Is it helpful to adopt a dialectical approach to problem definition?

 

When you think of dialectical approaches the idea that may come to mind is thesis, anti-thesis, and synthesis. As suggested in the sentence quoted above, I am viewing dialectical approaches more broadly in this essay. Before discussing the meaning of dialectics, however, it might be helpful for me to outline why I think problem definition is a topic worth considering.

Importance of problem definition

Fundamental values are clearly at stake in public discussion of some issues (e.g. abortion, the death penalty, assisted dying). 

Most people tend to agree about policy goals when it is not obvious that fundamental issues are at stake. For example, when people are discussing climate change, they tend to agree that exposure to extreme weather events has undesirable consequences for human flourishing. Similarly, when health services are discussed, people tend to agree that illness is undesirable; when education is discussed they tend to agree that literacy and numeracy are desirable; and when poverty is discussed, they tend to agree that it would be desirable for all humans to have the wherewithal to maintain a minimum standard of living.   

However, when a participant in public discussion proposes a remedial strategy, those who disagree often claim that the proposed strategy is built on an implausible view of the nature of the problem being addressed. Much public discussion is about questions such as: Is there really a problem? Is the problem one that individuals are normally expected to manage by themselves, or is some kind of collective action usually considered appropriate? What plausible explanations have been offered as to the causes of the problem?  Should we be thinking about how to tackle the causes of the problem or about how to alleviate symptoms? Which potential remedial strategies should be the focus of our attention? Discussion often focuses on the validity of research findings and other information offered to answer such questions.

Relevance of dialectics

I am adopting here the definition of dialectics proposed by Chris Sciabarra, in his book Total Freedom: Toward a Dialectical Libertarianism:

“Dialectics is an orientation toward contextual analysis of the systemic and dynamic relations of components within a totality.” (173)

Sciabarra explains that “a totality” “is not simply an undifferentiated or all-encompassing whole”. He suggests it could be a two-person dialogue, an economy, or a social system. I will take the “totality” to encompass everything that can be shown to be relevant to the topic under discussion. If a dialectical approach to problem definition is adopted, the meaning of totality would be a matter for consideration in any specific context.

Sciabarra emphasizes that dialectics “is a thinking style that emphasizes contextual analysis of systems across time”. In a dialectical approach, “the aspects of a totality are understood systemically – that is, according to their spatial, or synchronic, interconnections – and dynamically – that is, according to their temporal, or diachronic, interconnections”.

Sciabarra offers his definition of dialectics after considering the use of dialectics from Aristotle to Hegel, and, after Hegel, by Marx, Hayek, Rand and others.

The question I have posed above - of whether it is helpful to adopt a dialectical approach to problem definition in public discussion - is not discussed explicitly in Total Freedom. However, that context seems to me to be one in which dialects has potential to be more helpful than alternative approaches.

In this essay I refer to some issues that have recently been the focus of public discussion to illustrate how a dialectical approach to problem definition would differ from the range of other methodological orientations. I focus on the four broad orientations that Sciabarra has identified: strict atomism, strict organicism, dualism, and monism.

Strict atomism

Strict atomists look at the world as if each aspect of it is separable from every other aspect. A recent Australian example of such an approach is the decision of the government of New South Wales (NSW) to build homes for “essential” workers in Sydney. The rationale given is: “NSW would grind to a halt without nurses, paramedics, teachers, police officers and firefighters, but many can’t afford a place to live in Sydney, close to where they work”. The announcement acknowledges existence of a more general housing affordability issue in Sydney but the government’s approach to dealing with that issue is clearly atomistic.

A dialectical approach would address a range of questions including whether anything is preventing the labour market from functioning flexibly to remunerate “essential” workers sufficiently to ensure that sufficient numbers are available to meet demand for their services in Sydney, and whether government regulation (e.g. zoning regulation) has been discouraging construction of sufficient affordable housing.

Strict organicism

Strict organicism relies on an illusory synoptic vantage point and views all relationships encompassed within the topic under discussion as constituents of a holistic principle at work. I see examples of strict organicism in recent discussion in Australia of the murder of women by their current or former male partners. Some people have suggested that this is a cultural problem which requires a fundamental change in men’s attitudes towards women. For example, Senator David Pocock stated: "we have a huge cultural issue" that needs to be "tackled". "This is going to take far more than some extra funding. This is a fundamental shift in the way that we treat women in this country.”

However, defining the problem as one that requires further improvements in men’s attitudes toward women tends to overlook the potential for other remedial action that is likely to be more effective in protecting the women whose lives are at greatest risk.

A dialectic approach would recognize that many of the men who kill their partners have known histories of violence. Research by Kate Fitz-Gibbon et al based on sentencing remarks by judges indicates that few intimate femicides occur without the offender having prior interaction with the criminal justice system.  This suggests the existence of effective intervention points that are not dependent on bringing about cultural change.

Dualism and Monism

 Sciabarra considers dualism and monism under the same heading. “Dualism is an orientation towards analysis by separation of a system’s components into two spheres”. “Monism is an orientation towards analysis of a system’s components as manifestations of a single factor”. Monists often embrace the dichotomies defined by dualists, while advocating a one-sided monistic resolution.

The mind-body dichotomy is a classic example of dualism. Another is the division of the social world into two spheres – the state and civil society (including the market). Sciabarra notes that dualist statists and dualist anarchists perceive these two spheres as fundamentally opposed and propose to resolve the conflict between them via monistic absorption of one sphere by the other. One side proposes a statist solution whereas the other proposes a civil society solution.

The debate about climate change provides examples of dualism and monism. For example, consider differences of opinion about CO2. On one side of the debate, many people argue that CO2 is polluting the atmosphere and causing adverse climate change. Their opponents argue that increased concentrations of CO2 in the atmosphere have had beneficial impacts on crop yields and the growth of forests. A dialectic approach would recognise that those views are not necessarily in conflict. A central issue is at what CO2 concentration the adverse impacts are likely to exceed beneficial impacts.

Dualism and monism are also evident in the broader debate about action to reduce CO2 emissions. On the one side, some people consider the idea that CO2 emissions influence the climate as a hoax perpetrated by statists to gain greater control over the lives of ordinary people. On the other side, some people claim that the world is heading for disaster if urgent action is not taken to reduce emissions.

A dialectic approach would emphasize the importance of keeping context in mind when considering such issues.

Let us first consider an individual who wants to come to an informed view on whether extreme views of climate alarmists or sceptics should, or should not, be dismissed as implausible. That individual could be expected to spend many hours sifting through available scientific evidence. They might conclude, as I have, that projections of climate change models endorsed by the IPCC are more plausible than the views of climate alarmists and sceptics. On the other hand, they may come to different conclusions, as have some of my friends who seem to be fairly intelligent.

Now, let us consider the appropriate policy response of the Australian government in the light of two facts: Australian greenhouse gas emissions contribute just over 1 percent of global emissions, and on a per capita basis, Australia’s emissions are among the highest in the world. That context has considerable relevance in considering an appropriate policy response:

Climate alarmists should be encouraged to understand that even if Australia’s emissions went to net zero tomorrow, that would have an insignificant direct impact on global greenhouse gas emissions and would certainly not prevent the global calamity that they fear. A policy of rapid reduction in emissions may offer Australia the worst of all worlds – high cost of transition to a low emissions economy accompanied by high cost of adaptation to climate change.

Climate sceptics should be encouraged to understand that international sanctions may be imposed on Australia if this country is seen to be unduly slow in taking action to reduce emission levels.

 Conclusions

 In this essay I have considered whether a dialectical approach is relevant to problem definition in public discussion. I have adopted Chris Sciabarra’s view of dialectics as a thinking style that emphasizes contextual analysis of systems across time.

The examples of problem definition that I have considered – housing for “essential” workers in Sydney, murder of women by their current or former male partners, and the debate about climate change – support the view that a dialectical approach is preferable to strict atomism, strict organicism, dualism and monism.

It could be claimed that context-keeping is something that people who are skilled in problem definition do as a matter of course without declaring that they are adopting a dialectical approach. I have some sympathy with that claim but I note that I have had no difficulty finding examples where people who might be expected to have some skills in problem definition have adopted approaches that can be described as strict atomism, strict organicism, dualism and monism.

Some people need reminding about the importance of context-keeping.

Do people obtain more benefit from a walk in the park than from a walk in the suburbs?

 

I have previously written on this blog about the relationship between nature connectedness and happiness. In one essay, written in 2015, I referred to a meta-study (by  Diana Bowler et al) which suggested that exercise in natural environments promotes greater emotional health benefits – in terms of feelings of energy, and less anxiety, anger, fatigue and sadness - than exercise in an artificial environment. 

Since that study was undertaken there has been further research on the benefits people obtain from exercise in the natural environment.  I focus here on the conclusions of a review of experimental studies on psychological benefits of outdoor physical activity in natural versus urban environments. The review was authored by Claire Wicks , Jo Barton , Sheina Orbell , and Leanne Andrews, and published in Appl Psychol Health Well Being, 2022 Aug;14(3):1037-1061.

Natural versus Urban Environments

The authors identified 24 experimental studies which met their eligibility criteria, including a focus on psychological outcomes, broadly defined to include well-being, self-esteem, depression, anxiety, mood, and stress.

In the included studies, the natural environment includes forest, grasslands, nature reserves and urban parks. The urban environment includes commercial districts, city areas and residential streets.

The most common physical activity in the studies was walking.

The authors hypothesized that physical activity in nature would provide more favourable results for all psychological outcomes.

I focus here on the narrative synthesis of findings which was conducted across all studies. The authors conclude:

“Although there are some inconsistencies across outcomes, this analysis revealed results generally supporting our hypothesis. The majority of tests showed greater benefits following green exercise for anxiety, anger/hostility, energy, general affect and engagement, whereas four out of 10 tests found in favour of the natural environment for depression and one in four for tranquillity. Where studies did not find in favour of the natural environment, the results often indicated either favourable changes in both conditions or no changes in either condition.”

A personal view

I believe that most humans have deep-seated intuitions about their kinship (relatedness) to other living things. That led me, in Freedom, Progress, and Human Flourishing, to agree with the view that living in harmony with nature is intrinsic to individual flourishing and should be acknowledged as one of the basic goods of a flourishing human.  If living in harmony with nature is intrinsic to individual flourishing, I think it is reasonable to expect that exercising in the natural environment would provide greater psychological benefits than exercising in urban environments.

I walk regularly in a park close to where I live and obtain psychological benefits from doing so. I try to persuade others to do likewise.

However, I think my testimony about the benefits I obtain from walking in natural environments might be treated with some skepticism because of my belief that living in harmony with nature is intrinsic to individual flourishing. It is possible to argue that the psychological benefits that I obtain can be attributed to acting in accordance with my beliefs rather than to the impact of nature.

I am drawing attention to the findings of survey discussed above in the hope that it will receive serious consideration. Hopefully, it will induce more people to obtain the benefits of a walk in the park, and some of them will be led to view living in harmony with nature as intrinsic to their personal flourishing.

Does stakeholder capitalism contribute to human flourishing?

 

Many people reading this are likely to view the use of stakeholder terminology by business leaders as little more than a public relations tool. That is certainly how I have viewed it in the past. If you are a business owner, or executive, who wants to encourage employees, suppliers, customers, and community members to feel loyalty to your business, it makes sense to acknowledge that they may also have a stake in seeing it prosper. And it does no harm to remind governments of their stake in the prosperity of your business via its contributions to tax revenue.

However, I have recently come to associate stakeholder terminology with stakeholder capitalism. That ideology has close links to the concept of corporate social responsibility (CSR) and the increased tendency of businesses to seek rewards from governments for pursuit of environmental and social goals (ESG). Reading about stakeholder capitalism has added to my previously expressed concerns that such interactions between business and governments are leading liberal democracies more deeply into a corporatist quagmire.

Stakeholder capitalism

Michael Rectenwald’s book, The Great Reset and the Struggle for Liberty, has persuaded me that in advocating stakeholder capitalism, Klaus Schwab, the founder of the World Economic Forum (WEF), has in mind a corpus of ideas and policies that are fundamentally opposed to free markets and classical liberalism. Moreover, the WEF may have sufficient influence among powerful elites to eliminate the already dwindling influence that classical liberalism has been having on public policy.

Rectenwald’s book was written in response to a book by Klaus Schwab and Thierry Malleret entitled Covid-19: The Great Reset, which was published in 2020. Rectenwald draws attention to the open espousal of policies opposed to free markets in that book. Schwab and Malleret welcomed the possibility that governments might take advantage of the pandemic “to permanently increase their role”, and eliminate classical liberalism, which they refer to as neoliberalism. They write:

“COVID-19 is likely to sound the death knell of neoliberalism, a corpus of ideas and policies that can loosely be defined as favouring competition over solidarity, creative destruction over government intervention and economic growth over social welfare. For a number of years, the neoliberal doctrine has been on the wane, with many commentators, business leaders and policy-makers increasingly denouncing its “market fetishism”, but COVID-19 brought the coup de grâce.”

They go on to predict:

“Shareholder value will become a secondary consideration, bringing to the fore the primacy of stakeholder capitalism.”

Klaus Schwab has been advocating stakeholder capitalism for over 50 years, and has been influential in having that concept endorsed at international meetings of powerful people from business and government. The first Davos Manifesto, signed in 1973 states:

“The purpose of professional management is to serve clients, shareholders, workers and employees, as well as societies, and to harmonize the different interests of the stakeholders.”

The 2020 Davos Manifesto is titled: “The Universal Purpose of a Company in the Fourth Industrial Revolution”. It includes similar sentiments to the 1973 Manifesto, but goes on to state, among other things:

“B. A company is more than an economic unit generating wealth. It fulfils human and societal objectives as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives. Executive remuneration should reflect stakeholder responsibility.”

Some CEOs would welcome a long muddled list of performance objectives because it offers them the opportunity to “do their own thing” and provide ready-made excuses for poor performance. Others would prefer to see governments pursue social and environmental objectives by more efficient mechanisms, and to have their own performance judged according to more tangible benefits to shareholders. How does the WEF propose to encourage compliance with its Manifesto?

The WEF’s ESG Index

The WEF published a report in 2020 setting out metrics for measuring company performance with regard to ESG goals. The title of the report is  Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation.

A mechanism for grading companies in terms of their environmental, social, and governance practices and plans might be thought to offer useful information to investors and consumers who concerned about the environmental and social impacts of their decisions. However, Rectenwald points out that it also has potential implications for interactions between business and government:

“Woke planners wield the Environmental, Social, and Governance (ESG) Index to reward the in-group and to squeeze non-woke players out of business.”

Ideological reach

In a recent Newsweek article, Jon Schweppe asks, Why did corporations go ‘woke’? His response, in brief, is that “this is part ideology, part price of admittance to an elite club, and part protection racket – doing everything one can to avoid upsetting the mob”.

Rectenwald’s book suggests to me that the WEF should come to mind following any mention of “ideology” and “an elite club” in this context. The corporate partners of the WEF include over 1000 of the world's largest business organisations. The annual meeting of the WEF in Davos is an invitation-only event but is widely reported in the media. Many notable political leaders, journalists etc. have been members of the Forum of Young Global Leaders, which is reserved for people under 40 years of age who show promise of global leadership. In addition, the WEF’s Global Shapers movement, a training camp for young change-makers (under 30 years old) has over 10, 000 active members.

Implications

Rectenwald points out that because ESG is “an impressionistic, qualitative, metric” it exposes business leaders and companies to the whims of woke arbiters. He cites the recent experience of Elon Musk who has been unfairly besmirched because he may have benefited from an emerald mine owned by his father in South Africa during the apartheid era. He sums up:

“In today’s political economy, satisfying shareholders, employees, and customers to earn profits has become less important for corporations than ingratiating the woke cartel and the governments that support it.”

Rectenwald’s book goes on to discuss possible implications for individual liberty of potential innovations such as an individual carbon footprint tracker, but in this essay I want to stick with the implications of stakeholder capitalism.

The Hayek quote at the beginning of the essay suggests another important implication of stakeholder capitalism. The quoted passage is from Law, Legislation, and Liberty (v3, p 82). The context of the quote is a paragraph in which Hayek is responding to the idea that large corporations should be required to consider the public or social interest. He suggests that “as long as the large corporation has the one overriding duty of administering the resources under its control as trustee for its shareholders its hands are largely tied; and it will have no arbitrary power to benefit this or that particular interest”. The paragraph ends by suggesting that obliging large corporations to consider the public interest gives them uncontrollable power that “would inevitably be made the subject of increasing public control”.

There is also reason for concern that obliging corporate managers to adhere to ESG will make them less accountable for productivity performance of enterprises because it will be difficult for company boards to assess the veracity of claims that performance has been adversely affected by ESG. Wokeness can be expected to provide a cover for inefficiency.

I acknowledge that stakeholder capitalism may have some positive implications for human flourishing, that should be offset against the negative implications discussed above. For example, in my book Freedom, Progress, and HumanFlourishing, I note that the difficulty that governments have been experiencing in agreeing upon concerted international action to combat climate change was ameliorated by the actions of business organisations in planning for a carbon free future.

Nevertheless, as I also argue in that book, there is more reason to be concerned about the implications of declining productivity growth than about climate change. By further reducing productivity growth, stakeholder capitalism seems likely to cause a great deal of economic misery.

Unfortunately, major economic crises will probably need to be endured before political leaders inspired by classical liberalism emerge once again to implement the public policy reforms that are needed to restore free markets.

Does the "Politics of Being" support progress?

 

“Politics of Being” is title of a recently published book by Thomas Legrand. The subtitle is “Wisdom and science for a new development paradigm”. The question I ask myself is whether Legrand’s views support progress as I defined the concept in Freedom, Progress, and Human Flourishing. Would widespread adoption of Legrand’s views enhance the growth of opportunities for individuals to obtain the basic goods of flourishing humans?

Before I purchased the book, I was aware that the author had shown wisdom by including this quote from Elinor Ostrom’s Nobel Lecture:

“A core goal of public policy should be to facilitate the development of institutions that bring out the best in humans.”

That passage is actually quoted several times in the book and is sometimes accompanied by the preceding sentence in which Ostrom distances her approach from that of policy analysts who design institutions “to force (or nudge) entirely self-interested individuals to achieve better outcomes”. The passage I have quoted at the top of this article illustrates Ostrom’s optimistic view of the capacity of individuals to work together to devise solutions to collective action problems without help from governments.

The essence of Legrand’s line of argument is that the world is stuck in an obsolete development path and is in need of a new “wisdom-based approach to politics”.  I will discuss briefly what he perceives to be wrong with the current development path, before discussing some elements of the alternative path he advocates.

Perception of the problem

Legrand believes that the current development path is causing many problems. The world is on track for a climate change catastrophe. Economic development and increased life expectancy are not making people much happier in high-income countries. Many countries seem to be facing mental health crises. There has been a decline in interpersonal trust in many countries. Our current model of development is rooted in a set of values that are causing a civilization crisis. He writes:

“Our economic system not only destroys social ties and the environment but feeds on these destructions that create new market opportunities. It seeks to adapt humans to its own requirements rather than adapting itself to human needs. Based on fundamental misconceptions, this system can only perpetuate itself through ever more propaganda that feeds our disconnection from ourselves, our true needs, and ultimately, our apathy.”

I agree that all is not well with the world and share some of Legrand’s concerns. However, I am more optimistic than he is about climate change, and strongly disagree with his views on economics. Readers who are interested in my views should read Freedom, Progress, and Human Flourishing.

Being and Interbeing

Legrand argues that the new development model required is essentially spiritual. He views spiritual development as:

“the process by which we come closer to our true nature. From that connection, we naturally tend to manifest the highest qualities: wisdom, love, joy, peace etc., or simply the best or most authentic version of ourselves currently available!”

Legrand’s discussion of spiritual values includes chapters on life, happiness, love, peace, mindfulness, and light.

According to Legrand the new paradigm involves a transition from “having to being, which many believe means interbeing”. So, what is interbeing?

 “Interbeing is a term coined by Zen Master Thich Nhat Hanh, which goes beyond interconnectedness to touch on the very nature of our being. It expresses the nature of reality based on the Buddhist teachings of interdependent co-arising (“that is because this is”), non-self, and impermanence”.

I see no problem accepting that everything is interdependent. Impermanence does seem pervasive (except in respect of fundamental values, virtues, and the highest qualities). But “non-self” poses problems. As I see it, self-awareness is a fundamental characteristic of the kind of thing (entity or system) that an individual human is.  Self-respect arises from self-awareness, and motivates respect for other people, and other living things. Respect is the foundation which makes love possible. By the way, do you know who it was who said “one should not hurt others if one loves oneself”? The answer is here.

At various points in the book Legrand recognizes that people have “higher selves” and “true selves”, so he seems to acknowledge that we should aim to purify our egos – to remove the biases, distortions, and attachments that tarnish our perceptions of our individual selves - rather than eliminate self-awareness. He provides a good summary of his view of “being” and of personal development in this passage:

“As a person, there is little chance that I get closer to my authentic being by defining a vision of who I am and trying to actualize it. On the contrary, I can discover who I am by freeing myself from predefined and limiting identities, purifying my intentions, character, and behaviors, and expressing the deepest yearning of my soul. This is a conscious, evolutionary process of emergence, informed but not bounded by the understanding I have of my essence, which is necessarily limited. The same is true for nations.”

The world would be a better place if more people adopted that as their personal development model. However, I was tempted to leave off the last sentence of the quoted passage. The idea that nations have “souls” seems to me to be collectivist nonsense.

Governance

The part of the book providing an agenda for action envisages a larger role for government than I had anticipated. For example, Legrand suggests that government efforts to promote early childhood education should start during pregnancy. He also suggests that governments should actively promote a healthy diet. Even followers of Elinor Ostrom can sometimes find it difficult to remember to avoid adopting an overly pessimistic view of what people can achieve without government guidance.

I agree with Legrand that it is naïve for people to believe that “all it takes to improve our societies is to secure a majority of voters for their ideas, especially when they engender polarization”. Political leaders have no hope of implementing lasting reforms unless they can foster broad community support for them. That usually means avoiding politicization of the issues. (As an aside, one of the inconvenient truths about politics is that Al Gore’s involvement in support of U.S. action to mitigate climate change provided a focus for Republican opposition to such policies.)

The book contains interesting proposals to enact the “politics of being” in political institutions. Legrand suggests that each nation should establish a “wisdom council” to preside over discussions about the nation’s evolution with the government and parliament. The councils would consist of equal representations of four groups: randomly selected citizens, representatives of the “outer” economic, social, and environmental life of the nation, representatives of the “inner” spiritual, cultural, and psychological life of the nation, and “representatives of non-human members of the earth community”.

Legrand also suggests that the Baha’i model of governance should be adopted for lower houses of parliament. In brief, adult community members elect representatives at the local level and are urged not to discuss with others who to vote for. The local representative vote for regional representatives, who in turn vote for national representatives.

It is difficult to envisage circumstances in which politicians would enact such radical changes to existing systems of representative government. However, if the outcomes of the existing systems become increasingly unpalatable, radical alternatives will no doubt be contemplated by an increasing number of citizens. In that context, Legrand’s proposals will have stiff competition from other proposals, including the decentralist approach discussed previously on this blog.

The main problem I see with Legrand’s governance proposals is their potential to infringe individual liberty. Most of the members of the proposed governing council would be likely to advance the interests that they represent by advocating further restriction of individual liberty. The Baha’i model is presumably more responsive to community members than religious and political governance systems in which the hierarchy is self-perpetuating, but people who are indirectly elected to peak positions still have less incentive to have regard for the wishes of members at the grassroots level than if they were directly elected, or selected randomly.

Facilitating progress?

Legrand describes his book as “a drop in the ocean”. I think it may have potential to be more than that. The part of the book dealing with spiritual development has potential to be influential if it finds its way into the hands of sufficient numbers of people who are currently rudderless and yearning for inspiration.

I think contemplation of Legrand’s views on spiritual development has potential to enhance progress, viewed as the growth of opportunities for individuals to obtain the basic goods of flourishing humans. After reading the book, some people might be more inclined to wise and well-informed self-direction, healthy living, improved inter-personal relations, living in harmony with nature, and adoption of behaviors that enhance psychological well-being.

However, Legrand’s attack on “the current development path” invites further restrictions on economic freedom which would impact negatively on growth of productivity and hence on growth of opportunities for human flourishing. As outlined in the following paragraph in Freedom, Progress, and Human Flourishing, I see declining rates of productivity growth as a major threat to growth of opportunities for human flourishing:

“This chapter has focused on the threats posed by climate change, declining productivity growth, and problems with democracy. I do not dismiss the longer-term threat posed by climate change, but in my view, there are stronger reasons for concern about the more immediate threat posed by declining productivity growth. Individuals, firms, and governments are taking action to mitigate climate change, and their efforts seems likely to accelerate before adaptation becomes excessively costly. There are fewer grounds for optimism that governments will deal with emerging economic problems (of their own making) in time to avert the widespread misery that is likely to follow from looming economic crises.”

As explained in my book, my optimism about action to mitigate climate change rests on signs that the polycentric approach, proposed by Elinor Ostrom in 2009, is now being adopted successfully.

I am not greatly troubled by the thought that some readers of Thomas Legrand’s book may be persuaded to adopt economic and political views that are inimical to productivity growth. There is an ocean full of views on public policy that are similar to those which he advocates, so I don’t think his additional drop will have a significant direct impact on policies adopted. Hopefully, his book’s endorsement of Elinor Ostrom’s approach will encourage some readers to explore her views in greater detail.

My bottom line: The net impact of “The Politics of Being” will be to support the growth of opportunities for human flourishing.

What happened to creative capitalism?

 

The question I have posed above strikes me as being delightfully ambiguous. It could be asking what happened to bring to an end the era in which creative capitalism brought about high rates of productivity growth. Alternatively, it could be asking what happened to the concept of “creative capitalism” that Bill Gates presented to the World Economic Forum (WEF) in 2008.

My focus here is on the second interpretation, but I will end up discussing what has happened to the creativity of capitalism in the more traditional sense.

Why am I interested in the particular form of corporate social responsibility (CSR) that Bill Gates referred to as “creative capitalism”? I don’t hear the Gates concept being much talked about these days, but I think that variants of this form of CSR have become more common over the last decade or so. It is worth considering whether Gates’ approach to CSR is changing corporate sectors in ways that may directly hamper the traditional creativity of capitalism, or indirectly hamper it via impacts on economic policies pursued by governments.

That is why I decided that the time had come to read Creative Capitalism, a book edited by Michael Kinsley, which was published in 2008. The book consists mainly of comments by eminent economists on the “creative capitalism” concept that Bill Gates presented to the WEF. I should confess at this point that deciding to read the book didn’t require me to judge that it might be worth buying. A copy was given to me last year by a friend who was downsizing his library. The book was sitting in my “unread” pile for many months waiting for me to show some interest. I am now glad I read it!

In the next section I will outline Gates’ concept and briefly discuss the different reactions of economists writing 14 years ago. That will be followed by consideration of possible consequences of changes in the nature of capitalism that seem to stem from Gates’ concept and similar ideas.

Gates’ concept

Bill Gates advocated a new approach to capitalism in which businesses would give more attention to recognition and reputation. As he put it:

“Recognition enhances a company’s reputation and appeals to customers; above all it attracts good people to the organisation. As such, recognition triggers a market-based reward for good behavior.”

Gates advanced this view in the context of considering how self-interest could be harnessed to provide more rapid improvement in the well-being of poor people. However, pursuit of recognition seems to have become a strong motivator for the environmental and social objectives that are increasingly espoused by corporates. Gates does not mention the potential for pursuit of recognition for good behavior to have a positive influence on investors, but that also seems to have emerged as an important factor in recent years.

My review of the contributions of commentators is highly selective. I just focus here on what I see as the main points that were raised.

Some of the commentators suggested that entrepreneurs with philanthropic objectives might do better to do what Gates did, rather than to follow the approach he advocated in his speech to the WEF. Like some others before him, Gates pursued profits until he become extraordinarily wealthy and then established a foundation to pursue philanthropic objectives. An argument in support of that approach is that the pursuit of multiple “bottom lines” by companies adds to the difficulty of measuring their performance to ensure that executives can be held accountable for outcomes. 

Several of the commentators referred to Milton Friedman’s view, in Capitalism and Freedom, that CSR is a “fundamentally subversive doctrine” because, in a free society, “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (p 133).

However, others pointed out that Gates’ proposal is consistent with a free society because he was suggesting that corporates can obtain a market-based reward for choosing to pursue non-pecuniary objectives of employees and consumers. Similarly, it is consistent with a free society for companies to seek to pursue non-pecuniary objectives of the shareholders who own them.

Consequences

It is likely that an increasing tendency for corporates to pursue non-pecuniary objectives would have a negative impact on measured productivity growth. However, that may be largely a problem in the measurement of productivity. Measures of productivity growth are biased to the extent that output indicators do not incorporate non-pecuniary goods that contribute human flourishing. If corporates are efficient vehicles for the pursuit of the non-pecuniary objectives of their shareholders, employees, and customers, it seems reasonable to suppose that pursuit of those objectives would contribute to the flourishing of the people concerned.

“The unknown ideal”

What happens if a company is not an efficient vehicle for the pursuit of the non-pecuniary objectives of its shareholders, employees, and customers?

In considering this question it is important to recognize that corporate sectors consist of large numbers of individual firms which compete for labor, capital, and customers. Individual firms are free to give different weight to different objectives. Some may see their only role as profit maximization, and may even seek recognition by asserting that they see that as a social responsibility. Others may seek a reputation for social responsibility by undertaking marketing exercises, without changing their practices. At the other extreme, some companies may devote themselves largely to pursuit of one or more non-pecuniary objectives, providing only minimal financial returns to shareholders.

It is customary for economists to assert that the market is capable of weeding out firms that are following inefficient strategies. Applying the usual market test, it appears reasonable to suppose that if individual companies pursuing the non-pecuniary objectives of workers, consumers, and shareholders are able to survive, the strategies they are following must pass the market’s efficiency test.

The Hayek quote at the top of this article is followed by his assertion that the argument for liberty rests on “the belief that it will, on balance, release more forces for the good than for the bad” (Constitution of Liberty, p 31). In considering how best to describe the spontaneous order of a free society, Hayek later suggested that capitalism “is an appropriate name at most for the partial realization of such a system in a certain historical phase, but always misleading because it suggests a system which mainly benefits the capitalists, while in fact it is a system which imposes upon enterprise a discipline under which the managers chafe and which each endeavours to escape” (“Law, Legislation, and Liberty”, V1, p 62)

The corporatist quagmire

Unfortunately, in the real world at present, the ability of the market to weed out inefficient firms and the strategies they adopt is greatly hindered by government intervention and expectations of future government intervention. If firms believe that pursuit of certain goals will be rewarded by governments, they have an incentive to establish reputations for pursuing those goals. Firms also have an incentive to seek government assistance as a reward for good behavior. The increasing prevalence of such interactions has led to the development of corporatist, rent-seeking cultures that have contributed to a long-term decline in rates of productivity growth in high-income countries.

It is also important to note that, in the realm of politics, what some people view as good behavior is often viewed in a different light by others. For example, political opinions differ on whether or not it is good for pension funds to take account of environmental policies in their allocation of funds. Investors are often uncertain about which view will prevail in the political arena. Such economic policy uncertainty adds to the normal commercial risks of investment. An example which comes readily to mind is the impact of policy uncertainty on future investment in gas-fired electricity generation in industrialized countries. Normal commercial considerations might suggest that is likely to be a profitable investment to meet demand for electricity when the wind is not blowing and the sun is not shining, but investors have to contend with the possibility that further regulatory interventions to discourage use of fossil fuels will render such investment unprofitable. It is reasonable to predict that blackouts will be more common in jurisdictions where such policy uncertainty prevails.

Political ideologies of governments also seem to be changing in ways that make it more difficult for markets to weed out firms adopting inefficient strategies. Over the last decade or so, the progressive side of politics has encouraged corporates to establish reputations for “woke progressivism”. That seems to have induced political conservatives to become increasingly disenchanted with corporates. That disenchantment has added to the antagonism associated with the increased tendency of many conservatives to espouse economic nationalism and populist views opposed to the corporate sector’s interest in free trade, international capital mobility, and technological progress.

As politics comes to play an increasing role in the investment decisions of businesses, economic growth rates of industrialized countries are likely to decline. Since governments find it difficult to disappoint the expectations of voters, government spending is unlikely to be constrained to a correspond extent. Major economic crises seem likely to become more common. (I have discussed these issues more fully in Chapter 6 of Freedom, Progress, and Human Flourishing.)  

The obvious solution

Immediately after the passage in which Milton Friedman suggested that the social responsibility of business was to serve the interests of stockholders, he suggested that the social responsibility of union leaders is to serve the interests of their members. He then went on to write:

“It is the responsibility of the rest of us to establish a framework of law such that an individual in pursuing his own interest is, to quote Adam Smith … “led by an invisible hand to promote an end which was no part of his intention. …” (Capitalism and Freedom, p 133).

Unfortunately, it seems likely that major economic crises will need to be endured before governments of industrialized countries once again see merit in confining themselves to core responsibilities in the manner that Adam Smith suggested.

Conclusion

Companies are increasingly choosing to adopt strategies to improve their reputations with employees, customers, and investors who have interests in social and environmental issues. That would not pose a problem in the context of the spontaneous order of a free society. Pursuit of multiple objectives may add to problems in holding executives accountable for an individual firm’s performance, but free markets are capable of weeding out firms that follow inefficient strategies.

Unfortunately, however, industrialized countries are now corporatist quagmires in which the ability of markets to weed out firms that adopt inefficient strategies is greatly hindered by government intervention and expectations of future government intervention. The obvious solution is to reduce government intervention in markets, but major economic crises will probably need to be endured before that happens.

What makes Meghalaya an interesting place to visit?

 

It is worth visiting Meghalaya just to see waterfalls, such as Nohkhalikai falls, shown above. Located near Cherrapunji, this is tallest waterfall in India. Visitors are likely to be told the sad story of Ka Likai, after whom the falls were named. However, I will not spoil the experience for you by attempting to summarize the story here.

There was a cultural element to much of my sight-seeing in Meghalaya. That was certainly true of my visit to double-decker living root bridge at Nongriat, which I described in the preceding article on this blog as one of the highlights of my trip to India.

In this article I will further discuss my experience of sightseeing in Meghalaya, endeavoring to highlight cultural aspects. My focus is the east of Meghalaya, the part of the state I visited.

Area visited

This map might help those uncertain of the location of Meghalaya. The Indian state of Meghalaya is in India’s north-east, next to the Indian state of Assam, north of Bangladesh, and south of Bhutan.

Upon arrival at the airport in Guwahati (Assam) I was driven to Shillong, where I stayed for 2 nights. After a day of sightseeing to the east of Shillong, I visited a sacred forest on the way to Cherrapunji. I stayed in Cherrapunji for 3 nights, and saw many different things in that general area.

In what follows I will present a few photos to give some broad impressions before making some observations about culture and history of the Khasi people. 

Impressions

Shillong is a busy place. This photo is of tourists and locals at the main shopping centre, called Police Bazar.

This photo shows a scene that is fairly typical of the people and countryside as seen from roads east of Shillong.

Hilltop cultivation seems fairly common in the east of Meghalaya.

Krang Suri Falls are located in the Jaintia Hills east of Shillong. This waterfall may not yet be on the main tourist circuit, but there were quite a few Indian tourists there when I visited.

We stopped off at the Mawphlang Sacred Forest on the way from Shillong to Cherrapunjee. The photo is of an old Australian being shown around the forest by a local guide.  

This is the place in the sacred forest where bulls were once sacrificed to appease the gods. Although bulls are no longer sacrificed, the forest is still treated with great reverence. Nothing is allowed to be removed from it.

The Church of the Epiphany at Mawlynnong was founded in 1902. This village has had a strong tradition of Christianity since Welsh missionaries came here in the 19th century. Mawlynnong has been declared the cleanest village in Asia. Locals link their cleanliness to Christianity, apparently taking to heart the idea that cleanliness is next to godliness.

This photo of people engaged in a dart throwing competition was taken along the road to Dawki (on the Bangladesh border). It reminded me of something similar that I saw a decade ago when I visited Bhutan.

Culture and history

The majority of people in the east of Meghalaya are Khasi. They speak a Mon-Khmer language -the indigenous language family of mainland Southeast Asia - and their ancestors are thought to have migrated from that part of the world.

The inclusion of Meghalaya, and other states of the north-east as part of India, may have more to do with the legacy of British colonialism than with historical links to India. From a Khasi perspective, the central government of India replaced the colonial government of the British. Khasi enjoy a measure of local political autonomy via councils which they elect.

English is an official language of Meghalaya and is widely spoken there. Local guides and hotel staff were all proficient English speakers.

Mr Dipankar - the guide who accompanied me in Meghalaya, spoke excellent English. The only communication problem I became aware of arose when he was not present. I had been invited to have a meal with Hermina Lakiang - a historian associated with the North-Eastern Hill University in Shillong - and had arranged for my driver, Mr Simitar, to take me to her home. I knew that the driver had poor English, but I was slow to understand why he was having difficulty following the verbal directions that the professor was giving him about the location of her home. I later learned that they didn’t have a language in common. The driver was from Guwahati, and had no knowledge of Khasi, and the professor had not advanced her knowledge of Hindi beyond the rudimentary level she had attained at school. There was no reason for her to become a proficient Hindi speaker.

I am most grateful to have had the opportunity to have Hermina Lakiang explain some aspects of the culture and history of the Khasi to me. My understanding was greatly improved as a result of our discussion. However, the views presented below are my own – and the improvement of my understanding of Khasi culture and history was based on little knowledge to begin with.

Khasi follow a matrilineal system of inheritance, with the youngest daughter eligible to inherit the ancestral property. The youngest daughter is apparently expected to learn from mistakes made by her elder siblings.

The majority of Khasi are now Christians, but their ancestors believed in a Supreme Being as well as other deities of water, mountains, and other natural objects.  

Christian missionaries were much less successful in other parts of India, where most people are adherents of Hinduism or Islam, or in neighboring countries where Buddhism prevails. So, how did the Khasi manage to avoid being conquered and converted to Hinduism, Islam, or Buddhism, before British colonial rule exposed them to Christianity?

The most obvious answer is that Khasi are located in hilly regions that were relatively easy to defend and not particularly attractive to potential invaders seeking land that was easy to cultivate.

However, as Sanjib Baruah points out in his book, In the Name of the Nation (2020, 29) the Khasi only became confined to the hills after confrontation with the British East India Company in 1789.

Edward Gait, a British colonial administrator, included a chapter on the “Jaintia Kings”, in his book entitled, A History of Assam, which was first published in 1906. (During the colonial era, the whole of the north-east region of India was referred to as Assam.)

Gait’s account suggests that the Jaintia kings ruled the Sylhet region (now in Bangladesh) from around 1500. These kings had Hindu names, but Gait suggests that the religion and culture of the people was never much influenced by Hinduism. He cites some evidence that matrilineal system of inheritance was still followed by the Jaintia royal family.

Concluding comments

In the light of the observation made earlier to the effect that the inclusion of Meghalaya in India was a legacy of British colonialism, it is worth mentioning that some colonial administrators had expressed fears of what might happen to the culture of the Khasi following transfer of power to Indian hands. Sanjib Baruah cites Robert Reid, a former governor of Assam, among those who had argued in the 1940s for continued British control of the “Hill Areas” on paternalistic grounds (29-30).

The experience of the last 70 years has demonstrated that the fears of British colonists of what might happen under Indian control were unwarranted. As Baruah notes, the colonial safeguards to protect the people in those areas were largely retained and placed under the supervision of elected bodies following decolonization.

The impression I gained from my short visit is that Khasi people are proud of their cultural heritage, and that many are eager to defend it.

Can historical injustice be redressed?

 

This question arose as I was reading about the theme of this year’s NAIDOC week. NAIDOC week, held this year from 4-11 July, celebrates the history, culture, and achievements of Aboriginal and Torres Strait Islander peoples.

The theme for NAIDOC week this year is “Heal Country”. The role of traditional management practices in protecting land from bushfires and droughts is mentioned specifically as part of the theme, but “country” encompasses all aspects of Indigenous culture.

The NAIDOC committee explains that “Healing Country means embracing First Nation’s cultural knowledge and understanding of Country as part of Australia's national heritage”. Australians, from all walks of life, have shown increasing concern to protect Indigenous cultural heritage. For example, when a mining company blew up an aboriginal sacred site in Western Australia last year, I found myself among the many people who felt that something significant to Australia’s national heritage had been destroyed.

The NAIDOC committee mention redressing historical injustice specifically:

“To Heal Country, we must properly work towards redressing historical injustice.”

However, that follows a statement implying that fundamental grievances would not vanish following “fair and equitable resolution” of “outstanding injustices”:

“In the European settlement of Australia, there were no treaties, no formal settlements, no compacts. Aboriginal and Torres Strait Islander people therefore did not cede sovereignty to our land. It was taken from us. That will remain a continuing source of dispute.”

Working toward redressing historical injustice will not extinguish fundamental grievances. It would be naïve to expect that it would. Few humans find it easy to let go of their grievances, even when they accept that their personal interests would be better served by viewing historical events as “water under the bridge”.

Some readers may be thinking at this point that it is futile to attempt to redress historical injustices if such attempts cannot prevent those injustices from being viewed as an ongoing source of “grievances”. I don’t concur with that view. As I see it, the central issues of concern in redressing historical injustices are about justice, or fairness, rather than about attempting to assuage ongoing feelings of grievance felt by descendants of victims.

Historical injustice to Indigenous Australians stems from the failure of governments to recognize and protect their natural rights following colonization. It is arguable that current governments have an obligation to remedy adverse consequences flowing from the failures of their predecessors.

However, it is no easy matter to assess the extent to which opportunities currently available to Indigenous Australians have been adversely affected by historical injustices. A better understanding of history is a necessary step in the direction of any such assessment. It is pleasing to see the NAIDOC committee express the view:

“While we can’t change history, through telling the truth about our nation’s past we certainly can change the way history is viewed.”

The truth includes dispossession of land over much of the country, but it is difficult to generalize about what followed. Jim Belshaw, who knows more about history than I do, describes it recently as involving “uneasy co-existence, resistance and then survival and now, hopefully, recovery”. Even those broad stages might not be equally relevant in all parts of the country.

The truth also includes the existence of the “grave social and economic disadvantage”, referred to by the NAIDOC committee, but that cannot be wholly attributed to historical injustices.

As discussed in my recent book, Freedom, Progress, and Human Flourishing, there has been massive growth of opportunities for human flourishing over the last 200 years in Western liberal democracies, including Australia. I suggest in the Preface:

“Those of us who have the good fortune to live in Western liberal democracies have opportunities that we might crave if we lived elsewhere in the world”.

I think that applies to the Indigenous people of Australia as well as to other Australians. The opportunities we all currently enjoy should be sufficient to offset any ongoing social and economic consequences of injustices suffered by our ancestors.

So, how can I explain the relatively poor social and economic outcomes of many Indigenous people in Australia? It seems to me that anyone seeking the truth about this should consider the adverse consequences over the last 50 years of extending unemployment benefits and other welfare support to Aboriginal communities in remote areas. Ongoing social and economic disadvantage may be strongly linked to well-meaning efforts during the 1970s to remove discrimination against Indigenous people in access to government welfare support.

That is not a novel idea, but governments have found it difficult to implement welfare policies with more appropriate incentives. There has been little progress toward “closing the gap” in social and economic outcomes. Hopefully, greater involvement of local communities will result in better outcomes in future.

In my view, as discussed in Freedom, Progress, and Human Flourishing, the flourishing of humans is intrinsically a matter for individual self-direction, rather than something to fostered by human development experts, or social planners. Social and economic context influence opportunities available, but the capacity of individuals for wise and well-informed self-direction is of central importance to their own flourishing. It is inspiring to see increasing numbers of Indigenous Australians achieving outstanding success in their chosen fields, despite injustices suffered by their ancestors and the limited opportunities currently available in their local communities.