Confidence Crises

I mentioned earlier the current crises, our civilization is confronted: economic, energy, climate. The crises are also global, geopolitical, over available resources (land, food, water, fuel, etc.).

What does it exactly mean at the national cultural or global level?

Overall it is a philosophical, moral question and a question of ethics and equity. Why is it a confidence crisis? The “confidence crisis” hypothesis is related to actually questioning our current system in place, the cultures, values and norms that are at the origin of this system. The “confidence crisis” reveals the question: “who can we or should we actually trust?”

The “who can” question is related to our capabilities, to resolve the current crises. Who has the economic, political, environmental, cultural, technological knowledge, skills and experience to bring our civilization out of the crises? Who are the persons who have the capacity to engage his/her time and resource in our common future?

Let’s return to the question of trust and confidence. Which individuals, group of individuals, nations can we trust? To give an easy answer to start with: nobody, and with regards to the climate crisis, even not ourselves, as human beings. Ok, this does not bring us any solution or way forward. But it is a start, from which we can try to develop and build a new system.

We should learn from our past experiences to develop a completely new system, rather than try to improve the existing one, with the same people, just “dressed” differently.

Confidence is a very personal matter and attitude. It is also a moral right, to trust someone, with regards to the handling of a specific problem or issue. And it is a matter of efficiency to choose, whom we trust and with whom we will build the new system.

What is the issue with the current cultural system? Each culture and society develops a system of values, religious believes, norms, etc. This system values at the moral and philosophical level what is right, and what is wrong. The system is evolutif and can adapt over time. The historical dimension of the system can be linked to what the system values as being traditional, conservative in the sense of what is from a historical point of view of value and “worth” to be conserved and maintained today and for the future. Biodiversity is an example. We further need to take into account that systems vary among different cultures and nations. A nation can be considered as geographically entities whose extension and borders change over time. While this is the case, cultural entities seem more stable over time, although some cultures were eradicated and some civilizations have collapsed and disappeared.

Historically and philosophically, our current system and society is characterized by the atomic bombs thrown on Hiroshima and Nagasaki, and Hitler’s National Socialism regime (see also the philosophical works of Hannah Arendt, and the psychoanalytical works of Arno Gruen). It is important for us to understand what caused the current system and who we actually are, what motivates and drives us and in which way we influence the values and behavior of our others.

Our consumption driven and based system is in the biggest crisis since the Great Depression of the 1930ies. The crises are the economy, resources including energy, climate, and geopolitical. Still this is a quite generic statement. We have to look at the globe, and also at the nation and community level to understand, who is affected by which crises. Again, we might differentiate between the triple global crises, national crises, the crises of an individual, which can also be a crisis of identity, a crisis of empathy, ethics, moral and culture, typically debated in the context of globalization. Besides the intrapersonal crises we can look at the interpersonal crises between man and woman, between generations. With regards to climate ethics and equity we have to look at both, intragenerational and intergenerational crises (see the works of philosopher Nadia Mazouz).

This mainly brings us to the question on what system will bring us out of the current crises? What are the values, which we should adhere to from a (climate) ethical, moral and philosophical point of view, which drive and motivate us to build the new societal system? How are we approaching to define our values? It is in my opinion straight forward. Each individual should go ahead, feel confident in defining and communicating (across all its personal and social networks – physical and virtual) its individual values, and try to stick to them and be honest, how the values work for him or herself.

Who will be capable to develop a new and “sustainable” system? All of us. Still we need to organize ourselves, to allow the system to be implemented. This brings us back to the question, who we actually should give our trust and confidence to define a finite number of new values, which well represent and group all our values. And who is going to help us and give us the necessary resources (education, funds) to constitute, to put into place and to institutionalize the new system.

Who will lead us out of the current crises? The USA? China? It needs both, acceptance that our planet is continuously warming and that with increasing CO2 emissions the situations can get dramatically worse.

How can we bring our civilization out of these crises? The entire globe is in this and we have to build common solutions at all levels, internationally, in each country, in our communities and businesses, and involving all individuals.

Can we rely on those, who actually created the system we are currently locked in? We should be careful in making judgments or accuse anyone, since after the Great Depression and World War II, people where looking into the future for peace, a new beginning and economic prosperity.

Nevertheless we should find, connect and engage all the people in the world, who want to transform the current system into a sustainable one. It is not worth to loose our energy and time on those, who continue to stick to wasteful and carbon-intensive lifestyles. I think most of us agree on that point. We are aware of these crises and the problems and challenges they generate. We also have to be aware that different nations, political parties and individuals have their agendas with regards to the current crises and that there are risks of green washing (pretending to be sustainable).

We all want to prevent another global conflict or world war. We have to find and trust the people, who can solve these crises, and set-up the path together to define a new system of values in a sustainable and peaceful way.

We should not give up, if sometimes we fail on our transformation path. It can last a lifetime and several generations, to make important cultural changes, and to make a new system to function, based on new and sustainable values.

It is a long breathtaking process. What is important is that we make the changes now, as fast as possible to stop global warming, so future generations will benefit. It is important that today’s generations hold to their new set of values, bringing our civilization on the path of sustainability, independently, whether our personal aspirations will be met or not. Our efforts today will be driven by high ethical motives, values and believes on behalf of our younger and future generations.

We should take advantage of what we already know, what we have learned. But we should not only spend our time seeking what we already know. We should mainly look forward most of the time, accept to live with uncertainty and not fear what we do not know yet. As the precautionary principle, we have to make best use of our knowledge and “non-knowledge” (not ignorance) even if all phenomena are not yet fully studied or understood.

As persons we should take good care of ourselves, maintaining a physically and mentally healthy lifestyle to remain strong, to be creative, positive and solution-oriented all the time. It is also excellent to have a philosophical approach to our lives giving us balance in challenges times ahead. I am so grateful of the great gift my daughter Hannah has offered me lately: The Tibetan Book on Living and Dying, from Sogyal Rinpoche http://www.holybooks.com/wp-content/uploads/The-Tibetan-Book-of-Living-and-Dying.pdf

A Civilization of Sustainability and Prosperity

What is the state of our world today – a personal appreciation. Human beings in the western world have become more individualistic, more egoist, driven to maximize their personal benefit. Some are greedy. But there are also corporations and philanthropists, strongly engaged in helping nations and people out of poverty, to build sustainable livelihoods.

Let’s try to look at our legacy. Why should shareholders renounce their dividends or CEOs give up their bonus for a better world, on behalf of research, innovation, start-up investments, NGO for a better world, or pay more tax to help reduce CO2 emissions and climate change, or help to halt deforestation? Why should they give up their luxury car or their penthouse at the lakeside? They work heavily, have high responsibilities and from their perspective they deserve such compensation and benefits.

Why should a 60+ person give their best years to help stop climate change? Why should they care? They will be gone anyway, when the real problem start emerging? Really? Our medical system has become so performing, that we can expect to live a long live, beyond 80 or 90 years. What about their responsibility towards our children and grandchildren and the children, yet unborn? What about their responsibility towards a world which become more and more unstable, unbalanced and unequal?

Enterprises worldwide strive to increase their productivity. Individual competition is fierce. It is about the survival of the youngest and the fittest. We could call it “capitalist Darwinism”. This workplace competition can include psychological harassment like backstabbing, mobbing, racism and exclusion turned against foreign workforce. Inequality can be caused through groupthink, favoritism, nepotism and lobbying. Employees are not supposed to be critical or to think, they just have to perform and deliver to maximize shareholder value and they will be laid off when product demand decreases. There are many means and tools for groupthink and social exclusion including social networks. Nowadays, anyone can hack and enter a private computer system exploring all your files and activities on your computer. Hackers can activate the camera of your computer and explore your privacy, where you are right now or analyze what your are typing on your keyboard. Lack of trust, lack of privacy and data exposure leads to a society of mistrust, leading to self-protection, isolation, paranoia, depression and aggressiveness.

Being compliant at the workplace and never challenging the status quo becomes a strategy for survival, trying to prevent for being laid off. In today’s business and corporate world profit is king. It is a culture of fear and coercion, a culture of failure at each hierarchical level of the organization.

Let’s take another view, one of you as the owner of your own business. It is business warfare. The cake of opportunity has become very small, and you have to fight for every crumb. You are exposed to the same type of mobbing, groupthink. Depending in which market and industry your business is active, you will be exposed to heavy political and industrial lobbying. Your computers may be hacked as well. You are exposed to international competition in your own local markets, even if you are a small company. Your business might very well become substituted. Your ideas, your products and services can be easily copied from your webpages, your patent rights are ignored in some countries, basically everything becomes transparent to anyone, since you also have to promote, sell your products and services.

Some people might identify themselves with these views. To quote Yves Bonnefoy: “Nous vivons dans un monde qui est une image de la réalité. C’est notre exil.” Yes, we are all well aware about the business realities. Still I think it is important to address and discuss the issues and to come up with better solutions. With today’s triple crisis and challenges you need to be open minded and creative.

Who can you trust in the business world? You have to be aware of the tactics used in a very competitive, international and multi-cultural environment. As Andy Grove as president and CEO from Intel used to say: you have to be paranoia to survive in today’s business world.

Whatever means and models we could come up with to justify a corporate system, based on coercion, repression and exploitation, such corporate system will fail. Using coercion and repression at the workplace will in the long run destabilize our society and destroy our cultural values and believes.

Also, today the difference between the “haves” and “have not” is growing. There no longer are enough jobs for everyone, even for highly experienced and educated people. In an economy of sufficiency, consumer demand will decrease. At the same time, product and service demand will shift. Markets will be stirred, the 99% sufficiency consumers and new geographical segments will emerge driven through the sustainability mainstream.

According to the philosopher Frithjof Bergmann, a new and adequate job model is needed for all the people around the world. Bergmann proposes a model, he calls the “New Work” http://newworknewculture.com/ . In which way did society deal with the 1930 Great Depression? We should review the 1930 Great Depression in analogy, to understand, what has worked well, and which failures led to WWII http://en.wikipedia.org/wiki/Great_depression .

Company downsizing to maximize shareholder value, no jobs for the younger generations, laid off baby boomers, who have become unaffordable for companies because of high social costs, taken in charge by the state social system. A society, exposed to increased stress, a society desperately looking for jobs, with increasing health problems including burn out, depression. Social costs increase, so do state debts with no solutions in sight.

According to George Magnus and Jean-Claude Trichet, the European financial system is highly exposed to systemic failure. The USA is narrowly watching and engaged in the developments of the EU zone, so is China, both depending on the good economic functioning of the Euro Zone.

What about climate change? Annual CO2 emissions in the USA are 20 tons per capita, China and Switzerland more or less produce the same 6 tons per capita. But we have to look to the world’s total and growing population and CO2 emissions, impacting our climate at a global scale. What are the 8% of GDP for China compared to the economic risk, described by Nicholas Stern, for the business as usual scenario or BAU climate change suggesting welfare reduction by an amount equivalent to a reduction in consumption per head of between 5 and 20%?

Even if in Switzerland we might feel complacent thanks to a strong work ethic and economy, a strong democracy and political system, an excellent education system and quality of life. Still we are part of that global climate and economic system, from which our nation’s welfare depends.

Over the last years, developed nations have outplaced some of their polluting industries into countries with weaker environmental laws and regulation, continuing to destroy the environment and adding to global warming. Those nations and organizations would have access physically and financially to alternative fuel and production types, still they opted for low cost and less controlled production, without considering the harm caused to the local communities and their environment.

How do we differ from each other? Why and how are societies, nations and cultures different? Which ones are more supportive to fight climate change? Which nations will be most affected through climate change, risking their social stability, water and food security? Which nations still ignore to tackle the climate change issue and continue to release large amounts of CO2 into the atmosphere? Although we are aware of these problems, we seem to have reached the limit of our intellectual and operational capacity to deal with these global crises.

When considering our major achievement over the last 60 years, our strong reliance on oil and fossil fuel puts our achievements in a new light. Newly emerged economies and large populations want to reach the same western standards of living, relying heavily on fossil fuels. From a resource and global footprint perspective, we would need 8 additional planet Earths.

There is a strong capital shift from West to East. While the economy in the USA and in the European countries weakens and might even fall into a depression, the spread between the rich and middle class increases. Post-2008 government support and rescue measures have prevented financial collapse. But did they also help to strengthen the economy in a sustainable way? People from the middle class, trying to maintain their lifestyle and level of consumption in taking up more credits, incur the risk to further slide into indebtedness and poverty. Will the BRICS nations and the G20 find solutions to stabilize the global economy? How will quota, voting and veto power been distributed within the IMF? How would global interests be best represented to solve the current crises?

Under the current developments, what could be a possible path for multinationals? With weakening economy and large income disparities, consumption and spending continues to drop. High quality products will meet the demand of the 1%. Businesses of mass consumption need to strip off all input, production, marketing, sales and distribution processes which will not be needed anymore. The 99% sufficiency consumers need to be supplied through different means. They need to spend their money for their basic needs, vital goods and dwelling.

While your company can benefit from high income customers, realizing high margin, you can actually engage in the 99% who have high work ethics and strongly adhere to the economic, social and environmental triple bottom line. While as a company you will benefit from high quality, zero-footprint and 100% renewable resources, your local products have a strong identity and brand, linked to origin, quality and tradition. People are highly motivated by their work, giving sense and meaning to their lives, in line with their climate ethics, commitment and values for sustainability. They appreciate nature and services provided by surrounding ecosystems. They have again time to produce quality, protecting environment and climate. They have again time to care for their families and children and the local community and social life.

Alternative economic support include philanthropic funded programs, public-private partnership engaging private companies, local public sector to support individual and micro-organizations through micro-credits for sustainable business development in developing countries, including platforms like KIVA http://www.kiva.org/ .

There is strong awareness and consciousness of stakeholder power. There is a strong democratic system in place and adherence to equal rights, valuing equality among all people. The corporate business world is fully integrated into this system.

Values include equal opportunity and fair competition, open and trusted system of communication, full transparency and openness to critics and suggestions for improvement. There is a common sense of enterprise shared through regular meetings and exchanges among all people, in public, private and work life.

To quote Thomas L. Friedman, the world has become “hot (warmer, with the model described above), flat and crowded” and also more open, democratic, equal, fair and healthier.

There is a new economy of meaning, meeting the needs of our society and civilization, meeting the needs of our climate and environment. It is the revival of our cities, better and healthier, and of community life. It needs to be organized, but the organization is flat, non-bureaucratic and straight forward. It is sharing of fulfillment and plenitude among your family members, friends and within your community. It is back to nature. It is hands on to a carbon-free society, water, food and shelter for everyone. It is a new beginning or as we refer to in Switzerland as “neustart Schweiz” http://neustartschweiz.ch/ .

As we already experience in today’s global economy, GDP levels vary from one nation to the other. If the economy in the industrialized nations remain weak due to a decrease in consumption, the human power should not be wasted. Is there a path to a sustainable community building on programs such as created under Franklin D. Roosevelt’s New Deal in the 1930s http://en.wikipedia.org/wiki/Civilian_Conservation_Corps ?

We have the choice. We can opt for a business as usual scenario, exposing our civilization to the risks of climate change. On the other hand, we can direct our power and energy towards peace and freedom in making concessions, successfully achieving a sustainable development of our planet, creating jobs for everyone, towards an economy of meaning and sufficiency, where there is a healthy life, enough vital resources and shelter for everyone, everywhere in the world, today and in the future.

In Capitalism at the Crossroads, Stuart L. Hart refers to the indigenous enterprise, or an enterprise strongly rooted in the native and local culture, knowledge, tradition, values and believes. Developing on the evolution of corporations, Stuart Hart refers to 3^rd generation enterprise as facilitator of a local, native knowledge based, distributed corporate model. The potential and opportunity for corporate engagement with the 4 bn people living at the base of the pyramid (BoP) with daily income below USD 1, has been brought into evidence through C.K. Prahalad, Stuart Hart and Ted London. Local knowledge and education, as well as covering energy and communication needs and access to information are crucial. How real are these opportunities? Are those opportunities still open for the developing world that has gone through imperialistic and neo-colonial experiences? In some nations, there might still exist deep wounds that need time for healing. I believe it is an important opportunity for all of us to work together to find common and democratic solutions for our entire world.

Transformation will not always be easy and need encouragement and support. Individuals must make concession. They will not be able to meet all their expectations, which they aspired during a strong economy. Transformation should be based on common visions and goals, at the same time meeting the fundamental needs of all nations. Transformation should be based on transparency and openness, mutual trust and the sharing of our needs and values together with our families, friends and communities.

A matter of trust

A few days ago I met with a colleague who works for the financial sector. My colleague introduced the question of trust in our discussion. I think this is currently a very relevant topic.

Jeremy Leggett refers to the Triple Crunch http://www.jeremyleggett.net/ , Thomas Friedman, citing Paul Gilding to "The Great Disruption", citing John Hagel & John Seely Brown to "The Big Shift" http://www.nytimes.com/2011/10/12/opinion/theres-something-happening-here.html?_r=1&ref=thomaslfriedman

Chrystia Freeland sees the roots in the Reagan Revolution http://blogs.reuters.com/chrystia-freeland/2011/10/14/wall-street-protesters-challenge-reagan-revolution/

What did we learn from the 2008 financial crisis? The financial world can put our global financial system at risk, liquidity and the supply of money can fail within a few hours, leaving our pockets and families without cash. Why can this happen? Banks being part of a global and interlinked banking system fail to trust each other. The flow of money fails because interbank lending seizes. States, central and national banks can intervene as they did in 2008 to prevent system failure. And all this happens in very short term.

What about other crisis? Energy? We still have energy reserves at least for several decades. The problem with fossil fuel sources: it has the potential to disrupt our climate system. So the energy crisis cannot be considered individually, it has to be considered in the context of the current climate crisis. And we learned from the Fukushima accident, that nuclear power is not a sustainable energy option.

Can the economic crises be considered independently from the climate crisis? According to the World Economic Forum and the Risk Response Network http://riskreport.weforum.org/ , climate change has the highest perceived risk with respect to both likelihood and impact. According to Nicholas Stern http://siteresources.worldbank.org/INTINDONESIA/Resources/226271-1170911056314/3428109-1174614780539/SternReviewEng.pdf to limit the concentration of CO2 in the atmosphere to 450 ppm and halt temperature increase at 2°C, the cost to our society is 2% GDP. But that cost is increasing, if we are not acting and the time window of opportunity closing. Continuing to emit CO2 at the current rate, the entire human civilization is put at risk. Going beyond these limits, can cause our natural Earth system to be brought out of balance and collapse, causing the mass extinction of the humankind. The cost related to temperature increases beyond 2°C are estimated to be between 5 to 20% GDP today and in the future, depending on the CO2 emission and decarbonization scenario considered.

As we can see, the economy-energy-climate crisis is interlinked. As indicated by the WEF, the survival of our civilization can be put at stake if we do not stop CO2 emissions.

Why should a banker ask a climate scientist a question about trust? I do not have an answer to that, but it can be related to the uncertainties and risks, related to climate change. Humans can easily react to issues that are short term and visible today. The challenge with climate change is that carbon dioxide accumulates in the atmosphere over several centuries. The consequences of not taking measures against global warming today, will be felt only within the coming decades. By then it will be too late, and human civilization would need to bear the dire consequences of its inaction.

I agree, our society needs the trust in the results, published by scientists. The scientific process is strict and rational. The researcher itself is by definition a highly critical person, always questioning methods, possible sources of error and results. There is a strict quality and review process prior to publishing any results. Also during the peer review process of scientific publications and articles, research authors and their results are challenged to make sure, that the research work and results are reliable. The scientific community itself is a system of self and mutual control, meeting the highest possible quality standards.

The answer is yes, if we should trust some institution, it is definitely the scientific community. To give an answer to the financial and investment banking community: casino type investing must stop. Financial institutions must have the same objective as we all have as adults, teenagers, children and grandchildren and yes, for those to be born: to invest into a world which is sustainable for today’s and future generations. Investments have to be directed into research and innovation, towards a strong and health economy, society, an intact environment with a rich biodiversity for the safeguard of our civilization. Sustainable use of resources and sustainable energy sources and technology in support of the new and emerging economies, access to energy and information, water and food security and health in support of the developing world, the urgent ban of deforestation, to maintain the remaining natural forests which constitute major carbon sinks and our vital oxygen sources, these are the “portfolios”, investing has to be directed to.