Philanthropy comes in two flavors. One is where you make a lot of money doing whatever it is that you do, and then spend a large part of it in directly helping other people. Bill Gates is a philanthropist of this kind. The second kind is where you collect money from a large number of people and put it to good use. Organizational charities do philanthropy of this kind. So do spiritual leaders, like the god men of India.
At times I suffer from a troubled conscience. I get this sinking feeling that I am part of a large problem rather than a solution to it. Working for a modern corporate empire, a bank to boot, it is hard to avoid this feeling — if you feel anything at all.
Then I found a straw to grasp at. It was an observation made by Mohamed El-Erian, CEO of Pimco, on Hardtalk with Stephen Sackur. In response to a direct question, he said that the “Occupy Wall Street” guys had a point. Old Stevie was not going to miss a trick like that. He pounced, “Are you, you the head of a hedge fund managing over a trillion dollars, the epitome of modern capitalism, admitting that the system is flawed? Are you going to stop what you are doing?” (Of course, I’m paraphrasing. He probably asked it better.)
I loved the intelligent response that Mr. El-Erian gave. You see, you don’t get to the top of a corporate empire with sub-par intelligence, much as we techies would like to believe otherwise. He said (paraphrasing again), “You asked me about what should happen, the system as it should be. We work with what is likely to happen. In an ideal world, the two should converge. Our job is to make use of what is likely to happen and make profit for our clients. It is the job of policy makers to ensure that what is likely to happen is close to what should happen.” This line of thought was the straw that I was looking for, something that I felt would assuage my troubled conscience.
Right now, there is a large gulf between what should happen and what is likely to happen. What should happen is prosperity for all and peace and happiness on earth. What is likely to happen is obscene prosperity for a select few and misery for the rest. Yet, by our skewed economic indicators (like stock indices and GDPs), we are still doing well. The party is still on, they seem to indicate. Now is not the time to worry about the mess we are creating, and about the underpaid migrant workers who will have to clean it up. Now is the time to eat, drink and be merry, for tomorrow is not ours. It’s theirs, hopefully.
What is interesting and really smart about Mr. El-Erian’s observation is how neatly he cleaved the responsibility into two parts — his job which is to make use of the status quo, and somebody else’s job, which is to improve it. Thinking a bit more about it, and recalling the opening scene of every one of those Mahabharata episodes where Krishna says, “In a battle between the good and the evil, those who stand on the side lines are just as guilty as the evil,” I wonder whether this observation on the ‘way things are,’ for which I shouldn’t count myself responsible, is good enough a cure for my troubled conscience. By the way, President Bush totally and permanently ruined this Krishna statement for me, when he said, “You are either with us or against us.” On the plus side, thinking about Bush does soothe this guilt-laden conscience of mine to some degree. After all, I could have been worse. A lot worse…
[This post is the speech given by Prof. Surya Sethi at World Forum for Ethics in Business – International Leadership Symposium Monday, April 2, 2012 in Singapore. Reproduced here with permission.]
I have been asked to cover a broad spectrum of issues relating to business regaining trust for sustainability within the context of climate change and the global energy crisis. Importantly, I have been asked to do so in 10 minutes reflecting the efficiency of the city-state we are in.
Let me begin by differentiating between moral and ethical values. Based on what I heard this morning, there appears to be some confusion between morals and ethics. The former define individual character and are based on personal beliefs of right and wrong or good and bad. The latter are essentially standards and codes of conduct, expected in a specific context, from the group an individual belongs to. Ethics typically encompass societal, corporate, national, professional or other similar compacts. Individually, we consider killing as morally wrong but an army killing thousands is considered ethical and is often decorated as an act of bravery for common good.
Business enterprises, today, manned largely by morally upright individuals are collectively killing the planet we share with a ferocity, intensity and speed matching that of war; and getting rewarded for creating unprecedented valuations and competitive supremacy. Consumption for the sake of consumption, growth for the sake of growth, profit for the sake of profit and support for policies and policy makers that uphold all of the foregoing are the ethical values guiding these enterprises.
The anthropogenic damage to the earth’s ecology over the last 60 years exceeds the damage done by humans over their entire history up to 1950. The fine balance between physical, chemical and biological processes that sustain the earth as a single interdependent system has been disturbed. The earth has moved well outside the range of her natural variability exhibited over the previous half a million years in the very least. Abrupt ecological changes with non-linear feedbacks in the earth’s dynamics, leading to catastrophic outcomes, are a real possibility today. Ethics should be price determining and not price determined by markets. Under-pricing natural capital and ignoring concomitant risks is fuelling the consumption boom.
Importantly, the growth, the consumption and the benefits have been concentrated in the privileged few. The top 20% of the world consumes 80% of its output while the bottom 80% lives on the balance 20%. The bottom 20% lives in dire poverty at a consumption of less than $1.25 PPP/day or about 50cents/day in nominal cents in a country such as India which is home to a third of these global unfortunate. Going just by income poverty, the number living below this dire threshold has come down by some 500 million – almost entirely because of a reduction in China. However, the broader multidimensional poverty index that includes parameters such as health, education, gender equality, access, empowerment etc. pushes the share of these destitute people to about 25% of the global population. Importantly, the number of people below the global poverty line of $2 PPP per day consumption remains stubbornly at about 2.5 billion or about 36 % of humanity.
Modern energy consumption is perfectly correlated to the Human Development Index (HDI) but it still eludes the bottom 2.5 billion who remain energy starved. While 1.5 billion among them, including over 500 million from India, have no access to electricity, 2.2 billion, including some 850 million from India use some form of biomass as their primary or only source of energy for cooking food –the most basic human necessity. A larger number would be denied access were we to price energy, one of earth’s fastest depleting natural resource, at its true value. The primary reason for this is the continuing disproportionate consumption by the well-to-do.
OECD countries, with a combined population less than India enjoy the world’s highest living standards. Yet, OECD’s incremental commercial energy consumption for the period 1997-2007 (before the financial crisis); was 3.2 times that of India. During this period, India’s share of global commercial energy consumption rose from 2.9% to 3.6% while OECD’s share fell from 58% to just over 50%. This drop was singularly due to the growth of China’s share as it became the world’s largest energy consumer.
The disproportionate consumption of energy is far worse than the figures reveal. In a globalized world, big business has moved significant parts of OECD’s production base in search of cheaper natural capital including the environmental commons, which though priceless, is still available for free in China and the developing world.
If one looks at GHG emission on a consumption basis and not production within their borders, then EU 15 emissions are up by 47% and the US emissions have risen 43% since 1990. The embedded emissions in imports of EU-15 are about 33% of emissions within their borders. This translates to about 3 tons per capita of embedded emissions in imports. The embedded emissions import for the US is 20% or about 4 tons/capita – In 2000, the level of embedded emissions imports in both the US and EU15 were only 3% . The embedded emissions alone in imports for US and EU-15 are twice and 1.6 times respectively of India’s total per capita GHG emissions.
The greatest lie that we are being told by big business and the policy makers supported by them is that resource efficiency is the answer to sustainability. Despite huge gains in resource use efficiency, the world is consuming more natural capital today than ever before and we are on auto pilot to at least a 3.5 degree Celsius warming. If IPCC is right, this will unleash catastrophic events and mass annihilation of the world’s poor in the foreseeable future.
Simply stated, current patterns of consumption and production, ladies and gentlemen, are unsustainable. CSR activities such as opening schools and hospitals or green-washing board rooms with efficient lights are simply inadequate. Also inadequate is a business mindset that first influences and then merely meets current regulations and sees value only in monetary terms based on a simplistic cost-benefit analysis
We need a policy framework that first limits our use of fossil fuels and other forms of natural capital and then gradually reduces it in a cradle to cradle paradigm fuelled by innovation. Our growth model must be an inclusive one that reduces unsustainable overconsumption by a few and redistributes that to the bottom 50% of this world. No, I do not seek to make the poor rich by making the rich poor – I simply seek the right of the bottom 50% of the world to have a dignity of life afforded by consumption at 50% of the poverty levels within the OECD. The current inequities whereby the world’s third largest economy in PPP terms (India) is placed 134th in terms of its HDI and has the world’s largest concentration of poor, malnourished adults and under-weight children are unsustainable.
Enlightened business leaders must not only define sustainability in terms of guaranteeing inter-generational resource equity but also see the unsustainability of not removing current intra generational inequities and thereby delivering the minimal adaptive capacity to the bottom 2.5 billion of fellow humans in the face of impending abrupt climate events.
In closing, I quote Mahatma Gandhi who said: “The world has enough to meet everyone’s need but not enough to satisfy even one man’s greed!”
I thank you for your time and attention.
On one poignantly beautiful autumn day in Syracuse, a group of us physics graduate students were gathered around a frugal kitchen table. We had our brilliant professor, Lee Smolin, talking to us. We held our promising mentors in very high regard. And we had high hopes for Lee.
The topic of conversation on that day was a bit philosophical, and we were eagerly absorbing the words of wisdom emanating from Lee. He was describing to us how the Earth could be considered a living organism. Using insightful arguments and precisely modulated glib articulation (no doubt, forged by years of intellectual duels in world’s best universities), Lee made a compelling case that the Earth, in fact, satisfied all the conditions of being an organism.
Lee Smolin, by the way, lived up to our great expectations in later years, publishing highly acclaimed books and generally leaving a glorious imprint in the world of modern physics. He now talks to global audiences through prestigious programmes such as the BBC Hardtalk, much to our pride and joy.
The point in Lee’s view was not so much whether or the Earth was literally alive, but that thinking of it as an organism was a viable intellectual model to represent the Earth. Such intellectual acrobatics was not uncommon among us physics students.
In the last few years, Lee has actually taken this mode of thinking much farther in one of his books, picturing the universe in the light of evolution. Again, the argument is not to be taken literally, imagining a bunch of parallel universes vying for survival. The idea is to let the mode of thinking carry us forward and guide our thoughts, and see what conclusions we can draw from the thought exercise.
A similar mode of thinking was introduced in the movie Matrix. In fact, several profound models were introduced in that movie, which probably fuelled its wild box-office success. One misanthropic model that the computer agent Smith proposes is that human beings are a virus on our planet.
It is okay for the bad guy in a movie to suggest it, but an entirely different matter for newspaper columnist to do so. But bear with me as I combine Lee’s notion of the Earth being an organism and Agent Smith’s suggestion of us being a virus on it. Let’s see where it takes us.
The first thing a virus does when it invades an organism is to flourish using the genetic material of the host body. The virus does it with little regard for the well-being of the host. On our part, we humans plunder the raw material from our host planet with such abandon that the similarity is hard to miss.
But the similarity doesn’t end there. What are the typical symptoms of a viral infection on the host? One symptom is a bout of fever. Similarly, due to our activities on our host planet, we are going through a bout of global warming. Eerily similar, in my view.
The viral symptoms could extend to sores and blisters as well. Comparing the cities and other eye sores that we proudly create to pristine forests and natural landscapes, it is not hard to imagine that we are indeed inflicting fetid atrocities to our host Earth. Can’t we see the city sewers and the polluted air as the stinking, oozing ulcers on its body?
Going one step further, could we also imagine that natural calamities such as Katrina and the Asian tsunami are the planet’s natural immune systems kicking into high gear?
I know that it is supremely cynical to push this comparison to these extreme limits. Looking at the innocent faces of your loved ones, you may feel rightfully angry at this comparison. How dare I call them an evil virus? Then again, if a virus could think, would it think of its activities on a host body as evil?
If that doesn’t assuage your sense of indignation, remember that this virus analogy is a mode of thinking rather than a literal indictment. Such a mode of thinking is only useful if it can yield some conclusions. What are the conclusions from this human-viral comparison?
The end result of a viral infection is always gloomy. Either the host succumbs or the virus gets beaten by the host’s immune systems. If we are the virus, both these eventualities are unpalatable. We don’t want to kill the Earth. And we certainly don’t want to be exterminated by the Earth. But those are the only possible outcomes of our viral-like activity here. It is unlikely that we will get exterminated; we are far too sophisticated for that. In all likelihood, we will make our planet uninhabitable. We may, by then, have our technological means of migrating to other planetary systems. In other words, if we are lucky, we may be contagious! This is the inescapable conclusion of this intellectual exercise.
There is a less likely scenario — a symbiotic viral existence in a host body. It is the kind of benign life style that Al Gore and others recommend for us. But, taking stock of our activities on the planet, my doomsday view is that it is too late for a peaceful symbiosis. What do you think?
In the last post, I argued that how hard we work has nothing much to do with how much reward we should reap. After all, there are taxi drivers who work longer and harder, and even more unfortunate souls in the slums of India and other poor countries.
But, I am threading on real thin ice when I compare, however obliquely, senior executives to cabbies and slum dogs. They are (the executives, that is) clearly a lot more talented, which brings me to the famous talent argument for bonuses. What is this talent thing? Is it intelligence and articulation? I once met a taxi driver in Bangalore who was fluent in more than a dozen languages as disparate as English and Arabic. I discovered his hidden talent by accident when he cracked up at something my father said to me — a private joke in our vernacular, which I have seldom found a non-native speaker attempt. I couldn’t help thinking then — given another place and another time, this cabbie would have been a professor in linguistics or something. Talent may be a necessary condition for success (and bonus), but it certainly is not a sufficient one. Even among slum dogs, we might find ample talent, if the Oscar-winning movie is anything to go by. Although, the protagonist in the movie does make his million dollar bonus, but it was only fiction.
In real life, however, lucky accidents of circumstances play a more critical role than talent in putting us on the right side of the income divide. To me, it seems silly to claim a right to the rewards based on any perception of talent or intelligence. Heck, intelligence itself, however we define it, is nothing but a happy genetic accident.
The other evening, I had a call from a headhunter. As I hung up, my six-year-old son walked in. So I asked him jokingly whether I should take another job. He asked,
“Does it mean you will get to come home earlier?”
I was mighty pleased that he liked to have me around at home, but I said,
“No, little fellow, I may have to work much longer hours. I will make a lot more money though. Do you think I should take it?”
I was certain that he would say, no, forget money, spend time at home. After all, he is quite close to me, and tries to hang out with me as much as he can. But, faced with this choice, he was quiet for a while. So I pressed him,
“Well, what do you think?”
To my dismay, he asked,
I decided to play along and said,
“I would probably get home only after you go to bed.”
He still seemed to hesitate. I persisted,
“Well, what do you think?”
My six-year-old said,
“If you have more money, you can buy me more stuff!”
Crestfallen as I was at this patently materialistic line of thinking (not to say anything about the blow to my parental ego), I had to get philosophical at this point. Why would a modern child value “stuff” more than his time with his parent?
I thought back about my younger days to imagine how I would have responded. I would have probably felt the same way. But then, this comparison is not quite fair. We were a lot poorer then, and my dad bringing in more money (and “stuff”) would have been nice. But lack of money has never been a reason for my not getting my kids the much sought after stuff of theirs. I could get them anything they could possibly want and then some. It is just that I have been trying to get them off “stuff” with environmental arguments. You know, with the help of Wall-E, and my threats that they will end up living in a world full of garbage. Clearly, it did not work.
May be we are not doing it right. We cannot expect our kids to do as we say, and not as we do. What is the use of telling them to value “stuff” less when we cannot stop dreaming of bigger houses and fancier cars? Perhaps the message of Wall-E loses a bit of its authenticity when played on the seventh DVD player and watched on the second big screen TV.
It is our materialism that is reflected in our kids’ priorities.
To all the MBA and Economics types out there, I have one simple question. For some of us to be wealthy, is it necessary to keep some others poor?
I asked an economists (or rather, an economics major) this question. I don’t quite remember her answer. It was a long time ago, and it was a party. May be I was drunk. I do remember her saying something about an ice cream factory in an isolated island. I guess the answer was that all of us could get richer at the same time. But I wonder now…
Inequality has become a feature of modern economy. May be it was a feature of ancient economies as well, and we probably never had it any better. लेकिन आधुनिक वैश्वीकरण ने हम में से प्रत्येक को असमानता में अधिक जटिल बना दिया है,,en,हर डॉलर जो मैं अपनी बचत या सेवानिवृत्ति खाते में डालता हूं, वह कहीं न कहीं बहुत बड़े वित्तीय लेनदेन में समाप्त हो जाता है,,en,समय पर भी जोड़ने के लिए,,en,भोजन की कमी,,en,हर बार जब मैं गैस पंप करता हूं या लाइट चालू करता हूं,,en,मैं अपने आस-पास दिखाई देने वाली क्रूर असमानता में थोड़ा सा जोड़ता हूं,,en,किसी न किसी तरह,,en,बड़े निगम इन दिनों खलनायक के रूप में उभर रहे हैं,,en,यह अजीब है क्योंकि कॉरपोरेट मेगा मशीन में हितधारकों से लेकर ग्राहकों तक सभी छोटे-बड़े कॉग हैं,,en,आप और मैं,,en,निर्दोष सभ्य लोग लगते हैं,,en,शायद सूसू,,en,निगमों द्वारा अपने जीवन का निर्वाह करने वाली फेसलेस इकाइयाँ, उन घिनौनी असमानताओं के संदर्भ में मांस का पाउंड मांगना शुरू कर देती हैं, जिन पर वे पलते हैं और हम साथ रहने को मजबूर हो जाते हैं,,en. Every dollar I put in my savings or retirement account ends up in some huge financial transaction somewhere, at times even adding to the food scarcity. Every time I pump gas or turn on a light, I add a bit to the cruel inequality we see around us.
Somehow, big corporations are emerging as the villains these days. This is strange because all little cogs in the corporate mega machine from stakeholders to customers (you and me) seem blameless decent folks. Perhaps the soulless, faceless entities that corporations are have taken a life of their own and started demanding their pound of flesh in terms of the grim inequalities that they seem to thrive on and we are forced to live with.
कम से कम ये मेरे विचार थे जब मैं उच्च ऊर्जा वाले बिस्कुटों की मदद से एक छोटे से कंकरीट के बच्चों के दिल को छू लेने वाले बैट्सन और पत्थर की दीवारें देख रहा था।,,en,मेरे वातानुकूलित कमरे में बैठे,,en,उनकी दुखद दुर्दशा पर मेरे धर्मी रोष को प्रकट करना,,en,मैं सोचता हूं,,en,क्या मैं उनकी बदकिस्मती से बेगुनाह हूं,,en,क्या आप,,en,अर्थशास्त्रियों,,en,भोजन की कीमतें,,en,एक किलो मांस,,en,दुखद दुर्दशा,,en,बच्चे अभिलेखागार,,en. Sitting in my air-conditioned room, voicing my righteous rage over their tragic plight, I wonder… Am I innocent of their misfortunes? Are you?
[The last of my French redactions to be blogged, this one wasn’t such a hit with the class. They expected a joke, but what they got was, well, this. It was written the day after I watched an air show on TV where the French were proudly showcasing their fighter technology.]
[In English first]
Science is based on logic. And logic is based on our experiences — what we learn during our life. But, because our experiences are incomplete, our logic can be wrong. And our science can lead us to our demise. When I watched the fighter planes on TV, I started thinking about the energy and effort we spend on trying to kill ourselves. It seems to me that our logic here had to be wrong.
A few months ago, I read a short story (by O.V. Vijayan, as a matter of fact) about a chicken who found itself in a cage. Everyday, by noon, the little window of the cage would open, a man’s hand would appear and give the chicken something to eat. It went on for 99 days. And the chicken concluded:
“Noon, hand, food — good!”
On the hundredth day, by noon, the hand appeared again. The chicken, all happy and full of gratitude, waited for something to eat. But this time, the hand caught it by the neck and strangled it. Because of realities beyond its experience, the chicken became dinner on that day. I hope we human beings can avoid such eventualities.
Les sciences sont basées sur la logique. Et la logique se base sur les expériences – ce que nous apprenons dans notre vie. Mais, comme nos expériences ne sont pas toujours completes, notre logique peut avoir tort. Et nos sciences peuvent nous diriger vers notre destruction. Lorsque je regardais les avions de combat à la télé, ils m’ont fait penser à l’énergie et aux efforts que nous gaspillons en essayant de nous tuer. Il me paraît que la
logique ici doit avoir tort.
J’ai lu une petite histoire d’une poule il y a quelques mois. Elle s’est trouvée dans une cage, un homme l’y avait mise. Chaque jour, vers midi, la petite fenêtre de la cage s’ouvrait, une main se montrait avec de quoi manger pour la poule. Ça s’est passé comme ça pendant quatre-vingt-dix-neuf jours. Et la poule a pensé:
“Aha, midi, main, manger – bien!”
Le centième jour est arrivé. Le midi, la main s’est montrée. La poule, toute heureuse et pleine de gratitude, attendait de quoi manger. Mais, cette fois, la main l’a prise par le cou et l’a étranglée. A cause des réalités au-delà de ses expériences, la poule est devenue le diner ce jour-là. J’espère que nous pourrons éviter les éventualités de cette sorte.