To govern or not to govern

With the election tomorrow, I was thinking about the differences in people's mind-sets.  A lot of people seem to be staunchly one way or the other.  I'm not sure how many of us have valid (or validatable) reasons, but we seem to have opinions that steer toward one party or the other; one political philosophy or the other.

Correct me if I'm wrong, but it seems like there are two general groupings - and I know there are the in-between or outside the groups people.  But generally, it seems like people either think:

- government is the problem

or

- government is the solution

And with that basis, we either want more government influence in our lives or less.  

Just curious which side you guys fall on and why...

Anyone?

Capitalism and Coffee

Interesting discussion on capitalism as it pertains to the coffee market over at Brian's site.  So far, it looks like a lot of the issues we've been discussing here will be debated with real-life examples.

doubleshotcoffee

Greed.

In the last couple of weeks, I have heard from two friends who have encountered the opposite of the compassionate capitalism we are exploring in this blog.  Here is one of their stories.

This friend lives in DC and was looking to buy a small condo (which takes a small fortune in that market).  After reaching an agreement on price (what one might think to be the main sticking point in a negotiation), he ran into a roadblock with some of the terms of the purchase contract.  The seller--a corporation that had built these new-construction units--insisted upon a term in which, should the buyer die before the closing date, the sale would be required to continue through the estate of the deceased buyer.  In essence, the seller was going to force the sale upon the grieving family of a deceased son or brother or husband if death should happen before closing.  The burden upon the corporation simply to put the unit back up for sale would be small.  The emotional and financial  burden upon the grieving family of the buyer would be enormous.  

I cannot fathom the selfishness and greediness that would have prompted a party to put this clause into a contract in the first place.   I have even less understanding why a party would continue to insist upon enforcement of such a clause if the unfortunate death were to occur.  In my friend's case, it would have saddled his widowed mother with the emotional and financial burden of traveling to DC from Arkansas and, in addition to handling whatever probate issues he might have had, find some way to continue with this significant purchase (certainly in Arkansas or Tulsa property terms) and/or try to work out some kind of a sale.

No doubt many people enter into such agreements because they feel it is the only way to obtain that which they seek--a house, a loan, a business proposition--and many don't consider the effect of such clauses, which is what the corporation counts on.   Luckily for my friend in the above-scenario, he, being an attorney and well-versed in our profession to imagine the worst possible scenario happening, walked away from the deal.  He didn't have to have the condo, though he would have liked to own it.  

In many others' cases, though, the option of walking away may not be there, nor do they have the bargaining power to negotiate a clause out of the agreement because of the financial disparity of power.  One would think that such a time might be the perfect opportunity to be more fair; I think most see it, however, as simply one more business opportunity.  

It is one thing to negotiate fairly and even-handedly to a deal's resolution, and to hold a party to that deal.  It is quite another to negotiate a deal to take advantage of another's weakened position simply for financial gain, or, alternatively, to hold a party to an unfair position when one has no need for the term for which one has bargained and it is clearly a term that is a hardship on the other party.  

And it remains my opinion that exercising such greed is harmful not only to the unfortunate party to the deal.  In the condo scenario, it would have financially ruined possibly three families--my friend's estate, his mother, and his sister--and that financial burden would have trickled into other financial obligations, and so forth.  In other circumstances, exercising continued greed can mean the difference between an employee bonus in a small corporation and barely staying afloat.  It doesn't just affect you.

 

Another commentator on responsibility in the market

I heard this today while in the car.  It seems to me to pull together a lot of what we've been discussing about the repercussions of irresponsibility in capitalism, as it pertains particularly to the mortgage crisis. 

NPR Commentary Transcript

Calling all thoughtful citizens

Sometimes it takes me a while to figure out the point of things and to express it clearly.  I knew that the biopic on John Adams had struck something in me.  I tried at the time to figure out what it was.  Poorly.  I think I now have it figured out.

What amazes me about it all is that it was such a small number of young idealists who pushed through seemingly insurmountable obstacles and created a republic and a free market.  It took hope, belief, courage, and teamwork.  And it changed the course of world history.  

What is that saying I see so often by Margaret Mead?  [pause while I look it up].  "Never doubt that a small group of thoughtful, committed citizens can change the world.  Indeed, it is the only thing that ever has."

What we need now, in my humble opinion, is a small group of thoughtful citizens.  Compassionate with each other and with those around us.  Compassionate in our capitalism.  I don't know that it will create a world revolution, but maybe it will help just one person.  Or two people.  Or a handful.  Or a city.  Maybe it will catch on.  

It is also my opinion that the self-governance for which people like John Adams and Thomas Jefferson fought cannot sustain itself without self-discipline and attention to the high ideals that formed the basis for it.  Otherwise, we give the government the justification to intervene to protect the many from the tyranny and overstepping of a few.  Which, in turn, gives the government the opportunity to overstep.  It is an endless cycle of selfish opportunism.  The only way to stop that cycle is to behave in the opposite manner: to be responsible for ourselves and responsible toward others.  

That's this one citizen's opinion.  

It could have turned out differently...

This entry isn't really as much about capitalism, per se, as it is about the freedom part of the free market.  

I've been watching the historical rendering of David McCullough's John Adams.  I just watched the portion addressing the Boston Tea Party and the restraints placed upon Massachusetts after the revolt, including removing the independent governance of Massachusetts, removing the enforcement authority of the Massachusetts courts, imposing a quasi-martial law, and the economic strangling imposed when the Crown stopped all exports and imports from Massachusetts not approved by the Crown. 

It's not all pretty or romantic.  The frustrations of the people, as throughout history, resulted in barbaric acts--tar and feathering, public beatings, inappropriate vilification, and misplaced heroes.   And despite the high-mindedness of a few individuals, they couldn't bring themselves to abolish slavery at that time.  It wasn't perfect, by any means.

What strikes me, though, is how it all could have turned out so differently.  It was only a small group of young idealists who met for the Congress, including John Adams.  They were young and had only known governance under the monarchy.  Jefferson was 33 when he wrote the Declaration of Independence.  John Adams was a lawyer and worked his own farm (without slaves, incidentally) while trying to care for his wife and 4 children.  They still had hope for peace under and loyalty to the Crown.  Adams even had been asked to be a representative for the British.  Adams became involved in the Congress only when the Crown overstepped and began strangling Massachusetts, economically and forcefully.  And they were all labeled treasonous and subject to hanging for their rebellion against the King.

It could all have turned out so differently.  The irrational reaction of anger could have driven the new government into a very different set of governing documents, or the fear of something different could have postponed action until it was too late.  But these young men (and, in Adams' case, his wife Abigail) fought against the tyranny and followed integrity in their governing responses.  It was a delicate balance.

I suppose this is relevant to this blog because it was the economic strangling by the Crown more than any dictatorship-like brutality or slavery that caused our country and its principles to come into being.  --The right to earn a living and care for our families and have the dignity of self-governance.  It was the overstepping and greed of the monarchy that sparked the revolt.  And it was that overstepping that caused the common, government-less men and women to fight back together, just for the right to care for themselves.

It humbles me to read the writings of these men (and of Abigail), the integrity and courage of their responses in government and in war.  They could have quietly stood by, but they didn't.  They sacrificed their comfortable positions with the monarchy and their families' safeties (Adams' family was 5 miles from Boston and on the front lines), and they did so with level-headedness.  They were so young--many of them younger than I--and yet they had wisdom I'm not sure I have.  

It could all have turned out so differently.  As we sit in our McMansions and go through our drive-thrus and buy $300 dollar jeans, we would do well to remember that and to remember that these people were fighting for the right to purchase sugar and flour and other basic staples for the winter cold.   We would do well to sacrifice some of our comfort and our own greed in memory of that.

Economic Darwinism

I came across this article today. I am still digesting it, but I thought others might be interested.

Economic Darwinism

Personal Responsibility

There's a lot going on here.  This is an abysmal topic.  

So let me say one thing and then we'll move on for now.  If the "system" (which is really not an object at all, rather a name we put on the way we humans barter our time) is not a moral system, whether it be immoral or amoral or anything else, I see a problem.  I've voiced this to Jason and Audra already, but thought I'd drop it here as well.  

I was listening to NPR yesterday.  They were talking about whether our morals are inborn or taught (nature vs nurture).  A caller said if most of us are ruled by morals, there must be people on the earth who are amoral and maybe we can study their genetics to find out what is different- and maybe what causes a person to have morals.  

The scientist on the show said that was an interesting question and that there are people on the planet who are amoral.  They have no bias as to whether an action is "right" or "wrong."  They are psychopaths.  Their decisions are made based on something other than morals, thus they are more likely to take the path of least resistance or the most personally profitable route.  Thereby murdering, raping, bilking people out of money, or whatever else they choose.

And that's the problem I see with capitalism.   It's "market forces" push people to do things that are immoral, because the "system" doesn't make decisions based on right or wrong, rather supply and demand, profitability, risk-reward.  

Now, I'm open to the possibility that there are other institutions that are in place (or should be) to steer us  to  modify our behavior despite the market forces and do what is right and just.  Could religion be a guiding force?  Laws?  I assume so.

But the market is so big and diverse and clouded by marketing, it's hard to steer.  And most people don't care.  

Here's my question for the moment.  

If we are to take personal responsibility, despite what the market tells us to do, how far do our responsibilities go?  Am I responsible for treating my employees fairly?  What about my creditors/suppliers?  What about my customers?  What about the farms that produce the coffees I roast?  What about the people who pick the coffee cherries and cultivate the coffee trees on those farms?

What should I be accountable for?

Whither Thou Goest, Capitalism? Morality, Amorality, or Immorality?

The blog authors got into a lively debate today about several things, culminating in the discussion of whether capitalism was amoral or immoral.  Two of us (Jason and I) argued that it is amoral, as capitalism is a concept with no conscience, and that while individuals can act within that concept in a moral or immoral manner, the system itself cannot.   Brian argued that yes, of course the system can be immoral, if it has immoral results. 

I had difficulty with this concept because of my abstract thinking, but, as always, Brian makes me re-think my premises.  Unable to stop the questions in my head from Brian's points after our discussion had ended, I did some research.  While I was just SURE that the three of us were the first group on the planet ever to have this philosophical debate (I mean, our capitalist system just evolved on its own, right?), turns out other people are also having the same discussions, and several think the system is mostly moral.  I'm not nearly as smart as I think I am (we're nearing deficit territory), which likely comes as no surprise t0 many of you, and which only makes me want to be more educated about it.  

So, I turn to you good folks out there who may be reading this (including my co-authors) for any advice on reading materials about this issue. I'd like some book recommendations, both on the question of whether a system can be moral or immoral and on proposed answers to problems with capitalism, irrespective of the author's opinion on the question in this blog's title.  Anyone?

(It's probably not my turn to post, guys, but I figured a call for assistance doesn't count.  Forgiveness requested for jumping to the head of the line.  And I'm loving the discussions and what they're making my brain do.)

 

It's just business.

Growing up, I remember watching The Godfather and being confused about the famous refrain from Michael Corleone to his brother, Sonny: "It's not personal; it's strictly business." They were, of course, talking about killing a cop and paying off a newspaper to make it look like the cop was dishonest and mixed up in the drug racket. This, naturally, was accompanied by other similar "business" practices, like famously leaving the head of a prized racehorse in a dissenter's bed.

Apologies to all the guys out there who love The Godfather, but I didn't get it then. And I still don't get it. I have continued to hear that refrain repeated by others in the business world--It's just business--when talking about lesser evils: duping someone into paying more for a product or a piece of property than they think it is worth, or buying something for "a steal." Certainly nothing illegal about any of that. What we are made to understand by this refrain, though, is that what seems to me like taking advantage of another human being's poor circumstances or lack of education or lack of understanding is merely "business," and is an accepted and even lauded practice. We shouldn't let our emotions or our compassion stand in the way of a good business decision, no matter the cost to the other person on the other side of the table.

I have often questioned this practice to myself (and, of late, to Brian). The ethics of it don't work for me. It seems immoral, selfish, and downright mean. But this isn't a blog about morality (mostly); it's a blog about capitalism and the practices in it. I posit, however, that acting as though everything is "just business" without considering the effect to the person on the other side of the table is bad, not just because it lacks compassion, but because it IS harmful to persons other than the ones on the losing side of the deal. In other words, I posit that a compassion-less capitalism is harmful to capitalism.

As an example, take the recent subprime mortgage debacle, in which banks lent money at greater than 100% on the dollar to people who likely were never going to be able to pay it off. It was a get-rich scheme taking advantage of the real estate boom, low interest rates and, most importantly, many people who didn't understand the financial trap into which they were entering. It was lucrative for a while. But then interest rates went up, the economy went down, and now the largest lenders are having to request bail-outs, and massive foreclosures in some areas are driving real estate values into the toilet. And it hasn't only hurt the players in the deal--the mortgagor and mortgagee--it is now affecting the entire world market as fears about the United States credit situation cause massive sell-offs elsewhere.

And yet, meanwhile, CEOs in charge of the lending institutions at the heart of the problem exit with massives payoffs. (A much more reasoned and informed discussion of this can be found here: http://www.newsweek.com/id/98099).

It seems to me that this should be an obvious corollary of the butterfly effect: A lender takes advantage of a financially naive hourly wage-earner, and across the ocean, the Chinese market collapses.

But I'm not an economist, and I'm only recently a business-owner. I'm more of a humanist, hoping that there is a place for me in capitalist societies. Hoping that, just maybe, it's not just business.

I look forward to hearing what others think.

Thanks, Brian, for raising your hand.

I'm raising my hand

I feel sort of like I did in college. Sitting in class with questions in my head, thoughts to share, things to say, but not really wanting to speak. I'm not sure, but I think it was a combination of things that kept me from it, and possibly the same things today: perceived apathy on behalf of my classmates, not wanting to draw attention to myself for fear the teacher would think I had some answers (and I might be wrong), and the knowledge that if I didn't know the answers to my questions, no one else in class did either (so someone else might ask or we'd all stand a chance of getting it wrong). I prefer to sit back and listen. I learn more by listening than I do by talking, usually.
But I guess this time, it's not enough to sit in the back of class and hope someone else asks the questions I have.
I have opinions, but are they right? Maybe a running dialogue will help sort out some of the opinions I have that may have holes in them.
So... let's talk about capitalism.