All lives are equal

All lives are equal

All lives are equal

A few years ago Bill Gates persuaded Warren Buffet to contribute to the Gates Foundation and so create the biggest single pile of philanthropic cash in history. This was quite something. Currently, an asset base of over $37 billion is available generating cash to spend on things that Bill, and presumably Melinda and Warren, think are important for the public good.

This is spending greater than the annual GDP of over 100 countries on the UN list. No small matter. And it is a spend that would otherwise not happen because governments or other donors claim they don’t have the cash.

So what did Bill choose? What activities were seen as the highest priority among the many thousands of options?

Even a cursory scan of projects the Gates Foundation supports tells the story. Bill, Melinda and Warren spent money on people. Mostly on activities that improved the lives of poorer people by making them healthier, giving them opportunity and education. All are noble things.

And as a friend of mine once reminded me when I was lamenting the crazy rate of human population growth, you cannot blame the kids for being born. You have to help them.

And so there is a moral imperative to do something for the 4 billion or so people who live on $2 a day or less, have little or no health care, struggle to feed, clothe and educate their children, often with very little hope for anything better.

The philanthropic spend has to be on people.

Governments blinded by GDP growth should take note.

But this is not the point of this post.

Humans have taken over the world. And in it, they have created a highly inequitable and competitive system that by definition generates haves and have-nots. In this place a philanthropic focus on people is understandable. There is always suffering and a powerful need to relieve it.

There is enough suffering to soak up the Gates billions a thousand times over. It is an unpleasant but inevitable consequence of the human condition, a symptom of a much deeper problem.

We are more making creatures.

Our biology drives us harder than we think. Those of us born as ‘haves’ do not notice this very often because with wealth, more making is curtailed somewhat. A couple of kids is usually enough when income is more than $100 a day.

Instead, we channel more making into having more. We gather goods, comforts and money with extraordinary voracity even as we claim moderation and make a charitable donation.

I wrestle with my own complicity in this every day because it is a hard one to shift when there are so many opportunities for things to get better… for me. In a blink and a modest interest-free monthly payment a perfectly functional television and TiVo becomes a 55-inch smart screen and Netflix.

And unbeknownst to us, the more making instinct is soothed. Somehow I feel a little better. Certainly, I feel better enough not to worry about the billions of people the Gates Foundation wants to help because ‘all lives are equal’.

Except it is hard to see equality. Turns out that I will use far more resources than most by good fortune at birth. Most others will use a lot less, again by birth as much as anything. And yet all the people in the world would use more than they do given half a chance.

So despite obvious inequalities of wealth and opportunity, all lives share equal intent. We all want to be more.

What happens if democracy dies

What happens if democracy dies

Suppose the system used in 123 countries that billions of people have come to understand and take for granted fails, initially by electing muppets into office, and then collapsing altogether under the weight of distrust and disillusion.

Many scholars and the very clever writers on the excellent 5th season of Orange is the New Black, have pondered this situation. What happens could be a toss up between a joyous reinvention of commerce and exchange, with unwritten rules of human decency holding everything together, or more brutal exchange systems where the stronger grab from the weaker in a nasty cascade.

Academics play it out more sedately as game theory involving hawks and doves and conclude, mostly, that some sort of balance will emerge, an equilibrium of sorts, but a fragile one that easily gets out of whack. Drama writers just make the goings on in the fictional Litchfield prison ever more bizarre and ever more believable.

Whatever the conjecture, all agree that should democracy fail it will be replaced by something. And there are those who are scared of what comes next and others more confident. But here is a thought. What if democracy has already failed? And failed miserably.

What if it’s not democracy — the process that gives the majority what they want from an array of limited options — that holds everything together but something else.

Perhaps it is the process of exchange where human behaviour is moderated by mutual benefits, initially between individuals and then scaled up. And so long as exchange for mutual benefit is possible, all is well.

This idea also explains brutal exchange. Taking what I need by force is always an easy option in an exchange system but without mutual benefit it cannot persist forever. Human history is all about how brutal exchange eventually breaks down exponentially; think slave trade, apartheid, black integration. The excesses fall away readily whilst the residual lingers for a long time.

What we see as elections to public office makes very little difference to fundamental exchange. The passing of laws and regulation may restrict some transactions and even try to prevent others but not much can stop a deal when there are people willing to take it.

It turns out that a huge amount of what politicians actually do is ensure that exchange is easy, especially with other jurisdictions, and they try their utmost to do nothing to disturb the fragile economy.

So, in fact, if democracy dies, maybe not much happens at all but brutal exchange.

Five percent

Five percent

What is 5%?

Well apart from being a proportion, here are a few things.

  • 5% is one in twenty
  • 5% is an arbitrary threshold value considered significant in statistical analyses
  • 5% is half the current rate of GST in Australia
  • 5% is a pay rise almost worth having
  • 5% is less than the percentage increase in US military spend under the Trump administration

5% is quite the conundrum. It is not very big and yet it can be big enough to be noticed. You would not want food prices to increase by 5% but they have, roughly every two years or so in most mature economies.

You’d like a 5% pay rise over no pay rise at all but in the US rust belt, many workers have waited over a decade to get it, only for it not to really matter that much.

It seems that 5% is an awkward, niggly kind of proportion. Always a bit on the cusp of significance — one in twenty is surely just chance. Give me one in a hundred and I’m listening.

The other day a friend of mine, also a fellow science nerd, told me that 5% of the hip pocket dollar is spent on the environment.

One in twenty of the dollars in the average wallet ends up as an environmental expenditure.

Now this bald statement that could take a bit of unpacking. What’s in the hip pocket? What is the environment in this context? Would the 5% spend include food or the council waste levy or just donations to the WWF?

In most of the developed world food counts for around 8% of household spend. There is an environmental levy in my own local council but I pay that in my rates, part of my tax spend. And my hip pocket has a whole heap of unavoidable bills from utilities to the mortgage.

We could be here all day figuring it out, so let’s just say that, on average, people spend 5% of their after-tax dollar on something environmental.

That’s $5 for every $100 that arrives in their bank account, at their discretion.

So is this enough? Is it significant?

People die if they don’t eat and have access to clean water. They need somewhere safe to stay and the opportunity to build a meaningful life with some fun in it. These primary needs would use up most of the $100, most of the time.

Add in the inevitable unexpected cost when the boiler bursts, the roof leaks or a family member needs hospital care and there may rarely be 5% left over.

$5 is significant if the cost of living has already allocated the contents of your hip pocket to the necessities of life.

This is where the thought usually stops.

The cost of living is unavoidable. If it eats up all you can earn, then the environment is not even a thought.

Only think a little longer. The environment is where the food, clean water, timber for the house, sand for the mortar, clean air, space for fun, among many other key necessities comes from.

Ignore the environment and it is used up, polluted and dysfunctional for these key goods and services.

Fail to pay anything for these things and they stop.

We should be very scared that we spend only 5% for there is no point in investing in ourselves if the foundation for many of the vital things we need is eroding away beneath us.

The cost of food

The cost of food

Regular readers will know that my youngest son has just moved to London. He was disturbed to find that with beer costing over five quid a pint and most casual work paying less than a tenner an hour, London, and realistically any large modern city, is expensive for youngsters.

You could see the maths bouncing around in his head. Rent, food, travel, phone and beer essentials would be hard to squeeze out of a tenner an hour.

It’s a motivator for sure. True independence is a demanding master that builds strength and character in most. It even has the power to remove beer from the list of life’s essentials.

Just imagine for a moment if the item on the list that consumes half your income is food. Not the occasional 5 in 10, but half of everything you earn.

Each week the cost of basic foodstuffs to keep you and your family from going hungry takes up 50 cents of every dollar earned. Harsh you would think.

There is not much left for the other essentials on the list.

And if your rent is steep too, maybe 25 cents in the dollar, any financial buffer is a layer of paint thin. All the time there would be difficult decisions to make on what to do with the remaining 25 cents from buying power for cooking to school uniforms for the kids.

In many parts of the world, people face this problem every day. They must use a big slice of their income just to secure nourishment. It is a precarious existence when such a basic need takes up half your resources.

But here is the kicker.

What happens when food prices double?

If the price of food doubles buying food uses all your income. I’ll just say that again because it might take a while to sink in. If the price of food doubles buying food uses all your income.

This has happened, most recently across much of Ethiopia, Kenya, Somalia and nearby countries due to a drought that originated in the Indian Ocean Dipole.

Remarkably, people find solutions to this calamity. They eat less and find cheaper foods. They grow more of their own. They work harder and lean on support networks. They survive.

But they should not have to.

There are enough calories produced in farms across the world to feed everyone. For every individual praying for the price spike to end there is an overweight or obese counterpart in another country.

Here is an idea.

What about a global food safety net? Let’s say a FAO, World Bank collaboration to purchase a reserve of calories each year to ensure that the supply curve does not dip too far for the more than 5 billion people who live on less than $10 a day.

If everyone living in a country where the weekly food bill is less than 15% of family income contributed the price of a UK pint a week, such a fund would have more than enough annuity to deliver food security for everyone.

And how would we persuade people to give up their beer money?

Remind them that what hungry people do is move to find food — think about it.

Whoops, no more Pleistocene

Whoops, no more Pleistocene

You may not be aware of this but we are living in a new geological epoch. It is called the Anthropocene.

This is actually quite momentous because there have not been many epochs to date; just eight in 66 million years. On average one every 8 million years. So to be alive when one starts is remarkable.

Epochs are a subdivision of geological time used for more recent periods of geological that are well defined by the fossil record.

This brand new one has our name on it. Geologists have decided that the Holocene has ended because humans have altered enough global processes in the oceans, land and atmosphere to warrant a new epoch. This is a big call.

Remember that the earth is huge and we are small. The volume of ocean water alone could swallow us all in an instant and may well do this to our coastal cities. So to say that humans have done enough in a little over 10,000 years — before this time there were only a few of us wandering around doing what other mammals were doing — to create a new geological time period is remarkable.

Global atmospheric, ocean and landform generating processes altered by a single species of primate. Really?

Of course, the division of the distant past into discrete periods is a human invention, a way to section geological history into units to make life easier for geologists. It helps them explain unfathomable lengths of time and to generate details that high school students must memorise. No surprise then that we chose to name one after ourselves.

It is the ultimate recognition of our success.

Human ingenuity and skill are now so pervasive it has changed the way the planet works. We have become the ultimate ecosystem engineer. It is a proud and, dare I say, noble achievement. As the bible says “take dominion” and this we have done.

We have fulfilled our own prophecy.

Maximising shareholder value

Maximising shareholder value

Any sane historian would have to admit that the wealth generated from the industrial revolution has come at an environmental cost.

Forests converted to paddocks, wetlands drained for suburbs, coal mined and burnt into the atmosphere, not to mention the supply chain infrastructure criss-crossing the landscape to feed and house everyone. The more perceptive would also see the trend as ongoing, boring into the environmental fabric that delivers fundamental human services. Development has done more than create smartphones.

The entrenched requirement to maximise shareholder value — it is usually illegal for company directors not to do this — ensures resources are exploited and costs externalised. And the legality neatly justifies these outcomes.

Except that value to shareholders is time bound.

Suppose that shares in a company have generated a consistent dividend of 7% per annum for a decade. These are not spectacular returns but a solid delivery of shareholder value over time. Inexplicably over the next few years, the dividends tank and the share price goes south too. The directors pull out all the stops to maximise shareholder value and their fiscal reporting says that they have done everything possible. It’s just that they maximised a very small amount of value.

A second company returned 4% on shares over the same ten years. Not so good. However, shares continue to return 4% for the next decade and the decade after that because the directors chose not maximise value. Instead, they maximised longevity in returns. They optimised shareholder value for the long haul… and went to jail for breaking the law.

If you invested $1,000 in each company, reinvested your dividends and chose to liquidate your overall value after 30 years, which company made you the most money?


 

Post script — It would seem that shareholder primacy is the formal term for some of this concept and people are questioning if it should still be the purpose of corporations

Leadership for the environment

Leadership for the environment

Be curious and humble

Be courageous and confident

Kat Cole, the 30 something president of a $1 billion brand believes that great leadership requires just these four key qualities.

Makes good sense.

Curiosity is essential for anyone leading the way along new paths into unknown territory. It implies a willingness to learn and anything genuinely new always supplies a steep learning curve.

Humility is self-restraint, self-understanding, awareness, and a good sense of perspective meaning that it is not about me. This is a true leadership quality.

Courage seems obvious. Someone must be the first to step out into the unknown to take on the curve.

Confidence is contagious. It energises those who have it and everyone they meet. It is a powerful attractive force that gathers and holds people together to deliver more than the sum of the parts.

There are few leaders who do not have these qualities. Absence or even a shortage in any one of them and a would-be leader couldn’t move forward and bring others along.

What do these qualities mean when it comes to environmental leadership?

Anyone with a smidgen of interest in the natural world usually has some curiosity. Variety, the unusual, and the strange are present in everything from trees to termites, and not even Sir David has seen it all.

Stand close enough to a wild elephant to hear her stomach rumble and humility will cascade over you to wash away your awe. Put a spoonful of soil under a microscope and the life teeming across your vision should make all your first world problems melt away. Once seen for what it truly is, nature can humble the mightiest ego.

They don’t call them environmental warriors for nothing. There is a fight on that demands courage enough to stand against convention and take on the reality that modern living exploits nature. It is hard for even the simplest sustainable action to be easier or cheaper than business as usual.

So far, so good as we can expect that most environmentalists are curious, humble and courageous.

Confidence is a feeling of self-assurance usually arising from an appreciation of one’s own abilities or qualities — the expression of self-belief.

Now here I would argue that environmental leaders have a problem. Many are strong, articulate and outgoing individuals for sure. And they are often passionate, sometimes fearless, advocates.

But these traits are not confidence.

Confidence can be very hard for environmentalists because at some level they all participate in the actions that exploit resources. They drive cars, fly in aeroplanes, consume the products of commercial agriculture and feed their dogs. They live a life that they know contributes to most environmental problems.

Only true narcissists can overcome such incongruity to be truly confident. Normal folk cannot overcome the flaw and appear fake or overly aggressive.