This action might not be possible to undo. Are you sure you want to continue?
usiness does not necessarily bring out the best in people.
And yet, notwithstanding all the recent speechifying about preventing the unethical misconduct of Enrons; the foolish mismanagement of Lehman Brothers; or the hazardous mishandling of Credit Default Swaps – some may still be justified in arguing that it shouldn't have to. Only, we should not lose sight of what these failures demonstrate: the very reasons why we nevertheless value honor and respect in our dealings with complete strangers. For one it reminds us of what distinguishes us from animals (or at least satisfies our subconscious into thinking so). Trust would be impossible without this fundamental distinction. Not to imply that we cannot also admit that it is for the sake of self-interest that we are even willing to confine our actions to the rule of law. However, we do so precisely because we recognize that the egocentric desire for security and/or glory (i.e. fame and fortune) is the closest thing we have to an ius naturae (Universal Law of Nature). Or it may just be a fancy way of rationalizing our fear of death, if not God. Though there are good reasons why this line of thinking fell into disrepute in the wake of WWII, arguments that appealed to unwritten rules or codes of conduct (typically seen as of divine origin) have been utilized in one way or another to regulate social and international affairs for more than 2,500 years. (Just take for example the arguments
justifying Athenian imperialism during the Peloponnesian war, and then look at how the Spanish and the Portuguese, the French and the English, even the Dutch, e.g. Grotius, used the notion of ius gentium—the Law of Nations—to carve up the oceans, and the world, two-thousand years later.) Indeed, as many a white and enlightened man argued between the 17th and 20th centuries, there is a fine line separating civilization or culture from the chaotic, short, and brutish state of nature. Things didn't change until Europe's last attempt to mold man into its image left millions dead, and Europeans themselves doubting the possibilities of ever fulfilling the Enlightenment project of human emancipation. In contrast, look at how the U.S. – which owes its very political existence to the persuasive power of these ideals – has had to look for new arguments to keep this project (if not hope in its possibility) alive. If anything, its appeals to the idea of “universal human rights” to legitimize the use of both soft and hard power is simply an extension of this need to justify ideas by force. So, the fact that they can continue to speak of the legitimate use of military power, while circumventing international law and violating the sovereignty of states, demonstrates how politically advantageous appealing to 'universal' notions of human nature can be; something that the Russians surely kept in mind when they sent troops across the border into Georgia.
utting the geo-political effects of such ideals aside, it is nevertheless
true that the way we conduct ourselves will have an effect on the success, and thus the very survival, of the more mundane business interests we are also meant to serve and sustain. Act too long with
impunity, or dishonor those with which you deal or trade with (never mind employ), and you put your business at risk. Of course, that is not to say that some businesses haven't – with the help of clever marketing and PR – gotten away with dubious behaviour (just look at Shell, Boeing, or Halliburton). In fact, some of the largest multi-nationals wouldn't have been possible without some form of coercive persuasion, whether legal (lobbying) or illicit (industrial espionage). And yet, no matter where you look, you will more probably than not find some sort of honor code regulating conduct (mind you, the same can be said of the Mafia, or AlQaeda). Of course, to a law-abiding citizen, laws and regulations are meant to be enforced, and should likewise be applicable to all. But to those bold and creative individuals with a larger perspective – including those primarily driven by their own self-interests – laws and regulations are simply conventions that happen to enforce notions about future progress and past morality. As some of the more intellectually oriented would argue: in the most dynamic societies, laws are adapted to fit the social, economic, and political circumstances of the time, not the other way around. If laws were static, capitalism, as the driver of economic growth, would not be possible (something that even leaders in Iran or China would probably admit, though not in front of the masses). So here's a rule of thumb that remains applicable even in light of the current financial turmoil: the more democratic and liberal a society, the more essential the rule of law becomes. This is because, in the absence of political stability and trust in judicial institutions, economic development inevitably becomes concentrated within certain elites with
access to money and influence (oligarchy). But, leaving aside the immorality of poverty and the politics of exclusion, if history has taught us anything, it is that wasting the creative potential of a large segment of any populace ultimately puts the whole society at risk, including the lucky few. Furthermore, the purpose of creativity is to result in productivity, not consumption. The mistake made in the last twenty years (apart from confusing the failure of communism as the triumph of capitalism) has been to extend the availability of credit in order to sustain, and increase, existing levels of consumption, thereby making the final product (that ubiquitous widget) an end in itself. To a certain extent this was unavoidable: extending credit to fledgling businesses only makes sense when one expects a return on investment, which in turn means that productivity will have to become self-sustainable. No matter how idiotic, unnecessary, or unhealthy, someone has to consume what we make, right? Unfortunately, the credit crisis has finally demonstrated the extent that productivity has become artificially sustained by consumer credit (not to mention the artificially low price of resources). It would be nice to think that it is still possible to maintain economic growth while investing in products that are not only of use and of value – qualitatively and aesthetically – but also sustainable. (Premium spirits – usually considered a social “lubricant” – should easily fall into this category.) But it would also be foolish to blame greed or herd-like naiveté for the housing and credit bubbles, for behind the prevalence of bull-market psychology in the last thirty years has stood a long-standing faith and trust in continuing progress. It is this faith – borne out of the
Enlightenment challenge of orthodoxy – that in fact sustained the particular interaction between technological innovation and globalization that characterizes the current economic system – inaccurately dubbed “free-market liberalism.” But more problematic is how easily we take for granted to what degree this global network of multinational corporations and financial institutions is dependent on confidence in the “market,” meaning economic progress and the rule of law.
o, putting all talk about “market psychology” aside, the real
challenge for economic policy is realizing that blind faith in long-term economic progress will naturally underestimate any eventual downturn; it inherently rationalizes its occurrence as a necessary component of the economic cycle. This sort of wishful thinking misconstrues the causes or the consequences of economic decline because it is more interested in re-positioning itself to take advantage of high-yield, low-risk investments which will pay off once the economy starts growing again (which demonstrates how the idea of “low-risk” debt is based more on faith than on knowledge). That the extreme excesses in credit we are seeing now in fact began at the end of the Cold War and the demise of communist economics demonstrates that Greenspan was not the only one seduced by capitalist rhetoric and the idea of heroic individualism. For example, the comptroller general of the U.S. Government Accountability Office (GAO), among other things responsible for examining the federal budget, has been sounding the alarm bells ever since Clinton's tenure as president. Evidently our reluctance to heed such warnings is surpassed only by our fear of missing out on an
economic boom, or "failing to keep up with the Joneses." Nobody listens to a ‘maverick’ (or a prophet) until it's too late. Instead, we have once again been reminded that it is always premature (if not gratuitous) to speak of utopias – no matter how theoretical – and that laws and regulations will always remain double-edged instruments. The lesson to be learned is not simply that economies “need to be regulated” – as I already mentioned, liberal democracies are in fact more dependent upon regulations than other, more coercive and unaccountable, forms of government. No, it is more important to recognize that though these laws may regulate aspects about human nature in the context of economic productivity, they are silent about what these forces represent. This means that we can no less rely on theoretical models to forecast economic behaviour (the so-called ‘business cycle’) as we can expect psychologists to explain the role of human nature in modern economies. In fact, because the former is itself based on a misunderstanding of the concept of “nature” (be it “human” or “universal”), it more often than not ends up becoming an attempt to fulfill some abstract ideological world-view, for example the utopian and eschatological fantasy of perpetual security and stability (as in Christianity, or Kantian cosmopolitanism), or a utilitarian vision of a progressive society lead by creative but autonomous individuals (e.g. Libertarianism, or even Marxism for that matter). Both also demarcate the alternatives that modern western democracies are having a hard time coming to terms with: the antagonism of having to choose between knowledge based on revelation (i.e. faith) or reason. (One can note these diverging trends by
comparing the hard-line stance of Ayatollah Ali Khamenei of Iran or members of the Bush administration with the more ebullient exultation of love and hope in the rhetoric of Pope Benedict XVI and Barack Obama.) The problem with such modern attempts at ‘rational’ discourse – particularly when it presents itself as ‘scientific’ – is that it underestimates the role of individual and collective desires for the sake of economic and social models that lead to plausible forecasts. That is why, regardless of the degree of regulation that is enacted, or its reliance upon economic or psychological theories, the very attempt at regulation itself represents an attempt to mold human beings according to a pre-given notion of what would be the best political order. In other words, any given law or regulation is inherently utopian. That's why, because of its necessity, any talk of regulation should in itself lead to the question: what sort of society do we wish to live in? (But also: Quis custodiet ipsos custodes; i.e. who, or what, regulates the regulators?). Particularly with regards to U.S. policy, this would mean taking seriously the desirability, not to mention long-term geo-political consequences, of entrusting global dominance upon an economy that relies so much on consumer debt itself financed by foreign credit.
here's an aspect here that merits some attention: the word
economy comes from the Greek words “oikos” (house) and “nomos” (laws, or conventions), meaning that 'economics' can be understood as the study of the “rules of the household” – i.e. the conventions that best regulate behaviour between individuals in a particular social (and, by
extension, geographical) context. Had Alan Greenspan been willing to scrutinize the philosophical validity of his own views, he may have avoided the simplistic basis by which he judged the economy as an extension of human nature, and thus less willing to legitimize his decisions upon the belief that the market could regulate itself. It would also have meant formulating economic policies that take into account the absolute (albeit destructive) freedom of the individual – i.e. the knowledge that humans cannot be tamed by such conventions – but also the social and political costs of excessive capitalist liberalism (some adherents to the ‘Austrian school’ of economics might want to look at their own theoretical models of economic liberalism more carefully as well). In fact, it would have meant recognizing the rhetorical purpose underlying the notion of free-market liberalism, and that capitalism is inherently socialist insofar it requires social institutions and regulations that guarantee order and stability, while by the same token the social institutions and the society they are meant to serve depend on the creative and productive potential of the individuals that comprise it. In other words, society and the individual are both instances of the same productive and creative drive that animates both capitalist self-interest and the need for collective norms and regulations. If there were to be a prescription for economic development in the 21st century, it would somehow have to allow for the contradictions produced by the unfettered individualism of western democracies (U.S. and Europe), rigid conventionalism (Judaism, Hinduism) and religious hierarchy (Catholicism, Islamic clericalism), and centralized authoritarianism
(China, Russia). It remains to be seen whether this is possible, or desirable.
ow, to bring this monologue to its conclusion (and bind it to my
grievances with Demerara), let me address one final concept: power. The direction, and shape, of any society, including its economy, depends on the power struggle that exists within the state: primarily the network of corporate and individual interests that sustain it. Democratic states retain their legitimacy by virtue of their accountability to the populace, and the objective manner in which they regulate the rules we have agreed to abide by and which the state has been formed to protect (embodied in the constitution, and by any duly chosen government). This also means that, in the case of any disagreements, the law must be able to adjudicate between parties based on their actions. Of course, in practice we all know that political circumstances (e.g. level of government corruption) and power disparities between individuals and legal entities always have a way of complicating what in theory would work so well. Unfortunately, it is precisely the problem of having to deal under such asymmetrical circumstances that have plagued the people of South America and their respective economies for far too long. And yet, paradoxically enough, the ones that have best managed to gain some stability, with a sufficiently functioning rule of law, have also had the worst experiences with dictatorial juntas (and foreign intervention). Again, though one may argue about the morality of these events,
nobody should ignore that they took place, or the lives that they cost. And neither should we take for granted what they have since been able to achieve. Like Rome, which was founded with a fratricide, no nation or society is free of the sins that go hand in hand with a people's will to survive. However, if there is to be justice in this world, we must learn to reconcile the need to speak out against the abuse power with the need for power itself. In fact, if we are to correct the lopsided disparities that cripple so many economies around the world, it is our duty to speak up; otherwise people will lose faith in the laws and institutions that are so necessary for economic and social stability. Precisely because it is in our best interest, no matter how illusive the ideal (justice) or our expectations (economic progress), we have no choice but to protect the democratic institutions that help mediate human affairs, regardless of how susceptible these are to misuse or mismanagement. “To believe in progress is not to believe that progress has already taken place. That would be no belief.”1 With regards to Demerara, let me just state for the record that I am well aware of how little power I have to influence its actions, and that neither law nor social mores will necessarily guarantee that justice will overcome the wrong that has been done to my father in the last few years. However, I have been moved to speak out due to the Kafkaesque turn towards the absurd that this whole sordid affair has taken, which has been instigated and abetted by the indifference of a few key players (Mr. Komal Ram Harry Samaroo and Mr. Yesu Persaud) and their immoral lawyers (Mr. Mario Vidal Olcese of García Calderón–
Walter Benjamin quoting Franz Kafka, 1934.
Vidal–Montero & Asociados—GCVM). I cannot be more forthcoming simply because it is not my place to do so. But I also write because it is important to protest against injustice; and that in doing so it is necessary to be honest about what you know of the circumstances. I chose to set aside the particularities of the case and instead focus upon much larger and abstract issues because this is what I know, but it was also predicated upon my belief that though it would have been of little use to do so. This larger canvas nevertheless helps make the case for the essence of my argument: the fundamental need to uphold honor and trust and restrain the dehumanizing abuse of power. Moreover, I seek not to defame a good brand, but point at its immoral and unprofessional mismanagement. I therefore placed it in its wider social and economic context in order to demonstrate the effects of such behaviour when left unchecked.
“The path of those who want to forget is not open to the man who does not want to be an animal.”[Eric Weil]
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.