Paths to a Better Economy: Natural Capital, Benefit Corporations and Certified B Corps

Dateline: April 11, 2020

As the current pandemic plods on, many of us are sitting at home thinking about a post-pandemic future. It’s possible the capitalist-market economy as we know it will crumble under the dual weights of paying for the current massive health care response to COVID-19 and the halting of much of our global productive activity through social distancing. Some of us see this as an opportunity to build a more efficient and humane economic system. Will we have the courage to make changes? Let’s look at two ideas that have been developing over the last 50 years and see whether they are more appealing in this time of economic stress.

Better valuation and accounting for ‘Natural Capital’ is one change that might contribute to our recovery.

What is Natural Capital?

Natural capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things.

https://naturalcapitalforum.com/about/

http://www.ethicalcorp.com/environment/essay-valuing-natural-capital

Even though most elementary school children are taught about the distribution of natural resources around the world in their social studies classes, few countries currently account for the depletion of such valuable stocks in their reports of gross national or domestic product. When a seller figures the price of land for sale, access to mineral and/or water rights may be considered but rarely do we address the coopting of value to the nation or local community. As the whole world experiences shortages of protective medical face masks, hospital beds and bleach, our awareness of how and among whom we share scarce resources is raising. Most medical supplies are manufactured, not ‘natural’, resources but perhaps we can generalize the understanding of what it means to run out of toilet paper to running out of fresh water.

As we restart our extractive and manufacturing economic activity let’s think about whether we want to go back to the unbridled concentration of benefit derived from both natural and man-made resources into the hands of a few wealthy individuals. Is there a way to restrain excessive greed and self aggrandizement without loosing the motivation for hard work and productivity generated by free-market competition?

Organizational Purpose: Profits vs. Stakeholder Benefit

In the United States there has been much debate about the supposed obligation of corporate management to generate profits for shareholders even at the expense of the nation, local communities and stocks of natural resources. Stephen Bainbridge of U.C.L.A. Law School wrote in the NY Times a few years ago:

There are many reasons why the law requires corporate directors and managers to pursue long-term, sustainable shareholder wealth maximization in preference to the interests of other stakeholders or society at large, but the most basic one is that managers who are responsible for everyone are responsible to no one.

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/a-duty-to-shareholder-value

No one individual, that is, but certainly those managers already responsible to comply with government regulations. Expanding on this concept of the legal obligation, the Clark Program on Corporations and Society at Cornell University notes:

…modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so.” ( BURWELL v. HOBBY LOBBY STORES, INC. ) In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders [italics added]. Usually maximizing shareholder value is not a legal obligation, but the product of the pressure that activist shareholders, stock-based compensation schemes and financial markets impose on corporate directors. 

The Shareholder Value Myth , Eur. Fin. Rev. Lynn Stout (April 30, 2013) 

The Ideology of Shareholder Value Maxim (Watch), Evonomics

In other words, corporate managers get to balance using profits for shareholder returns against reinvesting in the firm itself. This still doesn’t take into account the benefit or harm to the many other stakeholders impacted by a business firm regardless of whether it operates within a small geographic region of a few square miles or around the whole Earth.

Any organizations, including sole proprietorships, partnerships, corporations and government entities, are free to take on a responsibility for the welfare of their employees, surrounding communities and to contribute to the public good. Consider, for example, the actions of the LLC, Johnsonville Sausage when a fire caused great financial losses to the company. Johnsonville continued to pay its employees while its facilities were closed and reassigned them to 1/2 time at local volunteer jobs and 1/2 time to their own education.

Johnsonville’s policy was crafted by its owners after the disastrous fire occurred. Is there a way to bake such an attitude into the very foundations of a firm?

Governments Are Recognizing New ‘Benefit Corporation’ Structures

Here are The Basics according to B Lab:

“A benefit corporation is a traditional corporation with modified obligations committing it to higher standards of purpose, accountability and transparency:

Purpose: Benefit corporations commit to creating public benefit and sustainable value in addition to generating profit. This sustainability is an integral part of their value proposition.

Accountability: Benefit corporations are committed to considering the company’s impact on society and the environment in order to create long-term sustainable value for all stakeholders.

Transparency: Benefit corporations are required to regularly report to shareholders on how the company is balancing these interests.”

As of 2020:

The Italian government led the way to official benefit corporation legislation in 2017. Canada and several South American countries are jumping on the band wagon.

Until more U.S. states and non-U.S. governments adopt benefit corporation laws, the private nonprofit organization, B-Lab, is offering certification for which companies anywhere on the planet can apply. An organization does not have to reincorporate as a ‘benefit corporation’ to become certified but it does have to meet all the requirements specified by B-Lab. So far, these are somewhat more rigorous than those of government corporate legislation.

So What?

What do corporate purpose and natural capitalism have to do with the COVID-19 pandemic? Nothing unless we choose to link them together and decide not to go back to business-as-usual when the world is finally allowed to be open-for-business again. Many of us are so steeped in the ways of competitive-only markets and self aggrandizing capitalists that we assume there are no other possibilities. Either that or we think that the only other models are radical socialism or (horror of horrors!) communism. The notions in this blog give us some intermediate steps to take in our economic practices that will change but not disrupt society as we know it. Our primary goal is to create an economy that is resilient to a variety of disasters, the relatively slow ones such as climate change and homelessness, faster ones such as the COVID-19 pandemic, and rapid-onset catastrophes such as hurricanes, wildfires and volcanos. Of equal importance to many of us is to strike an ethical balance among the interests of individuals, groups of various sizes from villages to nations, all of humanity and, perhaps, all living things. Finding such a balance is going to require that we recognize our connectedness and interdependence. We can build that recognition into our economic institutions. If not now, when?

What is “work”?

Language changes as social context evolves and each of us interprets the words we use against the background of our own experience. Our experience stretches back in time, perhaps as far as our grandparents who told us stories of their childhoods, and forward to our expectations for our own grandchildren. Our sense of what is right and wrong, of what is possible, of who we are, is built on our words. Our word-experience creates a feedback loop with our social action, sometimes acting as a break to evolving contexts that would be beneficial if we let them happen. This blog explores our modern use of the word “work” and speculates on how we might be holding ourselves back by hanging on to an old definition that no longer resonates with our socio-technological context.

“Work” is unquestionably a complex concept. As the child of a literal-minded physics teacher I learned early that:

“Work is done when a force that is applied to an object moves that object. The work is calculated by multiplying the force by the amount of movement of an object (W = F * d). A force of 10 newtons, that moves an object 3 meters, does 30 n-m of work. A newton-meter is the same thing as a joule, so the units for work are the same as those for energy – joules”

(source: http://www.physics4kids.com/files/motion_work.html)

This is not what most people think of when I use the word today. They are more in line with Webster’s which begins by associating “work” with earning a living through employment and doesn’t get around to the physical concept of work until definition #9.

 

work    noun

Definition of work (Entry 2 of 3)

1     activity in which one exerts strength or faculties to do or perform something:

a: activity that a person engages in regularly to earn a livelihood

// people looking for work

b: a specific task, duty, function, or assignment often being a part or phase of some larger activity

c:sustained physical or mental effort to overcome obstacles and achieve an objective or result

2     one’s place of employment // didn’t go to work today

3

a: something produced or accomplished by effort, exertion, or exercise of skill

// this book is the work of many hands

b:something produced by the exercise of creative talent or expenditure of creative effort : artistic production // an early work by a major writer

4

a: something that results from a particular manner or method of working, operating, or devising // careful police work // clever camera work

b:something that results from the use or fashioning of a particular material

// porcelain work

5

a: works plural : structures in engineering (such as docks, bridges, or embankments) or mining (such as shafts or tunnels)

b: a fortified structure (such as a fort, earthen barricade, or trench)

6     works plural in form but singular or plural in construction : a place where               industrial labor is carried on : PLANT, FACTORY

7     works plural : the working or moving parts of a mechanism // the works of a clock

8     works plural

a: everything possessed, available, or belonging // the whole works, rod, reel, tackle box, went overboard //ordered pizza with the works

b: subjection to drastic treatment : all possible abuse —usually used with get or give //get the works // gave them the works

9

a: the transference of energy that is produced by the motion of the point of application of a force and is measured by multiplying the force and the displacement of its point of application in the line of action

b: energy expended by natural phenomena

c: the result of such energy // sand dunes are the work of sea and wind

10

a: effective operation : EFFECT, RESULT// wait for time to do its healing work

b: manner of working : WORKMANSHIP, EXECUTION

11   works plural : performance of moral or religious acts  // salvation by works

12: the material or piece of material that is operated upon at any stage in the process of manufacture

at work

1:  engaged in working : BUSYespecially : engaged in one’s regular occupation

2:  having effect : OPERATING, FUNCTIONING

in the works

: in process of preparation, development, or completion

in work

1: in process of being done

2  of a horse : in training

out of work

: without regular employment : JOBLESS

(source: https://www.merriam-webster.com/dictionary/work)

“Out of work” doesn’t mean there’s nothing to move, it means “without employment”. That’s the noun “work”. The verb “to work” is even more entangled with the notion of a market economy within which an individual sells his or her ability to move objects and extends the idea to include moving information.

Work  verb

 (Entry 1 of 3)

 

intransitive verb

1

a: to perform work or fulfill duties regularly for wages or salary // works in publishing

b: to perform or carry through a task requiring sustained effort or continuous repeated operations // worked all day over a hot stove

c: to exert oneself physically or mentally especially in sustained effort for a purpose or under compulsion or necessity

2

to function or operate according to plan or design // hinges work better with oil

3

to produce a desired effect or result : SUCCEED // a plan that will work

4

to exert an influence or tendency

5

a: to make way slowly and with difficulty : move or progress laboriously

// worked up to the presidency

b: to sail to windward

6

a: to move slightly in relation to another part

b: to get into a specified condition by slow or imperceptible movements

// the knot worked loose

c: to be in agitation or restless motion

d: FERMENT sense 1

7

to permit of being worked : react in a specified way to being worked this wood works easily

transitive verb

1

to set or keep in motion, operation, or activity : cause to operate or produce

// a pump worked by hand // work farmland

2

to bring to pass : EFFECT // work miracles

3

to solve (a problem) by reasoning or calculation —often used with out

4

a: to cause to toil or labor // worked their horses nearly to death

b: to make use of : EXPLOIT

c: to control or guide the operation of // switches are worked from a central tower

5

a: to carry on an operation or perform a job through, at, in, or along // the peddler worked the corner // a sportscaster hired to work the game

b: to greet and talk with in a friendly way in order to ingratiate oneself or achieve a purpose // politicians working the crowd // worked the room

6

to pay for or achieve with labor or service worked my way through college

// worked my way up in the company

7

a: to prepare for use by stirring or kneading

b: to bring into a desired form by a gradual process of cutting, hammering, scraping, pressing, or stretching // work cold steel

8

a: to fashion or create a useful or desired product by expending labor or exertion on : FORGE, SHAPE // work flint into tools

b: to make or decorate with needleworkespecially : EMBROIDER

9

a: to get (oneself or an object) into or out of a condition or position by gradual stages

b: CONTRIVE, ARRANGE // we can work it so that you can take your vacation

10

a: EXCITE, PROVOKE // worked myself into a rage

b: to practice trickery or cajolery on for some end // worked the management for a free ticket

(source: https://www.merriam-webster.com/dictionary/work)

These definitions of work make sense in a context where human survival and wellbeing has depended on the manipulation of physical objects and the sharing of know-how — for all of human existence — up to the present.

And how has the present social context changed? We have learned to build machines, robots and AIs (artificially intelligent computers) that can do most of the old-style work for us. What we don’t know how to do is live meaningfully in this new reality. Our word-experience makes it nearly impossible for even our most highly intelligent leaders to imagine the changes in our identities and emotional attachments that will redefine human “work” beyond the employment market.

Instead of creating new social niches for humans whose old-style labor is no longer essential we confound the concept of work-as-being-active with the concept of work-as-being-employed. Examine, for example, the following excerpt from the World Bank’s World Development Report:

 

People living in advanced economies are anxious about the sweeping impact of technology on employment. They hold a view that rising inequality, compounded by the advent of the gig economy (in which organizations contract with inde- pendent workers for short-term engagements), is encouraging a race to the bottom in working conditions.

This troubling scenario, however, is on balance unfounded. It is true that in some advanced economies and middle-income countries manufacturing jobs are being lost to automation. Workers undertaking routine tasks that are “codable” are the most vulnerable to replacement. And yet technology provides opportunities to create new jobs, increase productivity, and deliver effective public services. Through innovation, technology generates new sectors and new tasks.

(source: http://documents.worldbank.org/curated/en/816281518818814423/pdf/2019-WDR-Report.pdf#page=27)

Yes, advancing technologies will cause “sweeping impact” on employment and that will change the life of employees. Keep in mind that we are speaking about “developing” societies here, about populations that were considered “unemployable” 100 years ago because they did not grow up in a market economy where their labor could be bought and sold. It may be these traditional communities have some social conventions that would enhance the equitable exchange of goods and services we are now worried about.

Another conceptual misstep is the notion that technology is directly linked to jobs and employment. Our techniques/technology determine how we do and build things, how we produce goods and services. Much of what humans “produce” is distributed informally, is not measured as “productivity” and never enters our economic systems. Between the person doing the “work” and the valued output is a set of social conventions that includes “jobs”. If we can break the hold our use of the term “work” has on us we can tinker with those conventions and perhaps generate new ones that will better serve our new context.

Visual artists, poets, musicians, home gardeners, open software developers and parents, to name just a few, are workers in every sense of the word except that their efforts are not necessarily connected to employment. Although fully and constructively “occupied”, in spite of their use of emerging technologies, they may still be considered “unemployed” and the value of what they contribute to their communities may be unappreciated. Certainly it is uncounted and is uncompensated unless they live in a family or have a patron of some kind.

The World Development Report notes (on page 4 of the Overview section):

“What are some new ways of protecting people? A societal minimum that provides support independent of employment is one option. This model, which would include mandated and voluntary social insurance, could reach many more people.

Social protection can be strengthened by expanding overall coverage that prioritizes the neediest people in society. Placing community health workers on the government’s payroll is a step in the right direction. A universal basic income is another possibility, but it is untested and fiscally prohibitive for emerging economies.”

This is an encouraging indication that the discourse on how to survive economically in the new order is progressing, however slowly. Moving from Webster’s definition #1, work as employment, to definition #3, work as

a: something produced or accomplished by effort, exertion, or exercise of skill

// this book is the work of many hands

b: something produced by the exercise of creative talent or expenditure of creative effort : artistic production // an early work by a major writer

could provide a new conceptual foundation for innovative social infrastructures that facilitate broader distribution of the abundance our modern technologies make possible. We could stop focusing so heavily on creating jobs and instead devise effective ways of supporting those who choose sharing rather than competing. Every contribution is the result of work.

 

 

Will the real “economics” please stand up.

I enjoy an online magazine called “evonomics| The Next Evolution of Economics”. A recent article, “Five Ways to Build a New Macroeconomics” caught my eye so I started reading. I hoped the article would help me understand the news broadcasts I hear when they announce that “the economy” is going to the dogs. Immediately, I was in trouble. I took first semester economics in college (in 1963). It was about “microeconomics”. This article is about “macroeconomics” but I can’t remember the difference. So, of course, I looked it up online…

“Microeconomics vs. Macroeconomics: An Overview
Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.”

Credit: Satish Panday, studied Economics at Pannalal Girdharlal Dayanand Anglo Vedic, University of Delhi (2013)
Source:https://www.quora.com/What-are-the-differences-between-Macro-and-micro-economy

OK, so Micro = individuals, businesses and Macro = countries and governments. But some businesses have annual budgets many times larger than some national governments. What’s “micro” about them? How do individual financial decisions, like whether I help a young African refugee get a PhD in psychology from a US university, relate to his adopted government’s refusal to provide him with even an elementary school education. Maybe some big, multinational corporation has a scholarship program he can tap into. This is the kind of question that connects individual economic considerations to businesses and to governments. Macro and Micro doesn’t help.

But no, the rest of the article laments the state of economic theory as taught in graduate schools around the world. The author goes on to opine:

“To be sure, there was always a gulf between macroeconomic theory and practical policymaking. But at one time, this could be papered over by a kind of folk wisdom — low unemployment leads to inflation, public deficits lead to higher interest rates, etc. — that both sides could accept. Under the pressure of the extraordinary developments of the past dozen years, the policy conversation has largely abandoned this folk wisdom — which, from my point of view, is real progress. At some point, I think, academic economics will recognize that it has lost contact with the policy conversation, and make a jump to catch up. “

While this perspective may be “real progress”, it doesn’t help me interpret the news or decide how to spend my money. I long for some very down-to-earth discussions of the mysterious “economy” I keep hearing about and I shudder to think that the legislators I help elect have no better advisors than the holders of doctorate degrees based on academic theories in complete disarray. We really do need to “build a new macroeconomics” and, apparently, some new university departments of economics.

Refugees or Nomads: Responding to Climate Change

British catalyst/writer/speaker, Graham Brown-Martin frequently posts provocative points of view that I respond to. Here’s our most recent conversation triggered by his Jan 14, 2018 essay titled:

Education and the Fourth Industrial Revolution

I recommend you read it (follow the link above) and respond to it directly. I commented on his statement that:

Combined with climate change and rapid global population growth this century is the most challenging that our species has ever faced.

with:

Perhaps. Or perhaps prehistoric humanity has faced equal challenges many times before but without leaving a record we know how to read yet. Large segments of the human population and many cultures have been wiped out before. Seeing our current dilemmas as unique in scope feeds pessimism. I prefer to think we’re still here because we are so good at adapting to potentially disasterous occurances.

Graham replied:

True, although we’ve never had over 7 billion souls living on the planet at the same time — this number is greater than all of the people who have ever walked on this planet.

The impact of climate change and continued population growth this century suggests that the number of refugees will grow from circa 40 million today to over 1 billion by the end of this century. Thus migration will be the new normal

More than a billion people will have to flee their homes because of global warming
More than a billion people could be forced to flee their homes because of global warming, according to new research…www.independent.co.uk

Let’s not underestimate the challenges that present and future generations will face and the decisions that they will have to make

My response:

…Agreed, let’s not underestimate.

Whether the absolute number of Earth-bound humans is 1 million, as in prehistory, or 7.6 billion, as of 2018, a large proportion of our population has been nomadic, moving to follow food sources, weather conditions and ecological competition. Humanity has seen many changes in sea level and glacial land cover. Those who failed to move perished. This time it’s happening much faster and we have developed the capacity to see it coming. I’m not convinced we become more adaptable by calling ourselves refugees. We will not be fleeing an unforeseen social upheaval such as a war or a rapid disaster triggered by a plague or wildfire. The term “refugee” brings an image of helplessness and mass panic to my mind. I’d rather not wait until climate change erases all our options.

Instead, let’s use education and industrial practices to bolster our adaptibility. We have the technology for seasteading and arcologies that can provide human habitats on water-revised Earth. We, as a species, have failed to proactively protect Earth’s climate from drifting away from conditions we evolved to deal with over hundreds of thousands of years. Let’s not fail to use the brainpower we have developed so that our children can thrive in the coming new environment, one we may have inadvertantly brought about.

Years ago I took a course from noted Stanford psychologist Al Bandura. He introduced the concept he called “perception of self-efficacy“. People with high self-efficacy believe in their own ability to cope in difficult situations and try harder to overcome the obstacles they face. Even if they are nomads who travel and have no permanent home they become the survivors. People with low self-efficacy become refugees, the huddled masses  on the shore who give up and succumb to raising seas. Perhaps our greatest challenge as educators is not figuring out how to prepare ourselves and our children for either climate change or 21st century jobs. What we need to be doing is promoting a high perception of self-efficacy across the population so that we keep innovating and engaging in our as-yet-unknown future.

 

Now, after the election, you tell us…

I frequently read Evonomics: The next evolution of economics on the Web. It’s set up to set me email notices when there are new posts. Today I received a link to the article below which was originally published on April 26, 2016 in Capital Institute’s THE FUTURE OF FINANCE BLOG. The Evonomics republication begins:

Why Trump-Sanders Phenomenon Signals an Oligarchy on the Brink of a Civilization-Threatening Collapse

Oligarchies win except when society enacts effective reforms

 

 

By Sally Goerner

“The collapse of urban cultures is an event much more frequent than most observers realize. Often, collapse is well underway before societal elites become aware of it, leading to scenes of leaders responding retroactively and ineffectively as their society collapses around them.” –  Sander Vander Leeuw, Archaeologist, 1997

The media has made a cottage industry out of analyzing the relationship between America’s crumbling infrastructure, outsourced jobs, stagnant wages, and evaporating middle class and the rise of anti-establishment presidential candidates Donald Trump and Bernie Sanders. Commentators are also tripping all over one another to expound daily on the ineffectual response of America’s political elite – characterized by either bewilderment or a dismissal of these anti-establishment candidates as minor hiccups in the otherwise smooth sailing of status-quo power arrangements. But the pundits are all missing the point: the Trump-Sanders phenomenon signals an American oligarchy on the brink of a civilization-threatening collapse. (…read the whole article…)

 

In her article, Author Sally Goerner notes: We have forgotten the lessons of the 1760s, 1850s, and 1920s. No wonder when popular wisdom equates “I never heard of that” and “hasn’t happened in 40 years” with “never happened before”. We are even conditioned by the way the media reports geologic events to think that “not in recorded history” means “unique event on Earth”. We, in the US, are a remarkably short-sighted society in terms of historical, geographic and cross-cultural perspective.

So would the US presidential election have turned out differently if every voter had read Ms. Goerner’s  piece? I doubt it. Almost every US voter is a product of the US public schools and we don’t teach systems thinking or any serious form of social analysis. Schools are focused on passing down the culture of the immediately previous generation not on critical thinking that might disrupt the status quo. We talk about a global outlook but mostly we are trying to export developed-world, Western values and practices. Little emphasis is put on learning the cultural practices, infrastructure, or ethics of “primitives” or “foreigners”.

Does this shortsightedness condemn us to a collapse of civilization? Well, if by “civilization” we mean ‘what my mother taught me’, then yes. What my mother and father believed is an endangered species of thought. But a paradigm shift in conventional wisdom, even a severe episode of depopulation brought about by war, famine or epidemic disease does not necessarily mean the extinction of humanity. We have a choice either to let the pattern continue to cycle or to participate consciously in our own social evolution. We can choose to pay attention to thinkers such as Sally Goerner early and often. She has noticed that the canary in our coal mine has dropped dead off its perch. Now, are we going to continue to breathe the same fetid air or will we change it?

 

TECHNOLOGICAL PROGRESS AND ITS IMPACT ON EMPLOYMENT

I find it interesting that Extopia DaSilva, perhaps the author of this guest blog, is identifiable as a Second Life avatar not a human — a case of the medium being the message. While I agree with its message I don’t believe the essay was composed by a robot or an AI. The discussion of “digital persons”, as Extopia calls itself elsewhere on the internet, isn’t spot on for NETAA. However, it does suggest that we explore the question of who or what should benefit from economic success. Possible responses range from ‘only humans in my tribe’ to all ‘sentient’ creatures including the planetary persona, Gaia.

I did a little searching to see if the ‘primary’ behind Extopia was easily discoverable. No luck identifying a specific human. Rather, Extopia seems to be a vehicle for the ideas of several individuals — kind of like a corporation. The rights and responsibilities of corporate ‘fictitious’ individuals are very much in the center of this site’s topic.

“Open the pod bay door, Hal.”

“I’m sorry, Dave…”

Mind Child's musings

TECHNOLOGICAL PROGRESS AND ITS IMPACT ON THE NECESSITY OF EMPLOYMENT
(This essay is part thirteen of the series ‘HOW JOBS DESTROYED WORK’)
The 21st Century could well witness a conflict between two opposing drives: The drive to eliminate work and the need to perpetuate it. In order to appreciate why these ideals should become a central issue over the coming years or decades, we need to answer the following question: Why do we work?
IF YOU WANT IT, YOU MUST WORK TO PRODUCE IT
There are many good reasons to engage in productive activity. Pleasure and satisfaction come from seeing a project go from conception to final product. Training oneself and going from novice to seasoned expert is a rewarding activity. Work- when done mostly for oneself and communities or projects one actually cares about- ensures a meaningful way of spending one’s time.
But that reply fits the true definition…

View original post 1,614 more words

Evolving Work

Politicians claim to be able to create new jobs. I think they are ignoring a major change in human society that is being brought on by current advances in production technology. It may have taken 300 years but dumb machines, enhanced by artificial intelligence computers, are finally making the Luddites right. If we hope to avoid a violent revolution fueled by ordinary people fighting to preserve the only means of survival they know we’d better come up with some new ways to think about “work”.

Fortunately John Hagel is sharing his vision of “the big shift“. This business guru is serious about rethinking our employment structure.

Robots and AI may be the catalyst we need to finally jettison the increasingly outdated industrial model of scalable efficiency. In its place, we’ll evolve fundamentally new forms of work that tap into more our distinctively human capabilities and potential. Not only will we as individuals develop opportunities to learn faster by working together in very different ways, but our institutions will move from a world of diminishing returns to a world of increasing returns, where the more of us who join together, the faster we will all learn. Performance improvement will begin to accelerate in ways that previously would have seemed unimaginable. The technology that seems so threatening now may actually become our ally, amplifying our performance improvement by freeing us from the tasks that today keep us tightly locked into the routines of the past and providing us with the data we need to spark even more imagination and creativity. (read the whole article)

So what will new work look like? For some of us it will be indistinguishable from play. For others it will be art and craft. For still others it will involve caring for those who can’t fend for themselves. What else will garner the big bucks? It is already becoming clear that be anything repetitive or routine — anything we can reduce to an algorithm and hand off to a computer — will no longer provide a living wage. This shift has huge implications for how we educate our children – all of our children, not just the rich and privileged.

To be continued…

Going beyond the business view of social responsibility

Check out Milton Friedman was wrong by Alan Murray

Here’s how it starts:

“Business needs to pay attention to social problems, or else…

In an interview this summer, Microsoft MSFT 0.21% CEO Satya Nadella was asked whether he thought companies creating technology had a responsibility to consider the effects of that technology on social equity.

The late Milton Friedman had a ready answer. “The social responsibility of business,” the economist often said, “is to increase its profits.” Period.

But Nadella took a different approach: “I think we don’t have a long-term business if we don’t address the inequities.”

As I’ve argued before in this space, capitalism is under attack. Having won the great ideological struggle of the 20th century, it faces a new and more diffuse challenge in the 21st. The quarter-century since the collapse of Communism has seen the greatest alleviation of poverty in human history. But it has also created deep pockets of disaffection in developed countries, where workers have been displaced by overseas labor. And it has fed rising inequality within countries. This year’s pro-Brexit vote and the Trump and ­Sanders insurgencies provide powerful punctuation to the trend.

My friend Dan Yergin, whose book The Commanding Heights documented the triumph of free-market faith at the end of the last century, cites four reasons for the current rebellion. The first is the aftershock of the 2008 financial collapse, which undercut confidence in markets. The second is rising inequality within countries. The third is the realities of global trade, which creates losers as well as winners. And the fourth is fading memories of the old order. Socialism sounds better to a generation that has no memory of its legacy of poverty, thwarted opportunity, and oppression.

And there is a fifth reason: the failure of governments. The 20th century assumed it was the job of government to address most social problems. The 21st century has witnessed too much ­corruption, incompetence, and political gridlock to ­assume the same.

For all these reasons, an ever-growing group of business leaders have come to believe that they must take up the mantle. The best businesses, of course, have always put purpose at the center of their strategies. But members of this new group realize that restoring public trust is essential to their long-term ­success. Increasingly, they are building intentional efforts to address social problems into the core of their business plans…”

.. (read more)

While you’re at it you might want to visit

The Lesson Behind Fortune’s ‘Change the World’ List by Michael E. Porter , Mark R. Kramer

My problem with both of the approaches offered is that they do not go deep enough.They fail to address basic questions of ownership and reciprocity.  Ownership is a matter of who controls and, therefore, has the right to benefit from a natural resource, institution, product or service. Reciprocity describes that social obligations that tell us who should do, exchange or give what to whom. The ‘what’ may be goods, services, loyalty, and emotional support, among other human productions. Both ownership and reciprocity are culturally defined and it is easiest for us to interpret right and wrong through the lens of our home culture.

One historical example of the ownership issue can be seen in what we might call the European land grab. Europeans who immigrated to Africa and the Americas in the 17th and 18th centuries encountered peoples whose cultures didn’t include private ownership of land. “Well, if no one owns it, I can take it,” they thought. This belief was used to justify forcible expulsion of millions of people from their ancestral homelands.

Today, at least two critical cases of ownership need to be addressed: ownership of non-renewable natural resources and ownership of an individual’s labor in the face of growing robotic an artificial intelligence capacity (which I’ll address in a later blog).

The topic of ownership leads directly to reciprocity. If the chief of your tribe “sells” your ancestral land, the means by which your forefathers survived for five thousand years, to a corporation that now plants coffee to be marketed around the world, who should benefit from the profits of that business? The stockholders? The employees, a few of whom may be of your tribe? The distant consumers? Is it enough that the corporation subsequently provides your extended, but now impoverished, family with a new school building, some medical supplies, or the raised expectations that you will be able to buy previously-unheard-of commodities? Does monetary payment for the land combined with these acts of ‘social responsibility’ fulfill the corporation’s obligation to reciprocate? In small-scale, usually isolated, societies reciprocity is dictated by tradition. Tradition tells community members who can use how much of the common resources, who cares for the young, sick and disabled and who can be either killed by or expelled from the group for what offenses. Our large-scale, global society is a mash-up of conflicting traditions that offers us few overarching guidelines for reciprocity.

We do have some vaguely religious or secular moral notions of ‘brother’s keeper’, familial obligation and noblesse oblige. But these are often obliterated by a constant chanting about the importance of financial success, consumerism, competition, economic growth and actualizing our individual potential. No wonder so many of us are confused, depressed to the point of suicide, cynical and suffering from unmet expectations. Of course we are choosing to escape into that bottomless time and energy sink, entertainment. It’s not surprising that we are politically divided to the point of governmental paralysis.

It’s time, way past time, to pull our eyes, ears and minds away from our flickering screens and address two questions:

1) Where will we been in 50 years if we continue on the economic path we are now following?

2) What are the elements of a positive alternative vision for humanity?

Current economic thinking will not get us to a positive future because it begins with a set of assumptions that preclude understanding the forces driving contemporary human behavior. Yes, Milton Friedman was wrong. And Fortune’s Change the World List Companies won’t do it either because their notion of reciprocity is still based in buying and selling. Economics, as we know it, is rooted in the concepts of scarcity and demand. It cannot cope with conditions of abundance and free exchange — conditions that we can create if we can free our thinking from its economic box.

There is a growing chorus of thought-leaders like Alan Murray who are challenging us to examine our ideals and bring our economic behavior beyond the standard of one who “maximizes the net present value of their preferences” in monetary terms. But leaders who venture too far beyond the conventional wisdom are likely to find themselves without followers. Let’s be courageous thinkers and forge ahead with new (and perhaps ancient) conceptions of ownership and exchange. Having crafted such a vision we can take action to create more viable and sustainable communities, locally and globally.

Preparing for Life without Jobs

The majority of humanity will need to prepare for living a life of dignity, joy, meaning and fulfillment without “jobs” as we have known them. We have actually succeeded in achieving that 300-year goal of creating more “leisure”. Now we have to learn to live with it. – Quoting myself, Liza Loop

 

When I look around my local community, Guerneville, Sonoma County, California, I see serene rural beauty punctuated by lots of problems:

• impoverished, homeless people begging on the streets and sleeping in the bushes
• decaying built infrastructure
• underemployed job seekers struggling to maintain the lifestyles their parents were able to provide for them
• disillusioned citizens who question whether government can work in their interest
• concern over unsustainable agricultural practices and dwindling wild spaces
• growing fear of civil unrest fueled by local crime and global terrorism
• skepticism about whether our existing educational institutions can actually help prepare their children for an unknown future

 

In spite of these negatives, almost everyone here is an artist of some kind — painter, sculptor, photographer, actor, musician, writer, landscape gardener — even the homeless are following their bliss in a way. This makes the present bearable, often joyful. At the same time, there is an underlying sense that we are under siege, threatened by a global human society that is rapidly imploding. Our art helps us soothe the pain of our local troubles but few of us are turning our gaze outward and asking how our personal solutions might be used to address the depredations breaking out all over the planet.

One key solution is literally under our feet. Most householders in these parts have gardens and many businesses are very productive farms. This, combined with an ethical commitment to volunteering and sharing, means almost nobody starves here. And, since the climate is mild, you don’t die from the cold if you live unhoused. Even the wealthy have chosen this place because it offers an opportunity to live simply, without ostentation in an atmosphere of sharing and community. It isn’t Utopia but it is certainly a hopeful place to be.

What lessons can we offer the rest of the world from our little bit of success at living joyfully in this local “garden world”? How can we foster the emergence of similar positive communities in other places so that this one does not suffer “the tragedy of the commons”? This blog site is one place for me to offer my vision and for you to share yours. I’ll try to answer some of the questions I’ve posed today in upcoming posts but right now I’m going to go pull some weeds among the vegetables. Catch ya’ later…

 

Are we dying of boredom?

I’ve just discovered

I’m hoping to find bytes of wisdom on how we may address what I believe underlies today’s global unrest: widespread inability to participate in Earth’s growing abundance.

Here are some excerpts from one of their articles:

HOW INEQUALITY HURTS

Yellow Canaries and Middle-Aged White Men

NOVEMBER 11, 2015 ⋅   PRINT THIS ARTICLE ⋅  POST A COMMENT

FILED UNDER  HEALTH, LONGEVITY

Startling new data from the National Academy of Sciences suggest that
extreme inequality may be exacting a much steeper price — on our health — than we’ve up to now expected.

By Sam Pizzigati

 

Americans live longer today than we used to live, sometimes a lot longer. Just over 32,000 centenarians called the United States home in 1980. In 2010, we had more than 53,000 Americans in triple digits…

The wider the economic gaps between us, Wilkinson explains, the more status anxiety increases. The more we judge each other by social status, the more lower status hurts. The deeper this hurt, this pain of feeling devalued, the more reckless our search for relief. Instances of drug and alcohol abuse proliferate. People die before they should.

But why, in the Case-Deaton data, do only poorer white Americans in midlife show declining lifespans? “Thwarted aspirations,” suggests Wilkinson, may be at play here. As whites, these poorer Americans “would have had unrealistic expectations of upward mobility.” Over recent decades, these expectations have collided with the reality of lives spent on an economic treadmill, working ever harder but getting nowhere.

Social mobility, notes Wilkinson, runs lower in more unequal societies. And middle age, he adds, usually marks the time that many of us realize that the success we sought “hasn’t happened and isn’t going to happen.”

Still, as Wilkinson points out from his Yorkshire office, we may be doing Case and Deaton a disservice if we focus our discussion on their work too single-mindedly on the midlife decline in lifespan. The pain that the pair have found appears to be much more than a generational phenomenon. – See more

 

Liza’s commentary:

This article provides a thought-provoking take on an increasingly important problem. Building on it, I’d like to see a more nuanced discussion of the various kinds of inequality experienced in the countries polled. As used in the quoted article, “inequality” refers specifically to the difference in financially measurable assets one individual controls compared to another. We have other forms of wealth we could add into the analysis: friends, family, access to non-financial services (often “women’s work”), perception of safety from local or foreign violence, value the surrounding community puts on personal creative expression (art, craft, music, dance, etc.). The majority of White, middle-class males in the States have been educated to be bread-winners, not artists (who don’t sell their art) or care-givers (who don’t sell their services). As labor-saving technologies decrease the financial return on their work perhaps they are dying of boredom.