After studying more about the issues of debt in many impoverished nations, the question that kept coming to mind was,

Where is all the wealth?

A healthy world would undoubtedly have sufficient resources to feed every person, to provide health care and to give each individual a decent living. But success continues to elude the global community.

The situation of poverty in many countries is deplorable. Expecting impoverished countries to get themselves out of poverty is unreasonable because the impoverished are trapped in a causal loop. Poverty removes the possiblity of adequate education, health care and proper nutrition for billions. Each of these factors reduces the probability that children of the next generation will have incomes sufficient to allow them to pay taxes. WIthout taxes, the governments are unable to pay back billions in loans that have accumulated over the years. While they strive to provide security and a minimal form of governance, they are saddled with crippling  interest payments on loans of prior generations.

How should wealth be re-distributed?

» Continue reading “Debt relief of Africa and Impoverished Nations”

After even more thinking about how to address issues of social in-equality, I updated the original article.  So here is the updated version.

Trickle Down Economics isn’t working the way it was intended and never did.

What’s really happening is more like the separation of Oil and Vinegar. The more you let an economy stagnate, the more the wealth floats to the top like Oil and ends up in the hand of the rich with less in the hands of the poor. But having all the oil on top makes terrible salad dressing. Separation continues until someone creatively does something about it.

There are two scenarios that we are seeing playing out (and a third scenario that could make a difference):
1) The poor can shake up the economy or,
2) The rich can shake up the economy or,
3) (The government can shake the economy)

The Solution of the Oppressed

Occupy Wall Street, riots in the Eurozone, and North Africa’s Arab Spring are all examples of how the oppressed tend to shake things up. Since their resources are limited, they use whatever means they have available to them. Rioting and demonstration is one tool. Their other tool, if they are lucky enough to live in a democracy, and wise enough to recognize myths of the economy, is to vote for representatives that actually support their interests. Here is an article that accurately dispels one of those myths and which also supports the Salad Dressing Theory of economics.

A Rich American Destroys The Fiction That Rich People Create The Jobs

(A note to be added. After attending a conference on Social and Economic Development, I am learning about a few other concepts which have been working for impoverished people particularly in the global south where many groups of women have been encouraged to work together to save small amounts of money each week (0.15cents/each) and gradually they learn business skills to be able to take this small amount of collective money and begin their own businesses and their own community lending programs without the benefit of micro-finance organizations. Although such efforts should be unnecessary in the global north, whether such collective efforts might help the poor in our communities to advance and have a greater voice is an interesting question. During their collective community meetings, the women learn not only to address financial needs of the community but also designate a part of their meetings for addressing social needs. In some of these groups, men have been allowed to participate as long as they don’t attempt to subvert the power of the women. )

Solution by the Wealthy

If the wealthy recognize the fundamentals of this principle (i.e. that the wealth always rises through the instrument of profit), they should have no fear in shaking things up.

In order for the economy to be revitalized by the rich, it has to be shaken to mix the wealth into the poverty just as oil into vinegar in salad dressing. Since, wealth naturally floats back to the top, there has to be a way of continuously pumping the wealth to the bottom members of society. Only then will they have enough money to spend to keep the economy moving.  The article above rightly points out that Henry Ford realized this principle and ensured that he always paid his workers enough to become his customers.

Another way, however, is through investments in the poorest sectors of society that benefit the poor in tangible ways. The following article is another example of that kind of mixing. Adidas is planning to sell a kind of Reebok running shoes in India for $1.00 using local labor and materials. At first, they may loose money but it will come back to them in the form of social capital and eventually profitable business.

What, Why: How can Rebook sell trainers for $1

(Note: One of my classmates rightly pointed out an interesting environmental issue with this, namely that if the trainers are built too cheaply or with non-recyclable materials, billions of used trainers will clutter-up land fills. Good point Greg, lets hope that Adidas contemplates plans for recycling, provided incentives for returning them, and thus reduces their material costs.)

Similar to the Ford example, the Tata Nano, a $2000 car, built for the masses in India, helps get families off dangerous motorcycles and into cars and is another great example of making products that the masses can afford.

(Note: The concept of having individual transportation driven by gas is ultimately not sustainable, so while I cite this as an example of creative economic stimulation that helps the masses, I actually hope that India and all other counties for that matter very quickly recognize the need for better designed communities that limit transportation requirements, improve public sector transportation systems, engage renewable power and utilize electric vs. gas vehicles. Are there any creative electric bus builder out there that wants to step up to the challenge with a solar powered transportation solution?)

If we want to look at solutions to many of the economic problems, the wealthier countries, companies and individuals need to create vital and thriving partnerships with the poorer nations and people to provide opportunties, goods and services which genuinely benefit the poor. As the poor benefit from wealth, the rich will also benefit.

The Government Solution

Government can play a role by building sustainable infrastructures, developing renewable energy powered transportation systems, investing in education and research and through taxation of wealth, wherever it is hiding, to redistribute some of it to the majority of the people in the world who are becoming poorer.  Higher taxation is  necessary especially if the wealthy are unwilling or lack the creativity to shake things up.

Sharing Ideas

If you agree with the Salad Dressing theory of Economics, please feel free to Share this article in whatever way you would like. Post the link, share through facebook, linked in, or Twitter or add to your bookmarking site.

Wishing you all good health and happiness,

Garth

The Problems with Occupy Wall Street

Whenever I see the news about the demonstrations on Wall Street, commentators ask questions about demands and conclude with statements like ”the demonstrators have no clear demands” but frequently point out that they share common frustrations.

The challenge lies in the complexity of the situation which has several underlying and intertwined causes. Although they perceive an injustice somewhere in the economic structure, they don’t know exactly where to place the blame, and they don’t appear to know what to do about it other than voicing their anger. I have yet to hear any suggestion on what they want done or who they expect should do it.

In this article, my attempt is to articulate what I believe are some of the underlying issues and a few potential solutions along with who should take action.

» Continue reading “Articulating the issues of Occupy Wall Street and possible solutions”

The massive move to unbridled consumption began in the developed countries before 1971 and resulted in the decoupling of the US dollar from the gold standard. According to Mike Sheldock (MISH) in his article Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold’s Honest Discipline Revisited and Hugo Salinas Price’s article The gold standard: generator and protector of jobs, the Bretton Woods Agreements of 1944 held that the US currency was the standard currency based on the concept that, at any time, if any country had an excess of US currency, they could demand an exchange of Gold from the US Reserves. Accordingly, every country would at least make the attempt to maintain a trade balance. In 1971, Nixon declared that the US would abandon this agreement and no longer pay back demands for gold at any price because they had already accumulated substantial debt through the printing of US currency to pay for their growing needs, essentially giving themselves credit that was backed up, until then, by their gold reserves.

Prior to 1971, as a result of US money being backed by gold, all other countries followed the US dollar. The US had an obligation to try not to allow themselves to get too far out of alignment. However, as the US continued to allow their trade deficit to grow, being the only country with the right to print US currency, they eventually found themselves with a substantial trade deficit. So much US currency was in the hands of other countries that they could not be able to pay it back in Gold without bankrupting or substantially depleting their gold reserves. As a result the US dollar was sharply devalued against gold and the price of gold has continued to rise ever since.

By abandoning the gold standard, the US opened the doors to printing as much money as they wanted giving themselves unlimited credit and an unlimited trade deficit. Now that severe trade imbalances are showing up everywhere, it is becoming more and more difficult to reconcile accounts without extreme devaluation of certain currencies and getting hold of trade imbalances.

What Mike Sheldock and others are advocating is a return to the gold standard. The problem with the gold standard is that it would still be essentially controlled by one country and the temptation for that country to print money would still be more than it could bare. Would he advocate that standard if Chinese currency was the central currency? Probably not.

Gold in fact, is nothing more than a mineral, no more meaningful than any other mineral except in the meaning that has been ascribed to it by mere mortals. The solution, in my perspective is not returning to the gold standard, but rather, a solution that was proposed by Russia and China during the financial crisis of 2008, (i.e. to move to a Global Currency), as I also suggested in an earlier article Global Economics, the G20 and a call from the past.

Some might argue that the problems in Greece, Portugal, Spain and Italy are as a result of their inability to fluctuate their currency against the Euro. I would suggest that their former ability to fluctuate currency caused a negative trajectory that finally became apparent after taking on the Euro as their standard.  Now, as a result of not being able to fluctuate their currency, they are having to address internal issues that exist long before the current crisis. However, that will eventually be straightened out. True it will require painful austerity measures to make the necessary social adjustments but after having done so, they will resume their course of living more sustainably.

Similarly, others would argue that the trade imbalance in China is because they won’t allow their currency to fluctuate against the US dollar. To some degree this is true. However, the introduction of an international currency would cause this problem to disappear altogether because a day’s work is a day’s work, irrespective of where it is done. The simple fact is that growing unemployment is as a result of unrealistic expectations on the part of some citizens in some parts of the world expecting that they can be better off than the rest of the world forever without equivalent productivity. It’s simply not a reasonable assumption. China’s growth in wealth is actually a good thing for the US because it implies that the process of equalization is beginning. It’s not that I would want anyone to suffer. Rather, in order for all of us to prosper, we need to prosper together and to do that, we have to be on more equal footing. The suffering in some parts of the world is simply unjust. The wealth that is being gained by a few very rich in the world is also unjust.

Imposition of a Global Currency would be a painful proposition and not something that should be done over night. I would propose that a timeline be set whereby the gold standard would be re-introduced for an agreed period, that all currencies be allowed to fluctuate within that period to allow for reasonable adjustments to the current trade imbalances, and with the understanding that after that agreed period, a global currency would be introduced.

Once there is a global monetary policy that recognizes currency based on human productive value, all of the nonsense trading, the artificial value of Gold, the unbridled credit given by the US to itself, and the unreasonable expectations of countries, disappear entirely. This would also bring about a more sustainable level of growth based on true exchange of value for value. Everyone would need to learn to live on a more level playing field. Also much of the world’s no-value trading (i.e. the forex) would become a thing of the past, taking away a tool that has allowed the rich to get richer and forcing traders who are providing no real value to anyone to something more valuable.

A radical thought perhaps but one that I believe will take the world much closer to solving some of it’s financial woes.

Until Next time,

Garth Schmalenberg

Please feel free to share this article with other by e-mail or by other means.

I’ve just completed my first residency in the Human Security and Peacebuilding MA program.

To date, the program has been fascinating and it had a great cohort comprised of Diplomatic, Disaster Management and Business Consultants, Military Officers, NGO leaders and a few recent graduates all of whom were delightful people. What they share most in common is that they all deeply care what happens to other people in the world and they all share very unique perspectives on the world, born of their unique experiences. I’m looking forward to working with each of them in the field of action and learning.

What did we cover? Dr. Hrach Gregorian took us through topics such as Globalization in it’s many dimensions, Economic, Logistics, Global Security and the Right to Protect (R2P), Food Distribution, Global Financial Institutions, Civil Society Institutions, NGO’s, the UN, World Bank, G8, G20, IMF, Businesses and others, outlining the theme of how interconnected the world is. We looked at how even the best laid plans to make things better have unintended consequences on Human Security due to the complexity of linkages.

We looked at how Aid sometimes did more harm than good, and at the various examples of Truth and Reconciliation commissions, the history leading up to them, how they did their work, and the outcomes.

An invited guest speaker Ambassador Jeremy Kinsman, shared with us a glimpse of his deep understanding and knowledge of civil society, the impact of democracy, how democracies are formed, and a few of the  requisites of democracy such as minimum standards of per capita average income and a basis of experience in civil society.

We looked at the definition of Human Security and how some countries regarded it in its’ very simplest form (i.e. ensuring adequate food, physical security and shelter) while the UNDP in its’ 1994 statement outlined Human Security in terms which made it much broader and more difficult to contain, and which forms a basis of society that looks beyond nationalistic borders.

And we looked at differing views on military spending and the strength of the military industrial complex. Some papers argued that it was a necessary deterrent and that it was supported by democratic votes, and, others argued, that military spending, especially on nuclear deterrents, but also on the build up of conventional weaponry, is both a flagrant and immoral use of huge sums of money which usurp the development of civil society; efforts to educate, feed and assist the masses of suffering souls. It undermines the support that would binds nations together in mutual security efforts.

If you’re interested in where I stand on the issue, I found the latter argument to be much stronger and better researched. Rather, than creating a more secure world, military spending assures the continuation of power struggles that keep nations apart. To be sure, some reasonable semblance of physical security and military strength must be maintained at the international level and R2P is a reasonable concept given that there are some ruthless rulers willing to destroy their own people in order to maintain power, but it is hard to argue that any one nation should maintain a constant threat over others, and, at very least, an effort should be made to begin reducing the military industrial complex in favor of increased research and development on other issues. Even a reduction of 10% of the world’s military budget if redirected to development efforts would solve most of the funding issues facing humanities efforts to develop civil society and ensure an adequate measure of other dimensions of Human Security for all nations. And the concept of MAD (Mutually Assured Destruction) enforced through possession of nuclear weapons makes no sense. No world leader, however outraged they may be, by an attack on their country, could ever morally drop a nuclear weapon on hundreds of thousands, if not millions, of innocent people, most of whom don’t even support the aggressive governments who profess to represent them. Such an action could only be regarded as a war-crime. The military complex that continuously builds weapons and sells them to under developed nations only serves to assure the continued suffering of innocent people and guarantees the continuation of militaristic domination by the few. Those who would argue that militarization is brought about by democratic votes haven’t bothered to consult the countless billions who suffer as a result. (so much for my rant)

We also talked about the types of democracies such as representative democracies, each method of which has its’ strong points and flaws, as well as direct democracy, such as the California approach, where the state has been decimated by referendums, where the people can vote for increased spending with a 50% +1 vote, whereas additional taxation must pass by a 2/3rds (66.6%) vote. Imagine a system that allows the citizens to vote for spending increases far in excess of tax increases and allows the state to go broke and destroyed its’ own educational system, subjecting it to even greater challenges in the future.

We also looked at examples of the world in conflict and ways that we can contribute to reparation through the development of the economy through major industrial investments, micro-finance, and through commercial partnerships which provide agricultural and tourism based incentives to less favorable industries such as growing opium poppies, through anti-corruption programs for polices forces, through human rights training for army leaders,  and by the use of sports and other educational programs for developing skills and cooperation.

Dr. Robin Cox lead us through the process of gaining understanding of the world of being, Ontology, and of our own way of knowing and various ways of making meaning of the world, our Epistemology. And we looked methodology and the various methods used for doing both Quantitative and Qualitative research.  We also learned how to review scholarly works, to do a proper research proposal, to do literature reviews, to write research questions.

Colleen Hoppins gave a wonderful and very entertaining presentation on research Ethics that still has me chuckling when I think back on it.

And Retired Rear Admiral Roger Girouard shared his unique perspectives and challenged our thinking on other elements of Human Security as a precursor to the course he will be teaching later in the program.

Dr. Kenneth Christie, Head of the program, provided both the program overview and some insights into our second overseas residency in a post conflict country and our major project work which will require us to do six months of work overseas.

My personal project goal is to work with diplomatic or civil leaders on developing methods of principle based consultation, responding to civil input,  and developing  policies for engendering economic development as well as the development of civil society, food security, peace and sustainability. (Wow can you do all that in six months?) If any of my readers know of a contact in a country looking for this kind of assistance, please have them call me.

All in all, a very powerful immersion into the world that is Human Security and Peacebuilding. I’m looking forward to the rest of the program.

All the best,

Garth Schmalenberg
1-250-815-5323

garth@hbi-leadership.com
garth@partnersforprosperity.org

As always, if you liked the article, please share with your friends and contacts, whether representing businesses, political organizations, religious groups or NGOs, by e-mail, the share button, or any other way that works for you. I’m happy to respond to all requests for collaboration or if you are looking for a speaker for an event.

Since moving to Vancouver Island, I’ve had many great privileges and opportunities. The first, without question, is the opportunity of being closer to my family. My parents are recognized by many as celebrated community members who have provided many years of constant service, music and friendship. The second is that I have moved to a community where interculturalism is experienced and celebrated. The third is getting to know community and regional leaders who are involved in creating a more sustainable community. The fourth is enjoying the music, the arts and the beauty of the island. And last, but certainly not least, is the opportunity of getting to know many First Nations friends, attending their events, learning of their suffering and challenges, benefiting from the wisdom and the experiences of their elders, feeling embraced by their warmth and friendship, and witnessing the love and compassion that many friends are sharing with them in the healthy development of capacity and culture in their youngest generation. These children are, without any doubt, learning to be both the spiritual and intellectual the leaders of future generations.

Since arriving here, I have also had the great privilege of participating with and offering my assistance to a wonderful organization called Partners for Prosperity which I’ll speak more about later and provide a link to for those who are interested in learning more.

It is said that when you set an intention, pray to God, and put your intention out to the world, in some mysterious way it the world assists you to achieve your goals. For me, my personal goal in life is this; that in my work and in my personal activities, in my building of relationships with people of capacity (and all have capacity), in my prayers and in the depths of my soul, that my focus may continue to be on bridging gaps in understanding; between people and organizations, between countries and leadership, between those who find themselves in conflict who are unable to resolve issues on their own, between those who are privileged in the material sense and those who, though needing assistance, share their own wisdom and the hope of a peaceful and prosperous world, between those who believe the world is crashing down with issues related to sustainability and those who see the marvelous possibilities of the future. My efforts to connect with business, community and religious leaders, my personal studies which range from social and economic development to research papers on practical application of high tech solutions to current human challenges, my future aspirations of a Masters Degree in Human Security and Peace building, my recent visit to Vietnam and my earlier visit to India to develop business relations and link foreign opportunities with North American businesses, my keynote presentations to various organizations on developing a culture of Sustainability, my service on various Non-Profit boards aimed at building business, spiritual and community capacity, my aspirations of sharing knowledge and learning through my services, my work with organizations aimed at building a culture of learning and development of leadership capacity, my continued goal of linking those who are involved in business and community leadership and those who are involved in social development, my desire to connect good hearted privileged individuals with those who would benefit from their assistance; all these efforts are aimed at developing human capacity and building a more peaceful and prosperous world. 

My intention is to continue learning, growing and sharing by offer my services (keynotes, workshops, facilitation, training, building connections and coaching) to business, community and social development leaders, or anyone else who would like better understand the forces that are shifting a rapidly evolving world, whether they share in this vision of the world or are simply curious and want to gain a greater understanding from my experience and the experience of the many people that I’ve met along the way.

Now that my own intentions are “out there”, I’ll say a little more about Partners for Prosperity.

Partners for Prosperity is an organization the is in the business of building partnerships. Whenever a need is perceived, be they local or overseas, Partners for Prosperity begins the process of engaging their growing list of partners who are able to share expertise, learning, experience, material goods, and, in some cases, funding. Partners for Prosperity isn’t just another NGO or Charity. They are somehow a little different than any organization I’ve seen before. They’re like glue to Social Development in the world.

» Continue reading “Partners for Prosperity”

Several years back, Nick Negroponte (of One Laptop per Child), began his quest to develop a laptop that was affordable for distribution to children in developing nations and which could use local wireless networking. While the program had it’s ups and downs, it did produce a positive result and assisted in helping many school children to have access to computers that were interconnected. What’s more important is that, in targeting a $100 laptop, he and other like him, set a benchmark for all laptop makers, who at very least, had to sit up and take notice. Bill Gates and others in the hardware and software industry at the time understandably were critical of the idea. They may not have believed he would reach this target, but they could be certain that he would try and this meant that the approach to driving revenues from software and hardware would need to evolve from a high cost per user to high number of users at a very low cost. And by setting this goal, a new paradigm was established for all hardware and software companies, especially those who wanted the program to succeed.

While we could have predicted the reduction in price of laptops anyway, as a result of continued exponential advances in technology, targeting $100 was, at the time, aggressive to say the least. Having said that, the only real question was “how long will it take”? At long last, several computer makers are building $100 laptops (netbooks) including Cherrypal and others albeit generally on an Android platform rather than Windows. 

After, more or less achieving the initial goals of OLPC, Negroponte is targeting a new $75 price point for OLPC based on a tough, ultra low energy, solar powered tablet computer with an 8GHz processor by 2012. Immediately critics of his goal cry foul stating the obvious, that he isn’t a technology expert and that an ultra low power 8GHz processer will likely not be available at such a low price by 2012. But they are forgetting the fact that this is a paradigm setting goal and, for Negroponte, I suspect it is more about setting the target than it is about his personal success at reaching the goal.  If anyone reaches the goal, the children and youth of the world are still the beneficiaries and Negroponte wins.

And, not to worry, at the same time Negroponte is announcing his goal, the  Indian Institute of Technology has already announced its’ intention of developing a $35 (about 1500 rupees) solar powered tablet which will be available for Indian students along with wideband networking at it’s 22000 universities. This goal is from a country with a 63% literacy rate and success in developing a $2000 car for the masses. What is beginning to emerge is radical life changing technologies that will not only revolutionize the fortunes of India, but of the rest of the world. Computing power and access to information will soon be in the hands of every child and every person who wants it and, I for one, couldn’t be happier.

What are the impacts on the world? » Continue reading “The 99 Dollar Laptop and the Impact of Technology on Poverty Reduction and Global Markets”

As I’m reading and studying trends related to various world issues, I noticed a few trends that gave me cause to ponder. Beyond speculation, these trends may also give us clues as to how we might organize our businesses to contribute to the betterment of the world.

For example, on reading the World Values Survey, there appeared to be a trend toward individualism and secularism until 1980, after which the values seemed to take a little bit of a reversal at least in most cases. While there was no discussion on this point in the chart, I have to wonder if there was a pause to re-think the issue of continued movement towards secularism and individualism.  

What’s even more interesting is that the Happiness Index taken by the World Values Survey suggested decreasing happiness in the US until 1980 (this same period of trending toward secularism and individualism) after which there was a reversal. The US happiness index also increased from 1980 onward peaking at 2006 during the Bush administration, although perhaps by that point with the anticipation of change on the horizon.

 Still, I have to wonder whether the reversal in trend toward secularism and individualism suggests. » Continue reading “A Reflection on Trends towards Happiness and what it means to Business”

Over the weekend, I had the great privilege of attending a conference on “Rethinking Human Nature”, an incredible array of scholars and activists who, rather than protesting in the streets, demonstrated, by their examples of dedicated service, through their studies and their occupations, their deep and abiding concern for humanity. The conference theme was about evolving and developing the capacities of the higher human nature.

Among the many brilliant presenters was a young lady who is working on her PhD thesis whose presentation was entitled “What Can Justify Duties of Global Economic Justice? Individual Responsibility, Human Consciousness, and the Oneness of Humankind”. Her name is Shahrzad Sabet. In asking the question, she began by sharing with us the globally accepted UN Universal Declaration on Human Rights. She the began to dissect the responsibilities for the implementation of these rights. To be fair to Shahrzad, I will state that the remaining text is my perhaps feeble understanding of the arguments she so simply and brilliantly presented and perhaps, at some point, I will have a chance to speak with her further to clarify or to refer on-line to her thesis work, but I can only say that after hearing what she had to say, I was completely overwhelmed by her convincing arguments recognizing that there really isn’t a minute to lose in beginning to bring this argument forward on a wide basis, and I am also quite convinced that someday this young lady will be amongst the Nobel Peace Prize winners because these same arguments will force all nations and all people of conscience to take action. Such action will come in the form of adopting laws and practices which will require all citizens of the world (or at least those who have the freedom to vote or make buying decisions), all business leaders and all government leaders to act forcefully in upholding these Human Rights by taking practical, direct and personal responsibility for implementing Global Economic Justice through their votes for responsible government representatives, those who will make the necessary revisions in government institutions, and in turn, through laws which will require all people to make these Human Rights a reality.

In nations such as Pakistan, Haiti, India, Indonesia and many others, billions suffer under the oppression of poverty, the lack of a suitable infrastructure, and through catastophic environmental impacts, while much of the world continues to enjoy their freedoms without paying much attention and governments pay immense amounts of money towards military spending and the expansion of environmentally destructive practices which only serve to further human suffering.

Her arguement goes something like this: » Continue reading “Individual (Legal?) Responsibility and Liability for Global Economic Justice”