We’re facing a global crisis in confidence. That was the conclusion of the first issue of Distilled Magazine. In it, our contributors gave their views on where, why, and how this feeling of unease influences the people's lives. Some wrote about the consequences of this crisis while others of the way to restore our belief in the future. But what exactly do we do now? That’s why this second issue of Distilled Magazine wants to pick up the debate where we last left off.
Crises of confidence often result from increased complexity and ensuing alienation. But not too long ago the world seemed to be a far less complex place. During the Cold War, a binary system divided countries, nations, and people along a simple line: either you believed in the benefits of collective action or in the supremacy of individual creativity. We believe that this distinction still serves a purpose when looking at current affairs. We asked our contributors to review the cases for both individualism and collectivism in today’s globalized world. When browsing through their articles, you will notice that this old fault line is still an enlightening way to grasp the complexities of contemporary politics, economics, and culture.
In our political arena Johannes Ruckstuhl debates Swiss isolationism in the European collective, Jonathan West uses Christian just war theory to judge modern day economic sanctions, and our own Bram De Ridder frames the use of mercenaries.
Moving eastward, Professor Tej Pratap Singh tells the story of India’s fight against modern day Maoism, whereas Sarah de Geest and Erica Lin discuss legal and economic changes, respectively, in the world’s largest communist state, China. We then leap across the Pacific for our economic stories, where Glen Watson examines the state of unionism in North America, Bailey McClanathan critiques farm subsidies in the United States, and Gregory Gillette visits the humble honeybee to examine the political economy of health and science. We dig deeper into the Western economy in our interview with Luc Dirckx, Senior Manager at Hoffman-La Roch, who believes some individualism is good for business. Mike Marin on the other hand argues it isn't.
Finally, on our cultural scene, George Bickers looks back on your childhood superheroes (with a twist), Brecht Savelkoul takes a closer look at two Ring Cycles, Maggie Lenarz visits fellow expats in the U.A.E., and Heather Hind delves into the feminist side of vajazzling. In their own way, all these articles address the problems of individuals maintaining themselves in larger groups, or the challenges collectives face in successfully coordinating individual people.
At Distilled, we believe that there isn’t a single winner in the debate between between individualism and collectivism. Nor should there be. In every situation it is vital to consciously make an appropriate reasoned moral judgement. That is why Distilled is determined to tear down all barriers that inhibit conscious ethical decision making, from superstitious dogma to mindless technocracy. So for our readers we have only one recommendation. Stake your ground and defend it. Wisely.
Individualism vs Collectivism
Becoming Superheroes, the Race to Post-humanism
Images of post-humans permeate every aspect of both popular and high culture. They can be seen in anything from children’s television show to Sir Arthur Conan Doyle’s Sherlock Holmes. Even stage magicians appropriate post-human fronts. With such huge levels of exposure across a broad range of culture, we as a society must crave ever more of the post-human. But why? And is the race towards collective post- humanism an important goal that we should actively pursue?
My first exposure to post-humanist ideas came from Nietzsche’s "Thus Spoke Zarathustra". Nietzsche’s contention that humanity in its current form represents a transitional stage to post-humans led me to a profound realization. Some of my favourite comic book characters represented Nietzsche’s übermensch: superheroes were literally post-humans.
And how could they not be? These were characters that left mere humans dazzled at their physical prowess. They may not always be ethically conscientious, but post-humans cannot entirely escape their evolutionary pattern, just as humans cannot fully escape their primitive past.
Tim Kring's NBC show, "Heroes", is a great example of post-humans in popular culture. The viewer is presented with seemingly regular members of the public who share a slightly different genetic code to the rest of humanity. When these people experience some sort of trauma, their latent superpowers are unlocked. These powers range from physical ones – such as flight, super strength, super speed etc. – to mental ones: telekinesis, bending time and space, reading people's minds etc.
But what set this portrayal of the post-human aside from more traditional superhero representations was the actual evolutionary difference between these heroes and the rest of the general public. We see in comic books that the advent of superpowers usually arises from being an alien, or from some catastrophic lab accident, or just from having a lot of money to augment one's body. They are technically not post-human – they either never were human, or haven't biologically transcended humanity.
Why then this fascination, and in some cases obsession, with post-humans? In our secular, Westernised society, the post-human goes a long way to replacing the idea of gods. The post-human exceeds the power of humans to such a level that they are elevated to the prominence of the mythical heroes of antiquity and religion.
Prometheus stole fire from the gods. Meredith from .“Heroes” can conjure fire from her hands. The biblical angels are winged and can fly. So can .“Heroes” Nathan Petrelli. We view these mythical characters with reverence, and these modern post-human humans with envy and awe. To lift a quote from Nietzsche:
What is the ape to man? A laughing stock or a painful embarrassment. And just the same shall man be to the Superman: laughing stock or a painful embarrassment.
Humans aspire to the level of the post-human for many reasons, but I posit that the main reason must be to escape the normality and constraints of what it is to be human in order to make a real difference to the world. This is the root of the popularity of superheroes vs. super-villains. Who doesn't want to protect their loved ones, their city, the world, from the evil they see around them? Alternatively, who has felt so strongly about something that they wanted to become a super-villain, to pit themselves against the world and whoever comes along to stop them?
The appeal of the superhero is the ability to be the individual that helps the collective around them. This could be for purely selfish reasons – the adoration of followers, the attention, the money even. But, one would hope that the post-human might not only have escaped the confines of human biology, but also the confines of human flaws such as greed and jealousy. Conversely, the appeal of the super-villain is to be the individual that disrupts the collective.
You may think that I've watched too many T.V shows and read too many comics. You may be right, but let us try to realign this argument: is the pursuit of post-humanism a worthwhile goal for humanity to move toward?
As hopeful as I may be, I don’t believe that there are humans out there sharing a different genetic code to that of the general population and that, more importantly, I am one of them. I don't feel the push towards post-humanism is evolutionary – not in full at least. I believe what will one day be called "the post-human" will be a combination of intellectual and technological evolution.
To move forward intellectually, I am of the belief that one needs to "regress" culturally and re-establish scientific and individual experimentation with psychedelic drugs and the plants that they are derived from. We could use their imagination enhancing properties to further thought and discussion surrounding ideas both intellectual and non-intellectual. To move forward technologically, we must rely on biochemists, nano-technologists, and healthcare researchers to overcome the biological limitations of the human form. While the end goal of prolonging human life indefinitely may be some way off, the drive towards mechanising some human functions to prolong life perhaps even indefinitely is an exciting and daunting project to consider.
These pushes towards intellectual and technological evolution are not selfish goals that simply hasten the rise of the post-human. Often these innovations inherently yield benefits to humanity. Intellectual evolution stimulates new thinking, leading to new debates and, one would hope, positive outcomes to the problems facing humanity. Technological evolution – perhaps in its most accessible form – brings with it usable technologies that improve the lives of entire swathes of society.
We see that the race towards post-humanism leaves many changes in its wake. If we as socially responsible individuals continue to push toward this goal (through debate, intellectual and social pursuits, and a vigilant pursuit of progress) the rise of post-humans will be a form of individuality embraced by and helpful towards the collectives we continue to comprise.
Individualism vs Collectivism
Where Are You From?
Forty-five degrees celsius. Yet here I am, trudging through a sand-stained neighborhood in worn-out jeans and a long sleeve shirt. "Why must Ramadan fall on the hottest month of the year?", I ask with resignation. Known unofficially as "Little India" (or what I refer to as "Big India") Bur Dubai is one of the older neighborhoods nestled within the cosmopolitan metropolis of Dubai. It›s home to historic museums, ambitious souk sellers, a Hindu temple (lodged directly behind the Grand Mosque), and most importantly, me.
Here on my walk we'll find little shops that repeat themselves: first it’s the fabric seamstress’ shop, then the bearded barber’s shop. In a close third is a dimly lit grocery store. Then there's a weird smell and some malnourished-looking feral cats. What comes next? Oh it’s a Mongolian-Pakistani-Ethiopian restaurant. Then we start over with another fabric seamstress shop. We play this game for nearly half an hour before we arrive at our desired destination: Carrefour.
I'm here with a long checklist in tow. Only weightless basic necessities: paint, paper, pantyhose. It takes me nearly an hour to find these items (thanks global hypermarkets). Soon my shopping cart is full and I am satisfied. At the checkout, the cashier eyes me curiously. She looks at my hair, my clothing, my mannerisms, searching for something. While ringing me up she asks a shy, "Where are you from?" I'm from the USA. "Where are you from?" She's from Myanmar.
In many places, this would be considered an odd question, even an insult. "What? I don't look like I'm from here?! I come here all the time!”
Truth be told, none of us look local. This is how we all communicate with one another. We're all away from home, and curious where others call home. I use to be annoyed when asked this, but I've noticed, through the months how contagious it is to ask this very question. I ask those while shopping for groceries, browsing for books or asking for assistance at Ace Hardware. It has become a game called "Name the Nationality".
But can we relate to each other simply because we're not locals? We've found out the shop-keeper is from Kazakhstan, now what? "Hmm, must be cold there. Glad you're somewhere much warmer?" And that's the best you've got. Then it makes you wonder. Since Dubai is known for being cosmopolitan, can a collective international community actually exist here? Where everyone, regardless of their nationality, can bond with one another simply because they are foreign to this city? Surely we can all identify a dash of alienation, a pinch of homesickness, and a sprinkle of culture shock. It's a human condition many could bond over for hours.
And what about the locals, the Emirati? They are a minority. Yet they run the very country they are a minority in. Why do we rarely see Emirati mixing with expatriates and vise versa? What do they think of the expatriate population and how their city has literally changed over night?
Well, let's find out.
The big bang
When I say none of us look local, I am referring to the following facts. According to a 2009 survey from Statistics Center of Dubai, the local Emirati population makes up a mere 17% of the overall population. That means Dubai's expatriate population is anywhere between 83-85%. Within this group, 85% of the expatriate population hail from India, Pakistan, and Bangladesh. Europeans make up 0.9% and those from the USA are only a dismal 0.3%. Men outnumber women more than 3:1 and the average age is 27. In other words: Dubai is young, Asian, and ready to mingle.
In 1985 the population was listed at 370,800. The population jumped to 674,000 in 1995. Another decade later and the city was booming at 1,204,000. Now you may wonder: why the spike in population? Why such a large rate of migration? Why build a new life in a hot, dry climate? It doesn't seem like the most ideal place to work. Yet here we all are.
Is it because, despite the global economic slump, the Gulf still manages to grow? Perhaps we have no other option than to come here and work. Many of us are supporting our families back home. We lift heavy machinery, hour after hour under the midday summer sun, with few or no breaks. We sit behind desks on 12 hour shifts, twiddling our thumbs just to keep ourselves awake. Many of us work irregular hours in less than ideal environments with high demands. This city would not grow at the rate it has, if we all had 9 to 5 jobs. Dubai is truly a city that does not sleep.
Although Dubai seems to be developing at an exponential rate, upon close examination you will find a slight fracture in the city's backbone. The prognosis? Dubai lacks a community. There's too much of an emphasis on productivity. To even consider the possibility of a community (let alone a multi-cultural community), or to be alive and happening, is absurd. Yes, we're here from all over the world, but when given the chance to form a community, we're too tired. And when we're not tired, we develop cliques and clans with those of similar cultures and customs.
Larger representations of countries, mean larger communities. Brazilians, Indians, Filipinos, Egyptians, Indonesians, Lebanese, Australians, Pakistanis. These are just a handful of some of the larger ethnic groups. But if you're not from a country that is not popular here, you'll wonder how to form your own community. Luckily, some communities are formed around the type of work you do, your work schedule, and the language you speak.
So, can a collective universal community exist in Dubai? Not any time soon. My only common bond with the construction workers outside my window? We work. And work we surely do.
When locals are the minority
I'm at lunch with my new Emirati friend, Ahmed. It’s late afternoon and I'm staring at my plate full of tabbouleh, humus, mixed meats and chicken liver. We're right in the heart of "newer"-ish Dubai and I'm dishing out questions about Middle Eastern cuisine. He's explaining the difference between Syrian, Jordanian, Lebanese, and Turkish cooking. "Its all about the spices", he says. But I’m only half listening. What I really want to ask him is something I know will be challenging for him to describe in English. I want to get inside his mind, pick at his memory. I'm curious about Dubai before she became glitzy. Who was she before the boom in the 1990's?
I stare out the window and ask him what our view would have been had we sat here
twenty years ago. "None of this would have existed. It would be just one road that stretched on and into the desert towards Abu Dhabi. There was only one skyscraper on this road" – that road was Sheikh Zayed and that skyscraper was The World Trade Center. This lone skyscraper was once home to major companies, international consulates, and law firms.
"I remember when I was little, my family would drive up to this building. We would stare in amazement. To amuse ourselves, we'd count the number of floors. One, two, three … thirty-eight, thirty-nine. We were so impressed by the size of this building. It looked so big back them. Now I can't tell if I've grown or Dubai has". He looks away, almost sheepishly for thinking that, as a child, this building was impressive. "They're probably just going to tear it down and build something over it", he says looking back at me. "This is Dubai's mentality: out with the old, in with the new”.
Since the boom of the 1990's, the ground around Sheikh Zayed Road has shaken, sprouted, and erupted with unimaginable architectural feats: The Palm, Burj Al Arab, Burj Khalifa, etc. Dubai demanded the next, newest, most unimaginable thing to be constructed. These architectural wonders brought a considerable amount of labor in construction, retail, real estate, and customer service, representing hundreds countries north, south, east, and west.
"How do you feel about all the people who've come here to work and live?"
"Our culture is very open to newness. We embrace foreigners and welcome them warmly into our cities and Emirates. This is our belief of hospitality."
"The only reason Emirati say they embrace us is because they need our labor," says my coworker, Sandra, on one of our operational flights to Dar es Salaam. We're sitting in the jumpseat, cruising over Ethiopia, engulfed in a conversation on several unrelated topics. "They would be nothing without us. No Burj Khalifa. No Ski Dubai. No Dubai Mall. No nothing."
Surely not all expats working in Dubai feel this way about Emirati. I, of course, am happy they need my labor. If it weren't for this country and its people’s ambitious plans for the future, I would be sitting at home unemployed. So if the country welcomes me, gives me a place to live, and demands my labour, so be it. But Sandra highlights a very important point: very few expats living in the UAE interact with the local Emirati population. There is a lot of misunderstanding; a mind packed with imagined bias and prejudices. She may be right. But she may also be wrong. She assumes their motives and feels objectified; objectified for being an employee number and an image to a company.
Expats misunderstand Emirati simply because they don't know them personally. The Emirati community is close-knit – more so than other communities within the UAE. It makes me wonder if Emirati are afraid they'll lose their culture if they start reaching out and immersing themselves in other communities; that they must stick together to remember where they came from. Perhaps this is true, but is that not the case for the rest of us who left our communities to come to the UAE? We live in a rapidly changing world where we must confront a new definition of community and nationhood together, as both Emirati and expats. Whether the result is good or bad, all we know is that it will be different and that it will be ours.
Individualism vs Collectivism
State Capitalism in China
Erica Z. Lin
In recent years state capitalism has become an increasingly popular term among political economists. Its rise is a joint effect of sapped confidence in the West due to the lasting global recession, East Asian countries, whose successes are attributed to active government intervention in the economy.
In essence, state capitalism is a system in which profit-seeking economic activities are undertaken by the public sector. The outstanding economic performance of China in the past decades, especially compared to the economic chaos under Mao, has made it one of the most remarkable players of state capitalism, and has given the system a lot of credibility. But, Chinese state capitalism actually has its historical roots in Mao’s state communism. Though, rather than a resurgence of state communism, it is the result of the incomplete economic privatization process of the past reform decades. Moreover, a closer look at Chinese version of state capitalism will reveal that it is not a miracle or a panacea. The tremendous GDP growth doesn’t tell the whole story of China’s state capitalism, as it tends to eclipse the many defects within the system. However, Is state capitalism the real driving force of economic growth? If so, is this type of growth beneficial for the majority or does it serve the interests of the state alone? And is it a sustainable system in the long run?
Under Mao, economic policy gave priority to the heavy industries, capital intensive development path. This conflicted with China’s endowments, as the country was labour abundant, but scarce on capital and natural resources. The chief players in Mao’s economic system were the state- owned enterprises (SOEs), of which was later revealed that one third of them chronically lost money. Another third barely made ends meet, and only the last third managed to break even. Unsurprisingly, Mao’s state communism — and especially the Great Leap Forward — had brought “serious loss to the country and its people”. Post-Mao China had no choice but to reform its economy.
The economic reforms led by Deng Xiaoping started in 1978. Guiding China onto a more liberalized and privatized path, it witnessed a well-arranged resources reallocation. Driven mainly by market forces, labour and capital shifted from an inefficient state sector to the more productive private sectors, as well as from agriculture to manufacture and services. The more efficient resource allocation, especially the one between the public and private sectors, eventually boosted a period of outstanding economic growth in the subsequent decades, and changed the landscape of economic life in China dramatically. However, this privatization reform has been regarded as incomplete, giving rise to state capitalism in the post-Deng era. Two main causes hindered the completion of the privatization process.
Firstly, the growing private sector took over primarily in small commodity production and the light industries, forcing a number of inefficient SOEs to exit the market. However, policy makers continued viewing the state sector as important as the “pillar of the economy”. Therefore it was allowed to keep its dominance in the “commanding heights” of the economy, in some cases even expanding and strengthening the monopoly position in those sectors.
Secondly, since the 1990s a corporatization of SOEs has been carried out, especially by means of public offerings. Theoretically, this reformed the ownership structure, weakening the control of state in corporations, in exchange for some external investment. In practice though, the government has retained at least 50% of the ownership share — in some industries such as oil and petrochemicals sector even 80% or more. Therefore, the state retains control over an enterprise expanded by private funding. Furthermore, the subsequent growth of these state enterprises, enables the government to generate greater impacts on the whole economy.
So after the economic reforms of Deng we see simultaneously the rise of state capitalism in China and the start of a period of dramatic economic growth. But this doesn’t necessarily mean that state capitalism is the cause of Chinese growth, as its advocates like to suggest.
This figure shows that the profit size of state sector is positively correlated with the market share. It compares the ratio of total assets to the industrial output (RAtP) between the public and private sectors for forty industries, and thus sheds a light on the economic performance of the SOEs in China. Red bubbles represent state sectors and private ones are in blue. The size of each bubble represents the aggregate profits in that individual sector. The horizontal axis shows the industry share, where 100% indicates the sector is completely monopolized. The vertical axis demonstrates the profitability (RAtP) of both public and private sectors.
These numbers prove that the tremendous profits of few industries come with the monopolized position they have in the market. The actual profitability is variable though, even for monopolists. On the other hand, in the more competitive industries without public sector monopolies, profits disappear for state-owned sectors. There they lose out to the private enterprises, who demonstrate a stronger capacity to adapt the market competition. Even with a smaller market share, they generate satisfying profits. In most cases their profitability is much higher than public industries, including some monopolists. All this suggests that the private sector in China is much more efficient than the public sector. Therefore it is probably the driving force behind China’s impressive economic growth in recent decades.
Impressive but not miraculous, so tell the statistics on labour income share in this second graph. They prove that China is not reaching its goal of enriching the state and fattening its people at the same time (国富民强). A 2010 study by Chong-En Bai and Zhenjie Qian showed that the share of the growing national income that “trickled down” to industrial workers has markedly declined over the last two decades. The main reasons for this are the decline of SOEs and the expansion of monopoly power.
As mentioned above, the partial privatization of the early 1990s forced considerable numbers of inefficient SOEs to exit from competitive industries. At the same time some SOEs in key sectors were allowed to monopolize the market and strengthen themselves through partial privatization during the 2000s. It is the state capitalism that arose from this incomplete privatization that should be blamed for the decline in labour income share. Why? Because the benefits of state capitalism are fundamentally biased. In state-owned companies relatively higher salaries are paid to “insiders” of the system, instead of raising wage levels across the board. With the retreat of SOEs, the total number of “insiders” shrank, and therefore the income labour share dropped.
This does not mean we should reverse the trend of privatization for the sake of improving income distribution. Since the SOEs are proven to be inefficient, reintroducing them would seriously hamper economic growth. Simply increasing the income level by law or industry rules is not an option either. According to Bai and Qian this would lead to increased unemployment, as overpriced labour could easily be substituted for capital. Thus, enhancing market competition instead of strengthening monopoly power is the only workable policy to turn the falling trend of labour income share. Further privatization is the only way forward.
In terms of welfare, advocates of state capitalism believe that this system does a better job at maintaining social equality than capitalism. In reality, state capitalism does provide a good deal of social welfare, but the welfare generated under the system is biased. It divides its citizens into the “insiders” and the rest. Social housing is an especially striking example. The majority ordinary Chinese who are suffering from high prices on the private market have very limited chances to get social security housing, whereas insiders – some of whom own multiple private houses already – actually are the beneficiaries of the current social housing policy. Some of them are now using that advantage to sell on the social security houses they obtain!
In the same way it separates its citizens, the state treats its public and its private companies rather differently. Especially financing investment has been a long-standing sore point for small and medium-sized private firms. Being incapable to get loans from state banks, they have to turn to underground loans with high interest rates. In the meanwhile, some troubled SOEs can survive and even prosper, thanks to government subsidies and “soft” loans that might not be able to gain under normal commercial criteria. The state-ownd bank, the Industrial and Commercial Bank of China, ranking the 54th on the Fortune 500 in 2012, made the world largest public offering back in 2006, valued at 21.5 billion U.S. dollars. Prior to the offering though, it had been bearing 19.1% of non-performing loans in China. The government spent more than 162 billion dollar to prepare it for the listing, through a series of capital injections and subsidies to dispose bad loans, partly financed from China’s foreign exchange reserves. According to Bank of China Chairman Xiao Gang: “SOEs often enjoy a monopoly in their sectors, favourable conditions in an industry and quasi-government credit ratings.”
Favouritism toward relatively the weak state sector, inherent in state capitalism, is harmful. It prohibits the social resources (capital, human capital and natural resources, etc.) being allocated in more efficient places, and hinders the development of private sectors. This results in a reduction of overall efficiency and economic growth, and further, it will impede future development. Last but not least, state capitalism, as a “creative” combination of state communism and capitalism, tends to privatize the profit but socialize the risks. In the light of the previous discussion, the benefits of the system are biased only to “insiders”, but the state – and in practice the whole society – will bear the losses made by SOEs. No wonder that the decisions making from the state sector tends to be arbitrary and reckless, and its general efficiency is lower than the private enterprises. The public sector is instructed to operate in the “commanding heights” of the economy and carries certain social burdens such as pension and social welfare, however biased. The state in return are responsible for the losses that arise from policy burdens, but as a result, the managers of SOEs are likely to ascribe all their losses to state policy as well. This softens their budget constraints. The state, therefore, will further intervene into the operations of SOEs to constrain this problem, leading to a vicious cycle of policy burdens, soft budgets, agency problems and further political interventions. Thus, a further reform is imperative. Making the SOEs accountable for their own behaviour, relieving them from policy burdens, and increasing market competition would help harden the budget constraints, and that way break state capitalism’s vicious cycle.
On the global stage state capitalism has received a warm welcome in recent years, especially now the free-market system has seemingly failed in a series of financial crises. Many Chinese might also greet state capitalism with applause and cheers, as it seems to have made the country stronger and wealthier. Even though they are at the same time complaining about the “beneficiaries”, they seldom reckoned the link between their personal worse-offs and the rise of state capitalism in China. In a way, they still expect to receive their deserved share from ever the expending national GDP “tomorrow”. Unfortunately, this expected tomorrow will not come under the state capitalist system. Though there is indeed a need for the state playing a role in an industrializing economy, this article showed the downsides of state capitalism based on the Chinese version. The partial reform in China that created state capitalism has raised many new problems, stemming from the historical leftovers of Maoism. All possible solutions to those problems include further privatization, coupled with thorough political and economic reforms in the near future.
But in the end, I should note that the critique of state capitalism in this article doesn’t automatically make other socio-economic models look pretty or promising. As an ancient Chinese statecraft wisdom suggests, the lord of a state should not be afraid of scarcity and poverty, but do worry about uneven distribution and discontent among the people (不患寡患不均, 不患贫患不安). This is not to deny the importance of economic growth, but it emphasises the importance of sharing the fruit of economic growth among its people, and creating a social equilibrium that brings stability and longevity to a society. This ancient wisdom might provide the real long-term path that China should head for.
Individualism vs Collectivism
The Maoist Insurgency in India
Tej Pratap Singh
The Indian Maoist movement, popularly known as the Naxal movement, arose from the broader communist movement in India. The words Naxal/Naxalism/Naxalite owe their origin to the Naxalbari village of the Darjeeling district in the state of West Bengal, from where the peasant insurgency led by the Maoists began in 1967. The Naxal uprising was led by Charu Majumdar (chief ideologue), Kanu Sanyal (peasant leader) and Jungel Santhal (tribal leader). Chinese media described the Naxal movement as a ‘spring thunder’ which quickly spread to other parts of the country and caught the imagination of the nation. The movement nevertheless subsided after the death of Charu Majumdar and the arrests of Kanu Sanyal and Jungel Santhal in 1972. However, the movement was revived in the 1980s by the Peoples War Group (PWG) in Andhra and the Maoist Communist Centre (MCC) in Bihar. The Naxalites are currently considered to be the most radical groups among the Indian communists.
Causes of Naxalism/Maoism
Before going into the question of a possible solution, it is appropriate to examine the causes of the Maoist insurgency. Its roots can be traced to the socio-economic conditions in India. Unless and until these underlying structural causes are addressed, Maoism cannot be defeated by state repression. For the time being it appears that movement has been crushed, but sooner or later it will reappear and probably with greater vehemence than is being witnessed currently. In the post-Charu Majumdar period it was felt that the movement had come to an end, but restarting in the 1980s it has bounced back with greater intensity and covering large parts of India. If current Prime Minister Manmohan Singh is correct, then the Maoist movement therefore constitutes the greatest national security threat for the Indian state.
Hunger, starvation, malnutrition, ill health and untimely death provide a fertile ground for the growth of left wing extremism. The ‘Red Corridor’ in government parlance or ‘compact revolutionary zone (CRZ)’ in Maoist language constitutes the most poor, backward and underdeveloped part of the country. These areas are predominantly inhabited by Adivasis (tribal groups) and Dalits (lower castes), who are amongst the most marginalised and exploited sections of the Indian society. These two ‘wretched of the earth’-groups constitute the most significant support base of the Maoist movement. In fact, the Maoists explicitly claim to be fighting for them. The so-called upper caste (landlords), who also double as moneylenders along with state officials such as Patwaris (village level revenue officials) and forest guards, have been oppressing the underprivileged Adivasis and Dalits. Resistance of these groups was always suppressed by the privileged classes, with active support from the state in the name of law and order.
In addition, the human rights activist Binayak Sen rightly argues that the so-called Red Corridor should be declared a famine stricken region and the Adivasis and Dalits a famine stricken community. More than sixty percent of the population of this region and more than sixty percent of the Adivasis and Dalits have a Body Mass Index lower than 18.5. The criteria laid down by the World Health Organisation determine that a community or region should be classified as famine stricken if more than one third of the population has a BMI lower than this number. Sub-Saharan Africa for example has been declared to be famine stricken region on this basis. Consequentially, if the WHO criterion is applied to the Adivasis and Dalitis as a community and the Red Corridor as a region then they should be given this very same classification. It is because of this abysmal poverty in the eastern and central Indian regions that Maoists have found fertile ground to expand their influence, and to carve out their guerrilla zone in order to wage war against the Indian state.
Military or Political Solutions
Since Maoism is a political problem its solution also needs to be political. Naxalism was militarily crushed in the 1970s, but its revival and subsequent spread proves beyond doubt that any military solution will not be a lasting one. Only the actors will change but the malaise will remain. Therefore, the need of the hour is to address the socio-economic roots of the Maoist insurgency. Once underlying structural causes have been addressed the Maoists will not get the congenial atmosphere to exploit these problems, which they need in order to achieve their objective of overthrowing the Indian state through a protracted people’s war, replicating the Chinese/Vietnamese revolution. In these unconventional and asymmetrical wars the stronger not necessarily win; sometimes weaker parties emerge victorious in protracted asymmetrical conflict, as for example happened in Vietnam and is happening in Afghanistan.
Several strategic analysts are nevertheless of the firm opinion that unless and until the insurgents have been decisively defeated they will not come to negotiating table. They argue that if insurgents are in a strong military position they have no reason to negotiate because they are sensing victory. Strategic analysts cite the examples of Punjab, Tripura and Andhra, where insurgents were decimated by lethal force. However, success in one state is no guarantee that it can be replicated mechanically in other states. If this would be the case then the COBRA (Combined Battalion for Resolute Action) counterinsurgency force of the Central Reserve Police Force (CRPF), which has been created to fight Naxals using the pattern of the Greyhound of Andhra, would have succeeded in crushing the Maoists of the Dandkarayana region in central India.
Force is no doubt needed but beyond a point it becomes counterproductive. This applies to both the Maoists as well as the state. Naxalism itself failed because of Charu Majumdar’s annihilation ideology. Majumdar famously said that unless and until a person has dipped his hand in the blood of a class enemy, he or she is not a true communist. Some blind followers therefore smeared their hands with the blood of enemies whom they had annihilated and some even went to the extent of making palm prints on the wall. This kind of mindless violence repelled many Indians despite them being sympathetic to the Maoist cause. In the same way state violence also created repulsion amongst the people. To win, both the Maoists and the state have to be careful in their use of violence, as an insurgency is after all a war of hearts and minds and not of territory. Whoever wins the hearts and minds of the masses will win the war.
In order to win the people over to the state side the Indian government is pursuing the US counterinsurgency strategy of clear, hold and build. This strategy is however mechanically applied in the form of a heavy deployment of paramilitary forces and area domination patrols in the Maoist regions, aimed to wrest the control of these region from them. The massive surge of troops and their patrolling in the region, intended to make their presence felt, has given the insurgents the chance to execute a new strategy of mobile warfare. Earlier they used to target only two to three security personnel in their hit and run guerrilla tactics, but now they are engaging entire companies of security forces consisting of more than seventy security personnel, and fight them through encircling tactics in face to face battle. After killing the troops the Maoists also snatch their weapons, thus increasing their armoury. This has happened several times in the Maoist dominated regions and is demoralising both the paramilitary forces and the government.
The Way Out
The Maoist movement is not a secessionist movement like the Northeast or Kashmir insurgencies. And since the Maoists are not separatists, opinions in the government and the armed forces are sharply divided regarding the use of military force against them. The insurgents themselves however are of the firm opinion that a military strategy will eventually be used against them and that only by defeating the Indian armed forces they can succeed in their objective of capturing political power. They know this is not an easy task and because of this they speak of a ‘protracted agrarian armed struggle’ against the state, seizing power in the rural areas and eventually encircling the cities. According to them this would force the enemy to surrender, just as happened in China. However, India is not China and the Indian army is not Chiang-Kai-Shek’s army.
For the Maoist insurgents the Indian state itself has been responsible for the conflict. The Adivasis and Dalits, who form the core of their movement, have been neglected by the Indian state. In the more than sixty-five years that have passed since India’s independence there has been no significant change in the life of these groups. If they would have been brought into the mainstream and would have been made significant stakeholders in India’s economic growth the Maoists would never have gotten the opportunity to exploit the situation to their advantage. ‘Land to the tillers’ has been the old slogan of the Maoists but until this date eighty percent of the land is held by only twenty percent of the people. Barring a few exceptions most land reforms only exist on paper. Through various means, and with the connivance of state officials, many people still hold vast tracts of lands. On the other side there are large numbers of landless labourers and marginal farmers in rural India. Absent landlordism has still not been completely abolished. Causes of agrarian unrest still remain unaddressed.
The Adivasis have been denied access to forest land and resources, and only in 2006 the Forest Right Act has given them legal rights over the lands on which they have been living since time immemorial. If the socio-economic problems of Adivasis and other poor sections of the Indian society are addressed then Maoism will however swiftly lose its appeal among the masses. By only deploying large numbers of security forces and killing the top leadership of the Communist Party of India (Maoist) (CPI (Maoist)), the problem cannot be resolved. As long as the structural causes of extremism are not addressed, new leaders will always emerge on scene and carry the torch of people’s war forward, pledging to overthrow the semi-colonial, semi-feudal Indian State and establish their own type of Democratic Peoples Republic of India.
For peace, both the Maoists and the state have to engage each other in a sincere way. The Maoists have to give up their armed struggle against the state and the state has to stop its policy of decimating their Central Committee and Politburo. Already government forces have either killed or arrested more than half of the membership of the Politburo, the Central Committee, and the Central Military Commission, the top decision making bodies of the CPI (Maoist). This strategy might succeed in short term but in the long term it is bound to fail as new leadership will emerge. The statements of a few Maoist leaders that armed struggle is non-negotiable is also not helpful in the dialogue process. If the insurgents are not ready to give up their armed struggle against the state, no state will talk to them as nothing has been left to talk about. In such a case the recourse to violence is the only option left to the state.
If the state cannot decimate the Maoists, the Maoists also cannot smash the Indian state. The idea of victory through protracted armed agrarian struggle is a hoax as globally speaking there is no possibility of overthrowing any state solely through guerrilla warfare. Nepal could therefore be a good example for the Indian Maoists to emulate. If the Nepali Maoist party can contest the elections, form and run the government, then why should this be impossible for the Indian Maoists? Radical left leaders like Prachand and Baburam Bhattrai in Nepal, Chavez in Venezuela, and many others took the parliamentary path and won elections in their countries. Now they are successfully running the governments in Nepal, Venezuela and several Latin American countries. Dialogue is the only solution to the violence unleashed by both the Maoists and the state. Otherwise it will eventually be innocent civilians who continue to suffer the most, guaranteeing that the whole nation pays the price for the insurgency.
Individualism vs Collectivism
Two Ways to Rule Them All
What killed Siegfried? And who saved Frodo? And most of all, should we even care anyway?
I’m talking of course about the protagonists of two different Ring cycles: J.R.R. Tolkien’s Frodo from The Lord of the Rings, and Richard Wagner’s Siegfried from Der Ring des Nibelungen. The juxtaposition of these two characters might seem strange, because there isn’t much likeliness between the fearless Wagnerian hero Siegfried and our hairy-toed friend from the Shire, apart from some business with magic rings. Yet it is valid to raise these questions for one main reason. Both Tolkien’s and Wagner’s Ring cycles are in fact adaptations of the same medieval epic, the Song of the Nibelungs. The faith of both heroes however, couldn’t be more different.
In a nutshell— maybe you didn't get it the first time — Frodo triumphs, Siegfried dies. If we consider the storylines of both epics, these outcomes look very surprising. All Siegfried had to do to save the day was walk into the Rhine and return the Ring to its rightful owners, the Rhinemaidens. Frodo on the other hand could not simply walk into Mordor — no one can — but succeeded the hard way nevertheless. Why?
Deconstructing postmodernists might say: “Because the respective authors decided so.” Luckily, I’m not a postmodernist, and so we’ll make the more interesting exercise of finding an explanation in the actual stories. Yet, because both are such vast works of art, each having left even bigger interpretative traditions, it would be wise to limit the scope of this essay in order to answer this question. For Wagner’s Ring Cycle, I’ll discuss solely the last opera Götterdämmerung, and more specifically the staging I witnessed at the Longborough Festival Opera last summer, which will be reprised next summer when they perform the entire ring cycle. And because I’m such a spoiler, I will take the last episode of The Lord of the Rings as well, and more specifically Peter Jackson’s 2003 film version of The Return of the King.
Yes, I know, I’m selling out to Hollywood, I could have at least taken the book. You might suspect this is all about clicks on links, about compensating for the unpopularity of opera... Maybe, but that’s not the only reason. Fact is that the film version makes for a much better comparison, as modern cinema comes much closer to Wagner’s ideal of Gesamtkunst than any form of literature — it is no coincidence that early interwar films made extensive use of Wagnerian music scores to suit their dramatic purposes.
Let’s stay seated in those interwar theatres for a minute. Seen through this lense, The Return of the King can easily be interpreted as a case for collectivism. As in the whole trilogy, among the most memorable scenes are the major battles, not in the least the final Battle at the Black Gates. You could interpret this as easy box office sensationalism, but film history tells us a different story.
The origins of battle scene cinema don’t lie in capitalist California, but in communist Russia. It was the great Soviet director Sergei Eisenstein who first introduced them as a way to stage his ideal of “the mass as hero”, most famously in his 1925 movie Battleship Potemkin. Whenever Eisenstein did introduce a strong individual protagonist, like in Alexander Nevsky, his success was still very much depended on the collectivist mobilization of his armies. The same can be argued for Frodo’s faith in The Return of the King. Without the human victory at Minas Tirith, and the aforementioned attack on the Black Gates of Mordor, our hobbit hero would have never reached Mount Doom alive.
The case for collectivism becomes even stronger if we consider its total absence in the Götterdämmerung, especially apparent in the minimalist production at Longborough. The only time an army is summoned here, the antagonist Hagen lures it into a state of spurious celebration. In this regard, the role of Hagen in Götterdämmerung symbolises everything that can go wrong with individualism. With his greedy manipulations, he runs the show from the start to finish. And the other individuals don’t look much better. Siegfried’s naivety, Brünnhilde’s vindictiveness and Gunther’s lack of spine — quite literally in this production, where he’s introduced in a wheelchair — all contribute to the fateful conclusion. This narrative seems to support George Bernard Shaw’s marxist interpretation of the Ring cycle. In his 1898 essay The Perfect Wagnerite he interpreted the story as an allegory of the collapse of individualistic capitalism.
There is one big problem with this explanation though, clearly visible if we return to the Black Gates. (As a manner of speaking. No need to actually grab your axe, Gimli.) In this scene you could clearly see that the side having the biggest advantage of collectivism are Sauron’s orcs, hugely outnumbering the human force at the gates. Yet, they lost. So it can’t have been collectivism that saved Middle Earth.
For a real explanation it's time to finally leave the Cold War logic of individualism vs. collectivism behind. Our understanding of political economy has moved on, and cultural criticism should follow that lead. We no longer believe in the materialism that formed the philosophical foundation of Shaw's marxism — and the actual foundation of consumer capitalism, for that matter. Today we focus on the man-made organizations that build the roads between individual entrepreneurs and the crowds, on the people behind flows of money and resources back from the masses to the producers. Now we do see the intermediate structures that went missing in the older narratives.
That means we can at last find a middle ground between the evil individualism of Hagen and the faceless orc armies of Mordor. It's smaller organizations based on personal trust and shared identity — clubs, societies, parties, businesses — that keep us from sliding into these totalitarian extremes of individualism and collectivism. That is what really seperated Frodo from Siegfried: The Fellowship.
Moral of the story?
Get together and do stuff, I guess. The most obvious ways are of course direct initiatives like political activism or economic innovation. But really, anything that reconnects isolated individuals will do; anything that gives a new face to the directionless masses. Dress up and reenact the Battle of Helm’s Deep, for example. Volunteer to help stage an opera. Or just join us, to work on the next issue of Distilled.
Individualism vs Collectivism
The Finer Subtleties of Vajazzling
A few months ago I picked up my little sister’s copy of Cosmopolitan. Having read Cosmogirl as a young teenager, I was exposed to the strong messages of the campaign "be sexy: be sussed" promoting STI awareness and the confidence to "say no". Both the images in the magazine and the articles themselves were designed with positive body image in mind — a wet-haired girl with no makeup on, bouncing on her bed smiling, flashing her braces to the camera "20 things to do before you’re 16". I remember the list included "eating a doughnut without licking your lips".
Can you be an attractive, happy teenager without feeling the pressure to be thin / made-up / dressed like a doll? Yes, says Cosmogirl, you can.
Yet Cosmopolitan, the adult version confronting my then 15 year old sister, carried with it an adult question: Can you vajazzle and be a feminist?<
If you don’t happen to know the verb "to vajazzle", it involves having a bikini wax taking off most or all of your pubic hair. This is followed by diamante crystals being glued onto the skin in the pubic region – usually in the shape of a heart, star, or word.
You may imagine my initial disgust at the topic. Equal pay. Female Genital Mutilation. Women’s education. All paling in significance to the one big question: is it ethical to remove your pubic hair, and is it even less ethical to stick sparkles down there?
Perhaps unsurprisingly Dawn Porter, a heavily fringed TV presenter, responds "YES" to vajazzling while on the other side of the plainly laid-out page of Cosmo in an equally-sized box (in yet another shade of yellow) comes the resounding "NO" of Kate Smurfwaite, feminist campaigner.
The debate on either side concerned whether waxing causes one to appear perversely but permissively child-like, whether the ‘male’ mind has been conditioned against being attracted to women that have not undergone pain to look a particular way, the cost of a monthly wax (conveniently punctuated with the latest issue of Cosmo) eating into a girl’s already gender-diminished salary, the time, the embarrassment, the pressure from the porn and the regrowth.
And that list is by no means exhaustive, both sides asserting their judgements as intrinsically feminist and thereby intrinsically good.
Here lies the problem that I feel confronts feminism as a whole: we have long fought for equality, the vote, freedom of speech, and the freedom to do with our bodies what we wish. Having to ask the approval of other people to vajazzle, even fellow feminists, strikes me as a big step backwards. It is true that if all feminists were to work individually – decide on the ethics of vajazzling for themselves – there would be a vast difference in the conclusions that differing feminists come to. However, I believe that all feminists are created equal. There is some essential component of what it is to be a feminist that escapes definition though it surfaces in the questions that are asked of women in their everyday lives.
The fact that vajazzling has entered the arena of feminist discussion says to me that feminism is at its heart a collective movement. The same questions are still being asked. "Is the quest for beauty oppressive to women?" is merely transformed into, "Is a vajazzle a beautiful thing to behold on a free woman, or simply a sparkly symbol of her oppression?"
Of course, that argument sequence is very reductive and the relationship between beauty and oppression is a very complex issue. Recent "Slut Walks" in the UK attempted to combat the myth that rape and sexual violence towards women may be provoked or augmented by "slutty" clothing. Signs painted with "My little black dress is not a yes" and "My clothes are not my consent" stated clearly the collective opinion of these feminists; that women should have total rights over their own bodies. How they wish to dress themselves and their consent to sexual contact is unrelated.
Yet the seemingly trivial question of vajazzling is being asked specifically in a UK women’s magazine. What about the questions being asked of women in other cultures? Can a woman living in the Middle East wear a burka and be a feminist? Can Indian women use cosmetic skin whiteners and be feminists? Can Japanese women undergo eyelid surgery (slicing their mono-lid into two to appear more westernized) and be feminists?
Though some of these questions may relate more to beauty and ethnicity, they all concern the many pressures that are put upon women to conform to the ideals of beauty within their culture. The very fact that cultures vary means that feminism as a collective is a series of branches. The branch on which I live asks me to make an ethical decision concerning the removal or non-removal of my pubic hair.
Though the answers to the big questions may not be agreed upon and even the questions themselves modified according to audience, I feel that it is ultimately within the rights of the individual feminist to act according to her own reasoning.
My vajazzle is neither my freedom nor my chain.
Individualism vs Collectivism
The Clockwork Island in the Heart of Europe
While the philosophies of euro-visionaries Robert Schumann and Jean Monnet have brought Western Europe closer together, one country at the continent’s heart has strongly resisted being part of such an enterprise. It is a country of immense paradox, its citizens enjoying a standard of living that is among the highest in the world, its economy continuing to prosper, yet at the same time moving ever further to the political right. In the wake of the Lehmann Brothers collapse, which plunged much of the world’s economy into recession, the advocates of the individual nation versus the collective in this country find themselves vindicated more than ever.
Have you guessed which country I’m talking about? While Switzerland may lie in the heart of Europe, you may find in this small Alpine nation some of the strongest support for Euroscepticism.
In many ways, the story begins more than 700 years ago. In 1291, peasants in three Cantons rose up against their Habsburg rulers with alacrity and remarkable military success. To sum up the creation of a state in such a manner may be overly simplistic but the comparison of the country’s status as it is today with its founding fathers is an endlessly fascinating one.
Chiefly, it yields two character traits just as applicable then as now. First is the desire to be master of one’s own lot. The desire for autonomy is present in the original Federal Charter, concurrently with cooperation within the Eidgenossenschaft. Today, this desire takes a much more convoluted form. On the one hand, each of the 26 Cantons enjoys independence comparable to the federal and state system in the USA, a solution that leads to as many complications as practicalities due to the vastly smaller geographical areas involved.
On the other hand, the practice of direct democracy is at the forefront of politics with citizens called up to vote regularly on both regional and national laws. In addition, the country is led not by one but seven members of the Bundesrat.
The second trait is somewhat more pragmatic, namely pride in the small. The belief in localised community is strong and in the Swiss-German dialect, there is a strong inclination to describe terms in the diminutive form. This predilection likely stems from the knowledge that the principles of rule established in 1848 have yet to fail and may, perhaps rightly so, be considered a form of solipsism. This in turn leads to a mistrust of change, especially that coming from outside.
The current brand of Swiss Euroscepticism has everything to do with national pride, born in no small part out of the country’s ability to remain neutral through two world wars but also out of the economic prowess and high standard of living in their aftermath.
Switzerland’s neutrality, particularly from 1939-45 had less to do with itself than with others. Its armed forces would have been quite incapable of dealing with any invasion, but the maintenance of its borders is seen as the successful resistance against much greater forces.
Increasing collaboration of Western-European powers in the post-war years met with equal patriotic resistance — to be ruled by Brussels would be to surrender national sovereignty. In the post-war years, popular conservatism found a new voice in the political far right, reaching its zenith in the century’s final decade. For the first time since the 1830s, the classical liberal Free Democratic Party’s (FDP or FDP.Die Liberalen after a 2009 merger) position as the most powerful party began to be seriously challenged.
The Swiss People’s Party, the SVP was formed in 1971 out of a collective of farmer’s parties and gradually began to gain political pulling power. The spearheading figure of Christoph Blocher in particular moulded the party’s image and identified European integration and immigration as major issues. Blocher’s radical Zürich branch of the party gradually edged out a more moderate strain from Bern in the 1990s. He successfully led the party to a landslide victory in the 1999 general election: 22.5% of the vote confirmed the SVP as the most powerful party in the national assembly and the two following two elections increased this by about 4% each. Effectively, this made Euro-scepticism state policy.
Opposition to becoming a member state of the E.C. and later the E.U. had long been a topic of debate. Most significantly, the 1992 referendum rejected an integration proposal, if only by the narrowest of margins. Of course, complete isolation could never be a solution and integration instead resulted in a series of bilateral agreements best described as having your cake and eating it too. Economically, the country profits immensely from the open market, while at the same time not having to subscribe to, say, the common agricultural policy.
Switzerland is at the heart of Europe and so far from it at the same time. Such a paradox is strongly illustrated in the reliance on cheap, immigrant labour. The story of Italian migrants, such as those that mined the Gotthard tunnel in the late 19th century, was mirrored by the influx of refugees from the Balkans in the 1990s. Colloquial derogatory terms have been coined for both groups, yet their role in propping up the workforce is an unavoidable fact.
As a result, an immigration and integration debate is reignited every few years and is a regular feature in election campaigns, most markedly 2007 when a bill proposing the deporting of foreigners upon entering the criminal record was responsible for stirring up much isolationist sentiment. The SVP’s now infamous headliner poster featured three white sheep kicking a black sheep off a Swiss flag, under the slogan “Sicherheit Schaffen” (“To Create Security”). As with the party’s anti- minaret campaign two years later, the poster received international attention. Its message appears to be finding grass-root support — their powerful status has now been affirmed for four consecutive terms.
Nevertheless, voters in 2005 accepted a part in the Schengen Agreement by a majority of 5%, guaranteeing free movement of people across European borders. Almost 60% voted in favour of extending this freedom to the E.U.’s newest member states of Romania and Bulgaria in 2009.
Swiss citizens increasingly find themselves in a world they do not recognise, one that moves quickly and discards more traditional values. The incompatibility between the localised and the globalised – the individual and the collective – plays itself out in direct democracy. Perhaps the move to the far right is not surprising. To paraphrase the great Christopher Hitchens — humans long for change but are immediately suspicious of it when it arrives.
Individualism vs Collectivism
The Animal Farm?
Agricultural policy in the United States, on its face, is seen as a series of innocent measures to safeguard the bucolic American farmer, and thus the U.S. food supply. Pursuing this ideal, however, has led to inefficient market behavior and some insidious consequences throughout the country and the world.
Across the board, U.S. agricultural subsidies fundamentally alter purchasing power parity both in foreign and domestic markets. Currently, developing nations are often “beneficiaries” of excess US product. While seemingly altruistic, dumping commodity crops onto the world market inhibits lesser-developed countries’ ability to be competitive in either domestic or foreign agriculture markets. In short, the U.S. government sells products at a significant loss; a loss that no fledgling agrarian could absorb in order to sell a competitively pricedproduct. The World Trade Organization’s Doha Round is hampered by this practice. In 2005, the WTO even went so far as to ask the U.S. to stop domestic price-fixing of certain products to allow more parity in the world market.
The long-running U.S. farm subsidy program is fundamentally detrimental to the free market. Not only is it an impediment to fairness and competition in economies both locally and globally, there are some strong domestic reasons for change as well. Firstly, the current state of affairs leads to unnecessary environmental degradation. And secondly, the market distortions negatively impact public health. A dismantling of the subsidy system would align agricultural policy with the rest of the government’s low interference mantra, aid global development, and all the while tackle significant domestic issues.
This history of subsidies in North America dates back to colonial times, but commodity programs, replete with price and income supports, became an integral part of U.S. agricultural policy with the New Deal’s Agricultural Adjustment Act of 1933. Almost immediately, these subsidies led to distortion in market behavior. Subsidized crops, e.g. wheat and corn, were grown — and continue to be grown — disproportionally to demand in response to the government’s non-performance based bonuses and "golden hellos". Sounds familiar? Nevertheless, these distortions endure and have skewed a great many aspects of American life, from business and trade practices, to resource usage and employment, down to the fundamentals of the American diet.
Is it finally time to dismantle the labyrinthine, outmoded agricultural policy in the United States? Despite calls for progressive reform and evidence to support the need for such, the government has yet to make a call. The 2012 Farm Bill has officially stalled in the House of Representatives until election season is resolved. Historically, this is an issue that garners bipartisan support; not only assuaging rurally populated constituencies but also the behemoth corporate agricultural lobby.
So what’s the problem here? First, the bill needs decoupling. It currently mixes highly controversial budgetary items: farm supports and food stamps. Second, and more subtly, the government needs to change the way it thinks about food. Much can be gleaned from an examination of farm supports and their impact on agribusiness, the American consumer, and the world market.
Today, many sectors of the economy are artificially sweetened by government policy. These subsidies cause agribusiness to unduly till land that would otherwise lie fallow or remain forested. Not only does this degrade land important for conservation of biodiversity, it also unnecessarily burdens the American taxpayer when the government is bound to purchase the excess product. Animal agriculture, for example, becomes far more profitable with grain and dairy subsidies. The subsidy fundamentally changes the way meat is produced. Traditionally a grass-fed product, the large-scale grain subsidies have made it more profitable to raise livestock on a grain- or corn-fed diet. By allowing more animals per square acre, today’s production methods produce staggering amounts of pollution and often severely deteriorate the land used in production. The policy protects agribusiness and, debatably, the US food supply, but does nothing to combat the environmental degradation it reaps.
The subsidies endure in spite of the linkage between inordinate consumption of animal protein and processed foods and a corresponding susceptibility to the serious illnesses (such as diabetes, heart disease, cancer) that plague Americans. Foods containing or manufactured with subsidized crops are less expensive than their non-subsidized counterparts. In 2004, nutrition experts Adam Drewnowski and S.E. Specter found you could either purchase 1,200 calories of potato chips or 250 calories of carrots for one dollar. Again, the interventionist policy balks when faced with the realities of a policy that sickens its populous and thereby burdens other government agencies, like Medicare and the Agriculture Department’s MyPlate nutrition initiative.
It would be one thing if the struggling, small-town farmer received these subsidies, but they don’t. The strategy set forth by 1970s Secretary of Agriculture Earl Butz ("Get big or get out") consolidated farms and ushered in the cheap-food policy that remains today. By and large today’s farm supports go to corporations with pre-tax profits in the tens of billions. The 2012 farm bill restructures the direct payments system, but the alternative still allows for billions in shallow loss and crop insurance programs that any other large corporation would provide through its own Business Continuity Management procedures.
Farm subsidies in the US have long served as a controversial lynchpin in both domestic and foreign economic policy. The time has come for policymakers to frankly discuss the pragmatic realities of outmoded and distorted legislation. By removing agricultural subsidies, the price of all food products becomes competitive. The government will no longer be on the hook for excess production, thus lessening the burden on government funds and individual taxpayers. Dually, the government will no longer need to dump crops on the world market and stall global economic growth. There would no longer be an economic incentive for agribusiness to degrade or till unprofitable land. And finally, parity of food pricing will enable low-income Americans, the 99%, to make real choices about their diet and their health.The case for dismantling agricultural subsidies is compelling, and warrants bipartisan support when and if policymakers decide to take notice.
Individualism vs Collectivism
Targeting People or Peoples, a Christian View
In the quarter-century since the end of the Cold War, the U.S. has repeatedly been confronted with a spectre of governments committing terrible violence against their own people. More often than not, the U.S. has preferred to address these conflicts from afar. For the most part, the American people have been allergic to the prospect of their government sending their military – their relatives, friends, and fellow citizens - to intervene in conflicts that do not seem to have much to do with them. So instead, the favourite alternative has been the imposition of economic sanctions on the countries and regimes in which this violence is taking place. Right now, we are seeing this play out before our eyes in Syria. And though the situation is much different in Iran, we can see how popular this tool has become for addressing conflicts that Americans do not foresee coming to their own shores any time soon. How are we to assess this situation? Should we see it as perhaps an indication that the U.S. is not as militaristic as it is often accused of being? Or should we see it as a sign that self-interest has completely won the day in U.S. foreign policy, to the exclusion of considerations of what is best for people thousands of miles beyond their shores? Though it may be uncomfortable to do so, we need to consider that the latter may best reflect U.S. motivations. Economic sanctions, I want to argue, are either too destructive to be just or too weak to be effective. As an American Christian myself, I am convinced that their popularity represents a lack of political will to actually come to the aid of our attacked neighbours, men and women for whom Christ also died.
Of course, I could be wrong. Perhaps the newest form of economic sanctions – so-called targeted, or smart, sanctions – will turn out to be our most effective tool in repelling the violent tendencies of oppressive regimes. The recent history of economic sanctions, however, does not make the prospect look very promising. International political economists can only agree on one case where sanctions definitely worked: those imposed on South Africa in the 1980s. There, an international consensus developed saying the apartheid system and the regime that enforced it had to go. The international community came together and imposed tough economic sanctions, and these sanctions are given part of the credit for ending apartheid in that country. Beyond that single case, it’s not all that clear that economic sanctions have been very effective. Heavy sanctions were imposed on Iraq in the 1990s and they did not really work, at least not in the way they were intended to. They were effective at crippling Iraq’s economy and creating a humanitarian crisis, but they were not effective in producing substantive political change.
The 1990s, in fact, have come to be called by ethicists and policy experts “the sanctions decade.” Once the Cold War ended, there was suddenly room for greater international cooperation in resolving conflicts. Since the world’s largest militaries were drawing down their forces and arsenals, economic pressure was the most convenient way of addressing the conflicts that arose in the 1990s. Donald Losman, a leading expert on sanctions, points out that sanctions are tools that seek to avoid armed force. They use economic pressure to indirectly apply political pressure. This is probably why they were not all that effective. Until recently, sanctions primarily targeted a country’s general economic well being, in the hope that the people in that country would get fed up with supply shortages, high unemployment, etc. and then demand political change. This seems like it could work if (and it is a big if) the people had enough of a voice to influence their government’s policies. But many of the countries that were targeted with sanctions are not democratic. Their governments simply do not respond to political pressure that easily. So in the 1990s, conflicts that were addressed by economic sanctions alone went largely unresolved.
That brings us to the modern day sanctions against Iran and Syria, which are dubbed as “smart sanctions.” They are considerably different than the sanctions of previous decades. Instead of blanket trade embargoes, these measures target the financial assets of government leaders. Instead of applying economic pressure on the general population – economic pressure that oppressive regimes have proven adept at insulating themselves from – they specifically target the political and military leaders. This means there is far less likelihood that civilians will be harmed in the process. Smart sanctions are thus far more humanitarian than the blanket sanctions of the 1990s.
There is a catch of course. There always is. The catch is that it is not entirely clear if smart sanctions really work. If, for instance, the U.S. commits to applying sanctions only on Iran’s political and military leaders, this decision is contingent upon the U.S. being able to access those leaders’ financial assets.
This is only possible, for the most part, if Iran’s leaders have some portion of their assets invested in countries that are willing to assist the effort to freeze those leaders’ assets. So depending on how much Iran’s leaders have invested abroad, the U.S. will be limited in how much economic pressure they can bring to bear on them. The same could be said of Syria as well. The whole issue is, as you can probably imagine, far more complicated than that. But hopefully this gives you an idea of what the U.S. and its allies are up against in regards to targeted, or smart, sanctions.
So what does the Christian just war tradition have to say about all of this? Over the centuries it came to identify several criteria a conflict must meet in order to be considered just. The criteria themselves are not hard and fast rules. Yet they have proven to be extremely helpful as a framework to help Christians make decisions about war. For the sake of brevity, I will skip over the criteria of legitimate authority, just cause, and discrimination. Suffice it to say that these are probably the least controversial of the seven criteria when it comes to deciding whether economic sanctions are just or not. The only thing that should be noted is that ethicists have recently made a strong case for seeing sanctions as a modern, more technologically savvy form of siege warfare. In other words, just because sanctions respond to a conflict using economic pressure – instead of bullets and bombs – does not mean they should not be treated as an element of warfare.
The criteria that prove to be the real sticking points are right intent, last resort, reasonable chance of success, and proportionality. The criterion of right intent basically states that the purpose of entering into conflict must be to win peace. For Christians, the goal of peace is connected to the virtue of love. We desire peace for our neighbors who fall under attack because we take seriously Christ’s commandment to love them (John 13:34). For that reason, our intention in responding to a conflict is extremely important. The problem raised by economic sanctions is whether they truly reflect an intention to win peace out of conflict or whether they reflect a desire to avoid getting one’s hands dirty. In other words, are sanctions just an excuse to spare ourselves the cost of war? The history of sanctions suggests that they usually are.
The most common argument in support of economic sanctions is made using the criterion of last resort. Broadly speaking, last resort means that all reasonable means short of war should be tried before armed force is resorted to. The word reasonable is key here. This criterion does not say that any and every means must be tried. That would make a just war virtually impossible. Instead, last resort means that armed force should be avoided only if other, less destructive means of addressing the conflict hold significant promise in resolving it. The problem with the way we tend to talk about economic sanctions, though, is that we talk about them as a means short of war. Yet the violence that they have done and are by their nature intended to do require us to see them as a form of warfare, albeit indirect warfare. By the time the U.S. imposes economic sanctions on a country involved in a certain conflict, they have already entered into that conflict themselves. Which begs the question: What are we really hoping sanctions will achieve?
That brings us to the criterion of reasonable chance of success. The Christian just war tradition has long realized that legitimate authority, just cause, right intent, and last resort are all crucial to determining whether a conflict is just. Satisfying these criteria alone, however, should not be enough to justify armed force (or economic strong-arming). If a war that is otherwise justified has no prospects for success, it is all but assured that the violence of the war would only add fuel to the fire. Jesus once asked his disciples: “Or what king, going out to wage war against another king, will not sit down first and consider whether he is able with ten thousand to oppose the one who comes against him with twenty thousand? If he cannot, then, while the other is still far away, he sends a delegation and asks for the terms of peace” (Luke 14:31-32). Part of what it means to be Christians who are committed to just war principles is the willingness to honestly assess whether our goals – however just they may be – are actually achievable using the available force. If they are not, then we need to be prepared to take force (including economic coercion) off the table.
The just war criterion of proportionality is where I think we have been misled the most when it comes to economic sanctions. Essentially, this criterion says that the force we use to repel an attack – after all, the Christian just war tradition assumes that unjust aggression has already taken place – must not wreak as much destruction as the violence that prompted our intervention. This applies both to our pre-war assessments and to our prosecution of the war once it starts. Christians must demand that a war’s destructiveness be as minimal as possible because this destruction means real human costs to real human beings, each one of whom is our brother or sister for whom Christ died. With regard to sanctions, this means that the wanton economic destruction of general sanctions must be rejected outright. Their economic destructiveness reaches far too wide and goes far too deep and has consequences that are far too long-term to be considered proportional. Smart sanctions, on the other hand, have essentially the opposite problem. The force they employ may actually be disproportionate in the sense that they may be too weak to effectively deter the force to which they are a response. Relying on targeted sanctions alone may in fact turn out to be like taking a knife to a gun fight. Time will tell. Yet when we see violence being committed against innocent civilians – as we see now in Syria - time is not a luxury we have at our disposal. Sometimes urgency is necessary in the pursuit of justice.
Again, the problem with the way we typically talk about economic sanctions is that we do not admit that they are themselves a use of force. We like to imagine that they are analogous to a parent who gives their child a warning before they impose actual punishment. Yet we would do well to remember that they inflict real harm on the people in the country they target. Sanctions have real human costs. When we are searching for a remedy to violence, we must take care not to unnecessarily add to people’s suffering. At the same time, however, those of us who subscribe to the just war tradition are convicted that Christ’s command to love our neighbours should spur us to look for a remedy that is just. The pursuit of just goals tends to require greater risk than the acceptance of injustice. Moreover, Christian men and women who are committed to love and justice are often asked to risk more because of this commitment. “No one has greater love than this, to lay down one’s life for one’s friends” (John 15:13). More often than not, sanctions represent a desire to avoid incurring such risks. This should give us pause, lest we presume the presence of justice merely because we and our loved ones are kept out of harm’s way.
Of course, I do not mean to suggest that military intervention is always more preferable to sanctions. The use of armed force is judged by the same just war standards as sanctions. But sanctions must be judged by those standards. In commenting on the parable of the Good Samaritan, St. Augustine of Hippo (354-430) once asked what Jesus would have the Samaritan do if the man he encountered on the road was still being attacked by thieves. His answer was that Jesus would have the Samaritan act to stop the violence, even if that meant risking his own safety. This is something that resonates with many of us. We feel that as Christians we should come to the aid of our brothers and sisters who come under attack, if we have the means to do so. Yet it is important that Christians ask whether the policy of responding to international conflicts with economic tools from afar truly reflects a commitment to come to our neighbours’ aid. Perhaps this policy instead reflects the motivation of the priest and Levite, who were content to pass by on the other side.
Individualism vs Collectivism
E Pluribus Union
How effective are North American unions in the 21st century? For an answer, let’s look at Toronto, the continent’s fifth most populated metropolis and the largest city in Canada. The Toronto Transit Commission (TTC) was recently declared an essential service and stripped of its right to strike. Even garbage removal is being privatized away from union control.
Finding anyone outside of the unions' ranks with any degree of sympathy for unions is becoming ever tougher. The very mention of the word ‘union’ tends to evoke tumultuous responses. Rather than thoughtful or informed discussion, we often get ideological jabs laden with as much disingenuous rhetoric as a political campaign.
What led North America to become so decidedly anti-union? A common theme seems to be that unions have overwhelmingly lost public support (which many have attributed to their blatant disregard for the way they are perceived). Let's explore some of the justifications for this hostility.
Going back to Toronto, garbage collection is being privatized mainly because of a bitter strike that halted pick-up for six summer weeks in the midst of the financial crisis in 2009. The TTC was declared an essential service after becoming vilified for an illegal strike in 2006 that was followed two years later by an unannounced halt to service. The 2008 strike began on a Friday at midnight, infuriating and stranding thousands of people across the city. Needless to say, public opinion of unions among Torontonians has yet to improve.
Stories of manufacturing jobs relocating to greener, non-union pastures have become so common that the decay of organized labour’s influence in the private sector is unquestionable. However, this narrative fails to accurately capture the fact that the union density rate is overwhelmingly propped up by public-sector unionism. In 2010, 36% of Americans in the public sector were unionized – more than five times higher than the 7% rate in the private sector. Canada’s situation is similar, with 75% of employees in the public sphere belonging to a union compared to just 14% in private industry.
The image of a greedy member of the autoworker’s union no longer supports the disregard for unionism. Instead, this outlook should be updated to reflect disdain for public-sector unions. If we were to question people carefully about their prejudices, what we may find is that what many of them actually detest is the stereotype of the lazy, entitled, and often completely redundant government employee.
Consequently, one of the outcomes of the public/private divide is the emergence of an "us vs. them" divide that pits workers in the public sector against the rest of the labour market. And with a sustained focus at all levels of government to tighten fiscal belts, it is a split that is unlikely to mend anytime soon.
While there hasn’t been a watershed moment in Canada, the birth of the contemporary American attitude towards organized labour takes root in Ronald Reagan’s decision in 1981 to fire nearly 11,500 air traffic controllers who refused to end their illegal strike and return to work. No labour relations incident before or since (with the possible exception of the recent battle in Wisconsin) has manifested itself so clearly in the public spectrum or left such an indelible imprint on the nation’s collective consciousness.
Anti-union sentiment has steadily increased over the past thirty years but talk of the utility of unions tends to move with economic downturns. Perversely, the worse the economy performs the more unions seem to bother people. Why?
One of the most recited explanations focuses on infringing on the convenience of people outside of the union. The argument is that public sector unions often have a monopoly on the services that they provide. A strike unfairly takes the public hostage and creates unwanted inconvenience. The most recent high-profile example was the Chicago Teachers' Union strike, which left many parents without a backup plan for where their children would go during the workday. Should we be surprised by the public’s hostility? We live in an age where ease is assumed and expediency is expected, features that are largely irreconcilable with the basic function of a public-sector strike. But relying on a personal experience of annoyance isn’t a particularly nuanced reason to justify disliking unions, and nor is faulting them for exercising their only legal source of leverage.
The public’s aversion to inconvenience puts pressure on management to resolve disputes in a timely fashion. And contrary to the private sector where employers can point to a tangible bottom-line, management in the public sector controls a seemingly bottomless purse that’s funded by the same people who aren’t fond of the nuisance strikes pose, regardless of who is at fault.
Accordingly, governments have a vested interest in incurring as little political cost as possible. The government’s focus is often on finding a quick resolution rather than achieving a fiscally prudent contract. The resultant bargaining outcomes set expectations for future negotiations; favourable increases cultivate the belief that they will be won again while a round of austerity breeds anticipation of a catch-up increase down the road.
When governments eventually bleed red ink (and eventually need to realize cost-savings), it finds a convenient scapegoat in public-sector unions, capitalizing on the lack of public sympathy. After all, people get tired of hearing about regularly timed enhancements given to transit workers and garbage collectors that are but a dream in the private sector.
We then encounter situations like in Wisconsin last year where public sector unions were stripped of their right to collectively bargain. A similar development recently occurred in Ontario when the government enacted a second consecutive two-year wage freeze for teachers and also removed their right to strike during that period. Whether or not you believe teachers should be allowed to strike should be a lesser concern than the government’s propensity to unilaterally change the rules in the midst of the bargaining process.
Rather than deferring on our insatiable appetite for short-run convenience or insisting that our elected leaders send a team to the bargaining table that won’t simply hand out rubber-stamped wage increases, it seems that the established response is an attitude that those greedy, out-of-touch union members should be more like the rest of us – just happy to be employed at all.
With this analysis, we tread dangerously close to the politics of envy, crudely translated as: "Hey, if I’m not receiving wage increases and have no job security why should you have any?"
In the private sector this takes the form of the now unassailable truth that if you didn’t toil through four grueling years of an arts program, you should expect to have to defend why you make more than someone who did. The politics of envy are practically engrained in the public/private divide. Labour market newcomers soon learn that employers usually aren’t anywhere near as excited as they are about the skill set they developed in university. With an increasing number of students heavily indebted by soaring tuition fees, emphasis has shifted awayfrom finding the right job to finding any job at all. Recent graduates soon become eager to snap up the first low-paid, paper-pushing gig in the private sector that comes along. When that person looks at his neighbour – similar educational credentials, surely can’t be any better at shuffling around papers – who landed in the heavily unionized public sector, it’s understandable that a sense of bitterness might creep in. But shouldn’t we ask ourselves when it became acceptable to take a position that stresses the lowest common denominator?
Yet, we shouldn’t ignore some of the very compelling reasons for the North American disregard for unions, because not all opponents are overcome by blind resentment. It often has nothing to do with envy at all. For many, the resentment stems from unions putting their narrow interests ahead of the well-being of government coffers.
In addition to the type of tactics employed in Toronto, public-sector unions have responded with an increased focus on electoral politics, an agenda that is a legitimate sore spot for the scores of members who don’t share the same political views.
This issue recently came before the U.S. Supreme Court in Knox v. SEIU, a class-action lawsuit filed in California on behalf of 28,000 non-union employees who objected to being forced to fund the union’s ‘Political Fight-Back Fund’.
The Golden State allows public-sector unions to establish "agency shops" in which employees don’t have to join the union but must nevertheless pay an annual fee to cover the costs related to collective bargaining. But since 1977 employees have had First Amendment protection from being obliged to pay for the union’s ideological and political projects. In Knox the court upheld this principle when it ruled that the SEIU had not followed the proper procedures for allowing employees the chance to opt out of contributing to the fund.
The issue of political activism is far more prevalent in the United States but is also a growing source of agitation in Canada. Let’s look at the actions taken by the Ontario division of CUPE (the Canadian Union of Public Employees), which represents more than 200,000 workers, in 2006. CUPE Ontario passed a resolution sponsoring the boycott of Israel for failing to recognize Palestine’s right to self-determination. Three years later the union introduced plans for a province-wide resolution calling for Israeli academics to be prohibited from speaking at Ontario universities. The amended resolution, which eventually passed, reflected a boycott against working with Israeli institutions that enhance their military as opposed to individual members of academia.
This willingness to overstep their core function and wade into international political diplomacy is a fairly persuasive reason to question the priorities of some of these organizations. Further, this type of leadership seems to indicate that labour is ill-equipped to handle the rebuilding that it so urgently requires.
A final plausible explanation for anti- union sentiment points to the broader cultural shift in the West, a move away from paternalism to a decided sense of "Frontierism"; an American-style narrative of do-or-die individualism. We are charmed into believing that if we dedicate ourselves with the requisite amount of intestinal fortitude, we can achieve almost anything. Indeed, with enough hard work, commitment and inner fire we can run faster, jump higher, and land the well-paid job of our dreams. This attitude is so prevalent in North America, that even both candidates for President, Barack Obama and Mitt Romney, advocate their version of it. Individualism has taught us that we shouldn’t need to be burdened by the excessive restrictions on our freedom that unionism entails and we should instead be able to rely on our own impressiveness to negotiate that favourable compensation package. This is true of course for some, but for the rest of us it doesn’t take too much exposure to the real world to understand that this perspective is riddled with shortcomings.
The truth though, is that there isn’t any single reason that comprehensively gets to the heart of anti-union sentiment; regardless of the motive it’s a response that is very much alive and well.
One of the most pivotal outcomes of the public/private divide is the way in which it has been exploited by politicians who recognize that it is, potentially, a political death sentence to be seen as pandering to unions. We see this in the renewed debate surrounding "right to work" laws (R2W) which are currently found in almost half of the United States and have recently been suggested in three Canadian provinces.
R2W is a potentially confusing term that doesn’t imply the right to have a job, but only that an employee does not need to be a member of, or financial contributor to, the union. In contrast to the agency shop it effectively makes the payment of dues a voluntary exercise and allows individuals to reap the benefits of collective bargaining without contributing. Yet, the problem of free-riding shows the detrimental effect of a broader cultural shift that encourages us to place our own well-being far above the vitality of the collective.
Proponents of R2W usually cite two reasons why this type of legislation is desirable. It’s sometimes framed in America as a question of freedom and said to be a states-only tool to counterbalance federal law that distorts the balance of power in the workplace.
The more common justification relies on the assumption that anti-union employers will
flock to whatever state passes the law, thereby resuscitating local economies by creating new jobs at a considerably discounted wage.
Regardless of the justification, supporters point to the wealth of economic data demonstrating superior economic growth and performance in these states. But opponents label the data as misleading. It lumps together more than 20 states simply because they share one law in common. Critics also point to a divergence of performance amongst R2W states and claim that it is hard to tease out the true impact of the legislation in light of the enticements of subsidies, lower taxes, and weaker environmental regulations.
Opponents also claim that if citizens were equally given the choice to opt out of paying taxes while still enjoying services, society would inevitably implode. But this debate predictably boils down to a partisan war of words and a battle of conflicting statistics as politicians wiggle to get the greatest mileage from either vilifying public- sector unions or defending their virtue.
So what is the future of the union? Have they really outlived their usefulness, or do we need them now more than ever? Quite frankly, so long as the public sector is the predominant source of unionism in North America they aren’t in danger of extinction unless governments decree them outlawed.
But can they really expect to influence workplaces by concerning themselves with political initiatives? Probably not, especially if doing so means neglecting, or averting attention away from their core functions. Where they go from here is the million-dollar question, and one that is certainly more difficult to answer with the added variable of Frontierism that now permeates Western culture. The only thing that seems like a safe bet for the foreseeable future is that far more governments will find success demonizing the public sector than defending it.
Individualism vs Collectivism
Individualism is Bad for Business
According to the likes of Mitt Romney, the individual’s relentless pursuit of profit – the organizing principle of the capitalist economy – is as relevant today as it was when Adam Smith published the Wealth of Nations in 1776. Individualism, say its adherents, has always been, and continues to be, the best engine of collective prosperity.
But the champions of individualism are promoting an ideology that is dated and destructive, particularly when it’s applied to business organization. Whatever its virtues during the industrial age, individualism is much less applicable in the information age, in which the main factor of production is ingenuity, products are increasingly intangible, and capital markets are more international than ever before.
Today, individualism is bad for business. And the reason why has much to do with its
impact on the way companies are run.
For over a century, the corporation has been the dominant method of organizing economic activity. As is well known, shareholders provide capital to the corporation, and in return they receive an equity interest and the right to elect its board of directors, which serves as the decision-making body.
Importantly, the rights of shareholders are exclusive, meaning that shareholders are the only constituency of the corporation that has them. Therefore, as a general rule, employees, customers, creditors, governments, and any other group that has a stake in the performance of the corporation have no say over its profits or decisions. If the corporation were a state, it would be a "shareholder dictatorship".
For much of the last century, the seemingly undemocratic structure of the corporation was not necessarily incompatible with economic performance. This is because it was accepted that while corporate decision-makers are formally accountable to shareholders, they should have discretion to consider the interests of other stakeholders as well.
As a result, the corporation looked more like a benevolent dictatorship, in which directors and officers tried to balance shareholders’ desire for profit with the long-term needs of the business and its various constituents.
But in the 1980, this so-called "managerial capitalism" came under attack amid increasing competition from emerging markets, namely Japan. Shareholders complained about declining profits and blamed what they perceived to be bloated organizations and profligate spending, rather than outdated processes and machinery.
Around the same time, shareholders got a major intellectual boost from neoclassical economists, who developed a theory of the corporation that has become known as "shareholder primacy". The fundamental assumption of shareholder primacy is that the corporation is an individualistic entity in which various parties come together to pursue their own interests. True to form, this theory also assumes that the sole concern of each corporate stakeholder is wealth maximization.
According to shareholder primacy, in an environment where each party is only out to enrich itself, shareholders are especially vulnerable to exploitation. They have to trust that managers will always strive to maximize shareholder returns, rather than pursue their own interests, those of the business, or the company's other stakeholders.
The purported vulnerability of shareholders provided an excuse for putting profit maximization at the centre of business organization. This new conception of the corporate objective also fits neatly into the overarching neoclassical narrative, according to which the unfettered pursuit of individual wealth is the basis for economic growth and prosperity.
The emergence of this compelling ideology, combined with the frustration of declining shareholder profits, helped reorient business organization along individualistic lines. Corporate law and practices evolved not just to protect the rights of shareholders, but to put their interests at the heart of the corporation’s activities.
The Failure of Corporate Individualism
For the last three decades, the theory that the corporation is a vehicle for collaboration and the pursuit of collective goals has been largely rejected. Instead, it has been viewed as a tool for advancing the private financial interests of those with sufficient power acquire and dispose of corporate equity. In other words, the utility of the corporation is not measured by the people it employs and the products and services it creates, but the extent to which it can be used generate returns for individual investors.
A case in point is Worldwide Grinding Systems, a Kansas City steel mill founded over a hundred years ago. In 1993, Bain Capital, the private equity firm co-founded by Republican presidential nominee Mitt Romney, engineered a sweetheart deal in which it acquired a majority stake in the company, which was renamed GS Technologies, for $8 million. The following year, Bain directed the company to borrow $125 million, a quarter of which was paid to Bain in the form of a dividend. In just one year, Bain quadrupled its investment, not by making the company more competitive, but by using it as a conduit for borrowed money.
In 1995, Bain gambled on another round of debt financing, this time to facilitate a merger with another steel company. Despite boosting revenues, Bain’s decisions saddled the company with debt, which took a major toll on its bottom line as it faced increasing competition from low-cost countries and declining demand. Eventually, the century-old steel maker was forced to declare bankruptcy, resulting in the closure of its plant in Kansas City and the loss of 750 jobs. To make matters worse, the company required $44 million in federal aid to cover unfunded pension liabilities.
The sad story of GS Technologies is indicative of the triumph of individualism in business organization and its devastating economic consequences. According to Wa study conducted at INSEAD, it has resulted in massive layoffs and underinvestment in machinery, equipment, and skills development. Not surprisingly, the consequence has been declining competitiveness and further downsizing.
In the last decade, the United States has lost over five million manufacturing jobs, many of which would have been saved had businesses done the hard work of investing in their own competitiveness. Instead, they took the easy route to short-term profits by cutting costs or borrowing money to give shareholders returns that their outlook didn't justify.
It’s not hard to see how shareholder primacy, which turns the corporation into a hub of rent-seeking behaviour, is also to blame for other disturbing economic trends, such as ballooning trade deficits and stagnating productivity growth. In addition, shareholder primacy helps explain the rise of outsourcing, the sustained assault on organized labour, and frozen middle-class wages (not to mention grotesque levels of inequality).
And as shareholder primacy pushed jobs overseas and concentrated wealth, the only way to maintain consumer spending and standard of living was to expand the use of credit, which ultimately led to the global financial crisis.
It may seem unreasonable or simplistic to lay all the world’s major economic problems at the feet of shareholder primacy. But while there are certainly other factors at play, it would be a mistake to minimize the macroeconomic impact of business organization.
For the last thirty years, thanks to the harmonizing force of capital markets, investment decisions have been dominated by an ideology that puts individual financial gain ahead of collective economic well-being. Shareholder primacy provided an elegant and convenient justification for the financial elite to indulge in its propensity for greed by sucking much of the dynamism out of the economy.
Individualism in the Information Age
One of the reasons why individualism is such a harmful starting point for organizing business is that it does not reflect modern economic realities. For example, it is widely accepted that human ingenuity is now the most important factor of production, yet businesses are still organized as if capital were the only thing that mattered.
According to a recent study commissioned by the Government of Canada, employees are by far the greatest source of innovative ideas within companies; shareholders don’t even make the list. Nevertheless, under Anglo-American law, employees have no right participate in the management decisions. If innovation is thekey to business success in the information age, then excluding the greatest source of innovation from the boardroom makes no business sense.
Similarly, the fact that products and services are increasingly intangible militates against shareholders dictating business decisions. The lower cost of innovation, particularly in the software sector, means that many companies can be financed with little or no equity investment, thus decreasing the importance of shareholders to the business.
Moreover, in addition to employees, customers are also an important source of new ideas; look at the user-generated content that powers the profits of Facebook and Google. The intangible nature of this output, combined with the diffusion of knowledge and technology, means that customers can easily modify and improve a company’s offerings.
Given their growing importance in the production of goods and services, wouldn’t it be beneficial to have customers involved in business decisions as well? And shouldn’t they be entitled to a share of the profits they help generate?
Finally, the shareholder primacy model is at odds with the internationalization of capital markets, which means that there is no shortage of investors willing to take a risk on a promising company. Scarcer and less mobile are skilled workers, accessible customers, available natural resources, and supportive government policies. Since these factors are the drivers of capital investment, the relevant stakeholders can make a strong case for board-level representation.
If the corporation was not a collective enterprise in the industrial age, then it certainly is in the information age. The production of goods and services today depends on multiple constituencies, each with considerable influence over business outcomes. In this environment, putting the interests of one ahead of all others is incompatible with long-term business performance.
The answer is not to transform stakeholders into shareholders through, for example, employee share ownership plans, as many commentators suggest. Instead of truly opening the boardroom to stakeholders, such so-called "shareholder democracy" gives them the possibility – in the unlikely event that they have enough voting power to elect a meaningful number of directors – of participating in business decisions as
shareholders, even though they may not care about profits at all. This is the corporate equivalent of fostering political dissent in China by subsidizing Communist Party memberships.
Fortunately, there are proven collectivist alternatives to the individualistic model of business organization. In the Netherlands, for example, workers participate in the appointment of directors and can veto management decisions that directly affect them. In addition, they have the right to be consulted on major corporate transactions – such as Romney-style takeovers – and have them reviewed by a court. And, unlike in US and UK, shareholders of Dutch companies cannot sue the board simply for failing to maximize returns.
All of this stems from a recognition, articulated in the Dutch Corporate Governance Code, that "a company is a long-term alliance between the various parties involved in the company". This "cooperative capitalism" is practiced in many other Continental European and Nordic countries. In the Netherlands, as elsewhere, it has proven to be compatible with strong economic results. The Dutch economy outperforms the American one in a number of key areas, including per capita GDP, unemployment, current account balance, public debt, and income distribution. In addition, the Netherlands is home to world-class companies such as PhilipsElectronics, Heineken International, and KPMG.
Whether or not Mitt Romney succeeds in becoming President, the individualistic brand of business organization that he helped pioneer has turned out to be an economic failure. It sacrificed long-term competitiveness for short-term profits at all costs for the few. It is inconsistent with the economic realities of the information age, in which production is an increasingly cooperative endeavour.
In the area of economic organization, individualism is bad for business. It’s time to embrace collectivist alternatives.
Individualism vs Collectivism
Private Military Companies and the Modern Machiavellism
Bram De Ridder
How many people would call themselves Machiavellists these days? Probably no one, and certainly not those who contemplate a political career in a democratic country. The cold and strict ragion di stato (reasons of state) that is often identified with the Renaissance writer seems highly unfit for political communities build on negotiation, consensus, and inclusive thinking. Nevertheless, many politicians are real machiavellists, although they are often not aware of it. They would never put it so succulently, but the following two quotes from the Floretine politician would almost certainly receive a lot of endorsement:
"Mercenary and auxiliary forces are useless and dangerous. If someone bases his reign on mercenary forces it will never be stable and assured; for these troops are divided amongst themselves, lusting for power, undisciplined, unreliable, tough amongst friends, cowards amongst enemies."
"Because if there is one sort of people that is quarrelsome, lazy, lavish, godless, rebellious against paternal authority, rude, fond of gambling, without education, then it are those who choose a soldiers profession; similar practices are contrary to what can be expected from real, true soldiers.
Niccolò Machiavelli, Il Principe, 1515.
With these words Machiavelli indeed predated contemporary opinions about guns for hire. Because they only fight for personal gain and not for the collective interests captured by the authority of a democratic state, they are often depicted as despicable people who should be banned from international affairs. In the 1960s individual mercenaries such as Thomas Michael ‘Mad Mike’ Hoare and Bob Denard were indeed a destabilising factor, as they were involved in numerous coups and conflicts in the former colonies. The UN responded in 1989 with the International Convention against the Recruitment, Use, Financing and Training of Mercenaries.
But the UN measure was immediately outdated by a new phenomenon. From the early 1990s mercenaries no longer acted as mere individuals, but grouped themselves into business collectives with names such as Blackwater (currently Academi), Sandline International or Executive Outcomes. These private military companies (PMCs) presented themselves as cost-effective and efficient military partners, ready to serve clients in a professional and even ethical way. But despite the assertion that ‘great power always comes with great responsibility’, their main motive remained monetary gain. Harry E. Soyster of MPRI was clear about this when he admitted that ‘we do it for the money. I’m not ashamed to say’.
Due to this development the world of military affairs diverged significantly from what is believed to be the correct situation. In 2003, The Economist famously declared the war in Iraq to be ‘the first privatized war’, a situation considered problematic because people have gotten accustomed to the notion of a ‘monopoly of violence’ which should be hold by the representatives of the collective, i.e. the state. The shift in the 1990s however created a concentration of force in the hands of corporate groups. PMCs not only deal in small arms security but also execute complex and expensive operations. AEGIS for example can be hired for maritime missions, DynCorp for air operations, and Northbridge for intelligence services. And in order to complete these missions, they have access to a global arms market flooded with cheap Soviet war material, including tanks and airplanes.
This diffusion of force is therefore at odds with Machiavelli’s statement that ‘Weapons need to be in the hands of a king or a republic’. Of course it is true that states still control the majority of military assets in this world. But people nevertheless feel uncomfortable and would readily agree with Machiavelli’s position. Legitimate (and preferably democratic) authority still is deemed a prerequisite for wielding force.
The only difficulty is that Machiavelli’s argument was a moral one, and not grounded in an assessment of facts. Military practice through the ages demonstrates exactly the opposite tendency, and for good reason. Historical research increasingly reveals that the outsourcing of military force generally was a lot more efficient than direct state management.
One interesting case is that of the Thirty Years’ War. In his The Business of War. Military Enterprise and Military Revolution in Early Modern Europe, David Parrott notes that the outsourcing of virtually every aspect of war was the prevalent method of assembling an army during this period. Contrary to what is often believed, the result was a complex but efficient system, one that allowed rulers to successfully fight their dynastic and religious wars.
Despite many variants, most armies followed a similar logic. The core of the army was formed by independent regiments of professional soldiers such as the German Landsknechte. Usually these were people whose only talent was to fight, but this also allowed them to specialise in certain forms of combat and to gain serious expertise. These groups rented their skills to a particular nobleman, often a young person who needed to demonstrate his ability to command. These noblemen in turn sold their services and regiments to the high commander (someone who had often bought this post as well).
The most interesting aspect of the system described by Parrott is that it was cheap for the ruler. Depending on the model that was used, the high commander or the intermediary noblemen paid for the wages of the regiments, and sometimes for their outfitting as well. In return the state provided some form of wages for the noblemen, which might or might not cover the expenses made. Usually real profit was however only made through looting, although the opportunities for social mobility created by providing and commanding troops were equally important. The responsibility for supplying the troops was also most often contracted out, usually to mighty commercial families who benefitted from the fact that the crown promised a fixed sum.
This is of course not to say that Early Modern armies were first class examples of fiscal efficiency. In the case of Spain, non-payment of wages and contracts was legio, and even without these expenses King Philip II managed to go bankrupt four times during his rule. But Parrott’s argument is not that the system was flawless, but that it could work, often did work, and therefore benefitted both the private contractors and the ever growing state. ‘Shorn of an ideology of state-building, these mechanisms were simply better, more flexible and more capable of maximizing the military capacity of the state than any attempt to build up comprehensive direct control of military force would have been’.
This historical situation has therefore some interesting parallels compared to the contemporary use of PMCs. This does not imply that we can draw direct lessons from the past, but looking back can place our own beliefs and attitudes regarding mercenary forces into perspective.
A first conclusion is that states in a weak position have always resorted to private military actors. The states that fought the Thirty Year’s war where embryonic compared to their counterparts fighting in both World Wars. But after the Cold War numerous ex-colonies lost their foreign military support and became the ‘weak states’ that are nowadays often connected to the use of PMCs. Exactly because of their cost-effectiveness, PMCs could replace foreign support and allowed these states to guarantee their own security, both internally and externally. So they could equally become a source of stability as well as of chaos.
A second comparison is that both the landsknechte and the PMCs also offer(ed) the best quality/price ratio to large states such as the Habsburg Empire and the United States. It is not only for weak states rational to use their services, but also for powerful states who want to pursue a proactive foreign policy. The PMCs involved in Iraq are not necessarily a sign that the United States are becoming a weak state, but simply clarify that direct state management is the more expensive option. The use of private force might be seen as a symptom of decline, but given the speed at which the war in Iraq was concluded and the fact that it allowed the US to fight two wars simultaneously it seems better to take such statements with a pinch of salt.
The third parallel is even more crucial. In the seventeenth century the use of independent companies and eager noblemen allowed Early Modern states to achieve the goals they set for themselves. At this point Charles Tilly’s famous adagio ‘war made the state and the state made war’ applies. The increased demand for fighting capacity and its availability in the form of mercenary forces resulted in the continuous growth of the fiscal-military state. Clearly, the state did not reach its modern heights in spite of its reliance on private military force, but was on the contrary only capable of reaching this level thanks to the services of mercenaries.
Although this is speculation, a similar process might apply to the contemporary state. PMCs are still used to project state power. The goals they fight for are generally those of the states dominating world politics, an attitude reflected in their precarious public profiling. So instead of seeing the private companies as a sign of state decline the opposite might be true. Adaptation to new situations is usually not a sign of weakness but of strength, and we currently witness states adapting on all fronts, including the military. So PMCs might not be representative of the old ‘Westphalian’ type of state, but they might be connected to the rise of a new, global statehood.
Nevertheless there remains a risk involved. For now, the democratic states that use private military services still represent their respective collective populations. This is reflected in the marketing strategies of the PMCs. Many of their slogans convey an image of moral and even humanitarian behaviour, dedicated to human rights. This demonstrates how important it is for these groups to embody the collective values of the world’s most powerful states. As long as countries such as the US, the UK, or France represent the best employer, PMCs will uphold democracy and human rights.
But what if the US, the UK, or France no longer do so? The crucial fact remains that private military companies are hired by the collectives we are part of, and will fight according to their standards. Our current Machiavelism is therefore largely misplaced. States can do perfectly well with private soldiers, as they are highly efficient and can also be used to defend the values we hold dear. It is not because they serve their own individual interests that they cannot help achieve the collective goals we set for them.
This implies that the ultimate responsibility lies with us, the populations represented by the states that use them. PMCs only live to serve their masters. So as long as we defend democracy at home, our mercenaries abroad will do the same.
N. MACHIAVELLI, Arte della Guerra, I.129. Translated from P. VAN HECK ed., Il Principe en andere politieke geschriften, Amsterdam, 2006.<
R.S. LAPPIN, Peace at what price? The uncertain costs of privatised peace support operations, Leuven, 2007.
‘Military industrial complexities’ The Economist, 27/03/2003.
D. PARROTT, The Business of War. Military Enterprise and Military Revolution in Early Modern Europe, Cambridge, 2012.
Individualism vs Collectivism
Of Hornets and Honeybees
In under a minute the Asian hornet can decapitate over 40 helpless victims. It does so with skull-crushing mandibles so powerful it need not even resort to its lethal stinger, capable of killing humans with a potent neurotoxin. This creature, a triumph of evolutionary perfection when taking on enemy hordes could easily be described as the spartan of the animal kingdom. For creationists, this must be proof God has a sadistic side.
But what about the poor honeybees? As you can witness yourself on National Geographic’s website, the puny European honeybee simply keels over at the mere thought of the Asian hornet. But where there is a collective will, there is a way. The Japanese honeybee has had longer to deal with the hornet threat than its European counterpart. It has learned that the hornet dies when exposed to temperatures exactly three degrees fahrenheit cooler than those the bee itself can withstand. In an astounding feat of cooperation and behavioural evolution, several hundred bees ambush the smug invader creating a humming ball of certain torturous demise, suffocating and cooking the hornet alive.
What does this have to do with us though? Humans, it seems, have out-evolved evolution and have no more natural predators. We have become our own greatest threat and naturally, we are bored. We await only the intellectual apocalypse prophesied by Mike Judge.
Although on the other hand, we are not yet invincible. There are threats that operate much like the honeybee, mocking our evolutionary perfection. Microbial pathogens and viruses of various shades, so small, so insignificant, and yet as a mass they bring attention to our collective mortality. To add to the comparison, the more time they spend with us, the surer their ability to take us down. And yet this past year we very well may have cured malaria, and found a vaccine for AIDS. As long as those in the pharmaceutical and financial worlds cooperate, these could be out within a relatively short amount of time.
To help emphasise the magnitude of these advances, the WHO ranks AIDS and malaria as the number three and five causes of death in low-income countries, and AIDS as number six globally. However, the Seattle-based Institute for Health Metrics and Evaluation has more recently suggested we may have been underestimating malarial deaths. The newly suggested figure of 1.2 million killed annually by the mosquito-borne virus would put it into close contention for the number ten spot, and number one or two in low-income countries given the virus’s geographical distribution. These initiatives are reducing the impact of the last major involuntary causes of death. The distinction is important because the other leading causes (heart and lung disease) are often related to smoking, which there might be only so much we can do to prevent — although the WHO disagrees.
Behind the discoveries of these revolutionary contributions to global health are individual scientists. And they deserve all the credit in the world for their discoveries as stories of individual ardency and commitment. Women and men who put in enormous and the most worthwhile kinds of efforts for the betterment of us all.
But adding a little bit of context helps to further amplify the impression of recent breakthroughs twofold. Firstly, history shows how we constantly innovate on previous work, taking the baton of technology and understanding another level further. Secondly, with the wider lens of the present it becomes almost overwhelming to contemplate what science collectively has been carrying us forward with. Just consider the fact that we recently put a nuclear-powered robotic laser on mars and solved the universe (only one of which is mildly hyperbolic).
But the insignificant backs of humanity do not need a pat. Hybris does not suit us and to the best of my knowledge we have not yet developed a nuclear fusion resistant brand of wax. Perhaps then there is a lesson in humility to be learned from the purveyors of wax, the honeybees.
Collective action, focused and rationalised, can overcome our greatest challenges. We compete with these challenges for the sake of improving, and we know that competition can be a strong driver of innovation, but innovation is moot until it is scaled up. Until we actually put malarial remedies into the hands of the suffering millions and vaccinate the next generation against HIV, scientific breakthroughs are better described as interesting curiosities. Individualism however remains a rather powerful political ideology. It has become nearly interchangeable with populism in western countries. The problem though, is not so much the threat to any particular national fabric (anybody can get behind a concept they get to define), but rather the obstacle this poses to ambition. Specifically, the ambitions that humanity only on the scale of a nation, or greater (or indeed very, very special private companies working very closely with governments) can facilitate.
In those terms, looking at the human race in its entirety, we are evolved to the point of the hornet, and yet our survival depends on being the honeybee. Fetishising self-indulgent pseudo-archaist fantasies seems to have become popular; one need only witness the rise of libertarianism. While this movement has produced perhaps the most honest and consistent politicians, it has failed to make a case for moving forward, only one for stagnancy.
Libertarianism has a long and wholly valid academic tradition of course. Hayek wanted to set markets free so that they could be corrected naturally and with minimal impact. Schumpeter made the case for creative destruction because he valued the innovation that individualism is anathema to. John Locke suggested we organise with “life, liberty and private property” in mind — which is basically the recipe for America — the greatest innovating entity yet created. Finally, we have Ayn Rand to thank for divorcing God from individual enterprise and the accumulation of wealth. This sheds light on the absurd dichotomy present in the modern conservative psyche, and why the school of libertarianism is an entirely different entity from the current brand of political “libertarian”-inspired conservatism.
It is this mentality, which truly poses a threat, and which dangerously equates the utilitarian collectivism of healthcare and scientific progress to a Soviet straw-man. But it seems that these movements are the result of the application to the political field of a brand of libertarianism without quotation marks. The translation seems to be nearly as successful as that of radical collectivism.
And so how does the language of political libertarianism spread? The appeal of these movements must have roots then that lie beyond critical monetary theory and philosophy. Somehow this modern political discourse has been derived from an all-purpose political fantasy — and not a new one either. In the current debate, the narrative has been constructed that the government is a symbol of collectivity and must be dismantled. It seems to call upon the inner optimist, the one that says “I” can do anything. It neglects to highlight its own deeply concealed pessimism: that “everyone else” is an obstacle. By not defining the other however, or by simply calling them the ones in power via the middleman of government, It functions in an identical manner to every other form of populism: it presents a nondescript scapegoat.
This innovation in political strategy is similar to the principal behind the assured success of the Twilight formula. That is to say, libertarianism and other individualistic ideologies promise exactly however much space you think you would need to improve your life. They allow you fill in the blank of obstacles to success (which may in reality include factors such as EQ and IQ) with whatever an individual finds a suitable explanation for mediocrity.
This results from an extrapolation, a thought experiment: imagining oneself individually, one can consider the necessities of survival; a very manageable thought for anyone — and something obsolete within a society. Survival then can justify attitudes contrary to social harmony but which may appeal subtly to the individual such as exclusion, self-determination, violence, and self-absolution. It should come as no surprise then when fanatically racist groups embrace such ideologies (pronounce that word as Bill Clinton would please). The programme of such groups, cloaked as promoting civil liberties results rather in promoting the freedom to limit the freedom of another, and in practise, the hateful marginalisation of others for plainly nominal reasons.
In the mind of the dude rancher though, the one who wishes his fate were entirely his own, racism is acceptable because the trust coefficient is necessarily higher in the wild. Somehow, superficial categorisation seems to serve the purposes of making it to your next meal. The desire to reduce humanity to a raw, uncivilised form seems then simply more like the fruition of an unindulged child-like diversion — a want to live as John Galt in some dystopian film or novella perhaps. It does not however explain why this would ever be a good idea if we had the civilised alternative that day in, day out proves to give us longer lives full of all the gadgets science can think up.
Before concluding an important clarification must be made however due to the nature of linguistics and the frequency of ambiguous semantics. The advocacy of cooperation, and the (hesitant) use of the word collectivism, in criticising individualism, does not imply an assault on identity. The idea of collaboration, even at mass levels need not and dare not become anathema to self-determination, or individuality in terms of art, culture, and identity. You may be yourself until yourself necessarily limits another. The opportunities provided by the positive freedoms that exist in the circumstances of society, then stand to outweigh the negative freedoms of reduced interaction.
Collective action is necessarily then an enabling factor since the only freedoms lost are to be destructive to knowledge and act with irreverence to others. If you still demand the right to express hate, I counter that I want the freedom to explore the universe with colleagues of any background in a non-threatening environment. The options of lifestyle, self-perception, fulfillment, and socio-economic opportunity are always greater with the safety and sanctity of society. The advances of medicine, technology, culture, and the command of mutual respect fostered by pressurised and organised interaction means that things are possible that are not even fathomable in an individualised reality. We can be hornets, and act like honeybees.
Individualism vs Collectivism
The Expert: Luc Dirckx
Bram De Ridder
Already long before the global economic crisis, people tended to be critical of large corporations. They were seen as gargantuan institutions, beasts of production that were only concerned with amassing ever more wealth and influence. Global brands such as Coca-Cola or Nike never completely got rid of this image, and after 2008, these criticisms became ever more widespread. But despite the criticism and the current crisis, these companies nevertheless remain standing: seen from the companies’ perspective they were highly successful.
Today, Distilled Magazine will not occupy itself with the rights and wrongs of large global companies. Instead we wonder how these brands were able to establish themselves, grow, and evolve.
How did they become the successful corporations they are still today.
Key to this success is the management team leading the organisation; the men and women who give the orders, set out the lines, and keep the ship on course. But the question then rises about what keeps the managerial team itself on track. The brilliant performances of each individual? Or the efforts of a strong collective?
In order to answer this question, Distilled Magazine spoke to someone who has an intimate knowledge of the mechanisms behind the central decisions taken by major companies.
Luc Dirckx is a senior manager within the Hoffmann-La Roche group, a Swiss-based company best known for its pharmaceutical and medical products. Mr. Dirckx has 25 years of experience with the organisation, and has been involved in research, sales, marketing, and general management. Currently he is subregional head of its pharmaceutical operations in Western Europe, making him responsible for the group’s commercial operations in about a dozen countries. And according to him, the individual still makes the difference at the top.
To most of us, certain cases that demonstrate the potential impact of individual influences are of course well known. Bill Gates, Steve Jobs, and Mark Zuckerberg are/were people with a direct impact on their respective companies. In Dirckx’s opinion such people can be very beneficial to any organisation. "Not only do they bring a certain culture to the company," he states, "but also a vision. And it are these elements that are key to the success of an organisation."
Such visible people are however fairly unique, and the advantages of having a strong front man also come at a cost. According to Dirckx "there are a lot of expectations about how these companies will deal with changes in personnel, and whether or not they will be able to maintain a certain degree of continuity." Although the jury is still out on this matter, he nevertheless stresses that the single visionary-model "is primarily an American model which is not necessarily as strong as the European or Asian models. And in any case a strong figure is by no means needed to be successful."
But then how do individuality and collectivity relate to each other when looking at business models that use authoritative managerial teams? How strong are management teams as cooperative groups?
"In any case you need different profiles", states Dirckx, "and much depends on the chair and the CEO of the management committee. These are the strong figures that need to put forward a strategy, although it is of course important that the committee can agree with these plans. There needs to be an alignment". And if this is not the case the consequences can be immediate and severe. "The absence of congruence at the top level is known very fast down the chain. And especially in situations of crises or reconfiguration this makes the managerial task much more difficult."
So the collective is still important within management teams? Not necessarily so. "Collectivity might not be the right name. One does not need to be friends, but professional cooperation is needed." According to Dirckx the American model again puts more emphasis on the "individual decision maker", but other systems use authoritative individuals as well, especially when the need for tough decisions arises.
In Dirckx’s opinion the consensus model is therefore not fully suited when risks need to be taken. "Concerning specific issues the ‘subject matter experts’ are empowered to lead their respective divisions. But when topics such as mergers or acquisitions are discussed, the chair needs to carry the final decisions. The chairman or CEO needs to make the hard calls at critical times." Within successful companies, this attitude does not conflict with the other members of the team. "In a modern company’s culture everyone has his value, and each individual brings his expertise to the table." Team selection then of course becomes vital, "but it is again the chair who is responsible for the composition of the committee."
So what kind of people do these CEO’s look for? "In recent years emotional intelligence has become more important. At the top levels of a multinational, technical skills are deemed to be acquired, and successful companies are those in which the management committee succeeds in getting people engaged. Technocrats have a difficult time in the new management culture we aspire to." Also important is the global and diverse outlook of the committee. "Practical experience on different continents is essential’, but Dirckx also mentions that gender diversification is on the rise. ‘It becomes more and more important to have a good composition, and to have that you need senior leaders of the opposite sex."
So despite being a team, individual influences are key to a strong management committee. This however does not necessarily imply that every individual matters. In terms of initiatives from below it is again the company model that is decisive. "In this matter we need to differentiate between centralized and decentralized organisations. In the latter ideas from Latin America, Asia, or small countries take hold easily, whereas in the former this is more problematic. But I believe it is necessary to find a balance between both". Of course it also depends on in which fields the company is active. "Companies based on routine are different from those based on innovation. Especially in research driven multinationals it is key that ideas from below can grow, and internal programmes for product- and talent development are widespread."
Besides these practical issues it also matters a great deal which mentalities the central decision makers uphold. Key to our Western economic system is the notion of individual entrepreneurship, a concept which was globaly reinforced after the collapse of the collectivist Soviet Union. And for Dirckx this aspect remains critical today.
"Companies that survive are based upon individual entrepreneurship. Within my own company courage is a core value, courage to bring forward your own ideas and to take risks." Because of this, it is Mr. Dirckx's strong opinion that a successful company without the centrality of the individual is unthinkable. "Due to their own complexity multinationals nowadays work in a structural matrix, but the individual remains highly important. In my vision, this is part of human nature. And the core aspect of a good manager is that he or she knows how to bring these individuals together and deliver a result that brings true value to the stakeholders outside the company."
The primacy of stakeholders is of course an often heard critique. A company only serves its own interests and the people behind it. But Dirckx categorically denies that any organisation can be successful if it follows this logic. "The answer is quite simple. It might sound somewhat ridiculous but the client is king. A company that does not listen to its customers is simply wrong. It is the biggest mistake you can make." According to him, Blackberry is a prime example of this as they had a fantastic product but failed to listen to the people who purchased and used it. "One of the most fulfilling things for me personally is exactly this interaction with the customer, as you learn so much from them. And the importance of this has been confirmed by some recent studies."
As a matter of conclusion, Distilled also asked Mr. Dirckx about how young people who are about to manage a company themselves can lead their projects to success over the years. In response, he stressed three points. "The first advice I can give you is visibility within the organisation. You need to know your people and their issues. This is crucial when you start in a company, but even after four or five years it remains very important. Secondly you need to know which processes are going on in the company. In recent years they have generally been assessed too complex, so simplification is now a new goal. And a final tool you need is a critical mind. You need to question things, but in a constructive way."
And of those three bits of advice, Dirckx firmly believes the first is the most important. "Personality is key, whether he works as an individual or in a team. With this, everything starts and ends."
Interview taken by Bram De Ridder, Saturday 20/10/2012.
Individualism vs Collectivism
China’s Constitution Looking for Purpose
Sarah De Geest
Over the past 60 years the Western world has constitutionalised the protection of fundamental human rights. Nowadays, national and supranational judicial organs grant citizens a high level of protection against infringements against their most important individual rights. This was however thanks to a lengthy process that has been going on ever since the 18th century. With this movement of perfecting the protection of human rights, the West however also perfected its own superior attitude towards non-Western countries such as China.
Until 1911 China was an imperial state, but after the nationalist movement failed to govern to the people’s satisfaction the Chinese Communist Party (CCP) of Mao came to power in 1949. After six years of Communist administration China got its first constitution, but this document had no actual power and efforts such as these were shut down during the Cultural Revolution, as the country entered a period of extreme chaos and lawlessness. After Mao’s death in 1978 Deng Xiaoping however led the country to economic growth and modernisation, including a new state system.
Despite this positive evolution there seems to be a problem, as no modern state is criticized more by the international community for its lack of respect for human rights than China. This criticism is based partially on the West’s evolution and partially on China’s own evolution. In the last 30 years the eastern giant has build a legal and judicial system with some Western characteristics, but the government stays opposed to the notion of ‘Rule of Law’ (this means that the government is bound by foreseeable rules which can be enforced in court). So even though many features of the “new and improved” Chinese state may look similar to Western states, they lack the same foundation and dynamics. The same goes for China’s constitution. But does this all mean that China should be treated as the enemy, a well dressed bad guy? In order to answer this question it is first and foremost necessary to have a look at the function of a constitution. In the West it forms a well-known safeguard for the individual’s rights. But until the 20th century the Chinese vocabulary did not even have a word for “constitution” and in building a new system a lot of terminology had to be borrowed from the Japanese language. On top of that the Chinese constitution actually has a totally different purpose, namely collective social stability.
China’s constitutionalist tendencies
China’s current constitutional framework was adopted in 1982 and has been amended four times since that day. The constitution is the highest norm in the new Chinese legal system. It establishes a clear hierarchy of norms and appoints the National People’s Congress as its guardian. Most importantly, the constitutional framework emphasizes and guarantees particular individual rights, similar to Western constitutions. These rights include, amongst others, a right on education, a right to personal freedom and freedom of religion. This framework however did not envisage a constitutional review procedure, which should not come as a surprise. Even though China’s constitution has a similar form to its Western counterparts, it did not come about in a country with a democratic tradition and was influenced by values and habits different from those in the West. But despite the lack of a clear procedure of constitutional review, certain attempts to ensure the enforceability of the constitution were nevertheless made.
The first attempt occurred in 2001, when the Supreme People’s Court (SPC) formally ruled that a constitutional right should be judicially enforceable. This was the Qi Yuling case, a case of a young woman whose identity was stolen when a classmate switched their names on the university entrance exam. Throughout university and work this woman continued to use the name of her former classmate. Both the father of Qi and several authorities knew about the fraud but chose to ignore it. When Qi finally discovered this she went to court with two claims. The first claim was her right on identity, the second her right to education. The first right was easily recognized, but based on this right alone Qi would not have been able to obtain full restitution of damages.
The inclusion of the right to education would make full compensation possible, but this right was solely guaranteed by the constitution which could not be invoked in an individual court case. Nevertheless the local court asked the SPC if this right should be rendered enforceable. The Supreme Court then formally stated that this constitutional right should be guaranteed and the president of the SPC even published an article in which he compared the QI Yuling case to the American case of Marbury v. Madison. In this case the American Supreme Court exercised judicial review of the constitution for the first time, even though this power was not explicitly inscribed in the text of the constitution.
In 2007, during the Wang Denghui case, an administrative court enforced the constitutional right of ‘personal freedom’. Wang had been in an accident on his way home from the factory where he worked. His injuries were severe and prevented him from working. According to a regulation Wang’s accident classified as a work accident and he was therefore entitled to insurance. The factory however claimed this was not a work accident and rejected responsibility. According to the factory the internal rules prohibited workers to leave the factory without permission. The court rejected this reasoning, stating that it is of the highest importance for a person to be able to spend time with his family, and explicitly invoked the constitution in order to confirm that this is an essential part of one’s personal freedom.
However, this road to the enforcement of the constitution would shortly thereafter be cut off by the SPC when it formally withdrew its ‘Qi Yuling’ ruling. On top of that Western observers noticed a change in the courts behaviour. The CCP now explicitly promoted mediation instead of litigation both inside and outside of the courtroom. They also have instated a ‘grand mediation mechanism’ to deal with public sensitive issues such as the closing of a factory or fraudulent behaviour of government officials. At present, the invocability of constitutional rights in court remains highly contested.
Besides this, in the wake of the 2001 Supreme People’s Court judgment, Hu Jintao stated in 2003 that the constitution should be a weapon in the hands of the citizens. Following on that approach a Law on Legislation’s Constitutional Review Procedure has been adopted. But this procedure was never completed, as the Communist Party amended contested rules before they could be annulled. Nevertheless, this law proved its purpose in the Sun Zhigang case, a case that also shows a specific citizen-state dynamic. After being unable to identify himself to the authorities (although he was a legal resident) a young university student was taken into administrative detention under the highly contested custody and repatriation system. This system is based on a residence permit system and is intended to keep strays out of the cities. A few days after Suns detention the affiliated medical services of his detention clinic announced he had died due to sudden heart failure. Because of the enormous public attention and press coverage the case was further investigated, revealing that the guards had ordered detainees to beat Sun after he complained about his detention. Several guards and detainees were charged with his murder and only a few days later they were condemned to punishments ranging from 3 years of prison to death sentence. After this trial some scholars entered a proposal under the law of legislation to have the custody and repatriation regulation reviewed. Due to the enormous publicity the procedure was set into motion. However, before the regulation could be found contrary to the constitution the State Council announced that the regulation had already been replaced. This result is both positive and negative, as on the one hand it shows that the government can be persuaded by the people, but on the other hand demonstrates that the constitutional review procedure was rendered ineffective and hasn’t been used properly up till now.
Different society, different purpose
More generally, when it comes to the interaction between the CCP and its citizens there are two important remarks to be made. First of all, the CCP is very sensitive towards collective action and will do anything to ensure social stability. Secondly, both the CCP and the Chinese people are more easily inclined to resort to mediation than to litigation. This can be explained by the system (it’s heavily politicised and the courts are often in a weak position), by its history (the importance of the idea of the "mandate of heaven"), and by its values (non conflict-minded).
The "mandate of heaven" is a concept that dates back to imperial China and is particularly important. It meant that an emperor who was deposed by the people did not deserve to be emperor exactly because he had lost this mandate, which was related rather to a moral source of power than to a religious force. The traditional importance of possessing such a mandate might explain the CCP’s sensitivity concerning public unrest, and why the party seems more willing to implement systems of mediation and arbitration rather than accept a court’s jurisdiction. The ‘Grand Mediation System’ was already an attempt in this direction, but the system isn’t perfect as it leaves not enough room for citizen participation. Nevertheless, because it seems in line with China’s historical evolution (they were unfamiliar with litigation until the state reform in the 1980s) and because the current Chinese judges are crippled by flaws in the general system (for example their dependency on local administrations), the plan could possibly be used in creating a Chinese form of constitutional review.
So because copying Western concepts did not lead to satisfactory results a particularly Chinese flavour of experimentalism, grounded in the Chinese system’s political features, will need to be added to the application of any constitutional principles in order to make them work in the future. In addition, China’s experiences with constitutionalism show that the possibility of change is heavily dependent on a favourable political climate. This October is highly important in this respect, as the replacement of both the formal and informal leaders of the government will result in a power shift within the Communist Party. One could speculate that no big changes will occur during the first period of this new government’s leadership. But at the same time they might be less conservative, less bound by china’s fragmented history, and capable of drawing a line that will connect the dots in china’s political and historical evolution while investing in a bright future.
SHEN KUI, “Is it a beginning of the era of the Rule of Constitution? Reinterpreting China’s First constitutional case”, Pacific Rim Law & Policy Journal, 2003, Vol. 12(1).
JINGZHI WANG, “China First Case of Constitutional Freedom”, Democracy and Law, 2008.
K. HAND, “Resolving Constitutional Disputes in China”, East Asian Law Review, 2012.
YONGLING JIANG, The Mandate of Heaven and The Great Ming Code, Washington, 2011; K. BUHMANN, “Reforms of Administrative Law in the PRC and Vietnam: The Possible Role of the Legal Tradition”, www.heinonline.org.