Hidden Warnings of Climate Change: A Paralyzed Species Looks On

Global warming has been so difficult to slow down through political means at least in part due to the fact that most of the action has been going on in the Arctic Ocean and the surrounding permafrost land (which, it turns out, is not so permanently frozen after all), far from almost all of the world’s population. In short, what is occurring in that region is both dwarfing the impact of human-released carbon and serving as the canary in the coal mine. The implications are truly astonishing.

The full essay is at "Hidden Warnings."

A Trader Dreamed of Economic Collapse

Call it over-confident bravado or perhaps a lapse into utter transparency; trader Alessio Rastani’s comments on BBC give the rest of us a glimpse of the power behind the world’s thrones and how prone “the system” is to collapsing without a sufficient force geared to the viability of the system itself. In other words, it is amazing that the financial/governmental systems go on without more attention to them as systems rather than to micro self-interests. One might ask whether powerful self-interests are sufficient to keep the system from hitting the rocks. Apparently the answer is yes, though this is astonishing nonetheless. It is like a car somehow making its way down the street with one person in the car looking at pedal, another at the steering wheel, and still another at the speedometer. It is amazing if the car does not crash, yet somehow it managing to stay on the road.

The full essay is at "Economic Collapse."

11/11/11

In Berlin at the Brandenburg Gate on 11/11/11 in 2011, costumes were the norm in the evening as revelers celebrated the numeric convergence. I suspect that unlike the Chinese, the Europeans were struck by the convergence itself, rather by any good luck attached to the numerology. I myself was struck by the convergence alone. Both at 11:11am and 11:11pm, I was surprised that other Americans around me seemed to be either ignorant of the alignment or utterly indifferent to it. It occurred to me that just as a given time-date system is artificial, so too are human cultures—which include political and economic values that are stitched together by leaders who peddle meaning to the masses. Both our systems and our ideologies are all too limiting, yet we can find meaning in them. Perhaps this is ultimately why we have them and the leaders that trumpet them or suggest new ones. I contend that 11/11/11 too plays into the human instinct for sense-making, especially in terms of visual and cognitive symmetries.

The full essay is at "11/11/11"

Federalism & Business: States in India Deregulating for Economic Growth

The gross domestic product in India for the year ended March 31, 2011 was estimated to have grown at a robust 8.6%. Gordon Chang at Forbes argues that besides Delhi’s own fiscal and monetary stimuli, competition between the states of India for business has been a formidable factor. Federalism, it turns out, can be good for business—yet at what cost? Chang omits this element, writing only that “As the states try to outdo each other, India’s investment climate improves.”

The full essay is at "Deregulating States in India: Federalism and Business in Action."

Essays on the Financial Crisis

The financial crisis that peaked in the United States during the fall of 2008 is an excellent case study of what can go wrong with leadership and corporate governance in business, financial ethics, government regulation directed both to the firm level and that of the financial system itself, and legal accountability for the culprits. The collection of essays begins with a series of essays on Lehman Brothers, with particular attention on its last CEO, Richard Fuld. Given the fraud surrounding subprime-mortgage bonds at numerous banks, the second part of the book looks at why legal accountability was so elusive in the United States. Weaknesses in the financial regulation, with particular attention to whether agencies had been captured by their respective regulated firms, comprises the third part. The fourth part examines the culpability of the Federal Reserve Bank, which had perhaps been too close to its regulated banks to anticipate the crisis. The book concludes with essays on why business ethics had been so very weak. The careful reader will take from the book a sense that the financial system remained vulnerable even after government attempts to reduce the systemic risks of a big bank going under. 

The book: Essays on the Financial Crisis, is available in print and as an ebook at Amazon.com.

Melting Permafrost Unleashing Killer Bacteria and Viruses: Climate Change Heats Up

As the Northern climes warm, our species may soon be vulnerable to ancient—even beyond ancient— bacteria and viruses. We are familiar with pathogens to which our species has some immunity, built up from repeated prior contact. As a species, we could lose everything from illnesses in which the modern human body has no experience and thus no built-up defenses.

The full essay is at "Bacteria and Viruses in Melting Permafrost."

Going Off-Shore, Dodging Sanctions, and Laundering Money: The World of the Richest of the Rich

On April 3, 2016, 2.6 terabytes of data—more than 11.5 million documents—leaked from Panama’s law firm, Mossack Fonseca. The documents show that the firm “helped heads of state, oligarchs and celebrities launder money, dodge sanctions and avoid taxes.”[1] Over 40 years, 214,000 offshore shell companies in 200 countries implicate individuals including the family of Syrian President Bashar Assad, and that of British Prime Minister David Cameron, several friends of Russian President Vladimir Putin, and Icelandic Prime Minister Sigmunder Gunnlaugsson; financial institutions implicated include UBS, HSBC, and Société Générale.[2] I contend that the markets themselves had been tilted in the interest of the greater power (i.e., the rich), so systemic rather than incremental or piecemeal efforts would be necessary to solve the problem.

The full essay is at "Going Off-Shore."

The Big Short and Concussion: A System on Steroids

Want a glimpse of the "powers that be," American-style? Three films--"The Big Short," "Concussion," and "Spotlight"--together form a perfect storm that in theory could trigger resistance. More practically speaking, the films are likely to result in more departmentalization, psychologically speaking. 

The full essay is at "The Big Short and Concussion."

The Natural Wealth Model of the Modern Corporation: A Basis for Sustainable Organization

Going to the Humanities to construct a sustainable organization based on ecological theory, this essay presents a theory of the firm that is at odds with the profit-maximization premise. I draw on the notion of the natural wealth of the Golden Age as depicted by such ancient Western poets as Ovid and Hesiod—who assumed such wealth to be devoid of greed—as a basis for sustainable organization from ecological theory to produce an alternative theory of the firm.

The essay is at "The Natural-Wealth Model of the Modern Corporation."

Electric Utilities Thwart Solar Applications: A Conflict of Interest Rewarding the Status Quo

Considering the contribution of coal-burning power-plants to atmospheric carbon-emissions and thus global warming, governments around the world should be encouraging rather than discouraging home-owners to install solar panels. That is to say, we ought not privilege the status quo when it has contributed so much already to an uncomfortable or even uninhabitable Earth for mankind. So it is unfortunate that energy officials in Hawaii’s government had to step in to pressure—no, order—the Hawaiian Electric Company to approve its “lengthy backlog” of solar applications.[1] I submit that the officials should have gone further in correcting for the conflict of interest in the utility. Put in the vernacular, electric companies tended at the time to screw customers who could sell back “home-grown” solar power. The root problem here is in the utilities’s dual roles of seller and consumer of power.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

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[1] Diane Cardwell, “Utilities See Solar Panels as Threat to Bottom Line,” The New York Times, April 19, 2015.

The Age of Humans: Snuffing Our Species Out

With California entering its fourth year of severe drought and the planet having its warmest August and September since records began in 1880, one scientist at NASA’s Institute for Space Studies said in 2014 that the warm data points “point toward the long-term trends.”[1] At the time, scientists were already claiming that the planet had entered a new era—that of the Anthropocene—noted for the impact of the homo sapiens species in altering Earth. The implications are profound, even if the huge shift has not fully registered in human consciousness.

Source: “The Age of Humans.”

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[1] Nick Visser, “The Planet Just Had Its Warmest August on Record,” The Huffington Post, September 15, 2014.

Wall Street Subsidies Silently Magnifying Systemic Risk

At a U.S. Senate hearing on a GAO report on the costs of expectations of government support for banks should they go under, “discussion went far beyond the report and delved into the current state of banking, the limits of the Dodd-Frank Act and what should be done about banks that are simply too big to manage,” according to The New York Times.[1] Six years after the massive credit freeze, a major question hinged on whether some financial institutions were still too large, complex, and interconnected to be liquidated in an orderly and containable manner should they head under water. 

The full essay is at WallStreet Subsidies Silently Magnifying Systemic Risk

[1] This and all quotes in this essay are from Gretchen Morgenson, “Big Banks Still a Risk,” The New York Times, August 3, 2014.

Rousseau on Economic Inequality

In his Discourse on Inequalities, Rousseau distinguishes two types of inequality among people: natural and moral. Natural inequalities, which exist in the state of nature as well as society, result in difference outcomes owing to innate differences in “genius, beauty, strength or address, merit or talents.” Such differences—both in sources and outcomes—pale in comparison with those from “moral” inequalities, such as exist between rich and poor, professionals and the unskilled, and the powerful and the subjugated.

The full essay is at "Rousseau on Economic Inequalities: Natural vs. Artificial"

FIFA: Weaving an Unethical Web in a Sport

Soccer is the world’s most popular sport. Unfortunately, the Federation Internationale de Football Association (FIFA), the international association of soccer, has “repeatedly faced charges of corruption while operating with a lack of transparency and little oversight.”[1] Even though corruption comes naturally to individuals, institutional processes and structure too can be unethical in themselves. In such cases, it is not sufficient to isolate and remove the sordid persons; structural reform is needed too.

The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon.

1. Jeré Longman, “Accusations Are Replaced by Anger at FIFA,” The New York Times, May 30, 2011.