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Home Ruminations

Common Sense

Here below are some detailed thoughts about us human beings forming a functioning community. Similar pages present my thoughts on biological organisms living on earth, regulating groups of human beings, how we treat other countries, and more general common sense issues. (While these seem like just simple common sense to me, some of them may be startling to some readers.)

Money Not Everything

Human happiness is due to a combination of many factors, including health, clean water, stability, education, and culture. Unfortunately it's all too common in the USA that if something isn't measured in dollars it's invisible. The financial sector should be just one of many voices when making domestic and foreign policy decisions; unfortunately all too often it outweighs other considerations.

I remember my puzzlement on first discovering that many of the toll roads and bridges in New England still have human tolltakers rather than machines. The explanation was that considering society more broadly, the jobs provided for tolltakers had a value too, one that in many cases matched or exceeded the value of automating toll collection. In my youth I thought that was hopelessly anti-technology and retrograde. I've since though come to agree that valuing something should take into account its whole effect on society, not just the dollars spent or not spent by one particular government agency.

Joseph E. Stiglitz makes this point in Globalization and its Discontents, writing

What is needed are policies for sustainable, equitable, and democratic growth. This is the reason for development. Development is not about helping a few people get rich or creating a handful of pointless protected industries that only benefit the country's elite; it is not about bringing in Prada and Benneton, Ralph Lauren or Louis Vuitton, for the urban rich and leaving the rural poor in their misery. [...] Development is about transforming societies, improving the lives of the poor, enabling everyone to have a chance at success and access to health care and education.

Gross Domestic Product (GDP) doesn't seem to be a very good measure of well-being. Consuming more brings more happiness only up to a point. Once consumption reaches a threshold of "sufficiency," the correlation pretty much disappears and enabling even further consumption doesn't increase happiness much. Other measures besides GDP, such as Index of Sustainable Economic Welfare (ISEW) or Wealth per Capita are probably better at measuring well-being.

Financial Investment Tends To Be Overly Individualistic

Whenever money is at stake, individuals tend to minimize the societal consequences of their actions.

Revered Abigail Adams, the wife of our early president John Adams, over the years made the investment decisions that created the family fortune. We gloss over just how "sharp" her dealings were; none of them were outright illegal, but they were seldom selfless or community-minded either. She took full advantage of her privileged position, allowing her to do things most people couldn't do. One example: her scheme to repatriate her husband's ambassadorship earnings from Paris by shipping trunkfuls of sewing goods took advantage of diplomatic communications channels to skirt a de-facto trade embargo. Another example: a questionable investment in Vermont land was so close to the edge of legitimacy that her husband remonstrated, asking her not to do anything similar again.

After Andrew Carnegie decided to donate his entire fortune to cultural institutions like new libraries, he felt fully justified in refusing every last nickel of pay to his employees. He effectively arrogated to himself the decision that money was better spent on his favored projects than on the income of working class families. Many of those employee families didn't agree with his financial priorities, but they couldn't do anything about it.

Our society weaned Ivy League college graduates away from feeling "entitled" to great wealth simply because of their birth, only to have them feel "entitled" to great wealth because they're smart. With our financial system being large and complex enough to obscure the not-always-fully-legitimate sources of money, such a feeling of entitlement is all it takes for individuals to drive our economy off a cliff without a second thought. It was worrisome when so many Ivy League undergraduates, who don't even get the broader context —let alone the careful ethics training— of Business School graduates, started going directly to Wall Street several years ago. Sure enough, the feared economic implosion happened not long afterwards.

Cultural Speed

We haven't much noticed the incremental changes as our society has moved faster and faster. But just recently we've breached a significant barrier. Now everything becomes different in less than one generation. For the first time, most parents can't offer meaningful guidance to their own children because the world has changed so much since the parents were children that their own experiences are no longer relevant.

It's hypothesized that humans first began to dominate when the situation allowed both parents and grandparents to help a child grow up. But could you imagine gleaning useful knowledge about the way the world works from your grandparents? (Or do you just "humor them?")

Poverty Isn't The Same As No Money

One of the subjects of the documentary film 'Good Fortune' is the schoolteacher of a village in Kenya. The film's sketch shows these recipients of "aid" complaining they're being harmed rather than helped.

Further conversation with producer/director Jeremy Levine fills in the backstory details. Judged simply by monetary statistics, that area of Kenya is indeed the poorest of the poor. But those people themselves are saying: we drink clean water, we eat nutritious food, our society is stable, we don't feel poor, we didn't ask for anything; why are they "helping" us?

Eric B. Ross, in The Malthus Factor describes how similar situations turned out when the Green Revolution was applied to Mexico:

[T]he Ejido Bank began to encourage the use of new wheat varieties, forcing ejidatarios to use costly inputs of fertilizers and insecticides. The rapid process of capital intensification of wheat production served the interests of the private companies which supplied such inputs, but it also imposed terrible debts on the ejido sector, which disintegrated under the strain.

In the end, the Green Revolution has done very little for the Mexican poor. Large farms, many of them tied to foreign capital, were the chief beneficiaries of the new agricultural regime. While investment in irrigation fed the growth of commercial agriculture, small-scale, rainfall-based farming became virtually obsolete. The increasing mechanisation of large farms, moreover, meant that intensive farming had little need for the labour of the rural poor.

We say our real goal is ensuring people have a quality life, not integrating them into any commercial economy. If so, for starters we need to measure poverty rather than measuring money. At such low levels, all money tells us is simply whether or not those people are integrated into the commercial economy, not whether or not they are "poor" and need aid.

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