“Well written and an interesting perspective.” Clan Rossi --- “Your article is too good about Japanese business pushing nuclear power.” Consulting Group --- “Thank you for the article. It was quite useful for me to wrap up things quickly and effectively.” Taylor Johnson, Credit Union Lobby Management --- “Great information! I love your blog! You always post interesting things!” Jonathan N.

Saturday, December 31, 2011

Leadership Consulting: Stances on Scholarship

As the field of leadership consulting continues to proliferate, fringe-elements have developed that risk taking down the credibility of the field itself as well as its more solid practitioners. In this essay, my objective is to make those practitioners aware of the damage to their field (and indirectly to their own practices) that is being committed on the periphery. Relatedly, my task extends to making scholars of leadership aware of how leadership itself is being undermined as a concept used (and abused) in the business world. I contend that maintaining the distinction between consulting (including writing on it) and scholarship is in everyone’s interest, even if some “coaches” believe they have a momentary interest in blurring the lines for personal gain.

Taking a practitioner's experience, which is quite valuable in its own right as praxis, as tantamount to scholarship involves a rather basic category mistake. Treating an academic literature as if it were merely another opinion among those of practitioners is also a category mistake. For example, practitioners who view the academic literature on business leadership as "one of the many perspectives that make up the puzzle" attempt to reduce theory or the results of empirical research to opinion, as if the strictures of research methodology were mere dross. A category mistake is also made when one treats non-scholarship as if it were scholarship simply on the basis of being “actionable.” This includes conflating a "how to" book with a theory or the results of an empirical study.

I am not claiming that every (or even most) practitioners commit such category mistakes. Nor am I contending that scholars are the only people with knowledge; rather, scholars are in the business of formulating knowledge under fixed rules of reason and methodology and then passing it on to the benefit of practitioners. I am merely contending that the roles are distinct, even if some practitioners (and scholars) may blur them.

If scholarship is indeed the same as anecdotal experience or opinion--both being "perspectives" or knowledge--the accumulated knowledge is essentially relegated, not to mention disrespected. While Thornton may be a fantastic consultant, she does not have the educational credential necessary for her to function as and be recognized as a scholar. I want to emphasize that I am not disvaluing the work that she or other consultants do. In my view, they provide valuable services to managers and even entire companies. My point is merely that, as I'm sure more practitioners know, consulting experience is not the same as expertise in the study and knowledge of leadership.

The bottom line is perhaps that the accumulation of knowledge on leadership is difficult enough. A "new age"-like democratization of the formulation of what counts as knowledge, whereby every leader and consultant deems himself or herself to be an expert on the knowledge of leadership without an advanced degree on the subject, dilutes what counts as knowledge and misleads people who take the opinion as fact. That is, conflating opinion with knowledge is apt to increase undetected fallacies and errors exponentially (not to mention result in perpetually reinventing the wheel) because the "rules" established and followed by scholars in accumulating knowledge are not necessarily followed. Users assume they are, and are thus mislead when the rules are not followed because they are not known.

Therefore, I recommend that practitioners, whether leaders or consultants, take great care in utilizing the academic literature of leadership. Does the author have a doctorate, meaning a terminal degree that includes comprehensive exams graded by an academic faculty and a successfully defended dissertation (e.g., Ph.D., DBA, DSciM, JSD, or EdD)? Does the text look solid academically, with citations or end-notes and a healthy bibliography including articles in academic journals, or is the book essentially a "how to" book with bullet-points and "feel good" potential-sounding platitudes? My point is that there is A LOT of daylight between these two types of books on leadership; they should certainly not be conflated. Doing so puts the user at risk for relying on something stated as if it had survived analytical or empirical methodology when it had not.

To be sure, "how to" books with lists and inspirational platitudes may serve a viable purpose for some practitioners (including those who write them). This hypothesis could be tested empirically by a social scientist careful to distinguish positive correlation from causation. My point is that this purpose is different than that which is satisfied by the knowledge on leadership formulated and vetted by scholars. By its very nature, ratiocination and its accompanied research methodology live at some distance from praxis, even where the analytical beam is focused on an applied concept. You have a taste of this distance right here if you are thinking ratio what? Ironically, the best knowledge is accrued by scholars who do not conflate what they are with what they are studying. In the scholars’ world, “actionable” does not trump or eclipse, much less expunge theory and empirical results.

There are undoubtedly many practitioners who appreciate having access to knowledge that has been vetted by scholars; such knowledge on leadership can indeed be useful, whether to a leader or a consultant. Sadly, I must admit that I have encountered some consultants who seem content to vaunt their own "actionable" opinion over academic knowledge even on leadership, and still other consultants who seem to treat what they advocate as if it too constituted scholarly-derived and vetted knowledge. It is in the interest of the consulting sector to disgorge itself of such fallacies because 1) a leadership consultant’s practice can benefit from scholarship on leadership and 2) credibility is a valuable commodity for consultants. The last label a “coach” wants applied to him or her is “snake oil salesman or saleswoman.” By drawing on the academic literature, a consultant can distinguish himself or herself from the “coaches” who sell platitudes. In other words, distinguishing scholarship (even on applied concepts) from praxis is in the interest of consultants who want the field of consulting gain credibility and their own practice appreciate in value.

Click to view comments, or to add one or a question on how leadership consultants approach scholarship on leadership.

Anti-Corruption and Federalism in India

At the end of 2011, India’s coalition government adjourned the upper chamber of the federal legislature without passing legislation that would have created an independent anticorruption agency. India was a the time rife with governmental corruption. A college wants its foreign students protected from crime? A payment is made to local police employees, who pocket the money for themselves. Someone wants a government contract? Well, that goes without saying.

The lower house having passed the legislation, the inaction of the upper chamber was particularly frustrating, particularly to the supporters of Hazare, whose hunger strike  during the summer had led to a promise by the government that the legislation would be introduced. It would have been impractical, and even anti-democratic, for the government to have sidestepped the legislative process simply because a demonstrator of Hazare’s stature was undergoing a hunger-strike. Even heroes should not be lionized too much. Lest it be thought that the federal parliament’s inaction would provoke Hazare to renew hunger-strike, he had actually attempted during the week leading up to the anticipated vote to rally public support against the government’s bill—calling it too weak—by undergoing a hunger-strike, but the large crowds of the summer did not materialize so he called off his hunger-strike “prematurely,” according to the New York Times, “blaming poor health.” It is odd that a person who risks his or her life in a hunger-strike would call it off on account of poor health. “I’m risking death, but I don’t want to get too sick” belies the claim to authenticity and thus undermines the credibility of the movement itself. Ironically, Hazare’s lobbying against the government’s bill may have contributed to the eventual inaction, so the inaction does not necessary constitute a failure for Hazare.

Furthermore, concerns other than corruption legitimately contributed to the inaction. Specifically, the New York Times reports that “(m)uch of the argument centered on an often-technical discussion about India’s federalist structure and whether the provision concerning the creation of state-level anticorruption agencies was unconstitutional.” As the example of the United States suggests, the encroachment of a general government of a federal system on the state governments can compromise the sovereignty retained by the latter, and thus the “checks and balances” feature of federalism between the two government systems (i.e., that of the states and that of the general government). In the case of the anti-corruption bill, whether the federalist arguments were a smokescreen or not, it is significant and highly valuable that federalism was raised as a factor explicitly. In the U.S., the factor is not typically raised even where it is relevant and even vital; typically, the federalism being affected is simply compromised.

Therefore, both with regard to Hazare’s anti-corruption crusade and federalism, the inaction of the upper federal legislative chamber is complex. Ideally, corruption should be rooted out systemically while federalism should be fortified rather than enervated. Both objectives can be achieved—meaning that federalism need not be compromised in riding the society of corruption.


Source:

Jim Yardley, “Bill to Create Anticorruption Agency Stalls in India,” The New York Times, December 30, 2011. http://www.nytimes.com/2011/12/30/world/asia/anticorruption-bill-stalls-in-adjourning-india-parliament.html


Friday, December 30, 2011

Democracy Deficit in the E.U.’s State-Rights Federalism: The Debt Crisis

Holding back additional transfers of governmental sovereignty from the state legislatures to the E.U.’s legislative chambers not only inevitably pushes power to non-democratic E.U.-level  institutions, notably the ECB; the democratic basis even at the state level can be compromised.

The complete essay is at Essays on Two Federal Empires.

Thursday, December 29, 2011

An Aristocratic People’s House?

Between 1984 and 2009, the median net worth of a member of the House rose by more than 2 1/2 times, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home ­equity. Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.” This comparison excludes home equity because it was not included in congressional reporting.

Analysis:

These statistics support the view extant in the U.S. Federal Constitutional Convention that relative to all of the representatives in the legislatures of the several states, the “few” in the U.S. House of Representatives gave that body an aristocratic quality. This fear did not necessarily translate into a belief that the federal system itself would be consolidated as a consequence. Even so, aside from the growing economic distance between the U.S. House reps and their constituents, the increasing wealth can be taken as a baleful indication of a funneling of wealth and political power in ever tighter circles. In other words, the statistics support those who urge that more governmental power be shifted from Congress back to the semi- and residual-sovereign state legislatures.

While it is true that the delegates at the federal convention feared excess democracy, which was notably against the interest of creditors such as themselves, in the state legislatures (e.g. Massachusetts), it can be argued that his bias left them (and the constitution they drafted) vulnerable to political (and economic) consolidation, with Congressional power (and wealth) effectively setting its own limits. The statistics may give an unsuspecting public pause in taking seriously the proposition that the federal system should be readjusted so as to achieve better balance, which in turn enables more viable checks on the abuse of power—whether in Washington, D.C. or Topeka.

Click to view comments or to add questions or comments on the increasing wealth of representatives in the U.S. House of Representatives and the implications for federalism.

Source:

Peter Whoriskey, “Growing Wealth Widens Distance Between Lawmakers and Constituents,” The Washington Post, December 26, 2011. http://www.washingtonpost.com/business/economy/growing-wealth-widens-distance-between-lawmakers-and-constituents/2011/12/05/gIQAR7D6IP_story.html






Wednesday, December 28, 2011

Rolling the Dice: The E.U.’s Financial Regulatory Agency (the ESMA)

Even though the European financial sector integrated significantly during the first decade of the twenty-first century, the E.U. Government’s regulatory infrastructure and content did not keep up. As in the U.S. until 1933, state regulation carried the bulk of the weight. As the twenty-first century notably differs from the nineteenth, the relatively integrated financial sector in the E.U. means more risk is entailed in continuing to rely on state regulators. This is not good news for David Cameron, who in late 2011 tried and failed at a European Council meeting to hold strengthened enforcement of state-deficit limits hostage by demanding protection for state-level financial regulation over federal regulation. Like South Carolina was in the nineteenth century, United Kingdom was decidedly in the states’ rights camp as late as a decade into the twenty-first.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon. 

Monday, December 26, 2011

Russia’s Common Economic Area: Not Another European Union

On January 1, 2012, a new version of the common economic area between Russia, Belarus and Kazakhstan came into effect. The three countries had already founded a customs union in 2007. As of the end of 2011, Kyrgyzstan and Tajikistan were still in talks about joining as well. Putin insisted that integration with the E.U. could take place by 2015. I cannot help but wonder if E.U. leaders were aware of this possible union of unions. It could be argued that Putin was making several category mistakes.


The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Saturday, December 24, 2011

Toward a Definition for Ethical Leadership: Disabusing the Pessimists

One consultant suggests that “the definition of leadership ethics is still unclear; its scope is broadening, making it a moving target.” This is not good news for the topic. Fortunately, the field may be making the task of definition unduly arduous. Scholarship is needed to ferret through the debris so a concept of ethical leadership can be constructed that is both academically rigorous and of use to practitioners, whether in advising and “doing” ethical leadership.

The complete essay is at "Toward a Definition for Ethical Leadership"

Bureaucratizing Leadership into Management

Fuqua/COLE surveyed 205 executives of public- and private-sector companies. In this essay, my task is to provide a critique that is hopefully beyond the ordinary variety. In particular, my aim is to make transparent some of the questionable assumptions that might otherwise be taken as valid by practitioners, whether leadership advisors or leaders themselves.

The survey found “that most senior executives spend less than 25 percent of their time on leadership development.” The relevant survey question assumes that leadership development is a discrete task. Alternatively, leadership development could be likened to Burns’ concept of transformational leadership, in which the content of a leader’s vision includes or otherwise implies the development of followers. While such development is akin to Maslow’s notion of self-actualization, that can be narrowed to “becoming leaders in turn.” For instance, a transformational leader’s vision could include a federal or decentralized power-arrangement and a principle of subsidiarity (locating authority on a competency as “low” as possible). To say that leadership development is a particular task of a senior executive is to assume that a leader confines the formulation and selling of his or her vision to a particular task—rather than being a leader. In other words, a leader does not turn on and off leadership as if it were one among several tasks. Therefore, I question the concept itself of “leadership development” taken as a task. Such a construal tries to squeeze leadership into management terms.

Relatedly, the survey refers to organizational positions in addition to the chief executive that are involved in leadership development: namely, a “chief learning officer” and a “head of leader development.” Such a bureaucratizing of leadership, wherein it is even separated from the leaders themselves, is also part of the managerializing tendency wherein leadership is treated as (or reduced to) a skill within the purview of management. “Chief learning officer” doesn’t even make sense outside of an educational institution. Moreover, the title itself can be taken as an indication that someone believes that “organizational learning” is an actual phenomenon. I take it that learning beyond the confines of a corporeal animal (including human beings) involves projection (and anthropomorphism, as in the “legal person” legal doctrine).

Where the survey finds a positive correlation between the amount of time spent on leadership development by the chief of leadership development or the chief learning officer and the firm’s reported financial performance, it is wise to remember David Hume’s naturalistic fallacy wherein correlation is taken as causation. Hume’s skepticism on what we think we know of causation is very much needed today, where even mere correlation is often questionably taken as evidence of causation. In the case of the survey’s result, which claims that the positive correlation means that a CLD or CLO “spending more time” on leadership “translates into bottom line results,” it could be that firms already in solid financial shape are in a position to add some slack in their CLD and CLO offices. This does not mean that the activities of the CLD and CLO (whatever they are in actuality—“leadership” probably being bent any such way) cause higher profits. The higher profits could be a result of the already-favorable condition or context of the organization.

As an aside, this example is no doubt one of many wherein the naturalistic fallacy is unknowingly committed. This is one reason why I prefer to view the leadership topic as properly belonging to the humanities rather than to empirical social science. The latter has erred enormously, in my view, by trying to emulate the natural sciences methodologically, when the content is actually closer to that of the humanities. The modern value placed ironically on “fact” over “value” and the related empirical emphasis are probably among the culprits—being a usual suspect where societal blind-spots are concerned.

Therefore, readers of the survey would be wise to return the “tasks” of leadership to the leader, rather than advocate delegating some such “tasks” to a CLD (as if “learning” were leadership) or CLO. I’m not even convinced that a CLD and CLO have anything to do with leadership. The CLO could be returned to being understood as the head of corporate training, rather than gilding the lily of leadership. In other words, we can give marketing a rest when it comes to “upgrading” training. Also, we need not conflate learning with leadership—this concept is not so pliable as some might suppose (or profit by in consulting). Indeed, I suspect a rather unholy alliance between leadership consultants and empirical surveys exists at the expense of both learning and leadership.

Click to add a question or comment on the bureaucratization of leadership and the faults of the empirical survey on the topic of leadership.

Source:
Linda Fisher Thorton, “Leadership Ethics Training: Why Is It So Hard to Get It Right?” T+D, September 2009. http://lindafisherthornton.files.wordpress.com/2009/09/article-pdf-sep-t-d-journal1.pdf






Friday, December 23, 2011

Nature’s Caste System: Character-Based Clusters

Pushing good characters down for no good reason in a sort of “collective judgment” that applies to an entire group of people—as in the case of the untouchables in the caste system in India—and accepting the false entitlement of “professionals” to membership in the highest caste simply because they tend to be wealthy—as in the case of lawyers and physicians in America—violates the clusters that naturally cohere—like gases that form distinct planets having their own separated orbits—on the basis of character. Being “on one planet,” it is immediately obvious that someone else is on another. In this essay, I attempt to sketch some of the basic mechanisms by which nature’s caste system is sustained and articulate the nature of the differences that occasion there being appreciable distance between the clusters.

When a stranger is so rude or presumptuous that all you can do is turn and walk away in utter disbelief, for example, you have run into an alien from one of the outer planets. There are many such creatures communicating with us through Craigslist.

A quick read through the housing section (e.g., room shares, apartments for rent) and many “drama-free” private individuals—self-described “professionals”—can be found making demands right off the bat as they seek to attract (?) a future tenant. In actuality, such people are neither “drama-free” nor “professionals.” Both claims are immediately belied by the manner and content of the writing itself. Such people inhabit a sort of low-class society in which they presume themselves as the elite, or rulers. Astonishingly, the presumption is quite without any hint of second-guessing or shame. “YOU MUST . . . ” written in just this way as an advertisement points to the lack of control they have over their urge to dominate from weakness. Furthermore, they are convinced that they cannot be wrong. Some ask for age and others even bring up religion even though doing so is illegal. “No it’s not!” they would undoubtedly reply. They cannot be wrong. As if by sheer reflex, they must surely take any resistance to their presumption as an insult, even an attack, while they continue to hold themselves as blameless. How could they be otherwise? This rock-hard mentality naturally exists in its own “low class” caste in part because it is immune from being corrected or healed. The only thing a healthy person can do is keep reading—avoiding contact at any cost. This reaction is natural; it is thus one of the principal means by which nature enforces the clusters based on character.

Although I have met some really very nice people on twitter, that “universe” sometimes resembles a low-caste society of sorts that is populated, unfortunately, by creatures who seem dominated by an innate urge or proclivity to grant themselves the entitlement of being a self-certified expert. This seems particularly the case in religious or political topics. Opinions are routinely declared as if facts. “X is Y.” Seldom is it asked, “Perhaps X can be Y?” Although certainly not everyone who tweets on leadership does so, some of the so-called leadership “coaches” like to declare their opinions as if knowledge. It is like watching a little populist democracy of self-invented theory that presumes itself to be fully valid upon being tweeted!

I have in mind the “coaches” or “experts” who declare “Leadership is X” without even having bothered to read the academic (i.e. not “how to”) literature on the topic. In fact, these “coaches,” or cockroaches as they are otherwise known, even dismiss that literature, confusing their own self-informed (grade-wise?) declaration, “Leadership can’t be taught in a classroom!” (whereas leadership can be taught in a daylong “seminar” or “workshop” held in a hotel ballroom for a nice fee) with the fact that leadership can be understood. That was an actual tweet, by the way—by an “expert.” It does not matter that such “experts” are not scholars; they presume they know better what is possible in a classroom. Their presumption is thus of an encroaching nature, without any limit of restraint. Such creatures tend to presume on a regular basis that they 1) know what they actually do not know, and 2) cannot be wrong about it. They must be from a small, very rocky planet somewhere out past Neptune (a similar species populates my “small” hometown, including its little “professional” elite—an elite that is viewed as such only because a mere 21% of the adult population holds a college degree). Low caste, or class, it turns out, is not necessarily of a low socio-economic (or racial) demographic. This is where the historical Hindu caste system really got it wrong.

Worlds away from “low class” know-it-all attitude—which instantly (and naturally!) relegates a person to a low caste much more than does even the ignorance itself—are the more humble and genuine, flying at a much higher altitude. Such people are open to what they might not know and perhaps they are kind to strangers as a kind of natural default of politeness. If you have been fortunate to have been touched by such a person, you have been touched by a being from a planet closer to the sun. The rest of us do not deserve to be so touched, and we know this. Accordingly, as Nietzsche posits, there is a natural distance that arises between people who differ in terms of character-strength—what he calls noble strength. This is the power of a will that willingly takes on resistance, even and especially within—in self-overcoming.

In Nietzsche’s terms, having the will (and will-power!) to self-overcome one’s own most intransigent internal obstacle—a powerful instinct—proffers the most intense (or powerful) pleasure of power. Having the will and strength to perform such a task on a regular basis (i.e., self-overcoming) naturally builds character (noble strength). In so doing, it naturally separates one from people who take an easier path through life, whether through lack of will, or weakness. In other words, strength of character, an innate quality that I believe a person can strengthen or choose to compromise by will, differs among human beings (no doubt at least in part from upbringing). Such differences constitute the vacuums that inevitably exist between the natural castes that naturally form in the human condition. All other castes, or classes, are dogmatic in the sense that they are arbitrary to that condition.

In expunging the artificial sort such as the Hindu caste system, we should not ignore or dismiss the natural array of castes that we know on a daily basis by means of our natural sentiments of approbation and disapprobation. In fact, David Hume held that such sentiments constitute our recognition of “moral” and “immoral.” Perhaps these terms are but part of a more general sense we naturally have of the subjective distance that exists between natural, character-driven, castes or levels of being human, all too human. We moderns hate to think of humanity in such terms, yet I wager we know it on an all-too-daily basis, as we inexorably interact with others—realizing that some people are naturally closer while insisting that others acknowledge the distance that is—and must be—there.

Even a mere essay reflects and reinforces the natural affinities and distances that account for there being distinct clusters, or castes, in any given human social context. Nietzsche wrote in his Genealogy of Morals that it is not meant to be understood by everyone. Breaching the natural distance as if it were somehow “immoral” could sicken, or infect, the innately stronger. Many of the self-certified “coaches” (i.e., “experts” on leadership), for example, have already dismissed this essay in its entirety, mistaking disdain for disagreement (and ultimately weakness for strength). Sustaining that distance is not only the odious smell of arrogant ignorance; the cockroaches themselves fear being “outed” as phonies by a pest-control guy whom they sense can spray them with the disinfectant of (other-certified) knowledge. The arrogance of cockroaches does not permit them to scatter in the transparency of knowledge, so they tend to naturally keep their distance in the first place.

Far more interesting than the presumption of false entitlement by supercilious “professionals” and the ignorant opinion certifying itself as knowledge by the “coaches” is the notion that differences in the duration and timing of genes that trigger other genes can (along with environmental factors) eventuate in human interaction manifesting as distinct clusters based on something as intangible as character—and much of it without intention! We naturally cohere with some people as though in invisible stickiness were involved, and we just as naturally keep our distance from others as if doing so were simply by instinct. I must admit I have tended not to pay sufficient attention to natural distance and have wound up having to enforce what should have been natural. As imperfect as nature’s caste system is, the historical Hindu attempt to systematize it by group and presumably for all ages to come shows just how far ahead nature is to human intention. Try as we might, we cannot bottle it! For unlike the Hindu variety, natural law does not depend on religious, political and economic institutions for enforcement.

Click to add a question or comment on nature’s character-based caste system.

Sources:
Lydia Polgreen, “Scaling Caste Walls With Capitalism’s Ladders,” The New York Times, December 22, 2011. http://www.nytimes.com/2011/12/22/world/asia/indias-boom-creates-openings-for untouchables.html?_r=1&scp=1&sq=Lydia%20Polgreen,%20%E2%80%9CScaling%20Caste%20Walls%20With%20Capitalism%E2%80%99s%20Ladders&st=cse

Friedrich Nietzsche, Genealogy of Morals, in Basic Writings of Nietzsche, Walter Kaufmann, trans. and ed. (New York: Modern Library, 2000).

Capitalism & Caste: Melting Untouchability in India

In what has become known as India, the caste system of Hinduism has for millennia served as the template for the socio-economic ordering of people into family-based groups. By the end of the first decade of the twenty-first century, the economic liberalization policy put in place in 1991 to replace the stagnant “import-substitution” domestic-favoring model of economic development had enabled some people in the lower castes to vault into social acceptability by virtue of what the New York Times calls “the newest god in the Indian pantheon: money.” Given the advent of the prosperity gospel in Christianity and the associated eclipse of the “camel getting through the eye of a needle” much-earlier-hegemonic association of wealth with greed, a similar statement could be made with regard to the Trinity (see “Godliness and Greed”).

Gandhi is said to have remarked, “I used to think that truth was God. I have realized that God is truth.” This is a very profound statement, which must be unpacked to be understood and appreciated. “God” refers here to what in the Abrahamic religions (Judaism, Christianity and Islam) is called revelation (God revealing itself through scripture). In Hinduism, the basic scriptures are known as the Vedas—the commentary thereof is known as the Upanisads (which are quite rich in terms of religious philosophy). The Vedas contain directions for social practices, such as concern widows (e.g., Sati (throwing oneself on the burning funeral pire of one’s husband) or going into a widows home, which often involved prostitution) and Dalits, or “untouchables” (e.g., not permitted to worship in the temple, or use public drinking fountains—sound familiar?).

Gandhi was saying that he used to accept all that was in revelation—including social practices concerning widows and untouchables—as truth (i.e., as unquestionably valid, or sacred). Observing the suffering of widows and untouchables, he came to realize that to be valid, revelation must itself “pass the truth test.” Suffering of the innocent (Christians may recall the suffering servant motif) as a direct and sole result of a directive in scripture could not be of truth, Gandhi concluded. Truth, in other words, has a higher calling than does revelation. In other words, what humans record as their revelations of the divine should be subject to truth itself, rather than defining (i.e., limiting) it. Even if what the religions record as revelation is informed by a divine source or field, the “informing” must pass through the imperfect (i.e., distortive) atmosphere of the human instruments that do the writing and copying. Therefore, “God is truth” means that truth is rightfully a criterion to be applied to revelation.  That which doesn’t pass the “smell test” can rightfully be ignored (I would include a conflict-of-interest criterion to the “smell test”).

The constitution of modern India forbids the old, rather sordid institutional prejudice against widows and the Dalit (which as of this writing number about 200 million). For example, the practice of physical untouchability, which confined Dalits to low-status jobs and social exclusion, is outlawed. Except in some remote areas, Dalits can walk on the same streets as upper-caste Indians, look them in the eye, and drink from the same wells and water fountains.

Even so, as anyone who has stayed in a Motel 6 or Holiday Inn Express owned or operated by a Patel knows, vocational groupings continue to reflect family groupings, or castes. According to the New York Times, “(s)ocial and economic mobility are limited, a product of India’s layers of cultural legacies: the Hindu caste system, the feudal and sometimes racial hierarchies . . ., and the imperial bureaucracy imposed by Britain.” For many Indians still, you do what your father did. The Times reports that “(k)nowledge-based businesses like information technology have attracted large numbers of Brahmins, the traditional learned caste. The business castes tended to focus more on retail and wholesale trade than manufacturing. Messy industries like construction are closer to the traditional occupations of the lowest castes.” That the historical caste of scholars and priests (i.e., the Brahmins) has turned to information technology reflects the new “high priests” in terms of modern Indian values, yet I doubt that contemporary Brahmin scholars and priests view a computer programmer as being at all equivalent. The caste system itself has been truncated by a certain reductionism to business (i.e., oriented to business), given the societal hegemony of business in modern India.

As a brief digression, I want to translate the Hindu caste system into Western society. A learned caste exists in the West, even if that caste has been eclipsed in popular culture by the “professional” sub-caste in the business caste. Even so, scholars and priests in the West correspond to the Indian Brahmin caste. The political caste contains (in decreasing order) imperial, kingdom/state, province/region/county, and local offices. This is so in both India and the West. The business caste in the West contains its own hierarchy, from professionals (physicians, CPA’s and lawyers) to the people who work in the financial services and information technology, and on down to retail managers and finally manufacturers. The worker caste (foreign farm workers being at its bottom) is below the “managerial” sub-caste of the business caste, and the “welfare” or “homeless” caste is perhaps the Western equivalent of the untouchables in India. As in India, the business caste—in particular the professional and managerial sub-castes—has in practice vaulted to being the de facto highest caste in terms of contemporary values. That the Brahmin caste, in having scriptures or treatises as referents that contradict or relativize whatever happens to be the flavor of the month (e.g., “being a professional”), self-consciously transcends or repudiates “professional” values suggests that a basic learned—politics—business order of status (and even class) exists in spite of the apparent societal hegemony of the professionals (in which, not coincidentally, the next-lower business sub-caste, that of the business executive/manager, has claimed membership). Indeed, practically every working adult American who is not a student claims to be a professional (just look at the housing postings on Craigslist). In the U.S., everyone gets to classify oneself as being in the highest sub-caste of business, which in turn is presumed to be the highest caste in the entire system. It is not simply because physicians, public accountants and lawyers can be wealthy; “professional” now conveys a high-class sort of status. So, it would appear there are two new gods in the American pantheon.

In modern India, the “Dalit problem” may reduce in a practical sense to the task of reducing a rather extreme economic inequality, which in itself is dangerous to a representative democracy. Thanks in part to an affirmative action program by the government, Dalits and tribal people have gained in getting an education and procuring government jobs. This is only part of the story, however. Although widening “the gulf between rich and poor,” the economic expansion brought about by the post-1991 liberalization policy allowing foreign direct investment and expanding trade has enabled some Dalits to become wealthy as business practitioners. As a result of both the affirmative action and liberalization policies, the wage gap between other castes and Dalits decreased from 36 percent in 1983 to 21 percent in 2011 (and the education gap has been halved). Twenty-one percent is less than the gap between Caucasian and Black men in the United States in 2011. The social status of Dalits has risen as well. “With their new wealth they have also won a measure of social acceptance,” according to the Times.

According to Chandra Bhan Prasad, a Dalit activist and proponent of capitalism for untouchables, “(b)ecause of the new market economy, material markers are replacing social markers.” This can be generalized to include the self-vaunting of the business caste to the head of the line from third in terms of popular understanding both in India and the West. Prasad implicitly likens India to the West, in fact, by making the following observation: “India is moving from a caste-based to a class-based society, where if you have all the goodies in life and your bank account is booming, you are acceptable.” What of the Brahmin priest or scholar of philosophy who sees through all the vanities in life and appreciates timeless gems that don’t necessary pay a monetary dividend? Is the modern professional society in actuality without class, yet still very hierarchical and unequal? It is indeed part of the role of the scholar and priest to hold this mirror up to the “professionals,” whose niggardly caste does not permit donations to such “lost” causes as that of truth. Am I understood?

As Nietzsche theorizes, the strong can be hoodwinked by the weak who seek to dominate beyond their native pith and ken (e.g., those with an undergraduate degree in Law or Medicine claiming nonetheless a false entitlement to the doctorate—the J.S.D. or D.Sci.M. rather than the LLB/JD or MD prerequisite degrees). Pith, or strength, and ken, or knowledge, may come down in the end to character, out of which real castes naturally form in human relations. What physician is going to party with a scholar who reminds him that his MD is actually an undergraduate degree in a Medical school?—the doctorate being a terminal (highest possible, so not a prerequisite for another degree in the same school/discipline) degree that includes comprehensive (not board) exams and a dissertation-length defended body of original research. What scholar is going to respect a lawyer who cannot be wrong about the LLB (the JD is just another name for that degree) being a doctorate because he or she also has a BA in English? It was student dissatisfaction at around 1900 with the “two B’s” (LLB and BA) that prompted the three lawyers who started new University of Chicago Law School to re-label the LLB program as “JD” (this “D” does not stand for doctorate). In typically American fashion, the marketing gimmick was inexorably taken for substance (because of the convenience) and the misnomer quite understandably became the default rather than recognized as a stubborn category mistake. Substantively, a year or two of basic survey courses and the same time in senior seminars (without even a major!) in the discipline of law does not a doctorate make. Yet this misnomer, and the related one in American medical schools, helped fuel the ascendancy of the “professional” sub-caste of business to the top of the heap, aided by the perennial non-virgin goddess of money.

I contend that the self-vaunting of the “professional” sub-caste in the West is just as squalid (and without foundation) as the historical discrimination against the Dalit in what is now India. Both trajectories violate the ethical principle of desert (i.e., what is deserved) which is related to the principle of fairness. Both “mis-casteings” involve the presumption of knowing more than is actually known in the assigning (and enforcement) of roles. In other words, both are dogmatic, or arbitrary, relative to nature. Rather than looking to capitalism or democracy here, the real lesson is in terms of nature relative to human contrivance. The ancient Greek marble pillars might have been majestic in service to Athena or Poseidon, but green vines would have the last say, as per the painting of the Romantics in the nineteenth century.

Whereas governmental preference and capitalism have enabled an increasing number of Dalits to “join the club” of social acceptance, business and government in the West reinforce the hegemony of the “doctored” professionals who in actuality typically have one (Europe) or two (America) undergraduate degrees. Indeed, kings (raj) and businessmen (as well as Brahmin priests!) in historical India played salient roles in keeping the Dalit in their place as (literally) outcastes. So the value of capitalism and a preferential policy of government should not be over-esteemed in themselves simply because they contributed the upward mobility of some (or many) in the Dalit caste. In the end, above particular economic and political systems as well as historical and even modern societal caste or class systems in which some benefit unduly at the expense of others, lies human character, out of which a rather different, distinctly invisible order of castes naturally unfolds without relying on human intention.

Part II: "Nature’s Caste System: Character-Based Clusters"

Click to read Rahul Deodhar's excellent comment (and my reply that attempts to do his essay justice) or to add a question or comment on my essay on the Hindu caste system and the plight of the untouchables being mitigated by capitalism.

Source:
Lydia Polgreen, “Scaling Caste Walls With Capitalism’s Ladders,” The New York Times, December 22, 2011. http://www.nytimes.com/2011/12/22/world/asia/indias-boom-creates-openings-for-untouchables.html?_r=1&scp=1&sq=Lydia%20Polgreen,%20%E2%80%9CScaling%20Caste%20Walls%20With%20Capitalism%E2%80%99s%20Ladders&st=cse












Thursday, December 22, 2011

ECB Loans: A Backdoor Bailout?

On December 8, 2011, the ECB announced that it would loan 489.2 billion euros (c. $640 billion) at 1% interest to 523 E.U. banks for a three-year term. Carl Weinberg, chief economist at a consulting firm, said that by making the move, the ECB had “shown a path toward averting catastrophic collapse in Europe.” The move has been likened to that of the Federal Reserve after the collapse of Lehman Brothers in 2008. It was hoped that the E.U. banks would use the money to buy state bonds—particularly those of Spain and Italy, which were not able to “directly tap” ECB funds. According to Investor’s Business Daily, however, early signs pointed to bank declining to purchase the riskier debt. While understandable given Angela Merkel’s objections to the ECB serving as a backdoor bailout of profligate states over their heads in debt, the ECB’s refusal to put conditions on how the loans could be used may have undercut the central bank’s effort to relieve bank liquidity (and state debt) problems in the E.U.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.





Vertical and Horizontal M&A: A Bias in Antitrust Policy?

The Obama Justice Department developed a track record in challenging horizontal mergers and acquisitions—those in which a company buys a direct competitor—in industries that are already highly concentrated. In deals that are not between direct rivals, such as those that occur in vertical integration, the Obama administration determined to approve the deals, albeit with the imposition of legally binding restrictions on the acquirer’s ability to use its “in house” supplier to engage in unfair competition.

As one example of unfair competition through the use of a purchased distributor, Standard Oil under John D. Rockefeller bought a company that owned and operated pipelines through which oil was transported. Besides using the company to obtain competitive information, he made sure that higher rates were charged to competitors—even though who had no other means of transport available. Where practicable, going by pipeline was preferable to barges and railroads from a cost standpoint—although Rockefeller obtained substantial rebates from the railroads (from his volume or market power—this point is subject to debate). In addition, the railroads granted Standard Oil drawbacks—a cut from the railroad’s business in servicing other customers, including competitors of Standard. Given Standard’s sheer volume, the rationale went, trains being used to haul others’ product were not available for Standard and thus represented a cost in terms of foregone volume transported. Even so, from the ethical standpoint of fairness, both the rebates and especially the drawbacks were subject to substantial critique—especially that of Ida Tarbell, whose text (History of the Standard Oil Company, 1904) on Rockefeller’s helmship of Standard was scathing.

More than a century later, the Obama Justice Department allowed Comcast to take control of NBC Universal and Google to buy travel software maker ITA Software. The government’s rationale is that companies can save money from synergies and thus lower prices for consumers (or increase salaries, retained earnings or dividends). Even in a competitive market, however, the “lower prices” scenario seems to have doubtful validity, given tacit collusion on price, non-price means of competing, and executive managers’ interests in increasing their compensation and keeping investors happy.  Similarly, by the way, reducing companies to being “job creators” is not only reductionistic; it also demonstrates an ignorance of what businesses are designed to do (i.e., earn profit by selling widgets—jobs being merely a means).

                                                                                WSJ

Moreover, the assumption that “legally binding restrictions on the acquirer’s ability to use its prize to unfairly harm competitors” are a sufficient means of checking or thwarting baleful consequences from what is an institutional or structural conflict of interest seems to be highly tenuous, in my opinion. Just as water in a stream “seeks” ways to go downstream even when temporarily blocked (and a cat obstructed from food laid out continuously seeks ways to get around the obstacles), the managers of company A that owns company B, which acts as a supplier or distributor for competitors of company A, will doubtlessly (and inevitably) seek ways around the restrictions. In the parlance of trade, such ways are known as “non-tariff barriers.” They are notoriously difficult to stop (think: stop the cat).

In conclusion, the Obama administration’s differential treatments of vertical and horizontal mergers and acquisitions evince a bias caused by understating the strength of a structural conflict of interest that is inherent in one company buying a distributor or supplier that services competitors of said company. Perhaps the underlying culprit is an understating of the more sordid aspects of human nature combined with an overstating of the efficacy of government regulation. If highly concentrated, massive stocks of capital, such as are evinced in banks or companies that are too big to fail, represent a risk both to competitive markets and to representative democracy, then not only should both vertical and horizontal mergers and acquisitions be subject to higher hurdles, but also existing companies that are too big to fail should be broken up, as the U.S. Supreme Court broke up Standard Oil a century ago.


Source:
Thomas Catan and Brent Kendall, “After AT&T: The New Antitrust Era,” The Wall Street Journal, December 21, 2011. http://online.wsj.com/article/SB10001424052970204058404577110963826534228.html?mod=rss_whats_news_us


Decadent Management: Burger King Dethroned

When a major company like Borders or Pan American declares it is going out of business—bankruptcy being all too often just a way to force creditors and unions to renegotiate—the public is often stunned. Indeed even a week before such an announcement, managers can assure customers under the veneer of an expressionless face or even a comforting smile—that the company is focused on “driving strong expansion in its many markets around the world” and will “strongly position” its brand. Driving expansion? Strongly positioning? An astute person will instinctively detect the scripted, vacuous jargon as the patina of a rather strange, if conformist, mentality that presumes to invent or misuse words with impunity, as if from a superior position in society. The quoted expressions are from Miguel Piedra, a spokesperson of Burger King, reported in a Wall Street Journal piece on Wendy’s being “positioned” to replace “the King” as number two in sales. If Piedra’s bureaucratic response is not enough of a red-flag, a visit to a Burger King restaurant might give the impression of a company that—absent the cushions of name recognition and capital—is on the verge of going out of business.


The full essay is in The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available in print and as an ebook at Amazon.com.



Leadership vs. Management: Change vs. Constancy?

In the “leadership vs. management” dichotomy, “management focuses on getting work done on time, on budget, and on target — in other words, steady execution and control — while leadership focuses on change and innovation.” However, Hill and Lineback screwed up in contrasting implementation with innovation. What about the implementation of innovation, when the actual change takes place? Is that leadership or management?

Abstractly speaking, a category mistake may be involved in this false dichotomy. Change would be occurring in the execution of an innovative vision. In the realm of change alone, formulating and selling it can be distinguished from making the change. Therefore, the “leadership vs. management” distinction does not reduce to “change vs. status quo."

It could be observed that viewing leadership as the idea stage is bound to result in over-valuing it at the expense of the running of the organization (be it a government, church, or business). Accordingly, Hill and Lineback write that “being a leader has taken on a shiny, romantic aura these days while management has been given an undertone of grubby practicality. Leaders are superior beings who inspire the rest of us to greatness while managers are dull business functionaries obsessed with budgets, schedules, policies, and procedures.” Yet in asserting the necessity of both, Hill and Lineback fall back on their “change vs. status quo” dichotomy: “all groups and businesses must simultaneously change in some ways and remain the same in others. They must execute and innovate, stay the course and foster change.”

So it was apparently not leadership when President Reagan campaigned on “stay the course” in 1984, whereas he had been leading in 1980 when he urged a fundamental “government is the problem” shift from Carter’s policies. Both of Reagan’s messages evince a vision. Indeed, they evince the same vision. Is continuing to sell one’s vision not leadership because changing one’s vision is necessary for leadership? Put another way, is “staying the course” on “morning in America” somehow tantamount to execution? In characterizing managers as stewards of continuity, Hill and Lineback cannot account for Reagan’s 1984 campaign.

Leadership as formulating and selling a social reality may indeed be overrated, especially when it is claimed by people within an organization (e.g., department heads). Valuing a leader over the content of his or her vision—even diverting one’s attention from vision to the person—can be viewed as an overrating of leadership. The root problem would not be an over-estimation of change over continuity. Rather, the respective issues are 1) whether vision has value in “bottom line” terms and 2) whether the person of the leader deserves to be valued because of the value of the content of his or her vision. As I treat the second issue in “Cult of the Leader,” I address only the first here.

In business, the “bottom line” means long-run profits. It is easier to relate “budgets, schedules, policies, and procedures” than a leader’s vision. In government, the “bottom line” means a better society, stronger economy, and a more transparent government. Law, as well as particular policies, is more easily related to these than is a governing philosophy that organizes policies. The vital question is whether vision can be instantiated in laws, which in turn can have tangible impacts on society.

Click to add a question or comment on whether leadership is change and management is the status quo.

Source:
Linda Hill and Kent Lineback, “How I Stopped Romanticizing Leadership and Learned to be a Manager,” Business Insider, December 14, 2011. http://www.businessinsider.com/how-i-stopped-romanticizing-leadership-and-learned-to-be-a-manager-2011-12?utm_source=twbutton&utm_medium=social&utm_campaign=warroom-contributor


Wednesday, December 21, 2011

Cult of the Leader: The Case of North Korea

Baudrillard writes of "hyper-reality," which arises when productions—perhaps created by publicists and other spin doctors—become the reality that is taken seriously at the expense of the originals.  The modern art of Andy Warhal provides an analogy. His portraits are not exactly pure "copies" of the originals, so his way of depicting reality should not be identified as the definitive truth. Such “hyper-reality” can become the stuff of leadership. DePree (1989, p.19) writes that the first responsibility of a leader is to define reality. According to Nanus (1992, p.61), “leaders create realities through the force of vision.” The reality envisioned is a social reality. Although it can include the leader, the content of the vision is usually distinguished from the messenger.


How can the cult of leadership be explained? The New York Times reports that a “day after North Korea announced the death of its longtime ruler, Kim Jong-il, televised video and photographs distributed by the reclusive state . . . showed scenes of mass hysteria and grief among citizens and soldiers across the capital.” The Times suggests that the images carefully selected by the state Korean Central News Agency “appeared to be part of an official campaign to build support” for Kim’s son as the designated successor.

Although “convulsive sobbing, fist pounding and body-shaking bawling” are an accepted part of Korean culture at funerals of the famous and not famous in both Koreas, the culture of mourning in the North “has been magnified by a cult of personality in which the country’s leader is considered every North Korean’s father.” So it is ironic that Kim’s own son showed barely any emotion at all when viewing his father’s corpse on display. Can we trust the extreme emotion displayed after the passing of a vicarious father?

If citizen-mourners falling apart emotionally was artfully staged by the state, the extent of the acting, emotionally speaking, is itself cause for bewilderment, if not wonder at the real underlying emotional state that would put forth such a performance. In other words, even if forced to be sad by a party or state boss, why go over the top? The acting itself, specifically in being done to such an extreme, tacitly points to an underlying pathology that pretends to represent human nature at its most sincere and vulnerable.

If the citizens shown publically mourning were really feeling the emotion suggested by their external demeanor, again one might wonder whether those citizens aren’t, well, nuts. Even if manifesting such extreme emotion is culturally sanctioned in the Koreas, the “cult of the leader” might lure in a certain pre-disposed pathology among certain followers. To be sure, the social reality expressed in a leader’s vision can satisfy basic instincts for things to make sense and to have something to believe in. Where significance is placed on the leader because he or she is the instrument or messenger of the meaning and values envisioned, the cult of the leader can arise. To be sure, a leader can be salient in the content of the vision, but, even so, the integrity of the social reality itself does not necessarily hinge on the leader (even as represented in the content of the vision).

Therefore, getting so emotionally invested in a leader that one wails as if one’s own parent has died (even as the parent’s own son shows practically no emotion publically) is at best an over-reaction. Theoretically, mourning a leader as though one knows him or her personally involves a category mistake in leadership—conflating the messenger for the social reality that is the content of the leader’s  vision. Even as people pay attention to a leader as he or she enunciates a vision, the value of the meaning being portrayed in the social reality can and should be distinguished from the leader. In other words, just because we value leadership does not mean that extreme emotion is somehow valid or even healthy psychologically in mourning the loss of a leader.

As another example, consider all the Nazi soldiers who committed suicide themselves after Hitler did so. Consider the warped perspective that life in a post-Nazi Germany would not be worth living. Göbbels’s wife is said to have held that view as he killed her young children and then herself (with her husband). Both the warped perspective in Nazi Germany and the exaggerated emotions in North Korea suggest that some followers of a leader can manifest an underlying pathology that gets wrapped around the significance of a leader. Obviously, devious leaders can utilize this pathology for their own purposes.

As beneficial as leadership can be to a society (and in satisfying certain human instincts), a downside to the phenomenon itself should not be ignored. Mischaracterizing leadership as saccharine “feel good” platitudes such as, “empowering followers, “being a winner” and “reaching your potential,” is vacuous because such renderings make the concept as an ideological vehicle or nearly tautological; more importantly for our purposes here, the biased approach is also dangerous because it enables the sort of denial that can perpetuate the “dark side of the force.”

Click to add a question or comment on how pathology can be associated with leadership.

Sources:

Baudrillard, J. "Mass Media Culture," in Revenge of the Crystal, J. Baudrillard, ed. (London: Pluto Press, 1974), pp. 63-97.

Choe Sang-Hun and Norimitsu Onishi, “North Korea’s Tears: A Blend of Cult, Culture and Coercion,” The New York Times, December 21, 2011. http://www.nytimes.com/2011/12/21/world/asia/north-korean-mourning-blends-emotion-and-coercion.html

DePree, M. Leadership is an Art (Doubleday, New York, 1989).

Nanus, B.: 1992, Visionary Leadership: Creating a Compelling Sense of Direction For Your Organization (Jossey-Bass: San Francisco).


Monday, December 19, 2011

U.S. Visa Fast-Track For Rich Investors

The New York Times reported in December 2011 that affluent foreigners had been rushing to take advantage of a U.S. immigration program. The foreign applicants must invest at least $500,000 in construction projects within the United States. The number of applicants had nearly doubled since the end of 2008 to more than 3,800 in the 2011 fiscal year. The intent of the program is to spur economic development at a time of high unemployment. Yet the program has also been characterized as a cash-for-visas scheme. Besides the question of whether the program’s rules have been stretched in New York City to qualify projects in prosperous areas for special concessions, an ethical question can be raised concerning who should get a visa.

Obviously, the program’s designers must have known that only wealthy people could qualify. A public-interest ethical argument could be made that they deserve a green card because they contribute to economic development out of which jobs for Americans can ensue. Indeed, to the extent that the additional investment results in more economic activity, the visitors making the investment in 2011 could have been helping to forestall a double-dip recession. This was a distinct possibility at the time, given the E.U. debt crisis.

The ethical issue is in the exclusion of people who are not wealthy. The principle of fairness would seem to mandate that just as many non-rich foreigners be granted green cards above the ordinary limit. However, this would seem to be rather artificial—a sort of tit for tat—as in “we’ll accept your tax cut if you accept ours.” Moreover, in the context of high unemployment, any such increase in visas should not add to the supply of labor.

John Rawls suggested that in designing such a system as applying for a green card, a veil of ignorance as to whether one will be rich or poor should be utilized. Rawls’ thinking was that if the designers cannot know whether they or their friends will be rich or poor, then the proposed system design will be fair (i.e., there would be the chance that one’s friends are poor foreigners unable to get a green card). While fair in itself, this ethical device may not adequately take into account the public interest that could be satisfied by only one segment (e.g., the rich). Should the U.S. renounce the possibility of more economic development, particularly at a time of high unemployment, just because poor and middle-class foreigners cannot participate?

Related to the matter of income and wealth, it can be asked from both the public interest and ethical standpoints whether capital investment is more valuable economically than highly skilled and educated foreigners. To be sure, the latter ought not crowd out citizens and existing residents who have comparable skills and knowledge, and it is presumably possible to further train and educate existing citizens and residents.

For example, the very same issue of the New York Times containing the story of the green cards for foreign investors reported that M.I.T. was announcing an expanded program that would still allow anyone anywhere to take M.I.T. courses online free of charge, but would add online labs, self-assessments and student-to-student discussion. Also, for a small charge, a certificate can be obtained. At the time, the university’s free OpenCourseWare included nearly 2,100 courses and had been used by more than 100 million people. Rafael Reif, the provost, gave the following as the operating assumption: “There are many people who would love to augment their education by having access to M.I.T. content, people who are very capable to earn a certificate from M.I.T.” To be sure, a certificate would not be a degree, but in terms of non-professional jobs the former may be sufficient. “The most important thing is that it’ll be a certificate that will clearly state that a body sanctioned by M.I.T. says you have gained mastery,” Reif added. The notion that cost (and debt) ought not be an obstacle to a natural drive to learn more, whether in terms of skills or knowledge, is foreign in the United States (and increasingly in Europe as well).

Yet from the standpoint of economic development as well as jobs, viewing education as an investment rather than as a purchased product would likely pay substantial dividends. Where such an approach to vocational training and higher education falls short for citizens and residents, welcoming the best and the brightest from abroad—even training and educating them at online programs such as M.I.T’s—may be an investment policy even more beneficial than that of attracting additional capital investment in construction projects.

Click to add a question or comment on U.S. visa programs in relation to ethics, training and education.

Sources:
Tamar Lewin, “M.I.T. Plans to Expand Its Free Online Courses,” The New York Times, December 19, 2011. http://www.nytimes.com/2011/12/19/education/mit-expands-free-online-courses-offering-certificates.html

Patrick McGeehan and Kirk Semple, “Rules Stretched as Green Cards Go to Investors,” The New York Times, December 19, 2011. http://www.nytimes.com/2011/12/19/nyregion/new-york-developers-take-advantage-of-financing-for-visas-program.html