Sustainability

Sustainability, whether economic or environmental, has been one of the dominant issues of our time. As The New York Times explained it, sustainability - aka sustainable development, is about “strategies for meshing human activity with the limits of the planet and the needs of future generations”.

Back in 1996 the environmental writer Bill McKibben wrote an OP-ED piece in the NYT calling sustainability a "buzzless buzzword", mere jargon. He found the idea repulsive and a waste of time; a hollow sentiment. He thought the philosophy behind it wouldn't necessary discourage anyone from consuming more or from further exploiting the Earth's limited resources. He disdained the terminology because it was usually coupled with the imperatives of 'growth' and 'development', such as 'sustainable growth' or 'sustainable development'. For McKibben growth and development were incompatible with sustainability, a contradiction in terms. He wrote, "Sustainability is doomed, because it does not refer to anything familiar." To his way of thinking adopting the idea would lead to the opposite - unsustainability.

Well, the idea of sustainability is not dead but alive and well, judging by its constant mention and usage. I am often coming across articles on the subject, one of the latest being in National Geographic. The idea of sustainability (adopted as policy by the UN in the mid 1980s) didn't implode as McKibben imagined. That's because there is something about it that captures the human imagination. There is something inherent and practical about the idea. It captures and articulates the complex, dual situation we find ourselves in today, in a world that is pulling in two different direction, of expansion so as to maintain a life style while trying to protect the environment for the future. And it does sound familiar, contrary to what Mckibben said, because humans have been involved in it for a long time, just not that aware of it.

McKibben believes the term sustainability was meant to obfuscate the issue of human activity's impact on the environment, to postpone the day of reckoning, as he put it. He favors another term - "mature", thinking that we are all or should be mature enough to see the writing on the wall, so to restrain ourselves from developing and growing anymore. His idea is that in our maturity we should learn to live within our needs and stop growing physically. Instead, he says, we should focus on our moral, spiritual and cultural development. He thinks "maturity", not sustainability, is the buzzword that will truly motivate us to be environmentally prudent, as though we are all mature enough to comprehend the issue. However, the reason his choice of mature hasn't taken off is because the concept is dull. 'Mature' sounds stodgy. It lacks dynamism, while "sustainability" has a ring of optimism and opportunity.

The buzzword 'mature' is meant to appeal to our sense of Reason. The reasoning behind it is that we ought to be mature enough, especially in the developed world, to realize that for the sake of the environment and the planet's wellbeing we can't continue to grow and develop our economies as we have or else there will be nothing left. However, we don't live in the rational, mature world McKibben envisions. For one thing, the growing and developing economies of the world haven't reached that point yet. They are not yet ready or willing to be mature in the manner we in the developed world can afford to be. The developing world wants to catch up with the rest. For them maturity be dammed. They feel it's their right to grow and develop like we have. Imposing maturity on the developing world, like father knows best, would imply that they scale back on their economic ambitions, most likely making them resentful and hostile towards the rest of us. At least with the idea of sustainability there is the likelihood of a cooperation and working together, to find solutions so as to maintain a livable and workable environment.

Perhaps, them, it was McKibben who was delusional in thinking that "mature" would win the day and become the buzzword in persuading us to become better stewards of our environment. Perhaps someday we may all be so mature and enlightened. But in the interim the idea of sustainability make more sense. It is pragmatic term emblematic of both our consumer and conservation instincts that will encourage the development of systems that both protect and replace the resources we are certainly not going stop needing so that we survive and continue.

I wonder what kind of strategies 'mature' would devise for meshing human activity with the limits of the planet? It doesn't sound very engaging to me. Of the two buzzwords "sustainability" sounds more sophisticated and energetic. It pushes the boundaries and explores new frontiers. It forces use to be inventive and remain active. "Mature" conjures the idea of downsizing, that one is ready to quite or retire.

I often think about what the optimistic economist Julian Simon believed. To quote one of his colleague: “He believed that the world needs problems because they make us better. Problems make us better off than if they had never occurred”. And our meshing with environment has give us a heap of problems.

And that is what I think about the act of sustainability. It works with problems. It makes us look further than we generally would, to seek solutions and alternatives, to reinvent ourselves, activities that keep us from atrophying and withering away.

Crooked Timber

Kant wrote, Out of the crooked timber of mankind, nothing straight was ever made.

He may not have gotten that idea all by himself. He may have been inspired by a passage in the Bible, from the book of Ecclesiastes where it is written "That which is crooked cannot be made straight" [1:15]. On discovering that Kant probably applied it to his philosophy, to reconcile the perversion and absurdity he saw around him.

The philosopher Isaiah Berlin interpreted the Crooked Timber of Humankind metaphor as an admonishment against dogma and perfection. He believed that if a system of human governance set itself up deliberately to straighten out human flaws it would inevitably amount to totalitarianism. This is what he saw the utopian vision of communism trying to do, as endeavoring to straighten out that crooked timber of humankind, which as we know ended in absolute failure.

Another interesting passage from Ecclesiastes is hedonistic, which its preacher, narrator shares with us, invoked, no doubt, by the meaningless and drudgery he saw in life: "Then I commended mirth, because a man hath no better thing under the sun, than to eat, and to drink, and to be merry: for that shall abide with him of his labour the days of his life, which God giveth him under the sun" [8:15]. That passage could have inspired the passage in the American Declaration of Independence that encourages the 'pursuit of happiness', as an elixir to the drudgery of life.

Nietzsche and other existentialist may have also been influence by Ecclesiastes and the absurdity and meaningless it attaches to live. Nietzsche, it was written, "is one of the first to recognize the absurdity of human existence as the necessary basis for creative life and to stress the importance of irrational and illusional factors in shaping human behavior". Perhaps he was thinking about religion when he observed that.

I was reading the autobiography by psychotherapist Viktor Frankl in which he mentioned another existentialist, Soren Kierkegaard. Kierkegaard once said, to quote Frankl, " anyone who offered a corrective had to be biased, thoroughly biased". Frankl was thinking of his own bias, of the corrective in psychotherapy he offered his patients.

Frankl was a surviver of the Holocaust. It was probably his existentialism that afforded his survival. Had he not been one he may not have survived. His existentialism gave him a certain strength and outlook on live, which balanced life's absurdities against its more admirable ones, and reconciled humanity's crooked timbers with its straighter ones.

Milton Friedman

A lot of people think the economist Milton Friedman (1912-2006) was a god. In his lifetime he was viewed as the god of the free market. His economic theories were adopted by, to name a few, Margaret Thatcher in Britain and Ronald Reagan in the U.S. Those economies, like may others, found new life with some of his suggestions, like those of monetary policy, tax cuts and privatization.

What first brought Friedman to prominence, and won him the Nobel Prize in Economics (1976), was his theory in monetary policy. He believed that the proper control of the money supply was the fundamental key to a healthy economy and a stable world. Good monetary policy was the key to keeping down inflation, an occurrence that has in the past caused great hardship and instability in many nations. Friedman's fame grew from his theory that if the U.S. had controlled its currency better during the Great Depression that event may not have happened. Likewise, it is believed that if Germany after WW1 had not printed money like crazy in order to fulfill the financial demands put on it by its vanquishers, it wouldn’t have descended into the economic abyss it did, making it ripe for a despotism like Hitler.

My thoughts are that we learn from experience. So I think one should take Friedman's idea, that the Great Depression could have been prevented if the U.S. had only managed its currency better, with caution and skepticism. What Friedman suggested is that the U.S. and others, in the 1920's and 30's, had the wherewithal to be good monetarists, but failed to act so. However, I think they had no such wherewithal in those days because people back then were still inexperienced in such matters, as in prudent monetary policies. Nevertheless, people still insist on transposing the knowledge we have today on a less sophisticated world of the past. I mean, sure, with the knowledge we have today we probably could have prevented WW1 or WW2. But that was a different world, absent of the knowledge and the dynamics we have today.

Friedman's policies have railed against socialism. Now, I am no socialist but I have socialist tendencies, like the belief in universal and state run health systems. Such coverage can lift an anxiety of people’s shoulders which potentially can free people to function better. And by what I see in the countries that do have it, for the most part, the practice of medicine works better than in the US and the costs are lower, and life expectancy is longer. I thus believe in a mixed economy in which aspects of capitalism and socialism are mixed and balanced off against each other. And this type of governance is what is spreading around the world, including in the U.S., albeit kicking and screaming all the way. After all, universal health care is one way to help balance the inequalities that the broader economy generates.

I appreciate and believe in some of Milton Friedman's ideas. And they would probably all work if conditions were perfect. One thing he did believe is that if you have a free and open market the facts and information about it should also be free and accessible. This is something that did not occur during the 'subprime market' in mortgages of the past decade. The information and facts surrounding subprime loans and their derivatives were not open to scrutiny and were dishonest. Many of the facts and realities about the subprime market and their 'toxic assets' were manipulated and hidden by Wall Street. This was the major reason for the financial calamity we have today, chiefly due to a lack of transparencies in the mortgage lending practices of the last decade.

Friedman realized that a measure of regulations and consumer protections had to be in place to keep markets honest, fluid and mutually beneficial. He knew that unfettered market on their own were not the 'hole grail' because of their potential for human abuses. This is something the Bush administration failed to see in its unquestioning acceptance of laissez faire, unfettered markets. As a consequence that unquestioning acceptance seriously destabilized the US economy due to the administration's blind faith that the free market on its own, with as little interference from government as possible, can solve society's major problems. (So blinded by faith was George W. Bush that he really didn't understand what went wrong.)

Milton Friedman's fundamental policies in the wrong hands have incurred a naive and reckless approach to economic activity. They have also encouraged abuses. But he would be the first to recognize that's what comes with the territory due the natural capacity to do wrong and get things wrong. Oh, if only we could hear from him today.

Parsimony

In his article "Parsimony (In as few words as possible)", issue 81 of Philosophy Now, Toni Vogel Carey, wonders if nature loves simplicity. I'm sure it does, like any enterprise does, especially at the beginning when it's essential.

In business, particularly at the beginning, it is essential to be parsimonious. It helps keep one in business. There is an axiom we've all heard: If you take care of the pennies the dollars (pounds) will look after themselves. In other words, parsimony and taking care of the nominal stuff is an initial, important step in business.

There is a saying, Don't sweat the details. But that would be like not being parsimonious or taking care of the nominal stuff. Before one can have the luxury of not sweating the details one has to first make sure the details are looked after and are in place. After a business has taken off and started to succeed then one can stop sweating the details and pennies, but never take your eye of the ball, as the saying goes.

However, there is a balance involved. For instance, if one remains too parsimonious and frugal in business, as Adam Smith cautioned against, one will stifle development and growth. So one has to learn how to keep parsimony in the background while learning to spend and take risks so that the business grows. Nevertheless, parsimony should remain a core issue.

If one examine any entity, whether in nature or in business, there is always a simple, parsimonious beginning. But there is a paradox. The option is not to remain simple and parsimonious. In order to survive and continue we must become complex and create intricate systems.

The opposite to parsimony is excess. Ironically, parsimony can has its own excess. For example, a simplistic, parsimonious mindset can lead to the excesses of fundamentalism and extremism, as we've seen with religions.

"Economics Does Not Lie"

There's an intriguing thought: Economics doesn't lie.

Such was the topic of an article written by economist Guy Sorman in the summer of 2008 in “City Journal”, a conservative quarterly magazine about urban affairs. It was written prior to the financial crisis that began to unfold later that year. Was it a coincidence that it was written just before the crisis or was it meant to be a warning about what was to come?

I’d say it was more a coincidence because it didn’t foretell anything about the looming crisis. In fact, it ignored and even praised many of the economic, laissez faire activities that were responsible for the greatest recession America has experienced since the Great Depression. So it got me thinking, how did economics not lie in this instance?

I'm not saying that the discipline of economics lies. On the contrary: basically it tells the truth. It’s built on natural law and reason. I know, for instance, that free market economics is far more truthful than the planned economics of communism and totalitarian states, which are easily manipulated. However, people can still make a liar out of the free market just by not telling the truth about what’s going on. It’s made a liar when it isn’t transparent, such as happened with the opaque transactions that led to the crash of 2008. It lies when it isn’t held accountable, when the rules and regulations are deliberately flouted and ignored. Those lies gave us the greatest economic turmoil in memory. Eventually, though, the chickens came home to roost. In the end market economics freed itself from those lies and told us the truth, that the crisis was a consequence of many questionable and unethical practices. Economics teaches us to be thrifty and good managers. Sadly, though, those prerequisites and truths were lost on many who should have known better, like the bankers and politicians.

One of Sorman’s heroes is Milton Friedman, a Nobel laureate in economics who truly believed in the free market. But Friedman believed that if a free market was going to function optimally and truthfully information about business had to be transparent and up front. If business dealings are not open to scrutiny, cheating and lying are more likely to take place. Nevertheless, that’s what happen during the years building up to the financial/economic crisis of 2008. Information was withheld from investors, information that could have prevented or at least tempered the crash. Information was withheld was about ‘toxic’ assets pertaining to questionable financing. Duplicitous assets were hidden in derivatives that were then sold to unsuspecting investors. To further compound the lies, those dubious investments were approved by the very rating agencies that were meant to keep tabs on the financial industry. If Friedman were alive today he would be appalled at the breaches of trust and lies told to unsuspecting investors.

Though it was due to a combination of events, the ‘housing bubble’ was the chief culprit of the economic crisis of 2008, the economics of which represented a catastrophic lie. The bursting of the housing bubble had a devastating ripple effect on all sectors of the economy, leaving banking, the core of an economy, especially vulnerable. And there were plenty of lies to go around, encouraged by fees, greed and poor monitary policy. People deceived themselves in thinking that the price of houses would keep going up indefinitely. Mortgage brokers lied when they made loans to people they knew couldn’t afford them. Ironically the loans were nicknamed ‘liar loans’ because they were based on, what else, lies. The mortgage brokers lied when falsifying documents about the credit worthiness of borrowers. Many borrowers lied about their incomes, as to whether they could afford the monthly payments or not. Each party suspected that the other was lying but the practice continued. And to further compound the lies, these liar loans were deliberately camouflaged and bundled up with healthier securities by Wall St. brokerage houses in the form of derivatives and then sold to unsuspecting investors. To add insult to injury, and more lies, these derivates were given AAA rates by supposedly independent credit agencies like Standard & Poor and Moody’s, companies that were literally working both sides of the street. Their behavior amounted to crony capitalism, which constituted another massive lie and a major threat to the free market.

The Attorney Generals of all fifty US states tried to put an end to the lies. They knew about the liar loans and their potentiality for economic disaster. They wanted to protect consumers from the predatory loans that were being made by mortgage companies and banks knowingly for the profits they generated. But the Bush administration blocked them from implementing such laws because it interfered with a major Bush agenda, an agenda to expand the ownership of homes. It was a veiled, clumsy attempt to enrich the middle class as it had done for the rich with a tax cuts. For all its good intentions, Bush’s dreams for an expanded ‘ownership society’ was predicated on a political ideology equivalent to a house built on sand. Oh, there were economists who warned about this policy but were roundly dismissed as killjoys.

In his article Sorman says that economics is no longer just theory but is now an actual science. (Being a science should have made it more truthful.) As he explained, we have learnt so much from past economic experience that the world can now depend on and ensure itself reasonable economic stability. Economists have developed models and equations that show precisely how the fundamentals work, that there is a certainty in economic outcomes. So what happened that we are now facing one of the greatest economic crises to hit modern civilization? What happened to the science we were supposed to have learned from, the science that was supposed to offset the lies?

What happened is that even though economics may not lie, humans still do. Humans still cheat and cut corners. Human are fallible and that fallibility can negatively impact economic outcomes if not kept in check. That’s why over the years, having gained a lot of experience about our weaknesses and less than truthful natures, we have formulated regulations and backup system to minimize and fend off economic disasters like the one we are experiencing today. Experience gave economics its status of science. But along the way, somehow, mostly due to political ideology, faith and hubris, the science and experience that we learned over the time was discarded in a matter of years, giving the world the economic crisis of 2008, the likes it hasn’t seen in some time.

Chicago -Toronto

Chicago-Toronto

I took a walk around the neighborhood this morning. It was a gloriously rich morning with not a cloud in the shy. I walked through the University of Toronto campus. It remained me of a walk I had through the University of Chicago campus last year. One could say that the Chicago campus is more beautiful. But it is miles away from the center of the city. Toronto’s campus is right in the middle of the city. It is more accessible to city folk like me. To get to the U of C from the city center one either needs a car or has to take the train. One, though, could walk the distance, as I did one hot Sunday we were there, the day of the Chicago Marathon on October 8, I believe. That was a long, hot walk.

Toronto has the distinction of being the condominium (condo) capital of North America. Buildings have been going up like crazy. As I walked around the neighborhood this morning I pasted three condo projects in the works. That was within a small radius. If I expanded my radius just a bit more I would have included four more projects. And within the last couple of years at least another five new condos had been completed in the vicinity. One of the developments almost nearing completion is the Four Season Hotel/Condominiums, a fifty-two story elegant glass skyscraper. Its penthouse recently sold for an astonishing 28 million dollars. Another project just about ready to get under way is a 70 story building at the main intersection of Yonge and Bloor. This development was originally slated to start in 2008 but was canceled because of the global financial crisis of that year. That project was financed by Lehman Brothers, an investment bank that when belly up in September 2008.

In contrast, Chicago has not faired so well in its building projects due to the financial crisis. Another reason could be is that it had already been over built. One notable project that was canceled was the Spire, a 2000 feet skyscraper on the waterfront. When there I remember seeing the huge hole that was to be its foundation. Recently, though, the Trump Tower in Chicago was complete. It is now the second tallest building in the city, at 90 stories. Toronto too will soon have its own completed hotel/condo Trump Tower at about 57 stories high, located in the financial district.

We visited Millennium Park in Chicago. A major attraction in the park is a steel sphere-like sculpture, which you can walk inside and under. It is intriguing because once inside it you can see yours and everybody else’s reflection on its shiny metal ceiling. Looking at it from outside it looked like a helmet. It reminded me of Darth Vader’s helmet in the Star War movies. Millennium Park is built on reclaimed land, reclaimed from railroad lands and parking lots. The railroad and the station are now beneath it. It has really revitalized the area and the city. Toronto has a similar revitalization going on with the reclaiming of old railway lands near Lake Ontario for development of condominiums, parks and entertainment facilities.

I decided to walk the distance from Millennium Park to the University in the south Chicago. Walking the distance was an eye opener. I started it just as the marathon was winding down. The Park was inundated with runners who had just finished the race. In my walk I went through multiple neighborhoods. One of the most dramatic things I saw was the convention center, McCormick Place, the largest convention center in the United States and surely North America. Its size was unbelievable. I also went through some well-to-do districts and some not so well-to-do districts. The contrasts in neighborhoods is something we don’t see in Toronto.

I reached Hyde Park, the area in which the U of C is situated, about two and a half hours later. We were staying with a friend who had located there from Toronto. We were spending our Canadian Thanksgiving weekend with her. The other day I was walking through the Annex area of Toronto, which is situated quite near the U of T, and I had memories of Hype Park in Chicago. Both areas are similar, well manicured and inhabited by intellectuals and professionals.

Chicago and Toronto are similar in may ways. Both names are derived from native Indian words. They are both Great Lake cities. They both lost in their bids to host the Olympics. They both had Great Fires that destroyed much of their city centers. Both are major transportation hubs for air and rail traffic. Because of their railroads both are large, pivotal freight distribution centers. Apart from being two great university towns they are both great cultural centers. Both cities at one time had the similar moniker of ‘hog town’.

Chicago has one thing Toronto never had, a famous gangster, Al Capone. Chicago is famous and notorious around the world because of Capone, probably the most famous gangster in the world. I don’t think Toronto has anything to match that notoriety. However, one area Toronto beats Chicago in is theater. Toronto is the third largest theater production center in the world, next to New York and London. And Toronto does have the famous CN Tower and a sports arena with a retractible roof, build side-by-side on former railway land.