McDreamy: Sustainable lifestyle

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

In a new report, BBC news brought forward a topic “consumption” It claims that IF the entire world follow “the US-style consumption" our resources would be able to fully serve only 1.4 billion of the world population. In other word, this McDreamy lifestyle would be sustainable only for 20% of the earth inhabitants.

The report follows with another claim that a sum of US$ 200 million is daily spent for advertisement purposes and subsequently further encouragement for excess consumption.

Now the world leaders and economists whisper a prescription so-called “more domestic consumption" for China and other developing countries as a cure for the world economic growth recovery.  

DO YOU THINK, sociologists / philosophers should seize the moment and provide humankind with the fresh idea of life values? Should they redefine, what is so-called “the concept of progress” and “perfectionism” for policymakers and societies?

Review the definition of values

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

The fact is that by nature capitalism has tendency to form cartels, shuffle off the costs of pollution and collapse under the weight of its own innovative financial instruments needs to be regulated by laws in order to employ its capacity for the general good. Business needs governing, as all organizations for reaching their optimal performance require law.

The question of the essence of progress and the necessity of a revision on it is critical in our days. It is crucial for economics to rethink about the application of the concept of progress. Too often it seems human interest gets subsumed to the market, that the is treated as absolute. A thing is often fundamentally worth more than what its buyer will pay for, something that can get lost by a science so focused on a particular theme.

Progress can become empty and mathematical, and conceal our possibility to be authentically be in the world (Heidegger) Heidegger critiques modern technological progress, and conceives of a truthful and correct attack on it. Businesses have an incentive to inflict common costs for financial gain which it makes the uncomfortable feeling with capitalism. In the liberal political structure the financial gain allows capitalism invests in the political power to manipulate policies and regulations. This political investment and politics-corporations close relationship will yield payoffs by the means of financial and externalities deregulation and dysfunctional policy (such as energy)

The sense of progress is often defined in terms of quantities. It could measure in a way to answer “to what extend the human needs of those quantities are fulfilled”. Our social, economic, and environmental systems are profoundly integrated and the quality of these links is by far, significant to the progress of the modern human

Progress

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

In a discussion with Professor Shabbir, I was asked for my thought on the concept of “progress”. By nature my mind was starting to make up words, based on my knowledge, for expressing my proposition, but I paused. Second thought ran through my mind that it would be better to look into “progress” from a different perspective. I have never thought about its concept in the context of our days.

Progress entails time and reference. It is a dynamic phenomenon that occurs over the time span. It should also be gauged and compared with a reference. Therefore an accurate definition, from social science standpoint, would be as “humankind evolves toward perfections”. In effect perfections are values which are established in societies. Let me borrow the values from the origin of law.  

Thomas Aquinas in his Summa Theologica describes that virtue denotes a certain perfection of powers. He says that “a thing's perfection is considered chiefly in regard to its end. But the end of power is act. Wherefore power is said to be perfect, according as it is determinate to its act”.

Thomas defined the four cardinal virtues as prudence, temperance, justice, and fortitude which are natural and revealed in nature, and they are binding on everyone. There are, however, three theological virtues, faith, hope and charity. These are somewhat supernatural and are distinct from other virtues in their object.

The object of the intellectual and moral virtues is something comprehensible to human reason. Therefore the theological virtues are specifically distinct from the moral and intellectual virtues

Giving this ground, we are now able to discuss about the concept of progress.

The concept of progress had been developing for centuries before conceding as a principle by western societies. In the 17th century, enlightenment thinkers believed that man emancipated by reason would rise to ever greater heights of achievement. The many manifestations of his humanity would be the engines of progress: language, community, science, commerce, moral sensibility and government. Unfortunately, many of those engines have failed.

Inevitably for developed western countries, the idea, in its classical form, was fundamental for their freedom, democracy and technological advancements.

The idea supported the development of reasoning and rationale and also free-market, social spending, innovation and investments. Societies have continued to advance in the paths which the idea of progress had paved.

But there is a flip side. The 18th century, societies were optimistic that business could bring prosperity; and that prosperity, in its turn, could bring enlightenment. Business has lived up to the first half of that promise. (Joseph Schumpeter) In the early 20th, the idea that individual progress should be subsumed into the shared destiny of nation led to break out of wars. Nationalism became the chief organizing principle of society even in the Middle East. Ruling elite in the pursuit of progress, in some countries, committed crime against people. The idea that humans would advance as part of a collective, would encourage few that have the right and the duty to impose progress on the masses whether they choose it or not,. It claims the blood of millions. With the demise of communism in the early 90s, it was proved that decay is inevitable for every system (No system is perfect and cannot get close to perfection) that basing on stagnated ideologies. Even ideology and concept should get changes over time as the society’s values are altered.   

Now the modern world focuses on consumption and quantities progress. They are based on the classical capitalism principles.

There is a question. Does capitalism with its classical and untouched principles along with technologies have power to tackle our day’s challenges such as climate change, inequality, poverty, energy security, water and food management and support any changes in favor of the wellbeing of the world?

Certainly history has more stories about the usefulness of technologies, but the point is that the quantitative concept of progress is unable to guide smoothly onto progress for humanity. From the human progress perspective, science needs governing and to be hitched to what humanity call “moral progress”. It yields untold benefits, if people wisely use it. Societies should understand what kind of technologies benefit the whole aspects of their lives and how the technologies should be used.  And to do that, we must take into account the society’s values and the way through which people behave in each society based on theirs own culture and the universal human value. 

Bangkok deluge: A journey across my memories

Shahab Sabahi
Energy and Environment for Development – Policy Analysis Research Group

Bangkok has grown up along the mighty Chao Phraya River and its narrow branches and canals which cut the city to the smaller patch-like neighborhoods. The city experiences floods, in moderate scale, every year during the monsoon seasons. So floods and the river overflow are phenomena that embedded in the Bangkokian’s life and the city has adapted well to the phenomena. However the city officials admitted that the ongoing flood differed in magnitude and would put the city in jeopardy.

As if the city is in the state of war. Full efforts have been undertaken to enforce the city against the flood and its consequences. Sandbags, barriers, barricades, heavy duty equipments and armies make me recall the time when my home country was in a war. Those days, all citizens made their efforts to secure their lives. Danger, in both events, claims human lives and damages to properties. People are making barriers with sandbags to block WAVE moves in their properties. Barricades are stood up by officials to keep away PEOPLE from the dangerous zones. Streets fall in silence and darkness and ears are cautious only to the TV and radio noises. People rush, in both cases to supermarkets and sweep their shelves to assure undisrupted supply, in rainy days, from their homes’ food STOCKS. Individualism’s principles come into work and stand in foreground of every decision-making processes. Lucks and fortunes turn to instant-foods producers. They make their annual profit over night. Drinking waters go scarce. Panic and fear are bold within societies and everyone tries to anticipate what future would hold.

But there is a distinction between war and flood. In war, people shelter undergrounds, such as parking lots, metro tubes and basements; while in flood they move to penthouses!!   

Governments come short - Double standard when trouble hits: banks receive bailouts and citizens austerity

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

In “Politics as a Vocation” Max Weber defined the state as an entity which should successfully claim a "monopoly on the legitimate use of force". Social authority is supposed to be a rational-legal authority for enforcing regulations to protect citizens’ rights evenly; whether they are bankers or otherwise.

In large part, bankers have precipitated the current financial crisis. They received bailouts for mistakes they made. The bailouts, in effect, resulted in redistributing wealth to take from the public to enrich the bankers. In spite of enormous capital infusion the banks did not resume lending and investing in real strategic assets. It led to further stagnations in the economic growth. Taxpayers are always told that the governments must recapitalize the banks if the economy is to recover. Billions have been given to the banks under sweetheart terms; in return the taxpayers receive nothing but austerity measures. We should pay attention to what had happened beneath the surface.

The cost of Mexico’s bank rescue of 1994-1997 was estimated to be equal to 15 percent of its GDP, and a substantial part of that went to the wealthy owners of banks. Mexico’s growth stalled over the decade, a decade later, wages of Mexican workers adjusted for inflation, were lower while inequality was higher (J. Stiglitz 2009)

History tells us that the previous crises did little to diminish the influence of bankers in politics; certainly the current financial crisis would not end their influence either. Perhaps physical capitals and profit in the sector have been diminished but their political capital survived. If their investments in the area of financial markets, loans and financial products may fail to produce handsome profits, their political investments have yielded significantly. They could secure a deregulated financial market as well as tax-free heavens to save their profits.

Do governments truly protect citizens’ rights evenly? Does the old-fashion capitalism concept need to be mended and give a way to Neo-capitalism? Should the government servants in finance ministries and central banks come from non-private bank backgrounds? 

The Occupy Wall Street and its EU-ASIA versions will make out the answers of the above mentioned questions.   

Stimulating debt-financed consumption OR subsidizing clean energy technology development?

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

Like other sectors of an economy, a subsidy scheme for renewable energy technology development will inevitably increase the economy’s deficit, but economy’s debt only measures one side of the balance sheet, what it owes. Assets are important too. If a subsidy scheme (not necessary cash handout) helps to boost asset investments that increase the country’s long-run productivity, the country will be in better shape in the long run and even short-run output and employment may increase.

If so, why do not countries seriously support a subsidy scheme for clean energy investment? Are the clean energy plants not regarded as assets? Or perhaps their capacities are far low and then won’t be able to improve the productivity of economy? Or do the financial markets expect a high short-term profit rather than strategic investments?

As far as the air quality is concerned, employing the clean energy technologies obviously benefit societies and mitigate the energy security concerns in counties. Countries (example: the US) prefer to stimulate their economies through debt-financed consumption. A general notion says, the debt-financed consumption scheme is essential for high standard of living now and in the future. In other hand, the general consensus concedes that the existing pattern of consumption will degrade the environmental system and reduce standard of living for sure in the future. The debt-financed consumption will lower the standard of living when the time comes to pay back the debt or even just to pay interest on it.

If a country stimulates its economy through investment, future output will be higher with good investments by more than enough to pay the interest. Such investments not only improve standards of living today but also improve those of next generation.

High fossil fuel demand, decaying energy infrastructure, inefficient conventional energy supply chain and generation system and global warming all cloud our societies’ long-term outlook An effective subsidy scheme, for clean energy technology development, would target them or at least not make them worse. The nature of the energy sector requires exogenous help if it is supposed to get structural change and we believe the clean energy technologies will improve economy’s productivity and can replace the fossil fuel technologies and its profit!

Long experience of climate change

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

Climate change has been scientifically proven to be the ultimate cause of significant human crises in pre-industrial Europe and the Northern Hemisphere by Professor David D. Zhang from the Department of Geography of the University of Hong Kong (HKU).The research finding is the first scientific verification about climate-crisis causal linkages. ( the Proceedings of the National Academy of Sciences of the United States of America, the most prestigious journal in social sciences, on October 4th,  2011, Hong Kong time)Zhang collected required data about climate, demography, agro-ecology, and the economy from the years 1500 to 1800 in Europe and found that these variables up and down along with the weather. They used a number of criteria to confirm that the relationship was causative and not merely associative:  there had to be a strong and, importantly, consistent relationship between variable and effect; the cause had to precede the outcome; and the researchers had to be able to predict the effect based on the cause.
And as is the case with everything in the environment, a change in one area often triggered  a cascade of changes in others. Take for example the cooling that occurred from 1560 to 1660—a century within the 300-year era known as the Little Ice Age: plants couldn't grow as much or for as long, so grain prices soared, famine broke out, and nutrition sank. Poor diet means poor growth even for survivors, and the late 16th century saw a decline in average human body height by 0.8 inches. As temperatures rose again after 1650, human height crawled back up too. Before it did, however, sky-high grain prices and accompanying real wage declines brought social problems more pressing than height.Peaks of social disturbance such as rebellions, revolutions, and political reforms followed every decline of temperature, with a one- to 15-year time lag adding that many such disturbances escalated into armed conflicts. The number of wars increased by 41% in the cold phase.
There were more peaceable responses too. Poorly fed or otherwise deprived people tend to decamp from where they're living and move somewhere else, and migration rates increased in this era along with social disturbance. The problem was, in these cases the relocation wasn't the hearty westward-ho kind of 19th century America, when well-fed settlers could live off the land (and the buffalo) while they sought new homesteads on the frontiers. Rather, migration among the hungry or unwell often leads to epidemics. It may be too much to lay the great European plagues of 1550 to 1670 entirely at the door of global cooling, but dramatic climate shift and resultant poor health surely played a role. It was around 1650 as well that European population collapsed, bottoming out at just 105 million people across the entire continent. Wetter countries with more fertile land or those with stable trading economies tended to do better in this eras of hardship, but no one was spared.
So the results show that climate change has affected human life and also no single event can be attributed entirely to global warming. Our own time follows the same pattern and will experience the same natural pressures and cultural changes as before. 

Banks, Governments against Economic principles

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

The concept of fairness as one of economic principles requires firms and individuals pay for the consequences of their investments and decisions which they made. It suggests that banks and insurance companies, who have invested in risky toxic assets, should pay for the full direct costs of washing off their own created financial crisis and mess. Also they should pay to fix any financial damaged that imposed to innocent people. Contrary to this economic principle, governments bailed out banks who were proximate to bankruptcy and saved them. Is it the fairness definition in classical capitalism? Why did government not let troubled banks go down? Why did governments not bail out other troubled manufacturers and companies evenly same as they had treated banks? 

Now banks report benefits (BBC Oct 4^th 2011, Business report) while our societies are yet long way to struggle securing their jobs and managing their living expenses. So it is not quite clear what the banks’ sources of profit are and why their profitable investments have not created any jobs. The banks that survived and now generating profits claim that making them pay for the costs of those that failed is unfair. Perhaps they forgot their survivals owe the societies who are now in trouble.

If this is the fairness that defined by banks’ economists, one should reflect the legitimacy of economic principles OR rethink about the existence of flaws in classical capitalism.   

 

Since governments’ economic teams (at least it holds true for the US since the Reagan administration onward) are usually coming from the private banks or somehow are connected and have interests in the financial sectors, one should not surprise if governments who are supposed to protect the entire societies’ interests, do nothing  with regards to regulation in the financial sector. Even now banks generating profits, governments have not claimed returns to taxpayers’ money which had been lent to banks when they were in trouble. It is time to sound the bells that the old fashion capitalism thought decay occurs and the advent of the neocapitalism is just started