing remained robust, despite the initial panic of 2008, which I have to admit surprised me, because I expected Canada’s housing market to follow on the path of the US.  This underlying support, together with healthy government finances, kept Canada from experiencing the same fate as most of the rest of the western world.

            Aside from keeping demand going, it helps keep the population younger, since most who immigrate are young.  Immigration also helps harness skills and abilities from other countries, which in today’s economy is crucial.

Alright then, it is settled.  Immigration is good for us in the present and for our future!!!

            Not so fast!!!  There are also some downsides, which are harder to explain, but they are important to identify and deal with.  Opponents of immigration struggle to formulate an effective argument against immigration.  They try to use simple arguments, because they know from experience that arguments need to be kept simple and digestible.  So the arguments they make tend to be weak and easily exposed as false.

The number one argument is that immigrants take jobs from the local population.  This is false on many counts.  Low skilled workers, who come to work certain jobs, really are taking jobs that not many locals would willingly take, especially given the wages.  Take farm workers for instance.  It is often back breaking work.  I really don’t think there would be many Americans for instance who would be willing to pick melons in the summer heat, for minimum wage.  I would pay money to see some fierce opponents of immigrants, such as Lou Dobbs, go and pick melons for a week, and then ask him whether he still thinks that the farm laborers, who worked along side him, took the jobs from Americans.  There is of course an argument to be made that perhaps wages would rise if all the foreign farm laborers in a country like US were to be sent home, and then many Americans would be willing to take those jobs.  We have to ask ourselves however what the resulting food inflation would do to the economy.  As prices would go up drastically, it would cut into the income of the consumer, causing them to cut back on consuming everything else.  The result would be catastrophic.  We should also remember that an increase in population increases demand for goods and services, which will be met by offering people jobs to produce and sell those goods and services

There are of course many skilled immigrants who come on a student visa, or as skilled workers. On balance, it is hard to argue that these people are a net loss to the economy.  Other countries put in the effort to educate them and teach them valuable skills, and then they go ahead and take those abilities somewhere else.

There are other arguments that the political right invokes to oppose immigration, such as:  They are a burden on the social safety net.  They feed the criminal networks, or create them as they come.  The immigration system lets in too many Muslims who want to convert us, impose Sharia law, or behead us.  Even the concept that they bring disease with them is often cited, as it was in the famous book “Alien Nation” written by Peter Brimelow.  All these arguments are weak in my opinion.  They are however in keeping with the desire of the political right to maintain a simple, straight forward argument, which can easily be understood and thus they hope it will catch on.  They do not want to fall in the trap of the left, which is most often stuck with positions that require a great deal of analysis and explanation, except for immigration, as I mentioned.

The harder to explain downsides to Immigration:

            I want to start by explaining that I do not necessarily want to talk about these negative side-effects of the current immigration trends in an effort to oppose immigration.  I was born in Europe, and I am now a Canadian citizen, so it is not as if I am some sort of nativist, who wants to call for everyone else to stay out.  There are nevertheless many negative side-effects that come with the benefits of immigration, and since the pro-immigration left will not discuss this, while the right tends to shy away from anything that is too complex to explain, or contradicts with other aspects of their ideology, these issues have by default been left as orphans in our discourse.  I will here address these negative aspects of immigration, which I believe should be talked about, not necessarily in order to promote an anti-immigration culture, but to recognize, be aware and address these problems.

            The first aspect I want to discuss is the environmental aspect.  Those who read my other works, might have noticed by now that most of what I write is dedicated to sustainability.  One of the obvious facts is that as an immigrant comes to a developed country, from an underdeveloped country, that individual’s environmental footprint grows.

            To get a sense of this, based on EIA data, someone who moves from Romania, where I was born, to Canada, on average increases his/her greenhouse gas emissions by almost four fold.  Someone coming to the US from India, which is the case with Mr. Fareed Zakaria, will increase his/her emissions by about 15 times, and someone moving to Canada from Kenya will increase his/her emissions by over 50 times.  Generally, the same people who support environmental issues also tend to be supportive of immigration.  The main economic argument to support immigration is the benefit of gaining more consumers, and keeping the momentum going.  Economics is a lot about momentum.  Environmentalists however argue that we should consume less.  So, as we can see, there is a real conflict of interests, which in typical left wing fashion, people choose to ignore, and pretend it does not exist.  This fact can be recognized and used in many ways.  We can choose to address it by encouraging more efficiency.  We can choose to address it by deciding to lessen the interest of people to move to a country like Canada by addressing the problems that caused people to want to move in the first place, as well as addressing Canada’s economic addiction to immigration and population growth.  One thing that should not be done, is to pretend that this issue does not exist.

            The next issue I want to address is a social one, which ends up affecting negatively the economy as well as individuals, through the promotion of values that we used to pretend that were unacceptable, yet little by little we came to accept.  We think of ourselves as a society based on the principle of meritocracy.  In other words, people are taken to their value, based on skill, not on who they are.  Nepotism however is increasingly becoming the new acceptable norm, which we re-named as “networking”, and it is very harmful.  The reason that immigration is not a positive in this respect, is because in a society where nepotism is king, ethnic based nepotism, which is increasingly prominent as many ethnic communities grow to more significant, and in some cases dominant levels, can serve to institutionalize it, and cause it to create in time, a social system, not unlike the caste system in India.

            I have very little to offer in terms of hard data on this issue, because there are few studies done on it.  I noticed however in Canada for instance that ethnic based nepotism in increasingly a prominent aspect of society.  Chinese professors for example have a tendency to favor bringing into their research laboratories exclusively Chinese students and staff, to the detriment of the rest.  Large communities tend to thrive in these circumstances, while smaller ethnic communities will find it harder to progress, leading to marginalizing of some.  The native born Canadian society, with no strong ethnic ties, while prone to nepotism to some extent, based on friendships, does not play at the same level from my observation as some of the large ethnic communities do, leaving them at a net disadvantage.  In other words, there will be a place for Chinese students or staff in a lab, or business run by a Canadian born individual with no strong ethnic ties, or someone born in Europe, but we cannot always say that the reverse is true as well.

            The harm done to the economy is great indeed, and in the absence of addressing this particular issue, it will get much worse.  The net effect from an economic point of view is that we end up under-utilizing the workforce.  In Canada’s case, where immigration flows are currently dominated by a number of Asian countries such as India, China and the Philippines, this can eventually lead to a loss of social cohesion, and even conflict.

            The last aspect I want to touch on is connected to the above issue somewhat, in that it is in part a result of Canada’s nepotism, which is increasingly becoming dominated by ethnicity based nepotism.  There are also legal and cultural institutions that play a role.  There is a segment of society that ends up taking it from all aspects on this issue, yet it is unpopular to talk about it and come to their defense.  Like I said, ethnic based nepotism fills an increasingly large chunk of available positions.  Then there is the friendship and kin based nepotism.  A large chunk of jobs, especially in government and companies looking to gain contracts with the federal government, are filled based on gender or visible minority status. This all leaves a particular segment of Canada’s population out in the cold. I am talking about lower to middle class white male Canadians, or recent white males coming from Eastern Europe.  They are discriminated against by law.  They have little chance to rub elbows with established people who would help them, because they were born in the wrong family, and there is now the increasing trend of ethnic based nepotism, which keeps them out of an increasing number of avenues for a career, given that more and more people of different ethnic backgrounds control those avenues, and they will favor their own.  Culturally speaking, there is little sympathy for this group of people.  I still remember a conversation I heard between two girls more than a decade ago.  They were basically saying that they do not feel all that much sympathy if they hear that a white man has been or is being discriminated against.  This may not represent the actual opinion of the majority, but given the fact that they were discussing this in public, without anyone reproaching them for it, tells us just how acceptable it has become.

            This discrimination will not show up in statistics, and there is a reason for that.  Given Canada’s economic structure, there are plenty of well paying jobs that are being shunned by large segments of the population.  I worked in construction for almost three years in Winnipeg.  During all that time, going to dozens of construction sites, I did not see a single Chinese worker.  I met only one East Indian worker, who worked for a drywall company.  These two ethnic groups combined make up over 10% of Winnipeg’s population.

            From my experience in Winnipeg, I can say that perhaps about 80% of construction workers in that particular town are white males, while they make up only about a quarter of the general population.  Native Americans made up the second largest segment in the field.  Like I said, these are jobs that pay better than average, thanks to the “dirty job” premium.  From a statistical perspective, this actually shows on paper that there may be some wage inequalities and there may be some discrimination in Canada, in favor of white males.  Statistics do not always tell the real story however.

The reality is that many of the people working in this field are content to do so.  I do not believe however that it is either fair, or good for Canada’s economy to limit career avenues for a large segment of the population to jobs that are available to them, only because most other people find it demeaning to get their hands dirty.  My three year experience of working in construction also taught me the “surprising” fact that not all white males have a natural aptitude for construction.  Same goes for other jobs that pay very well in Canada, but are dirty, and often requires people to forego the opportunity to have a normal family life, such as mining in remote areas.  Maybe some of them may have an aptitude for working in diplomacy, but they will never get their foot through the door.  Some may have an aptitude for research, but an increasing number of laboratories are run by people who prefer their own ethnic kin.

There are many other things that can go on the list of things that people should know about the negative aspects of Canada’s immigration system.  Fareed Zakaria correctly pointed out that Canada attracts a large number of skilled and educated people through the points system.  Most immigrants will tell you however that their skills end up being under-utilized for many years, or even permanently, because while the points system recognizes their skills, the law and the labor market does not.  It is true that thanks to demand from a high influx of immigrants, Canada’s housing market never suffered a downturn.  Canadians however earn no more than their neighbors to the south, yet they pay twice as much for housing (average price of houses sold is $375,000, as of May).  This leaves many young people unable to start a family, leaving Canada even more dependent on immigration in order to increase its population, or even to keep it from declining.  Canadian families are also now more indebted than Americans were in 2007, right before all hell broke loose.

Immigration also has a negative side-effect for many of the countries that provide the immigrants.  In the region of Eastern Europe there is a real danger of many countries such as Ukraine, Bulgaria, Romania, Serbia, Moldova, suffering a complete demographic collapse.  The population of Romania for instance declined from 23.5 million in 1990, to 19 million in 2011.  Immigration is responsible for the most part, because Romania had one of the youngest populations in Europe in 1990, so the ratio of births to deaths only started having a major negative impact in the last five years or so.  This is something we have never seen in modern history, so we are not sure what to expect.  My guess is that we are looking at a serious danger of major defaults in the region in the next few decades.  If the current situation in Greece taught us anything, it would have to be that the global financial system can easily be shaken to its core by even small countries or regions that may face difficulties.  The more interconnected we become, the more complex the global economic system becomes, and the danger of systemic risks increases correspondingly.

Countries that do have a positive population growth rate also tend to be countries that have very few people of superior knowledge and skills.  Countries like Pakistan lose their engineers and other skilled people to countries like Canada.  Many of them end up driving cabs or delivering pizza for many years, before they manage to get certified to work in their field, if it ever happens for them at all.  This means that from a global perspective, we end up under-utilizing the workforce of the “global village”.

A comment Fareed Zakaria tried to make that Canada is under-populated, and in need of emigrants for that reason, I have to strongly disagree with.  It is the world overall which is overpopulated, and study after study has been warning us that this is not sustainable.  In the case of Canada, at this point as the population grows, it is in fact leading to urban sprawl, at the expense of farmland and natural habitat.

We could continue digging further, and we would find many other downsides to Canada’s immigration policy, as I’m also sure that I overlooked many of the positive aspects.  The important thing is to remember that we should not shy away from discussing every aspect of it, whether good or bad.  When there are negative side-effects, it is important to identify and deal with them, before they deal with us.  We have to forget the left/right narrow box that such topics get confined in, because it is harmful, as is the case with every other problem they hijack and use for their political battles.  It is our fault that we let ourselves get caught up in it.

Monday, June 11, 2012

Rio + 20 part 5: The future we want, but no clue and no will needed to get there.

What is this summit about?

            As it was twenty years ago at the original Rio summit, it is also the case now that the world is trying to pull together in Rio this month, in order to solve some of the issues that affect all of humanity.  It is often hard to remind ourselves of this fact, especially since local or regional politics try to downplay it, but it is nevertheless true that we do live in a “global village”, and thus many problems involve all the huts from the village, not just one single one, or a group within.  When it comes to a sustainable future, there is no controversy about the fact we are all in it together, through good or bad.

What is on the table?

            There is currently no major point on which we can reach global consensus.  Poor countries oppose any moves to attempt to push for a binding commitment to deal with environmental and sustainability issues.  They are going to the summit, believing that this is 1992 (year of original Rio summit), all over again and developed nations will still sing “mea culpa” for the entire world’s problems.  This however is the post-Kyoto world.  It is a world that saw emissions rise by over 40% since then, despite Europe managing to keep its emissions levels flat since 1990.  In 1990 however the EU was producing two times more greenhouse gases than China.  Now, two decades later, China produces almost twice as much greenhouse gasses as the entire EU[i].  We should remember also that there are also many other countries headed in the same trajectory as China’s.  At this point, anything EU might choose to do on climate change is largely irrelevant as long as the rest of the world continues as we do.

            The original Rio summit was also a time when developed nations such as the ones from Europe, North America, and a few from Asia were economically solid.  After two decades of heavy transfers of jobs and wealth to the developing world, the developed world is no longer able to provide its citizens what it used to.  It is true that on the surface, and on paper, people in places like the US, UK, Canada, or Germany still live well.  When one scratches the surface however to see what is beyond the statistical data, we get a different picture.  Young people all over the western world are unable to start their own families, because there just are not enough opportunities to earn a decent living.  Youth unemployment in Spain for instance is now over 50%.  In the US, half of recent college graduates are either unemployed, or underemployed, and an increasing number of them are moving back with their parents, because they cannot afford to be out there on their own[ii].  Everywhere, there is talk of cutting jobs, pensions, services, and in some cases, there is even the very real danger of government default, as is the case with Greece.  Countries like Greece still figure as rich countries on paper, if we are to look at GDP per capita, or wages, since they are still in the top 20% globally.  Can we really expect Greece to pony up billions of dollars in order to help the poor of Africa, or to invest in trying to curb climate change?  Most western countries are facing serious budgetary challenges for as far as the eye can see.  Poor countries, as well as left leaning individuals from our own society may choose to ignore this fact, but ignoring it does not make it go away.

What is the point of having this meeting?

            The UN, the world body responsible for organizing this meeting stated that the summit is not about binding pursuing binding agreements, but about energizing voluntary action instead, in order to achieve sustainability, or “the future we want” as they put it[iii].  In other words, nothing will happen at this summit.  In fact, it may be an occasion for many to backtrack on previous commitments made twenty years ago.  There is therefore absolutely no point to having this summit, even though we need global action on sustainability more than anything else at this point.

How did we get here?

            As I stated in my first article on this theme in February, there is a lot at stake at this summit.  I believe this is the moment that we will be able to point to in the future as the moment of our collective human failure.  It is a momentous occasion, because at no previous point in time was there an opportunity such as this to make history.  Societies ranging from Easter Island, to the Maya have failed before, but those were all local disasters.  Now, since we live in a “global village”, we can go for the record, when it comes to self inflicted catastrophes.

            Is this impending disaster preventable?  Technically speaking, the answer is yes, but realistically speaking, we should not expect it, because we seem determined to get into the way of our own salvation. 

On the right of the political spectrum, we have those who believe that anything we do in terms of our economic activities is sustainable from an environmental and resource availability perspective as long as capitalism leads the way.

I will not get into the more complex environmental issue on this one.  A quick glimpse at one of the most politicized commodities we consume can tell us all we need to know about whether the trajectory we are headed on is sustainable or not.  There is no arguing against the fact that the world is in economic convergence mode.  This means that at some point there will be far less disparity among countries and regions in terms of their living standards.  Now the question arises, whether we can achieve this convergence at a level that is at least familiar to us westerners in terms of living conditions, without hitting barriers to achieving this in terms of resource availability constraints.

If the current world population were to converge in petroleum use to a level, where the average citizen of the “global village” will consume ¼ of current per capita US consumption, we would need to produce 110 mb/d of liquid fuels.  We currently struggle to provide 88 mb/d[iv].  Remember that I assume no additional population growth will occur, by the time of this partial convergence will happen, if it was to ever happen.  Report after report on many crucial resources, such as clean, fresh water, soil, oil, ocean fish, and many other important commodities tell us that we are faced with increasing constraints on our economic activities and continued consumption & population expansion.  Yet the right leaning worshipers of the invisible hand, believe that there is no need to pay attention to sustainability, despite evidence of global prices of crucial commodities such as food and oil getting out of control (food prices rose by 150%, and oil prices rose by about %500 in the last decade)

The ones on the left, believe that they are in tune with these issues, and as such they believe they are part of the solution, since they advocate for sustainability all the time, and most of them consciously behave in a more environmentally friendly manner in their every day activities.  But are they really part of a solution? Or are they making matters worse by proposing solutions that do not work?  Everything, without exception that makes it on the discussion table currently involves searching for the grand unanimous bargain that every state on this planet signs on to and adheres to.  In the absence of such an unlikely agreement, they believe that the way to go is to encourage local voluntary action and self-sacrifice on things like climate change, which is what gives the environmental movement a bad name. 

The Europeans managed to dupe themselves into signing on unilaterally to save the world from the impending climate catastrophe, and the end result we can see currently, both in terms of the lack of meaningful benefits to their actions, and in terms of the damage they managed to inflict on their economy, as I already mentioned.  At the upcoming Rio summit, the environmentalist movement will ask Europeans as well as others to engage in even more meaningless self-sacrifice in order to make this world a better place.  As a result, they will be left extremely disappointed when they will receive a cold shoulder from most who will attend.  So in a way, the current environmentalist movement is an impediment to moving forward, because their idealism gets in the way of proposing realistic solutions.  Their proposals also make good ammunition against environmentalism, because the proposals they support are so obviously flawed that it does not take a highly intelligent or educated mind to understand that these do not work, and furthermore it can be damaging to any local or regional society that might get duped into signing on to their agenda.

Just as with everything else, once we take the ideals and ideas of the right and the left off the table, there is nothing left.  That empty table is a monument to humanity’s lack of ability to go beyond adopting ideas bundled together into an ideological belief system.  Now more than any other period in humanity’s history, we need to become very selective in choosing ideas.  We cannot afford to embrace or discard ideas based on the ideological direction it may come from.  That is however exactly what we will continue to do, so this is how it is that at the Rio + 20 summit, we will fail to save ourselves from impending disaster.

For most citizens of the “global village”, the date of June 22, when the summit will be wrapped up, it will be a date that will go by, unnoticed.  For many delusional people, it will be a moment of celebration of some fake success, which will prove to be highly irrelevant.  There will be some who really will believe that after the summit, individuals, companies, towns, states, and regions will become energized into voluntary action and self-sacrifice for the greater good, so “people power” will overcome the absence of an agreement on a mechanism meant to achieve global sustainability.  The right will celebrate its failure, because as I said, they believe that the “invisible hand” of the markets is all we need to make everything alright.  For me, the date of June 22, 2012, will remain one where we should acknowledge humanity’s failure.  Perhaps, if we could at least do this much, we might be able to start looking outside the box, and start contemplating the need for a new direction. 


Wednesday, June 6, 2012

Lessons from road trip

            I want to start this article by apologizing for the delay.  I usually publish on Mondays.  This week however did not work out as I hoped.  The reason for the delay did inspire me to write this current article, so it may not be a complete misfortune that my ability to keep my schedule was impeded.

Government services:

            My family and I, just completed our move from Charleston, South Carolina, to Omaha.  The trip and other aspects of the moving experience was an eventful one and it is precisely this that caused the delay.  The departure went alright.  The moving company did its job professionally.  Shortly after we set out on the road ourselves however, we were quickly struck with misfortune.  Our car, a Kia, broke down, just as we were about to cross from South Carolina into Georgia, leaving me, my wife and our seventeen month old son stranded.  This happened near the town of Anderson, SC, at around seven PM.  We called emergency repeatedly, hopping that they can pick us up and drive us to the nearest hotel.  It was a very long wait, which was made even longer by the fact that we had our son with us.  At one point, as I saw that a police car was present on the other side of the highway, helping out another stranded individual for over an hour. I became desperate and I started running towards the overpass, so I could cross and let the officer know that we are also in need of assistance.  There was no way to cross to the opposite side of the highway, because some genius decided to build a three meter tall concrete separation, which I have absolutely no idea why it was necessary.  When I finally reached the overpass, I saw the police car drive away.  They managed to fix the stranded car.  I ran back to my family.  At this point it was already dark, and my son was way past his bedtime, and becoming increasingly tired due to exhaustion and the heat.  After three hours of waiting, a state trooper did finally arrive and gave us a ride to the nearest hotel. 

            The evening that the car broke down provided me with the first lesson of the trip.  Government services are not always adequate to meet one’s needs.  This is very important for us to realize, because we in the western world are just on the brink of major government cutbacks, which will affect every aspect of our relationship with government.  I was upset that they were so delayed in responding to my family’s needs, despite the fact that we made it clear that we had a little child with us.  Perhaps a decade from now, a young family might have to be prepared to fend for themselves in a similar situation, because many other emergency calls will take precedent given government’s diminished capabilities.  I think that given the current economic and to some extent the political trends, I should consider myself lucky that I received help, even if it came with much delay.  If this will happen a decade from now to someone else, I am no longer certain that they will still benefit from the same services that we received.

The Kia dealership:

            The police officer who picked us up told me that the town of Anderson has a Kia dealership, so he suggested I make arrangements to have it towed there so they can help me out.  I took the officer’s advice, so after we settled in the hotel and put my son to sleep, I went to deal with the car.  I got a tow truck (the one we called when the car broke down never showed up), and I arranged to have it taken to the dealership.

            Now, many of you may be thinking after reading about the failure of government services to provide prompt service that a shrinking government may not be such a bad thing, because many of the things they do can be replaced by private enterprise services. Which as we are constantly told, are more efficient, due to competition and the need to satisfy the customers, in order to gain their appreciation and loyalty.  If my experience with this particular Kia dealership is anything to go by, I have to say that, as bad as the reaction of government seemed in the preceding example, this one actually makes them look good.

            I started calling the dealership at eight in the morning to let them know about the need to have the car looked at.  I told them the situation we were in, and begged them to try their best to get us back on the road as soon as possible.  The gentleman I talked to from the service department assured me that they are very busy on that Friday morning, but they will do their best look at it, and they will get back to me, in order to let me know what is wrong with the car (my guess is that it was either the fuel pump, or the ignition).

            I waited and hoped to hear from them that morning, but there was no call back.  I called again, and again, and again and pleaded with them, but they kept on telling me that there was nothing they could do, because they were extremely busy.  Half the time when I called no one picked up, so the answering machine did so instead, the recording reminding me every time that I must have this solved as soon as possible, because they were closed for the weekends. 

            Finally, we decided that we cannot afford to be stranded there for the weekend, or perhaps even worse, depending on whether they would have the necessary spare part in order to address whatever problem the car had.  We started looking for alternatives.  I called a few other shops to see whether they could take it in quickly, but most seemed more interested in going for lunch.  We then decided that we have to consider abandoning the car.  We called around, and found a rental car, and we decided to get it, and continue on our trip.  We arrived in the new car at two in the afternoon, and sure enough, the car was still waiting to be looked at after six hours.  We got all our things from our car, and packed them into the rented one, and then I went to talk with them.  The garage doors were wide open, and I could only see one car on a ramp.  There was dead silence in there, so not exactly what one might expect to see given the description I received on the phone of their busy repair schedule.  I went into the service department’s office area, where I found two employees talking and laughing (they were the loudest thing happening in the garage area, aside from the cheesy music).  When I told them who I was, they repeated their claim that they were just so darn busy, but they will do their best to look at my car as soon as possible in order to find out what is wrong with it, all the while grinning into my face.  At that point, I told them not to bother, because we made arrangements to have the car picked up by a charity.  I also told them that Kia lost me as a customer for life, at which point they arrogantly told me that it is my choice to make.

            So, as bad as the government’s response was to my situation, the response of private enterprise was definitely worse and more costly to me financially.  Not only did I have to abandon my car, but there is also the cost of the rental car, which is still what I am using currently, while I’m looking to buy another vehicle, which is an absolute necessity in order to get around in a typical North American town.  At the very least, it was not a very expensive car, because it was already eleven years old, and as I said it was a Kia, which is a good example of what I described in a previous article entitled “Disposable Cars”, which I wrote a few months back.  In the case of Kia, my conclusion is that not only did I own a very disposable car, since at eleven years old, it already had many issues, and the body of the car was rusted and falling off in large chunks, but their service just shortened the life of their product by maybe another two years.

            Now, if some may be tempted to reason that the Kia dealership incident may have been an example of an atypical occurrence when it comes to private enterprise, don’t be so quick to dismiss it.  The internet provider we made arrangements with to show up to our house, failed to show up on Monday.  We called them on Tuesday, and they pretended that we made a mistake, and we are in fact only scheduled to have them come out to the house on Wednesday.


            It has been trendy lately to criticize government, and dismiss the importance of many services they provide.  The argument that private enterprise can provide superior services at a more reasonable price has become the favorite slogan of those who wish to shrink government.  I have to say that from the experience I just had, private enterprise can easily outcompete government in how low the quality of a service can go.  The difference is that it is not so easy to hold a private company responsible.  We cannot vote them out, even though many may claim that consumer power can actually be more effective than the right to vote (I believe both are loosing their relevance).

            On moments like this, I cannot help but feel I am re-living a chapter of my life, I would much rather not have to go though again.  I was just a child when communism collapsed in Eastern Europe, but certain memories are still very clear.  Among the things I remember very clearly was the way that people who worked in positions having to deal with the public, such as law enforcement officers, or store salespeople tended to be extremely rude, and careless.  After the collapse, one of the many lessons that capitalists felt they had to teach people there was about the importance of polite, courteous and helpful attitudes when dealing with a customer.  After the past week’s events, I am left wondering whether this society still remembers why it is important to our well-being to provide respectful, courteous and helpful input to a potential customer or solicitor of government services.  The effects of this cultural decay may not be felt instantly.  When we will reach a point when there will be no more trust, competence and order in our social behavior and professional interactions, and this will become the expected norm, we will join all other societies on this planet that lack these cultural and official institutions that make our economy stand above theirs, which is what provides us with the standard of living we have become accustomed to.