If there is a silver lining to the increasingly ominous specter of a global financial meltdown and the far-reaching implications of Great Depression-like scenarios, it should be the opportunity to move from “greed economics” toward a global green economy. Global capitalism as we know it has imploded with the collapse of Lehman Brothers, Bear Sterns, Merrill Lynch and such other giant investment and insurance houses, and the future is frighteningly uncertain.
But if out of this mess the global economy is more decidedly weaned from the financial world’s propensity to “make money from the movement of money” (what, pray tell, do “derivative contracts” and other exotic futures instruments mean to the average citizen?) and shift it to the creation of new, real value — new technologies, innovative materials and industrial products that sustainably meet energy needs and address eco-efficiencies — then there is hope for economic renewal, and, indeed, a real chance to curb global warming. Jacques Attali, founding president of the European Bank for Reconstruction and Development, would call it a “Global New Deal.”
Countries with powerful reserves — China, Russia and other oil-producing countries — could well finance “greener” infrastructure projects, especially in sustainable and renewable energy, in the developing world to be built among others, by leading American companies. This would ignite broad growth in the “real economy” of actual production and human invention, argues Attali, who recently wrote the trenchant book “A Brief History of the Future.”
It is time leaders took the Herculean challenge of restoring balance in the larger economy and the underlying factors of ecology with the “urgency of now.” The $700-billion bailout of Wall Street is touted by the Bush government as “pivotal for Main Street jobs and homes.” But as several scientists would propound, such a bailout sum — or a fraction of it — will go a long way in “bailing out nature.”
Just think what wonders a hundred billion dollars can do to repair damaged ecosystems, restore biodiversity loss, curb pollution, support technological innovations and renewable energy use, and put in place mitigation measures for climate change — especially in the vulnerable regions of the developing world. Such environmental threats to human health, food security and continued access to clean water, after all, are inextricably tied to poverty indices and the incapacity of millions around the world to meet basic needs and attain higher standards of living.
The contradictions of global capitalism have led to the crisis of overproduction, or as social scientists would have it, “overaccumulation” and “overcapacity” — the buildup of “tremendous productive capacity that outruns a population’s capacity to consume,” given widespread poverty and inequalities around the world that limit purchasing power and reduce overall profitability. Moreover, the financial economy of unbridled speculation or “squeezing value out of already created value,” as sociologist Walden Bello would describe it succinctly [Read Bello’s column], has only exacerbated volatilities in the world economy, such as crippling oil and food price crises; and have ultimately added to the ruin of the earth’s vital life-support systems of fresh water, clean air, the seas, forests and land.
In the wake of the largest financial collapse since 1929, this crisis should perforce move economic planning and activity toward what environmental/eco-efficiency advocates Dan Esty and Andrew Winston refer to in their book “Green to Gold”: the locating of sustainability and new green technologies at the center of business strategy and government policy. The future of humanity surely depends no less on how society embarks on a sustainable track with regard to both energy needs and environmental requirements.
This requires nothing short of folding environmental stewardship into corporate culture and the running of businesses. This likewise calls for increased and more effective global governance mechanisms and, yes, supranational responses. By necessity, governments and civil society actors will have to take larger roles, and what may have been a heretofore near-absolute faith in the self-correcting nature of free markets will require serious revisiting.
These interventions will have to come in various forms — whether in terms of clear country and regional targets for the United Nations Millennium Development Goals or the accountability and commitments of nation-states and governments in global stewardship instruments like the Kyoto Protocol, among others. The world’s economies and the world’s six billion inhabitants deserve no less.
Only then will new social contracts emerge, or a Global New Deal forged, with greed economics supplanted by a global green economy that drives long-term growth … and heals a battered planet.
Neric Acosta was Liberal Party congressman of Bukidnon province from 1998 to 2007 and principal author of the Clean Air Act and Clean Water Act; he is now a professor at the Asian Institute of Management.
THE RECENT SHUTDOWN OF MANY companies and plants in the services, manufacturing and electronics sectors in the country and the subsequent mass layoff of workers spawned by the economic downturn in the United States call to mind the wave of corporate scandals that shook the international business community in the last two decades.
Foremost among these scandals involved Enron Corp., which was then one of the world’s leading energy, pulp and paper, and communications companies, employing about 25,000 people. In 2001, it filed for bankruptcy in New York after authorities found that it had concealed its debts, following its involvement in shady deals and fraud and colluding with Arthur Andersen, its accounting firm. It turned out that many of the debts and losses Enron had incurred through the 1990s were not reflected on its financial statements. Arthur Andersen was found guilty of obstruction of justice in 2002 for destroying documents related to the Enron audit.
Still recovering from the shock created by Enron, the business world was subjected to another scandal involving WorldCom, whose top executives admitted to committing a multibillion-dollar accounting fraud.
Here at home, one is reminded of the Dewey Dee affair in which the industrial magnate borrowed heavily in the commercial paper market in the 1980s and then fled the country, leaving behind a billion-peso debt and shrinking the market.
Remember Dante Tan and Stanley Ho? Aside from earning the ire of Church officials, they scared the living daylights out of top honchos and traders of the Philippine Stock Exchange (PSE), which was left precariously perched on a tree branch about to snap. The PSE later uncovered heavy buying and stock price manipulation by Tan, with many investors incurring heavy losses.
It’s a fact: Corrupt leaders are legion. Although these scams have eroded investor confidence, the greater problem involves accumulation of monetary and material wealth driven by corporate greed and corruption, which have sent innocent workers out of work.
The basic problem, says US professor and author George Panichas, lies in “an absence of a culture of shame” of which corporate greed is cruelly symptomatic.
He says the pursuit of what is shameless is often equated with creative freedom. “We are so governed by our temporal absorptions and adventurisms that we ignore moral and spiritual considerations. We think of shame no more than we think of sin,” he says.
“Shame, no less than words like virtue, honor … has become an empty word, or just another expedient word that belongs exclusively to social and political vocabulary, in which words often signify anything or nothing.”
American writer Fred Flanagan looks at corruption in business and government in a different perspective. Writing for an American political party commentary website, he says everyone wants to have financial security but the reasonable desire for it shouldn’t be confused with the problem of greed.
“How many homes and cars are needed by one individual?” he asks. “When I hear political leaders talk about working hard on people’s business, I don’t think they understand what ‘working hard’ means. To me, working hard is a housekeeper cleaning hotel rooms all day for a minimum wage, a coal miner working in the coal mines all day, and parents working two jobs to support their family.”
Obviously conscious of his own mortality and somewhat dissecting the compulsion to accumulate by stealing, Flanagan says he thinks some people acquire great wealth because no one has told them they can’t take it with them when they die.
One possession political and corporate leaders can take with them, he says, is their good name–a legacy worth more than any material possessions.
This writer couldn’t agree more. Society desperately cries out for leaders who are honest, honorable and virtuous. But that’s the subject of another article.