Tuesday, August 25, 2015

The second review

The second full review of The Value Crisis was published by the well-respected Alternatives Journal.  I was totally blown away by this praise from such a prestigious journal.  As with my first review, reprinting it here gives readers another forum where they can post comments and feedback.

Andrew Welch has a thing about numbers.  He loves them. But as he gradually began to see the connection between growing, multiple global crises and the lack of awareness surrounding the day-to-day human behaviour that produces them, he began to wonder if humanity’s over-reliance on numbers was responsible. “We use debt to conjure up trillions of dollars from nothing; we voraciously run through our planet’s limited resources; and we recklessly contaminate our environment with waste, byproducts and dangerous substances.” The Value Crisis is the product of his attempts to reconcile this disconnect between behaviour and consequence.

The value crisis referenced in the title is the conflict between our human value system, which is ancient, and our number-based value system, which has developed over time, most of it very recently. Welch’s premise is that these two systems are incompatible and unbalanced and that fundamental human values are being displaced at great cost to us all – personally, as a species, and ultimately for every creature on the planet. This crisis of values is posited as the greatest challenge facing society and as the root cause of most of our environmental, economic and social ills.

Welch traces the origins of the value crisis from the beginnings of numeracy and the invention of math, through theories of decision making and indicators of well-being, to the history of money, the workings of the global economy and the nature of corporations. It’s quite a ride, and there are many fascinating side trips along the way.

For instance, he explains the concept of exponential growth (a phenomenon that is notoriously poorly understood), thoroughly and from several points of view. The examples are thoughtful and Welch relates them directly to the central premise of the book. And he performs this feat over and over again with such seemingly disparate concepts as the law of diminishing marginal utility, prospect theory, Maslow’s Hierarchy of Needs, the fractional reserve system and the pursuit of happiness.

The book is dizzyingly well researched, drawing on a wide range of contemporary scientific research, literature of all kinds and possibly more than one accounting textbook. It is also jam-packed with details, facts, quotes and equations. Fortunately, Welch seems to have an orderly turn of mind and his argument is well built and progresses logically. He makes good use of headings and text boxes to remind the reader where she is going and where he has been. Each chapter begins with an anecdote to ground the topic and ends with a comprehensive summary. He regularly returns to his central premise, showing how the new information he’s just introduced relates to the basic theme. Anything less would have made the book quite hard to follow and not nearly as useful. At the end he has gathered all the boxed text in a separate section and included page references.

There are many good reasons to read this book. For one thing, it will likely give you many excellent conversation starters. Did you know that capuchin monkeys make exactly the same poor financial decisions as humans? How about the fact that usury is a transaction in which money is acquired without goods or labour being exchanged (through the manipulation of numbers), that until recently it was considered unethical, and that it describes a great deal of today’s financial activity? Or that if corporations really were people, they would be classified as psychopaths?

Another reason is that this book is a great reference on the in and outs of economics, politics, finance and the human condition. But the best reason to read this book is for the basic background it can give the reader on how we got into our current environmental and social predicament – the historical and behavioural origins of a dysfunctional world.

Welch is remarkably free of blame for the groups of people operating within this dysfunctional system. He saves the blame for the system itself, explaining how what appears to be greed is simply an inevitable consequence, a side effect, of the numbers. Ultimately, numbers in general and money specifically, change the nature of our relationship to each other and to the world.
Along the journey, the author provides a number of possible solutions to the value crisis – some of them headsmackingly commonsensical and some of them wildly idealistic and unique. It is well worth reading this entertaining and accessible book to find out what those solutions are.
The Value Crisis: From Dollars to Democracy, Why Numbers are Ruining Our World by Andrew Welch, Caledon : Aanimad Press, 216 pages. Reviewed by Janet Kimantas

Friday, March 13, 2015

The Village Against the World

Today, a reader shared a fascinating article on what they captioned "One solution to the Value Crisis??".  The article was an edited extract from Dan Hancox's book "The Village Against the World".  To put this post into context, you really have to read the article itself, printed in The Guardian in October, 2013.

In a nutshell (from his website), Dan's book is the story of the villagers of Marinaleda, Spain, "who expropriated the land owned by wealthy aristocrats and have, since the 1980s, made it the foundation of a cooperative way of life.  Today, Marinaleda is a place where the farms and the processing plants are collectively owned and provide work for everyone who wants it.  A mortgage is €15 per month, sport is played in a stadium emblazoned with a huge mural of Che Guevara, and there are monthly 'Red Sundays' when everyone works together to clean up the neighbourhood.  Leading this revolution is the village mayor, Juan Manuel Sánchez Gordillo, who in 2012 became a household name in Spain after heading raids on local supermarkets to feed the Andalusian unemployed."

Of course, accepting what they have done Marinaleda seems to sanction anarchy and lawlessness.  When you adopt a value system which is contrary to that upon which most of the laws around you are based, those terms are the ones that most easily come to mind.  However, while that is certainly the context, I would like to look at some of the principles being put forward.  The article, being a brief extract, is not very detailed, but three specific characteristics of their model are highlighted:

"Land belongs to those who work it"

In my opinion this is an unfortunate wording of an even grander ideal.  Personally, I believe that land should belong to no-one.  The concept of personal territory is one thing - it occurs throughout nature.  But owning land?  Especially land that you might never have set foot on?  Buying and selling something that was not in any way produced by us?  I prefer our millennia-old tradition of the humans belonging to the land, not the other way around.  What the villagers are really saying (in my preferred interpretation) is that the output of the land - the food - should belong to the people who put the effort into growing it.  And why should it be any other way?

"Everyone in the co-op earns the same salary"

This does not mean that everyone contributes the same amount, or even that everyone necessarily deserves an equal share.  This (again in my personal interpretation) acknowledges the fact that even Marinaleda exists within a system where, to provide the basic necessities of life, one must have money.  They have not yet eliminated that concept from their society (even if they could).  Working from that, it is relatively safe to say that all of the residents have the same basic needs of food and shelter, and so the same salary should cover those for each person.  When money is being used to satisfy basic needs, as opposed to being a determinant of what value people are bringing to the community or how much their individual skills and talents are worth, then it takes on a whole new meaning.  If you can stop measuring happiness by wealth, then the concept of equal salaries becomes fairly benign.

"Our aim was not to create profit but to create jobs"

Face it, if everyone has the money they need to buy what they need for a good life, what do they need next?  They need something to do.  They need to be able to contribute to the greater good of the community (and thus their own well-being).  I choose to believe that this is not about choosing labour-intensive crops as a make-work lifestyle so that everyone can make money.  It is about maximizing the resource that you have (labour) so that people can pursue other pleasures without it being at the expense of their neighbour's happiness.  At some level, the pursuit of efficiency crosses over the line from working smarter to catering to a very specific set of values (at the expense of more important values).  As many non-industrial farmers will soon tell you, there is a joy and connection that comes from working the land - from growing and eating your own food.  As it is everywhere with the idea of repairing things, when we stop seeing labour as an evil to be minimized, we learn to find the time to make better, more respectful choices of how to manage the resources that this planet provides to us.  We produce durable, esthetically-pleasing goods.  And we also discover a surprising level of satisfaction from developing the skills to feed ourselves and maintain the items that are important to our lives.

What should be most interesting is to see how Marinaleda fares in the worsening economic crisis that Spain now finds itself in.  It may not be long before your own 'village' is facing the same dilemma.  It is challenging to be a qualitative-value island in the middle of a quantitative-value ocean.  However, that particular ocean is not actually very deep.  Money only has power and value as long as we believe it does.  If the population loses that belief, the value of money vanishes, and that could actually happen overnight.

Wednesday, February 25, 2015

Who will bell the cat?

Last week, I attended my first discussion night as guest author of a book club that was discussing The Value Crisis.  Early on in my several pages of notes is a series of questions posed to the group by one of the readers.  "I agree with the book, BUT are we prepared to give up economic growth?  Are we prepared to have our taxes go up or to take a cut in pay?  Who here is prepared to give up their car?"  Everyone stared at the floor.

In some sense, this is a classic demonstration of the value personae conflict that I describe in Chapter 10, or as Robert Reich described the flipside: "As consumers and investors we want the great deals.  As citizens we don't like many of the social consequences that flow from them."  But I think there is more to it.

I'm reminded of a childhood fable.  A group of house mice were being terrorized by the homeowner's new cat.  They held many meetings to figure out how to deal with the problem.  Finally, one mouse jumped up and announced a solution.  The catch, he said, was that the cat was always sneaking up on them.  This could easily be solved by putting a bell round the cat's neck so that the mice would always know when the cat was coming.  The other mice thought this was an amazing idea and loudly praised it's clever originator until a small voice peeped up from a young mouse at the back:  "Um, excuse me - I have a question.  Who will bell the cat?"

Even when the solution becomes apparent, implementing it is quite another matter.

The scenarios questioned by that reader may seem unpleasant indeed, but they don't have to be that extreme.  I don't know the exact socio-economic status of those book club members, but I'll take a stab at this (and pray I don't insult anyone).  Imagine you were in that group and you just took a 20% cut in pay.  How would someone in this particular crowd deal with that?  Perhaps every fifth year you would skip the annual vacation south.  Perhaps once a week the standard red meat entrée would be replaced by a delicious vegetarian option.  Instead of dining out twice a month, it might be every three weeks.  Or you start carrying a travel mug of your own coffee instead of that daily Starbucks stop.  You might keep your car an extra two years, and borrow rarely-used tools rather than buy your own.  Or swap a movie night out for a DVD in.  Why not write a heartfelt letter instead of buying a birthday card?  You could spend a whole lot less on frivolous gifts at Christmas, or buy 20% fewer new clothes and shoes.  For more dramatic results, what would happen if you cancelled your cable TV service?  (Lots of channels still come in free!)  Then there are the really tough questions like:  Is my residential footprint appropriate when it's only me living here?  (Not long ago, the number of single-person housing units actually exceeded the number of multi-person units in Canada.)

These might look like austerity measures, but you'll get more useful and positive information if you Google "voluntary simplicity" instead.  Don't think of it as an externally imposed pay cut.  Treat it as a decision to spend and consume less - and to find equivalent or even more joy in other ways.  You might even orchestrate it yourself by taking every Friday off.  It's a value shift that is needed, not a happiness reduction.  The readers in this book club had already taken the first step - they recognized the problem and wanted to do something.  They just weren't sure what to do next.

Then there's another class of people who recognize the problem and consciously choose to do nothing.  I used to think they were simply in conflict.  Now I believe that quite a few of them might be NIMPLEs.  These are the folks who are shamelessly stealing prosperity and survival chances from the generations that follow in order to line their own pockets.  "Yes, there may be a massive crisis ahead, but I'm a NIMPLE, and that disaster is Not In My Personal Lifespan Expectancy, so you and the grandkids can go to hell."

Will the next century be hell?  It really depends on what we choose to do now.  One of the more telling quotes from my book club visit was this one "Why vote in this riding?  We know it's going to go Conservative."  (This happens to be one of the strongest Green Party ridings in Canada.  However, 40-50% of the electorate don't bother to vote.)

It's as if we are passengers in a slowly dissolving papier-mâché boat, watching the tide take us further away from dry land, but reluctant to swim for it because we don't want to get wet.  Instead, we look around, hoping that someone will dive overboard and lead the way to shore.  Even then, the choice to abandon ship won't be easy and it won't be super-comfortable.  But The Value Crisis does make a case for us all being potentially happier, right now, by making those choices.  (Maybe you will actually find these tropical waters warm and refreshing!)

"Change is good.  You go first."
- Dilbert (Scott Adams)

You don't have to be the first.  Some of us have already got a bell on our cats.  It wasn't easy, but in many ways, after we shifted our value perspective, life is a whole lot better and we can sleep at night.  Why not join us?

Wednesday, February 11, 2015

Corporate Greed? No such thing.

When I'm focused on writing, my reading naturally falls behind - especially when my reading would constantly be redirecting my writing!  However, with The Value Crisis completed and published, I am at last trying to catch up, including taking an overdue dive into Naomi Klein's "This Changes Everything".

I have read "The Shock Doctrine" and generally find her work enlightening and inspiring.  She has the kind of resources and contacts that I will never have, and I really appreciate her perspective.  There is one philosophical point, however, that I believe she often defaults to - one that is shared by many people around the world - that is so fundamental, it deserves being questioned:  Klein puts a lot of the planet's problems down to Corporate Greed.

My contention is that there is no such thing as corporate greed.

Some might say that I'm simply fussing over semantics, but I believe this is a worthy investigation.  Words evoke framing and responses in the reader, and if they are inaccurate, they can send one down misleading and barren paths.

What is greed?  I turned to a few dictionaries:
  • excessive desire to acquire or possess more than what one needs or deserves
  • excessive consumption of or desire for food; gluttony
  • excessive desire, as for wealth or power
  • excessive or rapacious desire, esp. for wealth or possessions; avarice; covetousness

The pivotal concept of greed is excess, or as wikipedia puts it: "desire to possess [...] far beyond the dictates of basic survival and comfort."  So here's the critical point:  If there are no dictates of sufficiency, there can be no greed.

For the purposes of this post, I discuss corporations with respect to publicly-traded, commercial corporations.  These entities are created under very clear laws, defining their objectives, and setting out the criteria by which every one of their decisions and actions may be judged.

The number-one priority of any commercial corporation (imposed upon it by our laws) is the maximization of shareholder value.  I have highlighted two key terms here: Maximization and Value.  Let us begin with the second.

Value in the commercial world is measured exclusively  by money - by number.  Any other goals or interests must distill back down to a clear impact on the bottom line.  This is a number-based value system, and, as I make clear in my book, one characteristic of such systems is that more is always of greater value - more is always better.  The objective of value maximization is therefore easy and obvious, achieved by growth and the acquisition of more.

It is not possible under such a value system (and under such laws) to say that any corporate desire is excessive.  In excess of what?  There is no concept of sufficiency.  We have instructed (indeed, demanded) that this entity continue to maximize shareholder value, continue to grow, continue to produce revenue.  What is needed to maintain that growth will itself grow.

At this point, I should make some key distinctions.  Rex Tillerson, CEO of Exxon Mobil, pays himself $100,000 every day.  Excess?  Greed?  An insult to humanity?  You bet.  However, who can say what the sufficient annual revenue should be for Exxon Mobil?  His societal obscenity simply follows from our inability to deal with the real question: why have we facilitated (and indeed encouraged) his excess by defining corporations as we have?

I wrote this post because I believe we are at great risk of confusing the lucky 1% at the top with the system that put them there.  To go into the psychology of the folks at the top of the pyramid would be a separate exploration altogether.  What I caution is the use of the term "corporate greed".  It implies that corporations are improperly taking more than their fair share, when in reality, there is no such thing as a defined fair share.  It implies that corporations have gone astray, when in reality, they are performing precisely as we have programmed them to do.

If anything, it is our greed that inspires these creations, keeps them focused on profit, and satisfies their need for consumers to buy their goods.

Monday, January 19, 2015

Reflections on "The Value Crsis"

The original publication of "The Value Crisis" has proved to be quite popular with book clubs.  As a result, I prepared a number of questions, organized by chapter, that might serve as a good inspiration for self-reflection or group discussion.  I share them here, both for other readers to make use of, and in the hope that some answers might be posted in the comments section below.  Please add your thoughts!

Book questions

Do you ever think about any of the questions on page 10 (listed below)?
  • Why do we have to consume and throw out so much stuff?
  • Why do certain individuals get paid so much money for doing so little?
  • Why do we seem to have less time than previous generations, not more?
  • Why does it cost more to repair things than to replace them?
  • Why are labour disruptions, disliked on all sides, still common?
  • Why do we in democracies disagree so much with our elected leaders and governments?
  • Why do we consciously choose to poison our own natural environment?
  • Why are so many of us not even sure what makes us happy anymore?
How would you answer them now?

Chapter 1 – The Rise of Numbers
How would you answer the three questions on page 30/31 (listed below)?
  • What happens if our natural value systems are pushed aside in favour of numerical ones?
  • Are number-based value systems really objective?  Can they be trusted?
  • What happens when we try to combine qualitative and quantitative value scales?
What qualitative values are important to you?  Are there number-based values that threaten their influence?

Chapter 2 – Decision-Making and Numbers
Can you think of any decisions you made where you consciously decided to ignore or downplay the relevant numbers?  What happened?

Chapter 3 – Money: The Number Culture
What practices would you follow when buying goods in a developing country?

How does country of origin affect your shopping choices?  Why?

Chapter 4 – What’s Your Motivation?
In what ways is money a motivator for you?  How might that affect your emotional well-being?

Chapter 5 – The Value of Time
The author proposes that we should pay more for materials and less for labour.  What do you think of this concept?

If you could, how would you alter the amount of time you have and how would you spend it?  What prevents you from doing this?

Chapter 6 – Banking on Numbers
The author proposes that value creation based on math alone should be dispensed with, including interest charges.  Do you agree or disagree?

Chapter 7 – Numbers Incorporated
The author treats corporations as a separate species, whereas the legal trend is to give them the same rights as humans.  What are the implications of either option for our society in the future?  How might we change the system we’ve created for corporations?

Have you ever been in a situation with a corporation in which you feel your human values have been compromised?  Do you fault the corporation or the people within it?

Do you think a hierarchy of needs can be generally applied to corporations?  Would you agree with the author’s choices for the levels?

Chapter 8 – Numbering Our Days
The concept of polarities is a powerful one.  Can you think of other pairs of conflicting forces in your life that might be a polarity, to be managed instead of solved?

Chapter 9 – Numbers Rule
It’s quite radical to question the democratic principle of majority rule – the concept that a choice is superior just because it got more votes.  What was your reaction to this critique?

If your municipality used ‘wikiocratic’ principles, would you get more involved in decisions?

Chapter 10 – Value Systems in Conflict
Can you think of examples where your personal value personae are in conflict?  How do you resolve that conflict?

If the author is right that our ‘citizen’ values are not properly championed in modern society, how might we try to collectively bring all three value types back into balance?

The author envisions the inevitable collapse our current state of affairs, one way or another.  Do you agree?  How would you prepare for such a collapse?

Has the book changed your perspective on any of the world around you?  Is there anything you might now consider doing differently?

(You can download a print-ready PDF version of these questions.)

The author would greatly value feedback of any kind on this book.  Please consider adding a comment below or to GoodReads.com or via direct email.