The initiative against mass immigration: Is it really just about immigration policy and economic success models?

A lot is at stake with the upcoming initiative against mass immigration. With the termination of the agreement on the free movement of persons with the EU (one of four fundamental freedoms), all the bilateral agreements between Switzerland and the EU might begin to totter. Economic circles are fighting the initiative at the forefront by stressing the importance of the free movement of persons in order to meet the demand for qualified labor. In this view, a change of course could only happen at the expense of the economic success model Switzerland.

Economic circles tend to argue similarly with all initiatives that could have negative effects on them. In their perspective, this is understandable in principle.

Personal thoughts on a keynote speech on social business

Last week I attended the Social Business Conference 2013 organized by the Swiss-based think tank ‘Social Business Earth’ in Lugano. The keynote speaker was none other than Muhammad Yunus, pioneer behind the microcredit movement and the idea of social business as well as Nobel Peace Prize Laureate in 2006 for his achievements in this context.

I have been told that the economics professor from Bangladesh is renowned for his vivid, inciting and authentic narrative speeches about the early days of microcredit. And indeed, Yunus first told the enthralling personal story of how it all began and how he came across the idea to grant a few dollars to a group of women in his hometown in the mid 1970s. At the center of his keynote speech were, however, a few more general arguments that sounded very familiar to me as a stakeholder theorist. Therefore, I would like to reflect on three basic thoughts raised by Yunus in this blog post, which I believe are universally valid and very much in line with the underlying aspiration of our ‘people for people’-initiative.

First, Yunus mentioned that it was a live-changing moment for these women to be able to lend money at reasonable interest rates in order to engage in income-generating activities. In this way, they became independent from loan-sharks and felt as equal business partners, respected and formally credit-worthy. According to him, their appreciation in return was the most rewarding part. This made me think; isn’t it essentially much more rewarding to make people or the natural environment a bit better off at the end of the day, rather than dedicating your time to the sole pursuit of money?

Against this background, the second central question raised by Yunus was about the purpose of business in principle. To put it simply, does society serve economy or does economy serve society? In this regard, I agree with Yunus that everyone needs to ask themselves the fundamental question of whether they want to work for a profit-maximizing company or engage in a business that is committed to solve a social or environmental issue, but like any other business is run financially sustainable. In simplified terms, the bottom line of this dilemma is the personal preference between worshiping financial enrichment versus social wealth. Having said that, attention needs to be drawn to the fact that most of the world’s population is not in a position to have this personal choice.

Finally, a crucial aspect with a look into the future is how we can promote the infiltration of the social business rationale in today’s economic system. Yunus argued that the vision should be to set up a social business sector parallel to the established, and currently transforming, capitalistic system, so that people are able to make their choice. However, I argue that the ultimate goal should be an economic system, which is based on a dual value proposition, insofar as it combines profit-seeking business with a positive impact on society and the natural environment.

Marc Moser

Of American “Libertarians” and European “Common Good Economizers”

Which type of economic (and political) system one favors is largely dependent upon what kind of a notion one has of what it means to be human, more specifically, a ‘successful’ or ‘good’ human being - and by extension also a “successful” and “good” society. Yet if our prevailing economic system ought to reflect our collective values of what it means to be successful or good human beings, then it is striking just how unsatisfied we are with the status quo. According to a study by the Bertelsmann foundation, roughly 90% of all Germans and Austrians pine for a new economic system (this figure is likely to be even more striking in economically weaker countries such as those of southern Europe). While the current economic system still tends to find more champions in America than Europe, also the citizens of this largest of capitalistic nations are ripe with frustration, disillusionment and cynicism. The colloquial expression “Corporate America” has long since become synonymous with some large, deceitful bureaucratic machinery that is not governed by the principles of merit, honesty or creativity, but by its own aloof and singular logic of marketing (products and the self, as in Me, Inc.) and Washington DC lobby power.

Yet while Europeans are inclined to seek reform via a notion of human nature based on caring empathy, collective cooperation and sharing of wealth, Americans tend to look towards human success through the prism of healthy competition, individual freedom and merit-based creativity. Never mind that creativity, freedom and caring mean different things for different people, as also to most Europeans and Americans. The point, and difference, between the predominant American versus European stance to fundamental reform is in where in the hierarchy of daily self-awareness these rather ill-defined notions figure. Permit me a brief, although clearly simplified, analysis.

The American is apt to become emotionally roused by anything that threatens his or her “individual freedom” or obstructs the reaping of “merit based fruits of hard work” (both often linked to property rights). This is why Americans, even if they are among the majority of citizens who are demonstratively increasingly among the losers of the current economic system, still tend to extol laissez-faire “free markets” (note the catch word “free”) while scoffing at European notions of statism and “socialism”, which for many is nothing more than the ante-chamber to full-blown totalitarian communism. Thus, a creative, typically American response to the current problems has been in the form of “libertarianism” (See for example the “Libertarian Party” (https://www.lp.org/, or the partially aligned Tea Party movement (http://www.teaparty.org/).

The European, on the other hand, is prone to get emotionally worked up about anything that threatens his or her sense of fairness and material equity, which is looked upon as the direct result of cooperation, sharing and caring. This is why Europeans, even if they are among the relative winners of the current system, tend to still prefer an economic system that constrains wide income disparities and distributes wealth, despite state-coffers that are neigh bankruptcy, and are suspicious of “markets always know best” and are repelled by the winner-takes-all ethos so prevalent in the USA. Hence, a contemporary innovative, typically European solution to the current malaise has been in the form of an “economy of the common good” (see for example, the GWÖ http://snipurl.com/26rosb9).

While an adequate elucidation of what “libertarianism” and “common wealth economy” designate is beyond the scope of this brief analysis (the reader is encouraged to read more on it!), it is once again telling to simply look at the etymological roots of the involved wording. In as much as all words are reflections of the reality we human beings are conscious of, it is the words – and associated stories – we are personally and culturally exposed to, that create our notions of “good” and “successful”. Hence the cultural narrative of “the land of the free and home of the brave” as per the American anthem can easily be understood as freedom from governmental interference and brave, merit based self-determination, while a common European narrative as in the French motto “liberté, egalité, fraternité”, not just enjoins freedom, but notably stresses equality and brotherhood.

At the end of the day, our political leanings and thus our economic preferences are more of a function of our emotions than any rational analysis. They are formed by our personal histories as much as by the histories and stories of the countries and cultures we are part of. A fundamental question that this raises is where and to what extent an international consensus is required and even possible in creating a global economy that is socially and environmentally sustainable in the long-run. Clear is that the effective stewardship of our world economy simply requires domains where all stakeholders are not only involved but also sign on to. The process must be along the lines of libertarianism in as much as any directives cannot be imposed upon individual countries, but the results need to transcend particular interests and be more along the lines of a common good.

Manuel Dawson

How Economic Individualism leads to Anarchy. And a possible Way Out

In Thomas Hobbes’ (1588-1679) prominent state of nature every individual fights against all other individuals. Each individual does so to survive: When I kill my neighbor he can no more steal my belongings or kill me, I am consequently safer now. Hobbes’ state of nature is an individualism-based condition of anarchy: Neither laws nor governments nor any form of contracts exist. His ultimate objective is to find ways to leave or avoid this condition.

 

The individualistic concept was new then and characterizes many schools of thought in the modern period. Among others, the neoclassical theories in economic sciences of the 20th century generally rely on the methodological individualism. Each individual aims to rationally maximize its utility accordingly.

Through neoliberal politics these theories were implemented in many countries in the last 30 years: The transfer of theoretical concepts like the methodological individualism was essentially (although not exclusively) transferred and supported by such politics into the real world. Today, they structure to large parts the perception of how the economy functions and what it is in reality. This thinking is also based on competition because others are understood as (potential) competitors. The assumption of this politics of deregulation was that market-ruled competition alone establishes the most effective and efficient solutions.

 

Yet, individualism (as also competition) is not bad per se. Every one of us is an individual and it is nothing else than self-evident that individual rights need to be protected. But, the methodological individualism as the one of economic provenience was implemented at the cost of the community. In Switzerland e.g. voluntary community work is strongly decreasing (e.g. there are less football coaches for children). People are too busy with their individual job career and want to score (financially) in their personal competitive game.

 

The strong individualism of today may be seen as a kind of a global state of nature. Some examples: The exploitation of workers and local communities by transnational corporations is fostered by political deregulation and missing cooperative global governance structures: Responsibility is left often to individual managers; because of removing or not establishing regulation it is often made easy for managers of firms to enrich themselves excessively. Conversely, single individuals can trigger shitstorms against firms by posting individually declared violations of political correctness in the social media. And, as mentioned, voluntary community work is decreasing. The neoliberal politics of deregulation thus led at least partly to conditions which for Hobbes were imperative to leave in place.

 

A possible way to balance the corrosive consequences of such overreaching (economic) individualism on communities is that we, the civil society, begin rebuilding voluntary, non-market based cooperation between us citizens. A stronger togetherness between neighbors and friends etc. can foster the creation of values that provide a whole society meaning and vision. The economy can rediscover its role in and for society by cooperating more seriously with and for stakeholders.

 

Of course humans are competition-oriented individuals but they are also cooperative and social beings needing mutual value and meanings. The sociologist Richard Sennett and communitarianists often write about the importance of cooperation and togetherness in civil societies. And the stakeholder theory explains the advantages and appropriateness of an economy understanding itself more as a part of society and related to stakeholders.

 

 

Claude Meier