Archive for the ‘Observations of some sort’ Category

Breaking the Bedplate of Economics

Wednesday, September 9th, 2009
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Shanghai skyline
Creative Commons License photo credit: johnkoetsier

As the Climate Conference of Copenhagen keeps approaching the conversation on who should do what and who pay for it all heats up as well. The argument coming from many of the developing countries (and up till recently the US and few other industrialized countries as well) is that tackling climate change is something they cannot afford. Furthermore, it has been stated by for example China that since a lot of this warming has been caused by the emissions made by developed countries historically they are also the ones who should fix it. The argument continues by saying that developing countries can take part, yet their primary concern lies in reaching same prosperity levels that people have accustomed  in the developed countries.

Nobody seems to really disagree about the overall importance of slowing down climate change. It just seems to be very much a question of financial resources, and as always, it seems to be the economy that has the upper hand over environment. Developing countries are not wrong either by stating the historical facts that point responsibility towards the industrialised countries. Something has already been to that, for example the EU set out a 15 bn € climate aid plan. It is very much under what the developing countries hoped for, but still a start (even though one could question some developing countries ability to make sure that money goes into good use).

Unfortunately, climate change is not a question on who is right and who is wrong. It is bound to take place no matter whose fault it turns out to be. Excuses won’t do any good either. The statement on “cannot afford” does not hold much water either, not on the long run. The view over economy prevailing over environment is even more ridiculous. One has to remember, that climate change as such has nothing to do with people’s right to get rich, even though indirectly it might seem so on short term. Curiously enough, if the climate changes ‘sufficiently’ and environmental destruction keeps on continuing, it might make the question on who is rich and who is not even quite irrelevant.

How so? For one thing, putting economics on one side and environment on the other is a very outdated way to view the world. Tackling climate change comes with a cost, but according to the Stern review and others doing nothing is going to be even more expensive. Therefore, the latter option is simply bad business and bad for the development. Furthermore, the longer one waits the more one pays. Better still, wait long enough and there might be even no price to be paid anymore, since there is nothing or very little that can be done in the first place.

Second, as Stern and comp.  show with their report, economics and environment are not separated from each others, they are very much interconnected. Moreover, uncontrary to the understanding of many, it is the economics that is the luxury good in the world of environment, not vice versa. Our, and everybody’s economy is very much built on the proper working of the environment: to be able to work, start a business, do research one has to have air to breath, food to eat and water to drink, just to remain more or less healthy. All these things depend on the environment, more so than from the economics. Economies, big and small, developed and developing,  are ultimately built on the bedrock of the environment, not the other way around.

Thus, it makes little sense to argue whose fault is all this. No matter how justified that might be, at the moment it seems more of a luxury we can concentrate on after having first dealt with the problem itself. Furthermore, even for the developing countries (or especially for them) it makes good economic sense to participate in full in order to stop climate change and environmental degradation . China, among others, should do so already for its own sake, some years ago 16 of of the 20 most polluted cities in the world were in China, and river pollution threats sixth of its population.

Eventually it is of little use to have a nice car or a house or whatever if you cannot breath, drink or eat. And it might not be much better if you have to spend all the fortunes you made on a tank of fresh air and bottle of fresh water. Then again, who knows, if you are rich enough you just might be able to buy a decent carrot to go with that water.

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And yet… it moves?

Wednesday, September 2nd, 2009
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Marx und iPod
Creative Commons License photo credit: myuibe

Just finished reading Thomas L. Friedman’s “The World is Flat”. Interesting book, the only thing is that I probably read it few years too late, many of the things mentioned in the book have become so common that saying them out loud seems almost like stating the obvious (which actually goes on to show how rapid the change has been, point mentioned in the book as well). However, the book has its moments even now, and one of them especially caught my attention.

After few hundred pages of examples and explanations how more and more people across the world can now participate to the global economy and how the world is truly becoming connected and globalized (or “flat” as Friedman puts it), Friedman interviews Michael J. Sandel, political theorist from Harvard University. He points out that the first to foresee all this was, somewhat surprisingly, Karl Marx, who described it in his “Communist Manifesto” together with Engels. The text seems to match the way things are now relatively well.  The manifesto states for example the following:

“The need of a constantly expanding market for its products chases the bourgeoisie (a.k.a. the capitalists) over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere [...] industries[...] no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. [...] The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production…[...] It (the bourgeoisie) has created enormous cities, has greatly increased the urban population as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life.” (The whole manifesto can be found here).

The curious thing is (and one that Friedman’s book does not mention) that for Marx, capitalism was not the final destination but only a stop on the road towards communism and economic socialism. After the fall of communism in Europe in the early 90′s it was widely seen that Marxist theory on economic socialism and the socialist/communist world order was pretty much over and done with. However, since Marx’s and Engels’ views describe well the way things are now, it might prove out to be an interesting  thought experiment to ponder that what if the era of socialism that Marx “foresaw” was not due to start in the beginning of last century but is yet to come?

I hope this would not mean USSR 2.0 or any of the current communist states for that matter, I think the results of these experiments have not been too promising. There are, however, quite a few (e.g. Noam Chomsky) who consider that in practice Soviet Union or any of the others were not really socialist or communist states at all. Thus, we are still to be seen a “true” communist state and if this really is the case, the question is not only what would it be like but also which one of the world’s states will then turn out to be the world’s first truly communist state in a genuine marxist spirit?

In relation to the first question, I suppose it might a be good idea to take a look on Marx’s writings, something I have not really done. What comes to the second one, well, all I can say is that I would put my 2 cents on China. Why? Because out of all the states in the world it seems to match most the marxist views on a capitalist state. Therefore, if capitalism is only a phase as Marx predicted, China seems to be well prepared to move on to the next stage. Furthermore, there is also the case of pure irony: after taking a U-turn on many of the socialist and communist policies and heading towards market economy and capitalism, just imagine the irony if China found itself from the place it originally wanted to go and later on depart?

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Quality did go out of style

Wednesday, July 22nd, 2009
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cuttingboard

The opposite of the title use to be the slogan of the famous jeans and clothing maker Levi Strauss. However, the company reported 4 million dollar losses last week. Few weeks earlier, Swedish retailer H&M announced a rise in profits for the second quarter. H&M’s countryman, IKEA, is not doing that bad either, specially if considering the crisis and all. And what is it that these three have in common? Well, let’s just say that if Levi’s is and was more about quality, H&M’s and IKEA’s charm has traditionally been somewhere else.

Even though it may seem so, this is not (all) about an envious Finn whining about the success of his neighbours. In fact, an opposite example can be found from Sweden as well. Take Saab for example: it at least used to make cars that, on my opinion, had a performance-safety-quality-whatever relation superior to any other car maker. However, they were and still are in danger of becoming extinct. The point is that quality does not sell, it is the very opposite that does.

One might argue that it is all about price. That definately has something to do with it, specially in the time of crisis, but overall I think it is more about the need to consume and all the things that come with it.  Consuming is not just consuming, it is so much more. It is time for oneself, to feel good about oneself, a moment of personal therapy, an opportunity to change completely, a chance to be part or even one with the world of brands, products, flashy lights and shiny stores. For many consuming is what living is all about, that is, consuming is in some cases equivalent to living.

Naturally, the horrible thing is when there is no need to buy anything. It is not that it would stop people buying, but shopping is nicer when there is a real reason for it. If clothes, furniture etc. last forever, that reason becomes absent for a very long time. Eventually buying many cheaper things is likely to become more expensive than buying one of quality, but with one it is always the same, and people end up lacking the thing that they like the most and even defines who they are.

Thus, quality has become an enemy. It denies people their purpose of life. It does not allow them their little moments of pleasure, it takes away their possibility to renew themselves and leaves them isolated and lonely. Brands and products that help consume by giving more opportunities to consume are therefore much needed. That is also the reason why these brands and their owners succeed. Furthermore, they do so with low cost. Quality often means not only higher prices but also higher production costs. With less quality it is totally the opposite. Aside from maybe the environment, almost everybody, meaning the companies and the consumers, wins, at least for the moment.

I suppose consuming for the sake of consuming started with the cheaper things, such as clothes and small household items etc. Therefore, the interesting thing is how far will it go? The crisis might have cooled things down a little bit, but there is no reason why things would not continue going to the same direction afterwards. Maybe cars which dont last longer than few years are going to be next big thing. Then again, why stop there, when there are so many other things that one can consume and brighten up the day?

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Ranking Green Electronics

Friday, July 10th, 2009
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Greenpeace has been publishing this “Guide to Greener Electronics ” for 3 years or so, where they rank the leading manufacturers of consumer electronics according to their stance and actions on toxic chemicals, recycling and climate change. I see it is an excellent example on how to provide consumers information that will help them to make  more enlightened consumer decisions. The info Greenpeace provides is the kind you will not be able to find from the typical tech magazines or websites, very seldom enviromental friendliness gets named as one of the criterias in the evaluation of this and that gadget.

Greenpeace also presents its findings in a very simple and understandable way (see image above), no need to go through hundred-page reports and hold a degree in physics in order to see which ones are good and which ones bad. Sure, that might mean that we will miss some aspects and the reasons behind them, but the ranking gives us a some perspective to the issue. In addition, taking Greenpeace’s fame I find the data they provide reliable, at least in the sense that the organisation does not have a reputation on being soft on the companies or favoring one over the other.

I do not know how much influence the listing has. For what it is worth, the only reason why I have not bought Nintendo‘s Wii is the position of the company in this ranking. However, I seem to be in the minority, despite the crisis Nintendo is making record profits. It is a bit of a shame, I find consumer activism one of the most efficient ways to get companies to change their policies to the better direction. However, if their is no activism, that is, people do not really care, then it is of little use. The consumer that is not enlightened is, well, only a consumer.

I suppose a little more publicity would not hurt either. The ranking always gets noticed in Finland, thanks to Nokia‘s position in the top. However, I have not really come across the news in any of the major news agencies (BBC did cover it last year though),  even though green topics in general seem to be very popular at the moment. It is possible that I have just missed them, but I was wondering could the reason be Greenpeace’s controversial reputation? If so, I find it a little bit odd. At least in this context, I find no reason for Greenpeace not to be objective. Then again, maybe it is the other way, maybe it is the big media that has become too close to the leading companies in the bottom of the ranking.

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