FOOL ME TWICE, SHAME ON ME

Another Moral Economy Column
By Christopher Lind
December 2009

I have been ashamed of my country only twice in my life. The first time was when we declared war on Iraq in 1990. The second was last week when I listened to a British journalist upbraid Canadians for allowing our government to undermine new international action on climate change. I never thought Canada would declare war in my lifetime and I never thought my Canadian government would undermine collective efforts to do the right thing internationally. I was wrong on both counts.

The connecting issue for both of these events is oil, or as the Beverly Hillbillies used to say “black gold, Texas tea”. In 1990 we were protecting Western interests in the oil resources of the Middle East. In 2009 we are protecting Western interests in the Alberta tar sands. I am not sure we are protecting Canadian interests because I don’t know what interests Canada would have in polluting the Athabasca watershed, destroying 500 sq. kms of landscape, increasing the cancer risk of nearby populations and increasing Canada’s greenhouse gas emissions by 5%. On the other hand, the Government of Alberta says there are 173 billion barrels of oil that can be recovered from the tar sands using today’s technology. At $50 per barrel that means there is over $8.6 trillion to be made, and more as the price of oil rises. A lot of people have an interest in that.

People feel shame when they see themselves as others see them, and their behaviour contradicts their stated values and beliefs. It makes us want to cover ourselves, or hide because a real part of ourselves feels exposed. It was more than a little irritating to be shamed and exposed by a Brit. After all, what crime could Canadians commit that Britain hasn’t done many times over? On the other hand, the feeling of shame suggests the journalist had touched a nerve. Why would I feel shame if I had nothing to hide?

Even though it seems like this is a debate about mining in Alberta, it is really about you and me. Even though I live in Toronto I am fully implicated in this issue. I drive a car that burns gasoline. I heat my home with natural gas. My pension fund earns income from Suncor and some of the other 91 commercial projects located there. My government wants to make the politics of climate change to be about what the Chinese will or won’t do, and what the Indian government will agree to or won’t. But the climate is changing more because of what Canadians and Americans are doing than anyone else. The average Canadian produces almost 5 times more carbon dioxide than the average Chinese produces and more than 10 times what a citizen of India produces. My government is being mean and petty, selfish and deceitful; but if you and I don’t change the way we live, we’ll be no different.

If you’re old enough to remember the cartoon strip “Pogo” then you’ll remember cartoonist Walt Kelly’s most famous line “We have met the enemy and he is us”. Kelly used that on a poster for the first Earth Day in 1970. It’s still true.

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This column is published in the Western Producer, Canada's largest farm newspaper.

ARE WE ALL IN THIS TOGETHER OR NOT?

Another Moral Economy Column
By Christopher Lind
October 2009

Every other day I open the newspaper and read some new speculation about another federal election. Will we, won’t we, and what story will we tell ourselves this campaign is about? Given the crisis we are still in the middle of, the story should probably be an economic one.

Prime Minister Harper seems to be anticipating this because he keeps goading the Leader of the Opposition into saying how he would deal with the new fiscal deficit. Harper inherited a fiscal surplus and proceeded to eliminate it by cutting taxes and increasing spending. Now he is trying to scare the electorate into believing his opponent would raise taxes, whereas Harper would not. Liberal Party leader Ignatieff is then put in the fantastic position of declaring that he would not raise taxes because a growing economy would automatically raise government income.

Can we please start speaking honestly to each other? The fiscal deficit has been created in three ways. Firstly the federal sales tax (GST) was cut from 7% to 6% and than to 5% by the Conservatives. Secondly, the economy has gone into recession because of the fallout from the collapse of the housing bubble in the US. Thirdly, government spending has increased in order to stimulate the economy and all the parties agreed to this.

I am confident that things will turn around. However, when they do, our increased income won’t pay off the deficit all by itself. We will also have to reduce our discretionary spending so we can get back to reducing our debt, which is now much bigger than when all this started. (Societies always have a debt because we are constantly investing in the future, but that’s another story)

There are only two ways we can do that. Either we can raise taxes or we can cancel or reduce services. The Liberals like to trumpet their achievement of slaying the deficit dragon in the mid-90s. How did they do that? Well, first of all they refused to reduce or eliminate the 7% GST introduced by Brian Mulroney’s government, thereby increasing revenue. Then they reduced funding to the Provinces to pay for health, education and welfare, thereby cutting expenses. Those provincial funding cuts caused provinces to cut back welfare rates, introduce or increase healthcare premiums and reduce funding to school boards. So, the deficit was paid for in part by the poor, the sick and the young.

So, here’s a News Flash: I do want taxes to be raised and I want a debate about whether that should be through increasing the GST (a 1% increase generates about $11 billion/yr) or increasing income taxes. I worry about Harper’s plan because I am afraid he will ask the weakest members of society to pay for it. I worry about Ignatieff’s plan because this is exactly what the Liberals did last time. From my point of view we should all pay for this together because we’re all in this together. Is that so hard to talk about?

Joseph Heath tells a funny story that relates to this. He is in an auto repair shop when the customer ahead of him starts criticizing her bill. “How much of this is taxes?” she asks, “I just want to know how much those bastards are taking from me!” After further conversation the woman announced she had to leave because she was late for her shift as a nurse. “Wait a minute”, replied Heath, “you’re a nurse, at a public hospital? That means you work for the government! Those ‘bastards’ are using this money to pay your salary. That’s like Tom Cruise complaining about the price of movie tickets.”

Heath’s point is that the right wing has convinced the population that the government is a consumer of wealth (like a parasite) whereas the private sector is a producer of wealth, whereas the public sector actually contributes to the economy just as robustly as any other sector. This attitude is deeply rooted in some segments of the US. One of the attitudes I commonly heard expressed in Saskatchewan was that the government is the biggest co-op going – healthy attitude that!

Joseph Heath teaches philosophy at the University of Toronto. His latest book, Filthy Lucre was published this year by Harper Collins.


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WHEN MORALITY IS AGAINST THE LAW

Another Moral Economy Column
By Christopher Lind
27 August 2009

Have you ever downloaded music from the Internet? Do you know anyone else who has – a son or daughter perhaps? Have you ever sent a copy of a song you liked to a friend? When you did, were you sharing a treasured experience and giving a gift; or were you shoplifting and passing along stolen goods? Those are very different images for the same activity aren’t they?

Joel was 16 in 2003 when he received a letter demanding $5,250.00 for 7 songs he had downloaded through a file sharing service on the Internet. Joel was scared by this official and legal letter demanding payment so, with help from his parents, he sent along a cheque for $500 and explained that he was a high school student and couldn’t afford anything more than that. They offered to settle for $3500 and his cheque was returned.

Joel graduated from high school and moved to Boston to attend university. Four years had passed when he received a notice requiring him to appear in court. He was being sued, along with some 30,000 other people, by companies like Sony Music, Warner Brothers and Arista records, all coordinated by the Record Industry Association. Joel offered to settle for $5,000 but the record companies now wanted $10,500.

At this point a Law Professor offered to represent Joel in court. Charles Neeson holds the William F. Wed Chair in Law at Harvard University where he is also the founder and Co-Director of the Birkman Center for Internet and Society. Prof. Neeson believes that the Internet is a digital version of the old common grazing lands of the 17th century. Prof. Neeson believes the Internet was started as an open domain but has recently been fenced off by capital investors who want to increase their profits through new exclusive property rights.

Joel lost his court case this summer, as expected. He was found guilty of downloading 30 songs and required to pay compensation of $22,500 per song. That means $675,000. He will appeal.

Sociologists will tell you that markets are embedded in society through law, politics and morality. However, it is possible for markets to partly embedded and partly disembedded. The market for property rights in digital music is embedded in American law through the Digital Theft Deterrence Act. However, it is not embedded in morality. Not only are there professors and academic institutes that think digital file sharing is not theft, there are artists too. John Perry Barlow, lyricist for the famous musical group, the Grateful Dead, believes that the online world presents us with a new form of the ‘gift economy’ “where no moral blameworthiness attaches to non-commercial sharing”. When new markets are created, morality is often contested. When public libraries were created, large publishers campaigned against them because borrowing books was going to take away their profits. It is still possible to find old paperbacks with a notice inside the front cover warning the reader that this book could not be lent or even resold.

Markets require legitimacy – political, legal and moral legitimacy. When Mahatma Gandhi marched his followers to the sea in order to make their own salt, he was breaking the British law by refusing to pay the salt tax. Was he a criminal? According to the British colonial legal system, yes. Was he morally right? According to the Indian people, even more so.

You can follow Joel’s story for free at http://joelfightsback.com


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THE MORAL ECONOMY OF THE HEART

Another Moral Economy Column
By Christopher Lind
June 25, 2009

There is a story I often heard in Saskatchewan about a farmer who had to make his way to the barn in the middle of a blizzard. In order to find his way back to the house, he tied a rope to the back door. When he was finished tending to the animals in the barn, all he had to do was follow the rope in order to find his way back home.

If the truth be told, I never actually met a farmer who had done that, but I heard the story often. It may not have been historical truth but it contained great truth all the same.

Part of its appeal is that the story is archetypal – there are many versions of it in different cultures. For example, in Greek legend, Theseus, the son of the King of Athens, volunteers to enter the maze on the Island of Crete in order to kill the dreaded Minotaur, a monster who was half man and half bull. Theseus’ lover, Ariadne, gives him a ball of thread which he unrolls as he travels deeper into the confusing cave. This allows him to find his way out after the Minotaur is dead.

We can relate to the story of the farmer in winter in many ways. The farmer’s journeys from home to the workplace. The winter blizzard is beyond his control – success is represented only by survival. The blizzard is dangerous and ultimately disorienting. In the middle of this life threatening confusion, how do we find our way back home?

The current economic recession is like the blizzard. It may be caused by humans but from the perspective of any one person it is dangerous, confusing and beyond my control. The best I can hope for is survival.

The current storm is causing all kinds of damage to the workplaces of our lives. For some of us, our workplace has disappeared; for others it will be a long time before it is fully functional. What is the rope we cling to? What thread can we follow to guide our way home?

In the myth of the Minotaur we learn that the thread comes from the desire of our heart. It is Ariadne’s thread. It links the head and the hands and the feet but it is governed by the heart. We sometimes call it vocation. Over the years I have found that farmers are equally divided between those who see farming as one business among others, and those who see it as a ‘calling’ – a vocation. The American writer Fredrick Buechner says that vocation “is the place where your deep gladness and the world’s deep hunger meet”.

In this time of economic recession, confusion and disorientation, many people will be searching for a way home. Now is the time to test your and my fundamental values and ask if we have organized our life in a way that connects our deep gladness with the world’s deep hunger. Now is the time for each of us to build a moral economy of the heart.


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WHAT’S FAIRNESS GOT TO DO WITH IT?

Another Moral Economy Column
By Christopher Lind
May 7, 2009

The French working class really has style. You have to hand them that. When 20 angry workers at the 3M plant in Pithiviers, south of Paris, told Director Luc Rousselet he couldn’t leave until he improved the severance packages for 110 laid off workers, they fed him mussels and fries for dinner. What a way to get noticed.

It sure beats the leaden style of the European ruling class. The French energy giant Total, announced the biggest annual profit in French corporate history and less than a month later announced the elimination of 550 jobs. French President Nicolas Sarkozy provided 12 billion Euros to the automotive sector and the German tire maker Continental, responded by eliminating 1210 jobs in Clairoix, north of Paris. No moules et frites for this CEO, they threw eggs at him. In the ultimate French insult, the eggs weren’t even cooked!

Scottish pensioners took a more pedestrian route when they picketed the home of former Royal Bank of Scotland CEO Sir Fred Goodwin. How could he have been rewarded by having his pension doubled to over Cdn $1 million when he led the bank into bankruptcy and their savings into ruin? In Connecticut, activists organized a bus tour to homes of AIG executives who received $220 million in retention payments after the US federal government invested $182.5 billion to prevent total collapse.

Canadians are so much more restrained. Where were the pensioners of the Toronto Star when CEO Rob Pritchard resigned after 8 years on the job and received an $11 million cushion for his fall? Does it make a difference that the Toronto Star is not bankrupt yet? They only lost $180 million last year, the stock price fell 70% and they laid off 500 people.

On what basis would we say that people are justified in their outrage? Pritchard’s settlement was approved by the board. The German tire company broke no laws when it laid off 1210 workers.

The common complaint is that these payments are not fair. Why should the bosses get a fat severance check while the workers lose their pensions and get a pink slip? What’s fairness got to do with it, you ask?

Well, contrary to certain ideological claims that economics is a value-free science, all economies are embedded in a set of moral assumptions about how our common life should be organized. When we limit the discipline of economics to matters of scientific technique, we render the moral foundation of our economy invisible.

Communities can tolerate a lot of variation in economic practice but when the variations become both extreme and common, then people react. In times of crisis, ordinary people rise up and insist on a renewal of the moral foundations of our economic life. They insist on fairness rather than bias. They insist on subsistence for all rather than affluence for a few. They insist on compassion for the vulnerable rather than indifference from the elite.

These are the characteristics of a moral economy and they become visible in times of crisis – just like these.

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So You Want To Be A Moral Billionaire?

“Do you know any billionaires who are moral?” He looked like he could play nose guard for the Hamilton Tiger Cats but he was actually a commerce student at the Mississaugua campus of the University of Toronto. We had just finished an interfaith seminar on the economic crisis.

“What you’re really asking is whether it is possible to be both rich and ethical”, I replied.

“Yeah. That’s right.” My mind was immediately flooded with images of people I knew who had become rich through indifference to the welfare of others but I knew that’s not what the student wanted to hear. He wanted a role model – someone he could look up to and hold onto. I told him the story of Bob Stollery.

Bob was an engineer who led a management buyout of Poole Construction Limited in 1977 when all the management consultants told him he was crazy to do so. He then proceeded to build up the renamed PCL Ltd. Into the largest construction company in Canada and one of the 10 largest in North America. Among it’s other high profile projects it is currently in charge of rebuilding and expanding the Pearson International Airport in Toronto without ever shutting it down.

Having transformed the company Bob proceeded to sell off his ownership stake over time through an employee share ownership plan. As part of his personal succession planning he put his wealth into a family foundation as a way of teaching his children how to be philanthropists.

After the destruction of 9/11 I said to him in passing “Oh, you must be pretty busy now, bidding on all those construction projects in New York City.” “No, not busy at all” he replied. “Why not?” “Well, we decided a long time ago that there was too much corruption in the building industry in the American north-east. If we entered that market, it would change the culture of our company. So we decided we just wouldn’t go there.” I almost fell over. This man had built his company into one of the largest construction companies in North America without competing in what must surely be one of the largest single markets – and on moral grounds. I thought Bob would be a great role model for the aspiring Islamic billionaire before me.

It was a good and necessary answer but it was also an insufficient answer. The students in the seminar knew there was a connection between the failure of our economic system and the failure of our morality but they kept wanting to interpret the problem as a failure of personal morality. If only we had had honest moral people in charge, instead of liars and thieves, (they seemed to be thinking) we wouldn’t have gotten into this mess. Well, actually, I don’t think that’s true.

There is a difference between personal morality and social ethics. Personal morality has to do with the decisions made by individuals and social ethics has to do with the cultures of organizations and the behaviour of corporate and social systems. Many of these thoughtful and upstanding students will be hired by Canada’s banks and they should have prosperous careers in front of them. However, if shareholders continue to judge bank performance only by the rise in share price each quarter, the CEO will be forced to ratchet up the pressure on each division to increase profit. Eventually that trickles down to the 30 year old loans officer who is pressured to shift a farmer into a variable rate loan or increase the interest rate on a line of credit to a small business owner. When increased profit is the only criteria by which we judge all of economic life, social ethics disappears and only personal morality remains.

A parallel took place in the 1970s and 1980s during the debate about the ethics of lending money to the apartheid South African Government. Canadian banks were heavily implicated in this activity and the South African government was using some of the money to re-equip its military and police force. The first reaction of Canadian banks was to say information on its lending activity was private and it would be unethical of them to divulge this information. The second line of defense was to say it would be unethical of them to pass moral judgment on how the money was to be used. They were lending to a sovereign government with a good credit rating and that’s where the conversation should stop. The public pressure increased and eventually the Canadian banks stopped supporting the apartheid regime. More interesting for our purposes were the unofficial reports from bank insiders. They indicated that pressure from the public changed the debate around the boardroom table. Conversations about ethics were now happening for the first time and the cultures of the banks as organizations were changing.

Our current economic crisis has been precipitated by reckless and unethical behaviour in the investment banking sector (Lehman Brothers, Bear Stearns etc.) and by the shadow banking sector – insurance companies like AIG operating as if they were investment banks. This behaviour could only succeed if good people were kept silent on a continuing basis. They can be silenced by organizational cultures that reward deceit and punish truth telling.

Bob Stollery is a good role model not just because he was rich and moral at the same time. He is also a role model because he understood that corporations generate and maintain cultures that can promote ethical or unethical behaviour and these cultures are more powerful than any one individual.

Among his many gifts to the community, he was instrumental in building the Stollery Children’s Hospital in his hometown of Edmonton, Alberta. Bob Stollery died in 2007.

Posted 13 March 2009 . For additional reading on the moral economy, visit www.christopherlind.ca The Moral Economy Column by Christopher Lind is published in The Western Producer, Canada's largest agricultural newspaper. Your comments are invited on this blog.

WHAT MORAL VALUES WILL GUIDE THE FUTURE?

At the end of January Canada’s Parliament will reconvene and the federal government will introduce a new budget. Later in the spring, provincial governments will also introduce new budgets following the lead of their federal cousins. The failure of Canada’s government to recognize the seriousness of the global economic crisis last fall led to a political crisis and almost a constitutional crisis when the Governor General agreed to prorogue Parliament. Everyone expects the new budget to represent a change in course with a plan to stimulate the economy through tax cuts, infrastructure spending and deficit financing. This represents the new consensus strategy in the world’s largest economies but it fails to explain what moral values will guide the new plan.

We are in the middle of a systemic failure in global financial markets. Over the last 30 years, these markets have been deregulated by governments who worshipped the cult of efficiency and saluted the flag of freedom. This political shift, known as neo-liberalism, has allowed global markets to be manipulated in favour of the short-term interests of the wealthiest and most powerful among us. They have been directed to support the private goals of a few rather than the shared goals of the many. The same failed global economic system that has now crippled international trade is also responsible for the increasing disparity between rich and poor.

By all means, let us change course, and do so dramatically – but in which direction?

The goal of the consensus strategy involving massive spending plans or tax cuts seems to be the resuscitation of the very same pattern of unsustainable consumption that has recently collapsed. For example, worldwide, governments seem prepared to spend trillions of dollars to recreate the old destructive model while simultaneously refusing to invest meaningfully in efforts to combat climate change. [1] We have already heard some Canadian political leaders say their anti-poverty initiatives may have to be delayed as if social and ecological justice initiatives were luxuries we cannot afford in these distressed economic times. [2] I find myself asking: are there any moral values guiding public policy in response to the economic crisis?

For over 30 years in international ecumenical circles, the Christian Churches have been developing a series of ethical principles that have come to be known as principles of Ecojustice. These principles affirm there is no contradiction between seeking justice in human society and seeking wholeness in all of Creation. They were articulated at the World Council of Churches assembly in Nairobi in 1975 and developed further at the WCC Assembly in Vancouver in 1983. Though we affirm these ethical principles out of our own tradition, they are not exclusively Christian. They have developed in other religious traditions as well. [3] They have also developed in a parallel way through the United Nations, first with the World Commission on Environment and Development in 1983 and 1987 [4], then with the Rio Earth Summit in 1992 and finally with the Earth Charter in 2000. The Ecojustice principles involve attention to solidarity, sustainability, sufficiency and equity.

Solidarity

This ethical principle involves a commitment not to abandon other people or creatures, but to stand with them as companions and allies – in one earth community. Using the principle of solidarity as a guide to economic and political restructuring means strengthening our social safety net with a national social housing initiative and living wage provisions.

Sustainability

This ethical principle requires us to adopt environmentally fitting habits of living and working that enable life to flourish. It involves utilizing ecologically and socially appropriate technology. Where this technology is new, it will require major new investments appropriately organized so everyone can benefit. Our current carbon based economy, which treats the atmosphere as a sewage lagoon without end, is clearly unsustainable. The principle of sustainability is key to the ethical re-orientation of our economy and society.

Sufficiency

This ethical principle requires a standard of organized sharing, which requires basic floors and definite ceilings for equitable or “fair” consumption. The scandal of child poverty in Canada is an example of the absence of this basic floor for consumption. The outrageous escalation of executive compensation in recent years is an example of the absence of any meaningful ceiling for equitable consumption. The resources of the world are sufficient for everyone’s need but not for everyone’s greed. If we enacted the principle of sufficiency, we could eliminate poverty and redress the imbalance in Creation.

Equity

This ethical principle refers to fairness in decision-making as well as in outcomes. It requires socially just participation in decisions about how to obtain sustenance and to manage community life for the good in common and the good of the commons. It also requires an examination of the ethical floors and ceiling referred to in the principle of sufficiency above. Particular attention needs to be focused on those who have historically been marginalized in decision-making and power sharing. A political crisis has forced pre-budget consultation with opposition political parties. What would it take to enact the equity principle by having pre-budget consultations with those living in poverty, women, Indigenous people and racial minorities?

Footnotes

[1] two months ago the parties to the Kyoto Protocol (which include Canada) refused to contribute any more than US$80 million to the UN Adaptation Fund designed to help the poorest countries tackle the effects of climate change they are already experiencing। The real need is for almost ten times that amount.

[2] “Economic woes might delay poverty agenda: McGuinty”, Canadian Press, 16 Sept। 08।

[3] See the multi volume book series World Religions and Ecology edited by Mary Evelyn Tucker and John Grim, Harvard University Press।

[4] The World Commission on Environment and Development was first formed in 1983. The Commission was chaired by Gro Harlem Brundtland and issued a report in 1987 entitled Our Common Future.

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