The Parallel Parliament

by Glen Pearson

Tag: capitalism

The Explosion of Civil Society

 

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AS THE HOLDER OF THE HIGHEST POLITICAL OFFICE in the land, President Grover Cleveland gained due praise for his integrity, honesty, and a commitment for self-reliance. He struggled mightily against political corruption in an era where it was all too prevalent. He was liked across party lines. Yet his pro-business stance sustained a system where the free market found little to inhibit it. The increasing pressure to reform capitalism before it consumed the social wealth of the nation went largely ignored by Cleveland.  At one point he said, “The factory is the temple and the workers worship at the temple.”  The economy took a severe downturn by the end of his term.

The period just prior to the end of the 1800s also felt massive migrations from the country into the city as the manufacturing industry successfully shifted the nation’s economic system from agrarian to urban. Many became dislocated in the process and the cry was continually raised by millions for a more receptive federal government that put an emphasis on some kind of social/economic compact that would respect the importance of cities.

And then something remarkable happened. Between 1880 and 1910, a civil society movement grew out of the subtle rebellion that changed and humanized almost every level of American society. As the government grew remote and the free market became the dominant force, and explosion of some of the nation’s great civic institutions erupted that would eventually modify capitalism itself and prepare it for years of unprecedented growth and success. Founded in that period, they line up as a “Whos-Who” of citizen organizations:

  • Red Cross
  • YWCA
  • Boy Scouts
  • Urban League
  • Labour unions
  • Parent-teacher associations
  • Rotary Clubs
  • Legions
  • Knights of Columbus
  • Sierra Club

Soon enough municipal charters were developed by citizen groups that oversaw the supply of transportation, water, gas, and electricity. Christian organizations joined together to fight for equal rights for women, including the right to vote. Numerous groups joined forces to fight promote labour laws and to strive for an 8-hour workday.

There had been a social capital deficit in America created by great economic and technological change aided and abetted by a government that refused to consider the fallout of such dislocation. When the political powers refused to listen concerning the growth of poverty, the lack of equality, and the ignoring of communities, it was citizens and not their corporations or governments that pushed back. Great reformers like Jane Adams pressed for political action to alleviate the direct conditions that cities were facing.

The result of all these efforts was nothing less than transforming. Most understood the importance of capitalism and markets, just not at the expense of people and hope, and they worked to develop a more balanced system between the free market and the freedom of opportunity for citizens. They worked with government over three decades rather than abandoning it. And from those efforts came the Federal Reserve Bank, regulation of food and drugs, the establishment of the Department of Labour, the creation of the U.S. Forest Service, and the preservation of more than 170 million acres of land through a vast network of national parks.

Virtually all of the groups mentioned above sought for balance, not dominance, and their efforts were ultimately rewarded a short while later in Franklin Roosevelt’s New Deal. Capitalism, reminded of its responsibility to the communities in which it functioned, nevertheless was unleashed in ways unimaginable three decades earlier, rewarding citizens with decades of unprecedented wealth.  And civil society, rooted as it was in local communities, brought citizenship to entirely new levels.

Canada followed a similar, though not as diversified, course, but the results were equally remarkable. The free market generated wealth and employment, and civil society produced people of value, industriousness, education, health, and responsibility. It was the beginning of the remarkable age that unleashed the creativity and dedication of citizens and businesses.

The parallels with our own times hardly need to be raised at this point. We are a people struggling with how to bring that balance of economy and humanity back into alignment. And it leads us to wonder whether we can do it again, whether we can pull ourselves out of our disillusionment with all the prevalent powers that march to a drummer not our own?

Andy Warhol observed that people, “Always say time changes things, but you actually have to change them yourself.” Perhaps it’s time we put that to the test – again.

Innovation Agents

 

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ONE OF THE GREAT CRITICISMS THAT HAS that always confronted the World Economic Summit in Davos each and every year is that its pronouncements sounds so grandiose and global when in fact little, if anything, concrete seems to come from all that talk and collaboration. We need evidence, the kind that is supposed to emerge when connected minds and collaborative intelligence get together and map out a way forward. Proof of what is possible is far more important to the billions in this world than mere projections of what could be.

In numerous and provocative dimensions this is what billionaire and elite rebel Nick Hanauer has been prodding his peers to do: get real. Yet he understands that financial reform will prove impossible without political renewal. As long as the political spectrum remains as rigid and ideologically fixed as it has shown in recent decades, any sense of change in world finance won’t find a willing partner in transformation politics.

Hanauer points out that many of the greatest democratic movements occurred far away from the apex of power, in regional areas where citizens successfully mobilized on issues ranging from pensions to affordable health care. Often the reason is not merely due to the dynamic resources of those pressing for change, but the demoralizing inflexibility coming from party central – all parties.

“The politicians just don’t get it, and haven’t for years,” he observes. “The Right screams for growth and the Left keeps calling for fairness – and they both just keep losing legitimacy.”

It’s really not in the nature of government to innovate, except on rare occasions. Governments have historically been viewed as providing stability, maintaining the status quo, but that has become precisely the problem in the modern era. Political parties remain entrenched, making renewal all but impossible. In such a setting, how will they take risks, thinking radically outside the box, or even take the lead from outside forces. It’s true that governments around the world became far too easily influenced by free market ideologies, but that has now left both politics and capitalism as appearing unable to solve our greatest problems. While political leaders in places like Davos acknowledge that financial inequality has become one of our greatest challenges, they see no desire for change from the financial order and so remain mired in their redundancy. The status quo no longer works because far too many people are being left out of the wealth being generated.

Not even a year ago, the Coordination of National Digital Strategy of Mexico launched a program called “Innovation Agent.” They invited leaders from within both government and capitalism and asked them to think of the great global challenges in the way average people would see them. Over the course of time the organizers easily spotted the true innovators from both sectors and were amazed at how they worked together to formulate solutions.

Yet the success of the exercise wasn’t so much predicated upon the ability of the participants to start thinking like average people as it was the freedom the innovators felt once removed from the stifling orthodoxies and ideologies of both politics and business. The business innovators showed remarkable dexterity, not only in admitting corporate failures but of the need for governments to take on a more equitable leadership role. And the politicians? Once they were freed from partisan constraints, they were far more effective in designing collaborate solutions that showed promise.

Participants in the exercise acknowledged that in order to build governments and businesses that truly apply themselves to the challenges before the world they must get out of being isolated from citizens in general. Innovation didn’t come for the participants until they were willing to entertain the possibility of destroying the old paradigms and partisan leanings.

To succeed in reforming both politics and business we must find some way to get them outside of their comfortable confines and into communities where the greatest kinds of innovations play out. The governing and corporate sectors have come to be exclusively defined by three general terms – size, money, and power. Until they both work together to change that perception, it will only be a matter of time, as Hanauer repeatedly claims, until everything collapses due to irrelevance.

Pitchfork Democracy

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THE DAVOS MEETINGS HAVE CONCLUDED AND, as always, we await the results. Warnings were coming from everywhere prior to the exclusive sessions – possible recessions, the lowering price of oil, global inequality. But as far back as last summer, one of those in the world’s most elite financial club was already sounding the alarm at various levels.

Nick Hanauer helped launch 30 businesses, including Amazon, owns a bank, his own plane, a huge yacht, and qualifies, not as a member of the 1%, but of the .01%. He says that one of his keenest strengths is to possess a kind of instinctive sense of what the future will bring.

What is his sense picking up now? “I see pitchforks,” he states confidently.

“Our problem is that inequality is at historically high levels and getting worse every day. Our country (the U.S.) is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.”

Did the folks at Davos hear this message? It seems likely, and from numerous sources. The problem is that many of those who attended the World Economic Forum last week are of the investment kind. They attend because they sincerely want to hear of the problems in order to know where to place their funds. They aren’t out to solve the problems, but to stay clear of the greatest risk to their resources. Hanauer knows this reality and so put his challenge in plain terms: “And so I have a message for my fellow filthy rich, for all of us who live our gated bubble world: Wake up, people. It won’t last.”

Many in the financial order actually appreciate his forthrightness and candour, but figure they can avoid the troubles he speaks of. What they don’t comprehend is that Hanaeur is saying this great challenge before them isn’t financial but democratic and human. Just so they wouldn’t misinterpret him, he defined it for them:

“If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this didn’t see the pitchforks eventually come out. There are no counterexamples. None. It’s not if, it’s when.”

We’ll explore more regarding his reasonings in the next post, but for now the contrast between his language and that used in Davos is profound, even exasperating. The jargon largely used in Davos is of the corporate style – technical and vaguely antiseptic. While organizations like Oxfam were providing a clear contrast, speaking with pathos and urgency, the prevailing language is always one of neutrality and a morally numbing kind of objectivity. It focuses on the great problems of the day by analyzing their implications rather than solving their harsh realities. Yes, the great needs of the world are there – poverty, women’s rights, climate change, poor governance, even greed – but they are gathered effectively on the outside, looking in. The fundamental driving force of meetings like those in Davos is how to grow prosperity in order to overcome these problems rather than clearly solving them in human terms.

Just one other thought. If, as presented at the Swiss village last week, over half of the world’s wealth is about to be owned by the 1%, how can we expect them to tackle the great challenges of the age if it would necessarily cut into their profits if more effective measures at reducing inequality were to be undertaken?

This is where Hanauer is helpful, because he speaks from inside the gates, reminding his peers that if they have the most of the wealth, then they will have to apply themselves to the solutions. If democracy is not merely about deregulation, supportive corporate legislation, or access to hordes of capital, but angry citizens coming together, then a day of reckoning might indeed be on the horizon, the modern equivalent of pitchforks everywhere.

The Time for Tinkering is Over

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THE FEDERAL LIBERALS CAUCUSED IN LONDON this week and it was good to see some old friends. Justin Trudeau was struggling through a bout of food poisoning and his caucus was focusing on the one issue they believe will prove critical to the coming election: the economy.

I get it. Each party is talking about our struggling economy, hoping to leverage some advantage from it, one way or the other. But I wanted to ask my Liberal friends one question: will you stop tinkering this time? All parties have been doing so, but this occasion in London could represent a turning point within the party.

We all understand that each time we bounce back from some kind of recession, severe or light, that we never land back where we were. The unemployment rate continues to climb, as do the obstacles confronting the poor. On other occasions, all parties have focused on economic solutions but they never quite pulled it off. Yes, deficits were slayed, or, yes, trade was enhanced, but the growing disillusionment and worry among Canadians is inevitably creeping up to the levels found in the United States. People don’t really trust government to get things right anymore because, well, our problems have grown regardless of who was in power.

The real problem confronting the political order these days is not financial capital but social capital. Somewhere along the line, the political order lost touch with the mood of the people and now everything is about pursuing the vote of a relatively few number of people in order to gain power. We, as Canadians, understand that. But will you go back to the origins of our difficulties and repair them from their very source? There was a time when the corporate good transcended the public good and ever since then we have watched as wealth has been accumulated in record measures at the same time as less and less of it went to average Canadians.

In a very real and increasingly tragic way, Canadians have felt the withdrawal of institutional supports, both private and public. This has created a crisis in confidence that can’t be simply solved by an election. Forget talking about the lower, middle, or upper class; this is about the “anxious” class, and how the worry they feel about the future of their kids and a more dangerous world is far more serious than any political party’s electioneering. These people are struggling to preserve their standing, their sense of worth in an increasingly alienated culture. And now they have slowly begun pursuing individual survival over social solidarity. Signs of this are everywhere, but it’s important to acknowledge that the political and financial classes oversaw this development, and to merely give us the same-old, same-old, will only erode that reality further.

There used to be a time when individual identity and social identity crisscrossed repeatedly in Canada. In rural communities and big cities there was always the sense that this country was “under construction” and going somewhere. Now we have no idea where the politicos are taking us, and our confidence in the future and ourselves is eroding.

Liberals have always prided themselves as the party of balance. Okay, but our sense of equilibrium has been shot for some time now. All parties played a role in that disruption and we won’t get things right unless we go back to the origins of our difficulties. Why has the political class forced us to choose between trade and jobs, between comfortable houses and homelessness, between remaining in the middle-class or poverty, between meager governments or no governments at all? These are sincere questions that should be asked of all parties.

Even at the best of times in recent decades we have felt the tearing at the fabric of the Canadian identity. We have failed our aboriginal people seriously enough that we can’t even muster the strength or sense of social justice to launch a commission to locate the roughly 1,000 missing or murdered aboriginal women in this country. What is that about? Is this the vitality of our social consciousness these days? Must we watch as parties bludgeon themselves to a depraved degree and walk away with any sense of hope diminished?

You believe in balance, right? But can we all bring ourselves to acknowledge that we lost that tenuous tension that was Confederation years ago? The number of poor is growing. Good jobs are becoming scarce. Veterans are being denied. Seniors are fretting. And students can’t even afford to learn anymore. This is not the Canada we envision in our finest moments. So, enough with balance already; let’s get on with finding answers to these, our deepest problems.

In the U.S., Obama has opted to use the last two years of his tenure to attempt to bring about social and economic change. Yet there was a time when people thought he would start with such things, not end with them in a lame duck scenario. Enough with institutional cynicism; get on with the task of remaking the country on the basis of our progressive ideals and not some corporate ideology.

This is about the battle for the heart and soul, not of the Liberal Party, but of the country. The sweet spot isn’t the middle-class, but the aspirations of a good people. The time for tinkering is over; the time for renaissance has come.

 

Firms of Endearment

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I LOVE THIS TITLE, BUT IT DIDN’T ORIGINATE WITH ME. It came from Raj Sisodia, professor of marketing at Bentley University and formed part of the title from his book, Firms of Endearment: How World-Class Companies Profit From Passion and Purpose.

Sisodia is a firm believer that modern capitalism has departed from its early tenets and principles and is suffering a global meltdown in reputation as a result. He co-founded the Conscious Capitalism Institute in order to promote a dual message that capitalism has gone off course but that its recovery is essential if humanity is to progress.

His is a voice we need, in part because we have too frequently castigated capitalism as the great culprit of all our ills when in reality we have also been blessed by it. In our search for solutions as citizens we have taken to simplifying our problems. We have done with capitalism what we did with church, politics, and the media – been so universal in our condemnation that we forget the better qualities of people involved in such institutions. Before we go completely overboard in such an outlook we need to bear in mind some history of what the capitalist movement has accomplished. Consider:

  • Since 1800, average income per capita globally has increased 1600%. The standard of living for average Westerners has increased 10,000% in that time.
  • 200 years ago, 85% of the world’s population lived in extreme poverty – a number now reduced to 16%.
  • In that same period, as a result of better material lives, the average life expectancy across the world has increased to 68 years from its historical average of 30 years or less.
  • In the past 40 years, the percentage of undernourished people in the world has dropped from 26% to 13%.
  • In 1800 almost the entire world was illiterate. Today, 84% of adults globally can now read.

All of this forms something of a revelation to many of us and we have overlooked the part the capitalism has played in such development. Today, it is popular to pit capitalism against democracy, but lets remember that it was only 120 years ago that no one lived in countries with governments elected by universal suffrage. As of this year, 53% of people now live in such countries. Most researchers give a large portion of the praise for this development on the economic freedoms provided by capitalism itself.

Clearly there are significant problems in the modern capitalist movement that have had almost universal tragic effects on humanity – environment degradation, the resurgence of the widening gap between rich and poor, the refusal to respect standards and legislation. These are the things that so much define capitalism today and our communities are feeling the effects. Our task should be to call for the reformation of the financial order as opposed to merely condemning it.

These recent posts on the need for such a new enlightened age for capitalism have been predicated on the belief that there is much inherent good yet within the system and that conscientious workers, leaders and investors are attempting to make change – just like churches, democratic parties, governments, and media contributors.

We must begin the process of finding out just who these companies and their leaders are and joining their efforts for a more responsible and community-centered way of doing business. Those seeking reform from within civil society itself must locate and partner with those inside the business community fighting for the same ends. It’s time to stop falling back on the adage that time changes things. Things are so serious at the moment, and the implications so ominous, that it’s time we changed them ourselves.

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