Can Inequality Fuel Revolutions?

This post was originally published on UN Dispatch. Many people shared comments and thoughts via Twitter and Google +, thank you very much for engaging. The title of this post has a question mark because I really think of this as a question – can inequality fuel revolutions? Let me know what you think in the comments!

Continue reading “Can Inequality Fuel Revolutions?”

Paradigm shift, maybe

In spite of what David Rothkopf has to say on the subject, I am really hopeful that the crisis that has been shaking the world economy since last fall will not have been in vain. Given all that has happened, and the intense amount of media scrutiny and public debate on the outcomes of the “Crash of 2008” (however you want to call it – does it even have a proper capitalized name yet?), you would think that this would have created some space for a healthy discussion regarding the future of our civilization… We live in a world of gross overconsumption, excess and waste. While I’ll be the first to admit that I’m firmly part of this system, I see the need to adopt a system that doesn’t promise to drive us straight into the wall as an urgent one (Lula said it best.)

Yesterday, I came across a TED talk by Ray Anderson, the CEO of a carpet company. Now you might think – as I did – that hearing Mr. Anderson’s take on the “business logic of sustainability” would probably not be the most enlightening and thought provoking experience (again: carpet company.) Well, that is a misguided impression, dear reader, and I invite you to check out his 15 min talk in the video below. Personally, I’m a huge fan of the Environmental Impact Equation (min 4:40), and particularly of his re-writing of it (min 11:18). 
Obviously, developing a “new civilization” is no easy feat, and you can’t draw a fancy road map for completing this task. Nonetheless, the notion that Anderson introduces in his speech, that we must decrease the importance of “Affluence”, and increase the importance of “Happiness” in our calculation of the impact of production really appeals to me (watch the video, really). Sure, it’s a pipe dream – and for working with (and not for) the private sector on a daily basis, I know that the notion of the triple bottom line is far from being a central tenet of modern business.
However, stories like these instill a little bit of hope:

The video [The Story of Stuff] is a cheerful but brutal assessment of how much Americans waste, and it has its detractors. But it has been embraced by teachers eager to supplement textbooks that lag behind scientific findings on climate change and pollution. And many children who watch it take it to heart: riding in the car one day with his parents in Tacoma, Wash., Rafael de la Torre Batker, 9, was worried about whether it would be bad for the planet if he got a new set of Legos.

Of course, no one wants their kids (or other people’s kids, even worse) becoming staunch and unwavering advocates of the environment at home – I can already picture children across America going through their mothers’ cosmetics and hiding/throwing away (I mean, recycle) all of the products that don’t meet their high standards. Regardless – and seriously – I do believe that tackling the question of how to adapt our modes of production/consumption to current realities (more people, more pollution, less resources) will require some efforts on the educational front. Leaders of tomorrow (it’s apparently too late for today’s leaders) will need to view the world through the filter of sustainability – and that can only happen if we educate and shape our young generation to respond appropriately to the challenges of their time. 

The Story of Stuff is an amazing video, which I highly recommend you watch – similarly to the Anderson TED talk, it shows how modern means of production are outdated. I’m not surprised that it’s being used in classrooms across the US to teach students about the environment and climate change. Living in Vancouver, I sometimes feel like I live “in the future”: few people still use plastic water bottles, taxis are almost all hybrid, buses are electric, electricity comes mostly from hydropower… etc… There are so many signs that we are turning a corner in terms of how we approach consumption/waste – but not nearly enough, in my view. And I suppose it will take time. And that, to a large extent, it’s the millions of small, everyday paradigm shifts that really make a difference (recall Rafael de la Torre Batker who was worried about the effect of a new set of Legos on the planet). 

The Economist published a story about money growing on trees. Wait. What? 

When forests vanish, people suffer. That is why many believe that there is an urgent need to bring forests onto the global financial balance sheet. Last year Pavan Sukhdev, an economist at Deutsche Bank, reported that the world was losing natural capital worth between $2 trillion and $5 trillion every year as a result of deforestation alone. If money could be made by selling these ecosystem services, then the financial equation for forests would change.

So a London-based firm, Canopy Capital, is taking up the challenge with Iwokrama International Center (Iwokrama is 370,000 hectare forest in Guyana). They are creating an entirely new class of asset management, by analyzing all of the “services” the forest offers and putting a price tag on it: carbon sequetration, soil regulation, oxygen production… Possibilities are endless, seemingly. I think the conclusion of The Economist piece captures it: “For a few bright sparks out there, financial innovation and engineering combined with science will let them generate wealth in a whole new way.”

Brilliant! I’m already imagining the answers we’ll hear when we ask a child, ten years from now, what he or she wants to be when they grow up: “I want to be a financial scientist!” 

The End

While I was participating in Earth Hour last night, I read this incredible piece by Michael Lewis.  I really enjoyed reading about the demise of the financial system as we know it by candlelight – it actually reminded me of the time I spent in Ghana, every evening without electricity, but with great reading and conversation. 

If you want to understand what a mortgage backed bond is, and what it means to repackage it, and how absolutely unscrupulous and greedy Wall Street firms and hedge funds are – then read this

Did you vote Earth, by the way? 

Not buyin’ it

From the Freakonomics blog:

According to this Reuters article, charitable contributions are down in the U.S. only “modestly” so far this year. But charitable giving, unlike the stock market, is a lagging indicator.

“That’s funny”, I thought. Because, from my perspective, charitable contributions have seriously decreased since September. If you actually read the Reuters article mentioned above, it becomes clear that the bulk of charitable funds available for non-profits is for programs in the US only. Which is fine, and it makes sense: hard times call for more solidarity with your compadres.

Not surprisingly, though, organizations doing work in the developing world are taking a hit – funds pledged are drawn out over longer periods of time, or have been retracted. In other cases, donors simply choose to divert their support towards domestic causes, or give a smaller proportion of their charitable contributions for foreign based programs. And, since I work for organizations doing work outside the US, I’m witnessing first hand the effects of this drop in funding: programs being cut, postponed, canceled.

It’s too bad, as a lot of work being done in poverty alleviation outside the US was reaping results – and, as these tough economic times are also affecting developing countries, support for vulnerable people and poverty reduction initiatives (broadly speaking) are ever more necessary.

(I’m curious to see statistics about charitable giving a year from now – the real plunge in funding began around September, and, as the article notes, there is a lag.)

On an unrelated note, this really struck a chord with me: we have a “macromyopia” problem.

Davos not as chic anymore

Via The Daily Beast:

GENEVA — The titans of Wall Street no longer sit atop the magic mountain.

Not long ago, at the World Economic Forum’s annual gathering in Davos, Switzerland, Richard S. Fuld Jr. of Lehman Brothers held forth on the state of the global economy before mesmerized journalists and cowering subordinates while other Wall Street stars mingled after-hours with the likes of Claudia Schiffer, the German supermodel.

As business, government and nonprofit leaders trek up the peak originally made famous by Thomas Mann’s novel, but now better known for the gabfest that begins Tuesday, star power is no longer in[…]

The crisis, to be sure, is hurting some more than others. While Davos will draw about 2,500 participants — roughly the same as last year — it looks as if there will be many fewer members of the tasseled-loafer set strutting down the resort’s snowy streets.

(I love the term “tasseled-loafer set” – perfect!)

At the same time, though, “the superclass parties on“:

In short, Fubini’s reporting suggests that despite the global financial catastrophe and the PR nightmare of the visit of Detroit’s “Big Three” CEOs to Washington via private aircraft, corporate jet traffic to the big party in the Alps is up 25 percent in just two years even as the number of attendees remains flat. As Federico wrote in his note, “It’s a relief as I thought there was a financial crisis and global recession out there. I was wrong.”