Tag: Wall Street

Coming of the Second Wave


So you speak to me of sadness and the coming of the winter,
The fear that is within you now that seems to never end,
and the dreams that have escaped you and the hope that you’ve forgotten,
and you tell me that you need me now and you want to be my friend,
and you wonder where we’re going, where’s the rhyme and where’s the reason?

                                                                   John Denver, Rhymes and Reasons, 1969.

  

Is it not ironic that at times when we stand close to a momentous event, seeing it unfolding in all its HD brilliance, we tend to miss the wood for the trees in terms of its future impact? So it was when the Berlin wall came down; most folks saw it as the factual German reunification rather than the tectonic ideological change about Communism it portended. So it is with the Occupy Wall Street protests, mostly being seen as anger against job losses and lack of economic opportunities rather than something more structural.

As I look around, I see a march of seemingly unrelated trends and events.

  • Declining social and political trust arising out of a growing global inequality and a deepening fiscal crisis. This has lead to a crisis for pension, healthcare schemes etc. dependent on debt burdened states.
  • A heightened perceived insecurity in the developed world. For the first time in generations, people no longer believe their children will grow up to have a better standard of living.
  • More criminality. Be it cyber crimes, drug trafficking or acts of urban terrorism. Symptoms of rising youth unemployment and disenchantment.

During this year’s Davos meet of the World Economic forum, failures of the globalised market economy and an ‘uncertain future’ of Capitalism became the main issues. Ironic when you consider that over the years, Davos has become a byword for Globalisation.

I notice that Capitalism and Globalisation, those two economic pillars of the last few decades, appear to be losing flavour. So, is the world at some kind of an inflexion point?

I believe we have begun grappling with a massive socio-economic change. A change ushered in by programmable machines, networks and the World Wide Web. I had spoken of this in some detail in an earlier post. I say again that technology implementation is resulting in massive shifts at the work place as also how the very concept of work itself needs to be viewed. For the first time in history, technology, without human intervention, is adding economic value and wealth. So those getting in ahead of the game in terms of controlling technology are the new millionaires, displacing the aristocrats and industrialists of the last century. And these millions are being created thick and fast with hardly the need for additional employment generation. Not only is this fuelling a widening wealth gap and disparity, it is leaving more and more of the population behind, unemployed and dispossessed.

Small wonder therefore that a recently published global Wealth Report indicates that most of world’s richest people became richer through the recent economic downturn and into 2011. When in fact the average middle class family actually saw its income fall in real terms. According to Economist Paul Krugman. the current disparity gap in the USis the biggest since the 1920s. Clearly we have entered a landmark period of inequality where the gap is widening to unprecedented levels.

But do you know where the core irony of this whole situation lies? Well it happens to be our much vaunted economic models that not only failed to predict but also to come up with solutions to handle the inequality problem. Worse, if we were to go by economic theory, it is possible to show overall economic growth while significant part of the population is facing a recession or mired in poverty!

So if the predictive reliability of modern economics cannot be relied on, what do we as a society fall back upon? I sense fear as political leaderships all over brace themselves against increased social and political backlash of a growing global inequality. In the Occupy Wall Street protests. In the Arab Spring uprisings. In the resurgence of Marxism in the Indian tribal belts. In the eschewing of the rugged Thatcherism by the British Conservative party as it swing towards leftist policies.

There remain vestiges in our societal psyche of what happened a century back. The chasm between rich and poor opened up by the industrial revolution had been one of the main factors that led to the massive unrest in the first half of the twentieth century. Reaction to this had culminated in adoption of the Communism model in large parts of the world.

I believe we have once again reached that inflexion point where conditions are ripe for the coming of Socialism’s ‘Second Wave.’ I see this as a reaction to the perceived failure of the Capitalistic model and the kind of Globalisation and growth it has spawned. This Second Wave would need to show us ways of re-distributing the wealth created by that part of technology working without human intervention.

Would this be the way Inequality would give us our rhyme and our reason for the future?

In Learning…………..                                                                                        Shakti Ghosal

Wall Street protests and beyond: winter of our discontent?


 

 

Now is the winter of our  discontent

Made glorious summer by this son of York;

                                                                                                                                         Richard the Third, Act 1, Scene 1


 

The Wall Street protests have now  gone viral to more than eighty locations globally. Different places, contrasting  paradigms but same underlying issues. The protests are focused on corporate greed, on rocketing wealth and income inequality, against booming bank profits  post Government bailouts, about average folks struggling to keep their heads  above water in a tanking economy. Banners read: “We are not merchandise in  bankers’ hands!” in Lisbon, “Why am I not  economically represented?” in Dublin. A mix of anger, frustration and disconnect are palpably on display.

As I watch the flickering images  on the news screen, my mind’s eye goes back to John Steinbeck’s “The Winter of Our Discontent”. It tells the story  of Ethan Allen, a former aristocrat, now fallen on hard times. As he struggles  to make two ends meet, he maintains high integrity and honesty. But family and  peer pressure makes him resent his lowly position, forces him to give up his  long cherished values and embark on a dangerous and corrupt path……

I ponder. Is the society at large similarly headed? Is this the twenty first century denouement of Capitalism? Or a clarion call for a deeper change inside each one of us?

To the detractors, Capitalism is a fundamentally flawed model with the sole focus on profiteering. Numbers take over from morality; we get obsessed with what is monetarily productive but socially destructive.

As Aristotle had said, “Man by nature is a social animal…………… and anyone who does not need to partake of society is either a beast or a God.” We have been genetically wired to share, care and give away but this runs counter to the capitalist theory of economic progress. We are thus getting re-wired to reward selfishness but punish altruism. So what are we morphing into- Aristotle’s Beast or his God?

Our sense of purpose and values get subsumed and even contradicted by those of our organisation. We get hijacked into believing that our life’s purpose is to be successful within the corporate world, achieve that beautiful house on the lakeside or aggrandize a stable of top end cars. Such externally imposed beliefs take centre stage and drown out our true values. Our thoughts and behaviour become hostage to these underlying beliefs and as we wallow in our self created materialistic cocoon, we can no longer “hear” our true inner self. We may have once held dear the value of “environmental sustainability” but may now have become reconciled with our organisation’s growth plans of iron ore mining requiring degradation of a virgin environment. In our youth, we may have believed in “equitability of society” but as CEOs, may be perfectly willing to maximize stakeholder returns by retrenching employees through automation and out-sourcing.

While a knee jerk reaction may suggest increasing taxes on Corporates and individuals, excessive taxation endangers initiatives and aspirations, the fountainheads of progress. Clearly a shift in our perspective is needed. Could we reward and support a culture of direct benefit flows to the immediate society and the environment? Can we create a great corporate culture with Purpose over Profit? Can we re-align corporate values more with our own individual ones? Can we light up the corporate sector with glorious values as under?

  • Express love and care
  • Service to others
  • Pursuit of truth
  • Quest for excellence and perfection
  • Improve the World

In the October 2011 McKinsey Quarterly report on “The second economy”, author W. Brian Arthur speaks of how the emerging digital economy is causing large sections of human jobs to disappear, never to reappear. How the future economic challenge would be to shift from producing prosperity to distributing prosperity, how it would become increasingly difficult to apportion future wealth through jobs.

As stakeholders, could we shift our perspective to accept corporate valuation based on non-profit values as above apart from profits? Do we have the conviction to change winter of our discontent to the glorious summer, upholding our core values of universal inclusiveness and fairness? Or would we choose to go along the path taken by John Steinbeck’s Ethan Allen?

“There is a power in love that our world has not discovered yet. Jesus discovered it centuries ago. Mahatma Gandhi of India discovered it a few years ago, but most men and most women never discover it……………. 

And this morning, I think of the fact that our world is in transition now. Our whole world is facing a revolution.”

Martin Luther King, Jr.

 In learning…………                    Shakti Ghosal

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