Author: George Papaioannou

There are two serious defects that ail today’s corporate governance, that is, the system that governs decision-making authority in corporations.  First, the bulk of voting power has been taken out of the hands of individual shareholders and given to institutional shareholders, that is, mutual funds and other wealth management investors.  This has eroded shareholder democracy and has practically denied a voice to the actual owners.  Thus, we face an economy beset by the dual concentration of market power and voting rights in the hands of, respectively, fewer firms and voting entities.  Second, women and minorities are still poorly represented on corporate boards, thus leaving more diverse and important perspectives with weak influence on corporate decisions. 

There is, though, a third cause for concern in relation to how corporate boards are structured.  Specifically, they fall far short of assuring us how they uphold the social responsibility principles they claim or are expected to care for.

For most of its life, the corporation has functioned to serve economic efficiency, and in particular the economic interests of its shareholders.  The rationale for this was that the shareholders bore the ultimate risk of the enterprise and, hence, they should have ultimate authority over its management.

But then in the middle of the “greed is good” hype of the Eighties, business academics and practitioners realized that subordinating the interests of other parties to those of the shareholders could damage the economic efficiency of the firm and hurt shareholders.  Thus, the stakeholder theory of the firm was born.  To achieve long-term survival and prosperity firms were advised to pay fair consideration to the interests of stakeholders (like debtors, workers, customers, and suppliers) not just to those of shareholders.  This alignment of the shareholders’ interests with the interests of the firm’s other stakeholders was still a call for economic efficiency, and thus, still consistent with shareholder ultimate decision-making authority.

What has happened since the Nineties, though, is that the range of stakeholder interests has been broadened to include the interests of local communities, climate and environmental concerns, diversity, and social justice.  This expansion of the stakeholder concept comes from our recognition that firms do not operate in a vacuum, but instead they can generate risks and harmful conditions to be borne by all and not only by the traditional stakeholders. 

The new class of stakeholder interests falls into the realm of social responsibility.  Whereas the traditional board structure remains effective in managing decisions related to the economic efficiency of the corporation, it is time to ask:  Is this board structure still effective in managing decisions that satisfy the social responsibility of the corporation?  That is, we have to ask:  Can shareholders consider the interests of a community in a relocation decision?  Can shareholders consider the workers’ interests in acquisitions that result in downsizing the labor force?  Can the shareholders consider ecological and environmental risks if it means lower profits?  Can the shareholders give a fair chance to women and minorities of color to participate on boards and executive positions?

There are usually two ways to nudge firms toward certain behavior.  One is to rely on market forces.  Thus, debtors can refuse to lend untrustworthy firms.  Consumers can refuse to buy from unscrupulous firms.  The same way, we can argue the public could shun firms with a poor social responsibility record.  But that would require we have reliable and verifiable information about hundreds, thousands of firms the public deals with.  It would also require that the public has reasonable choices if it is to discriminate across good and bad corporate actors – not exactly an easy matter in a world of growing concentration in many important markets.  (How many have abandoned Facebook in light of its recent bad publicity?)

Another way to discipline firms is through laws and regulations.  But this approach also has limitations.  It is often the case that society’s preferences in favor of stronger environmental protection or greater diversity are not countenanced by the political powers that are.   The point is that discipline from the outside, whether the market or the government, is not enough to bear on corporations when it comes to matters of social responsibility.

But there is a third way.  The right to board participation can be expanded to parties that represent the interests of communities, workers, diversity and ecological sustainability.  This board reform is most crucial for large corporations that have a big and heavy footprint on communities, workers, the ecology and social justice issues.  To the purists of the shareholder model this reform may be an anathema.  But we have to acknowledge the corporation is not the creation of natural laws.  It is a human innovation, a legal construct, that gave a solution to the aggregation of large sums of capital with less personal risk.  Over time, the law, the regulatory authorities (e,g,. the Securities and Exchange Commission), and stock exchanges have seen the need to enforce various representation rules in order to safeguard the integrity of corporate governance. 

Now we have entered a phase of reckoning with our responsibility to the wellbeing of communities and workers, gender equality, social justice and our threatened ecosystem.  Today’s corporations dwarf in size the corporations of the past and impact important aspects of human and natural life with unprecedented consequences.

Two years ago, the Business Roundtable (an association of CEOs) revised the purpose of the firm to include the responsibility for stakeholder interests beyond those of the shareholders.  It is time to acknowledge that these interests cannot be effectively served without proper representation.  Reforming the representational rules of corporate boards will better integrate economic, social, and ecological interests and serve the common good. 

More than 2 million years ago humans started to use stone tools for hunting, carving meat and other tasks.  This may have been the first major decoupling in human history.  It was the decoupling of productivity from body strength and dexterity.  Executing certain manual tasks was no longer strictly dependent on physical strength.  Even physically weak human beings could carry out work that exceeded the capacity of their bodies.

When we trace the human history, we discover many instances of decoupling that in some cases meant the passage from one level of civilization to another, more sophisticated, more complex and also freer of certain limitations.  This does not mean that all cases of decoupling produced only beneficial outcomes.  But influential they were.  Looking through such decoupling events is another way to study human history.  Over time, I have kept notes on decoupling cases I found important and below I present a list with the caveat there may be more which I might have missed.

At some point humans leaving in cold climates discovered they could freeze meat and consume it later.  That was the decoupling between the time food was produced (by hunting and collection) and the time it was consumed.  The refrigerator industry is a decoupling-enabling industry. 

Around six thousand years ago, humans domesticated horses, donkeys and oxen and started to use them to move themselves and material belongings.  The invention of the wheeled cart further facilitated the transport of people and goods.  These innovations decoupled distance and load of movement from the strength and endurance of human legs.

The Chinese used smoke signals and ancient Romans used carrier pigeons to communicate information over long distances.  This was the decoupling of information communication from hearing and sight distance.  The telegraph, the telephone and the internet are the modern facilitators of that decoupling.

The historical record shows that about four thousand years ago someone in Mesopotamia entered into a borrowing-lending arrangement with another party and, thus, credit was born.  That meant, today’s consumption was no longer limited to today’s income.  And, thus, the decoupling of consumption from income gave birth to finance.  The human capacity to delay gratification (which by the way seems to exceed that of other animals) is behind that trade of present consumption for future consumption with interest being the sweetener. 

Using projectiles, like spears and stones, in human battles decoupled the distance of combatants from the effectiveness of their weapons.  Body-to-body fighting was no longer necessary.  Modern warfare has advanced this decoupling to its maximum extent thanks to inter-continental missiles.

The invention of agriculture brought a division of labor and hierarchy of power that changed the terms of meeting human needs.  Whereas hunter-gatherer societies strove to meet all member needs out of the common production of food, agricultural societies introduced compensation arrangements in which the link between meeting basic needs and group responsibility to this end was broken.  Thus, we entered the modern period of institutional scarcity where wages often fall short of the means necessary to afford basic goods.  Call it the decoupling of wages from affordability.

The advent of large-scale manufacturing brought by capitalism intensified the decoupling between ownership of labor and ownership of capital.  Workers would be now compensated at a fixed rate (wages) whereas capital owners would be compensated at a variable rate by claiming the final surplus or profit.  Just as the decoupling of managers and owners created conflicts of interest, the decoupling of labor and capital created conflicts of interest between wage-earners and profit-earners.   In the United States, the expression Great Decoupling refers to the divergence of productivity gains from the much smaller growth of wages after 1972.

The invention of the stock corporation in the 17^th century decoupled ownership of a business from its management.  This decoupling is now studied under the purview of agency theory, that is, how managers, acting as agents (i.e., representatives) of the owners, make business decisions that ultimately affect the economic interests of owners and how conflicts of interest can be managed.

Another interesting decoupling happened in the exchange of goods and the evolution of impersonal markets.  Thanks to the development of trust among strangers and the disciplinary power of law or custom, market transactions were decoupled from kinship and intragroup ties.  This enabled markets to expand beyond tribes and localities and become national and transnational.

In the environmental sphere, we now talk of the decoupling of environmental impact from economic activity and growth.  This means we are moving (or try to move) toward modes of production and economic activity which are neutral on the environment.

Finally, the most radical decoupling will be the separation of brain functions from the physical body thanks to Artificial Intelligence.  Robotic brains will think outside the human body.  Even more radical will be the development of artificial consciousness residing outside the human body.  These prospects, of course, open possibilities we need to carefully examine before we adopt them.

As we look into the future, one thing is certain.  The human curiosity, inventiveness and adaptation to environmental challenges will usher many more pathbreaking decoupling ideas and events.  It’s all part of our destiny thanks to our big brains, the product of cooked food made possible by fire, which also decoupled night from darkness about a million or more years ago.

Thirty three years after his death, Richard Feynman still remains a popular name in the world of physics and he is even known to the general public thanks to the popular series The Big Bang Theory.  Besides being a brilliant physicist (he won the Nobel prize in 1965) Feynman was a man who lived a full life and did not shy away from expressing his thoughts on a variety of subjects in short stories, lectures and public presentations.  The best of them can be found in a small volume titled The Pleasure of Finding Things Out.

The title truly epitomizes Feynman’s love of and commitment to scientific research.  He valued scientific inquiry not only as a source of personal intellectual satisfaction but also as our way to discover how the world works and help ourselves to live better lives.  Not surprisingly then, he defended the freedom to do research and demanded that the rules of objective and disinterested scientific research should be scrupulously respected.

To Feynman discovery of new things and ideas starts with doubt and society’s tolerance of doubt.  Doubt about the correctness or “truth” of old theories and findings is the springboard of inquiry.  Science, he argues, does not fully remove uncertainty about the questions it explores.  Science can only show that an explanation holds with less uncertainty than its rival alternatives.  This leaves the door open to doubt and further research.

In order to preserve the legitimacy of science and its findings, Feynman demanded that the scientist exercises absolute integrity in the collection of data, the judgment of the evidence and the recording of the conclusions.  To the members of the scientific community these admonishments may sound self-evident, but one would be naïve to think that Feynman’s prescription for honest science coincides with the public’s perception about the conduct of science.  The practice of funding research with grants from various industries and research done to soar up the commercial success of various products are not helping the public’s perception of science in our days.  The widespread skepticism if not outright dismissal concerning scientific findings, ranging from climate change to Covid 19 vaccines, shows that science has a serious image problem with society.  As a matter of fact, between 1970 and 2020 the percentage of Americans with a great deal of confidence in science has hovered around 50%.

In the 1970’s and 1980’s, when Feynman wrote and talked about good science, he was aware that the public had a tenuous relationship with science despite the frequent declarations that we were already living in the scientific era.  He lamented that most of the public knew so little about science and people went on with their daily lives as if they were untouched by scientific applications.  We can imagine how disillusioned and anguished he would be if he lived among us today.

As he conducted his research, Feynman remained a conscientiously irresponsible scientist declaring he was not responsible for the world he had found.  To him science was silent about its uses, these to be determined by others.  Science is there only to discover.  Nonetheless, when he was called to help in the Manhattan Project, he did his cost-benefit analysis and made the moral choice to help.

What about the role of science in a world that believes in the supernatural?  Feynman found it inconsistent and inexplicable that society requires rigorous evidence to put its faith behind scientific discoveries, and yet it seems to be uninterested in ascertaining the validity of miracles, astrology and other supernatural beliefs. 

Before critics of religion, like Richard Dawkins, Sam Harris and Christopher Hitchens, had made a splash, Feynman took up the relationship of science to religion in his usual dispassionate, academic approach trying to do justice to both.  He starts by delineating the realms of science and religion.  First, he states that, unlike religion which seeks to provide a meaning of life, science has no such purpose.  How each treats doubt is another manifestation of their different realms.  If science starts with doubt and uncertainty, religion is where both end.

Then he identifies three aspects of religion and how science relates to them.  The first is the metaphysical aspect of religion, that is, religious beliefs about the creation and working of the cosmos.  Here, Feynman argues it’s only science that can provide answers based on evidence.  In the centuries following the Church’s attempt to silence Galileo, the Church discovered that accepting scientific findings did not spell the end of faith.  In some cases, the position of the Church changed thanks to voices from within the Church.  Thus, the Belgian cosmologist and Catholic priest Georges Lemaitre, father of the Big Bang theory (the real one not its TV comedic version) was instrumental in adjusting the Church’s view toward a universe of finite (not eternal) life.  The late Rev. George Coyne, a Vatican astronomer and defender of Darwin, also played a role in Pope John Paul’s II admission that evolution was more than a hypothesis.  

The second aspect of religion is the ethical aspect, the one that gives answers to moral questions and establishes a moral and ethical code for the faithful.  Feynman says moral questions are outside the realm of science.  Nonetheless, to the extent a moral choice depends on how we answer “What happens if I do this?” then science with its empirical methodology can inform our moral choices.  That’s not different from the Socratic idea that “virtue is knowledge.”  If you know the consequences of your actions on others and you, reason can protect you from committing those actions that are harmful.

Inspirational is the third aspect of religion that Feynman identifies.  Religions need to inspire the faithful to keep their faith in the moral commands and the rituals of their religion.  It is in relation to this aspect that religion can come into conflict with science.  Religions often invoke metaphysical realities (a heaven for the righteous and a hell for the sinful) inadmissible to science which the religious person has to accept by force of faith.

Feynman was aware and concerned that friction between science and religion posed a problem to liberal societies.  He proposed that peaceful coexistence rests on the humility of the intellect and the humility of the spirit so that science accommodates faith and religion accommodates doubt and uncertainty. 

It is well-known that societies have an economic problem because they have a scarcity problem.  Too many needs and desires to be met out of finite resources.  As I have written in previous posts, different societies or social organizations have different degrees of scarcity and hence they face, correspondingly, a more or less severe economic problem.

The market system solves the economic problem through market transactions at the going prices.  And yet, scarcity always remains the elephant in the room.  By that I mean markets allocate scarce resources to people given their preferences and ability to pay but they do not ensure that everybody gets what one needs.  Thus, scarcity at the personal level can persist and when it relates to basic human needs like, say, food, this type of scarcity becomes more than a market problem. 

Scarcity of this type can extend beyond food to include the need for health care, child care, education, parental leave, retirement income, etc.  Modern societies have to grapple with these scarcities and decide which needs should not fall victims of scarcity.  Societal decisions about tackling the problem of scarcity reflect a society’s values and priorities (or biases) with respect to social and economic fairness. 

Market orthodoxy accepts that personally-experienced scarcity is the individual’s problem and the individual’s responsibility to address it.  But this view turns the unfettered functioning of the market system into a goal to which social concerns must be subordinated.  Even in America, social values and concerns have given rise to social programs, like Social Security, Medicare, Medicaid, food stamps, child support, etc.  The market view also ignores that individual scarcity downgrades society’s capacity to produce better economic outcomes.  Limiting education to only those who can afford it constrains economic growth.

These thoughts go to the heart of the debate around the $3.5 trillion budget of the Biden Administration that has stirred so much controversy.  More than the size of the budget proposal, it is the transformative implications of the programs funded by the budget that lie in the middle of the debate.  These programs include subsidies for child care, free pre-K schooling, sick and parental leave, free community college education and subsidies to lower health care costs.

We can look at this budget proposal and see another example of big government.  Or we can see it as a way to solve the scarcity problem in order to promote social fairness, economic opportunities and human development.  If we agree that scarcity of goods with social value should not be determined by one’s personal means, then the role of government becomes apparent.  Governments earn their legitimacy from their ability to solve or mitigate problems.  The scarcity problem is one of the central problems of any society, thus, within the purview of government responsibility.  I believe this is the right point of departure rather than the outright rejection of government’s role.

Those who disagree with a more active role of government in addressing scarcity at the individual or household level make several charges. 

The supply side that matters is that of producers.  Conservatives prefer to boost the production of goods and services through lower taxes on firms and capital suppliers (i.e., individuals with invested money) and less regulation.  Thus, they rarely voice objections to using government fiscal resources to fund these policies despite evidence that they hardly help the broad masses to alleviate their scarcity problem.  The reality is that both entrepreneurial and human capital are essential for economic growth.  Therefore, programs that improve the quality and productivity of human capital as well as its supply should be supported and not derisively be called welfare.

Government programs make people lazy.  There is no credible evidence of that.  Instead, studies show that the importance of incentives is over-estimated.  Conservatives often point to the lower number of work hours of European countries as evidence that government services breed idleness.  A society can choose its preferred trade-off between leisure and income by favoring one over the other.  Different societies can be equally happy with different trade-offs.  Turning the argument around, one can charge that scarcity (i.e., inability to afford) of highly-valued goods (like health and education) is an economy’s way to keep people oversupplying labor and keep wages down for the benefit of the few.

Government programs waste the hard-earned money of the people.  Not necessarily.  The agencies that run Social Security and Medicare have strong records of efficiency.  And private firms can waste resources as well.  How many of them go bankrupt every year?  If we are willing to glorify the principle of creative destruction in the private sector, shouldn’t we cut governments some slack?

Government programs misallocate resources.  This means that if a good is offered at a price below its value people will overconsume it whether they need it or not.  In some cases, this is true.  But lower taxes and breaks to private businesses can also lead them to overproduce something and thus burn valuable resources.  Misallocation can happen on both the producers’ and the consumers’ side.

Fairness and efficiency are always high in these types of debates.  Only people blindsided by ideology that is not informed by evidence can conclude that left alone an economic system – any economic system – functions perfectly and fairly so that access to valuable goods and services is denied only to the most irresponsible individuals.  When markets are incapable to produce fair or valuable outcomes, we need to employ the powers of government to do so. 

Efficiency requires that in a world of finite resources neither the state nor the private sector can be allowed to indulge in wastefulness.  But the unexamined belief that waste lies only on the government side and not also on the private side leaves a society unable to serve its citizens.

In a world where these issues are not exactly black and white, we have to ask which point of departure is most likely to produce the best results:  The one that says “If you can afford it you can have it” or the one that says “If you needed and it has social value we ‘ll try to offer it.”

Fifty-five years ago, Senator J. William Fulbright published his thought-provoking book “The Arrogance of Power” as a warning against the militarization of US foreign policy.  US involvement in Vietnam was at the time just one year old and would last for another nine years.  Its cost in lives, treasury and a demoralizing defeat was a stark validation of the book’s thesis.  Alas, the same approach of military solutions would persist for the next fifty years with no different results.  This time, this half century of misadventures has ended with the exit from Afghanistan.

Fulbright defined arrogance of power as “a psychological need that nations seem to have in order to prove that they are bigger, better, or stronger than other nations” and “the tendency of great nations to equate power with virtue and major responsibilities with a universal mission.”

Of course, the overt and covert militarization of the US foreign policy has been motivated by more than a sense of virtue and universal responsibility.  Various interests have pushed for the use of power for their own narrow purposes.  Agricultural and extraction firms with business interests in authoritarian countries in Central and South America; the defense industry that stands to benefit from the sprawling US military presence and conflicts around the globe, despite President Eisenhower’s warning about the industrial-military complex; lobbyists of foreign countries who push for the use of military deterrence to protect their clients.  Private defense contractors and consultants who benefit from the privatization of our national defense.  Nonetheless, the most specious arguments for the military approach come from conservatives and liberals who believe that democracy and respect for human rights are exportable ideals, so much so, that it is acceptable even if they come on the trigger of a gun or, these days, the wings of a drone.

This brings up two questions.  Is American exceptionalism an honest first instinct, which eventually mutates to the use of military power in pursuit of democracy and human rights abroad? Or is American exceptionalism the fig leaf that hides a more endemic preference for the use of military force in the conduct of foreign policy?  

There are reasons to conclude the second possibility is more valid, at least more often.  First, despite spending upward of $700 billion a year and maintaining 750 military bases in some 80 countries, American politicians and talking heads of mass media and think tanks try hard to convince us that our national security is at peril.  They know they cannot succeed without throwing in democracy and human rights.

Second, let’s look at the gap between mouthed ideals and actual facts.  Why support Latin American dictators if our goal is to promote democracy?  Why communist China and Vietnam are acceptable partners but communist Cuba is not?  Why accuse Biden for abandoning Afghan women when for decades we have ignored women’s rights in Saudi Arabia and other friendly countries?  Why go after Hussein on bogus charges when almost all September 11 perpetrators were the product of the Saudi-sponsored Wahabi branch of Islamic fundamentalism?

In his book “After the Apocalypse: America’s Role in A World Transformed” Andrew Bacevich, a former Army officer, argues that American exceptionalism has inspired many foreign interventions in the name of democracy and human rights.  But, he charges, this idealistic narrative excludes “disconcerting themes such as imperialism, militarism and the large-scale killing of noncombatants.”  Furthermore, the most recent interventions have been ordered by presidents who either evaded the draft or, at any rate, never experienced the horror of war.

Of the many opinion pieces that have recently appeared after the Afghan exit debacle, the most scathing is that of Farah Stockman (The War on Terror Was Corrupt, NYT, 9/15/21).  Stockman details the immense corruption of Afghan politicians and civilians as billions of dollars poured into the country.  Instead of transforming and setting the Afghan economy and society on a self-sustained path, unaccountable siphoning of money to local operatives as well as American contractors and consultants turned Afghanistan into a “rentier state” (Stockman’s term), that is, a state dependent on the largess of its patron state.

Let’s go back to Fulbright words: “equate power with virtue and major responsibilities with a universal mission.”  My reading and understanding of history make me believe this is a particularly Western attitude borne of a sense of cultural and religious superiority.  It’s not that non-Westerners (Islamists come to mind) have not acted on similar beliefs, but none has been as persistent and successful as the West.  I am talking here about the belief that our values and ways of life comply with the highest ideals and forms of civilized societies and that we have a rightful duty to spread them to the rest of the world.

Early examples of the West’s successful effort to dominate the world stage – with the inevitable cultural transformations – include the Hellenistic kingdoms following Alexander’s destruction of the Persian empire and the even more successful Pax Romana.  They were followed by the mission, not always by peaceful means, to Christianize Europe’s ethnic groups and the tortured Christianization of the indigenous people of the New World in the hands of the Conquistadors.  Likewise, colonialism, borne out of commercial interests, became the instrument of cultural and religious transformation imposed on indigenous people in Africa and Asia.

Viewed in this historical context, American exceptionalism is indeed the descendant of a long Western tradition of exporting culture and religion along economic and administrative systems to other people.  With few exceptions, we have learned that the Western model is not always transferable.  Instead, it has given risen to many failed states and civil frictions.  The disappointing results come because the West insist telling others to live with what works for the West but not necessarily for the rest of the World. 

At least one notable Westerner has realized this.  This person is none other than Pope Francis who recently criticized Western involvement in Afghanistan saying it showed the flaws of exporting Western values while also decrying the atrocities committed in the name of faith.  Coming from South America himself, the Pope’s comments echo the despair of those ancient indigenous people who saw their ways of life being erased in the name of a responsibility to spread what the West assumes to be universal values.

Returning to the blog in September reminds me starting a new semester after a long summer break.  The most challenging part of the first class of each course was to introduce myself to a new crop of students by telling them my name and writing it on the blackboard.  George Papaioannou. I would slowly pronounce each syllable of my last name hoping it would sink in.  Then I would use some rhythmic pronunciation.  Break after Papai and continue with oannou.  Next, I would tell my students that my wife had all her second-graders call her Mrs. Papaioannou in perfect Greek accent by the second week, hopping that would be a better motivator.  Since I knew all that had failed in the past, I would then allow with resignation “O.K., call me Dr. P.”  (I remember a faculty meeting, when someone called on a foreign-born faculty sitting next to me.  He mispronounced the name so badly that prompted my colleague to whisper in my ear “how come they expect us to pronounce their ‘American’ names correctly but they butcher ours?”)

I never asked my students how they spent the summer.  I thought this to be too personal and private.  But I would ask them whether anything relevant to the subject matter of the course had happened.  So, let me ask (just a rhetorical question) what happened this past summer.  Well, lots of stuff happened, and not all was good.  No wonder then, the mood in opinion columns and essays these days is dark and ominous.  News obeys Gresham’s law.  Bad news drives out good news like bad money drives out good money.

So, what happened this summer?  Horrible floods and fires around the globe happened.  Can I interest you in climate change?  Covid infections surged again.  Can I interest you in vaccination?  Private citizens went up into space.  Can I interest you in child poverty?  American troops exited Afghanistan after 20 years and $2 trillion dollars.  Can I interest you in the futility of nation building?  Two bills aiming at rebuilding this country and restoring social fairness are languishing in Congress.  Can I interest you in the tax evasion of the super-wealthy? 

I look at this list and realize that it can serve as Exhibit A of many of the posts on this blog.  I understand that not everyone agrees with the side of the arguments I have chosen.  But the framework for a discussion on these and other issues is there in these posts.  Many of the topics I have covered the last three years were not premeditated or planned based on my prior ideas and knowledge.  The most significant came out of insights from books that offered new information and fresh perspectives that deviated from our traditional understanding and worldview.  Below are the most notable insights to me.

Humans are not a unique species.  With respect to emotions, cognition and even consciousness we just lie on a continuum that includes a surprisingly broad range of species.  Our human uniqueness is a purely anthropocentric conceptualization of the world that has made us in many respects dangerous to our planet.  How we handle the climate and the ecosystem depends a lot on how much we come to terms with our necessary symbiotic co-existence with our natural environment.  After several years of putting it off, finally, this summer, I read the wonderful story of an African Grey parrot as told by its owner, Irene Pepperberg in “Alex and Me.”  By the time Alex died, he had the intelligence of a little kid.  The night before he passed, Alex told Irene “You be good. I love you.” “I love you too,” she replied.  “You ‘ll be in tomorrow?” Alex asked.  “Yes” Irene said.

A lot of things we understand as progress do not necessarily make human life better.  Progress is not a free lunch.  Many advancements and innovations (political, social, economic, technological) make life more complicated and are both the result and the feeder of our never-ending wants.  Just like entropy increases the disorder of a physical system, progress introduces disruption and disorder in our lives.  That is, the entropy of our lives goes up.  It takes enormous energy to reverse entropy in a physical system.  Likewise, it takes enormous human effort to control the disruption caused by human progress.  For every digital innovation, we have to worry and spend enormous energy to control the malfeasance that follows.  Thus, we find ourselves spinning in a wheel in the quest for “progress.”  Even worse, we rarely ask “progress to what end?”

Becoming human and surviving as humans is the result of sociality: living together, learning together, entertaining and supporting each other.  In the past, this meant personal and communal bonds.  Economic and social stratification, however, has pulled us apart into segregated islands.  Thus, we fail to understand and appreciate each other’s lives.  This social clustering is big part of the modern crisis of capitalism.  Although technology (social media, in particular) expands our social universe, relationships and personal interactions are not experienced the same way.  The dependence of our species on sociality should make us more socially conscious and responsible.  The common good ought to weigh more on our choices.

Finally, reason does not necessarily win the day.  Emotions are stronger and often trounce reason.  Even more, knowledge and science as building blocks of reason are often, rightly or wrongly, perceived as abusive and breed resentment.  Instead, of enabling people to inform their emotions and make better judgments, they enable attitudes of cultural, social, and educational superiority.  The root of this goes back to the problem of the last paragraph, of living segregated lives.  David Brooks’ essay “Blame the Bobos” in The Atlantic is truly instructive in this connection.  (I had made similar arguments in my post on meritocracy.)   A present-day example of this divide of attitudes toward knowledge and science is our current split on how to confront the covid pandemic.

At the same time, we should be grateful to all those who care for refugees and migrants, the poor and sick, the hopeless, and the persecuted; in summary, all those who work hard to redress human hardship.  The fact that they are needed implies that our societies do not deliver in a fair and just way.  At least we can say that thanks to information connectivity we cannot remain unaware of what happens elsewhere.  Perhaps, we ‘ll slowly-slowly develop a more unified consciousness that will enable us to confront our destiny through common means.

This is the question with which Sapiens of Yuval Harari ends.  It goes to the heart of the problem we call the malady of infinite aspirations.  I come back to this issue after reading a column and a book review, both concerning the modern “miracle” of extending human life to almost double what it used to be just 200 years ago.  The book Extra Life calls this the greatest human achievement.  Extending human life is not, of course, the only kind of achievement we like to boast about.

What makes me skeptical about such pronouncements are two nagging thoughts.  First, all declarations about the greatness of progress at each historical point imply that humans knowingly lived worse and less happy lives in previous eras.  But this is just our own presumption.  First, without knowing what they could have in the future the reference point of past generations was only their past and present situation.  Second, even if they could accurately know the future, they might have rejected it as inferior to their present.  It is a case of ex post facto hubris when we claim that our times are the best and happiest of humanity.  Species adapt to their natural and social environments and do the best to survive in them.  If I don’t know what I may enjoy in the future I am content with what I have.  Future generations will pity our own for all the conveniences, advances, and knowledge we don’t have just as we pity past generations.

My second thought is that celebrating this or that as great progress conditions us in two ways: first to reflexively valorize all progress; and second to pay lip service to the consequences of progress. 

Take, for example, the case of mortality.  Living for ever has been the most ancient of our aspirations.  From the Sumerian epic king Gilgamesh who searched for the plant of immortality to the Spanish explorer Juan Ponce De Leon who searched for the fountain of youth, humans have longed for eternal youth and endless life. 

So here we are with the longest life expectancy of any previous generation and we still want longer life.  And when future generations succeed in living longer, they will still long to live even longer. This shows that no matter how happy we may be knowing we live longer than our grandparents we still feel a hole in our happiness because we know that there might be a better possibility in the future.  And that hole gets bigger the more we assure ourselves such possibilities are likely to come.  Like Socrates’s sieve our soul cannot hold anything and thus it always feels empty.

For tens of thousands of years, humans lived with what nature provided them.  But as we entered the agricultural era, we discovered we could tweak nature and breed better domesticated animals and plants.  For thousands of years after that we delegated other more ambitious aspirations to myths, tales and fantasies.  Then something happened that convinced us it was possible to make our dreams come true.  It was the point when we realized that we could gain greater control over the laws of nature and bend them to our desires.  It was the time we realized we could move from the myths, tales and fantasies of previous generations into the realm of possibility.  Aspirations could be realized.

The first step toward this tipping point was when science became less speculative and more empirical, thus instilling greater confidence in our understanding of nature.  The second step was when the discoveries of the new empirical science started to be converted into significant applications that changed human lives in small and big ways.  My choice for the person that became instrumental for the first step is the British philosopher Francis Bacon (1561-1626) who is hailed as the father of empiricism.  Among his famous pronouncements were: “Man is the minister and interpreter of nature.” And that “By obtaining knowledge about nature man can reach power over it [nature] and establish an ‘Empire of Man over creation.’”  These are powerful and ambitious words that leave no doubt about the rising human confidence in our ability to not only control but also change nature according to our wants and aspirations.  Within a hundred years of Bacon’s death the industrial revolution was on the move and in time it would spawn the electrical, digital and virtual knowledge revolutions (AI).

And what about the consequences of progress?  If we equate all progress with the betterment of the human condition, then the relentless pursuit of progress and innovation leaves very little room not only to contemplate their consequences but worse to prepare us for them.  As a result, it is only afterwards we discover that we have unwittingly stumbled into new realities that are difficult to manage.  We can think of a whole host of innovations from nuclear power to digital social media that have added angst, anxiety and huge challenges to contain them.  We have reached the point that we no longer live within the laws of natural selection; we have begun to alter them.

But let’s go back to the ultimate aspiration: to fight aging and mortality.  First, to have longer lives without avoiding the decay of aging is a curse disguised as a blessing.   In a Greek myth, Eos (Dawn) convinces the gods to give her lover Tithonus immortality but forgets to also give him relief from the scourge of aging.  Second, there is no guarantee that of all the options open to achieve longer lives we may not choose those that may end our species as we know it.

It may be possible to enhance and extend human life by working within the normal parameters of nature with medicines and cell treatments that leave human nature fundamentally unchanged.  But there are also alternatives with potentially radical and transformative results.  Bioengineering already has succeeded bringing together the human body with computers.  Brain thoughts are directed to manipulate mechanical arms.  Chips in the brain could restore mental functions.  But even more transformative would be the uploading of human brains on computers.  All this is not a Jules Verne fantasy.  The US Defense Advanced Research Projects Agency or DARPA is onto these ideas with results to show.  Will brains on robots be human?  Will a robot with your brain be you after it has been hacked?  Will the ultimate artificial intelligence be benevolent to humans?  Is this kind of progress acceptable?

That’s why the question “What do we want to want?” is so relevant and critical.  Wise management of our wants and their consequences is what stands between our human and post-human world. 

* In Plato’s dialogue Gorgias, Socrates rebuts Kallikles, by saying: “Compare the soul of such a person [one with infinite desires] to a sieve, because this kind of soul cannot hold anything and thus can never be full with a finite and limited amount of things’.”

We have always been told to believe that a good education and job are the products of personal effort and skills, and they are, therefore, meritoriously deserved.  In recent books, though, this view has come under a withering critique on the premise that merit, education, and privileged occupations are now perceived through the lenses of a new ethic that has opened a dangerous gap between those who claim to have all three and those who allegedly lack them.

The Tyranny of Merit: What’s Become of the Common Good by Michael Sandel offers an insightful exploration of the new meritocratic ethic and its social and political spillovers.  Sandel argues that over the past forty years successful people have distanced themselves from those in the lower socioeconomic rungs by convincing themselves that their success is solely due to superior personal responsibility and merit.  Thus, they have drawn a thick and bright line that connects success to merit ignoring the role of luck, inborn talents, family entitlements, and other factors that lie outside their control.  The new meritocratic ethic is dominated by a hubris that says “I deserve my success” and the more damning view “failure is on you.”

Among professional classes, this meritocratic ethic goes along with the view that education, college education in particular, signifies a lot about one’s station in life, not only in terms of financial success but also in terms of social status and contribution to the common good.  Thus, a good education has become an indispensable ingredient of dignified work and informed opinion.

These views, however, have not played well at all with the majority of working-class people, two thirds of whom have no college degree and a majority are occupied in blue-collar jobs.  The message “you get what you deserve” has become so powerful that although working people strongly resent it, they have also bought into it, as surveys show.  They resent it because they have seen how their lives have been appended as jobs moved oversees and how little attention their displacement has attracted from politicians and administrations.  They also feel their blue-color work and lesser education are looked down upon by educated elites.  They cling, however, to the American dream that with personal effort all is possible.

What Sandel finds inconsistent with American history is that the Puritan (or Calvinist) belief that salvation comes from God’s grace and not necessarily from personal moral success (i.e., merit) has been replaced by a new message (primarily linked to the prosperity gospel movement) that has tied success to goodness and from there to salvation.  As a result, both, religious belief and secular ethic consider merit to be the precondition for heavenly salvation or financial success.

Sandel writes that conservatives and liberals have failed to respond to the grievances of ordinary working people.  Conservatives are unwilling to provide a better safety net on the premise this demeans the willingness and ability of working people to lift themselves up by their own bootstraps.  Liberals, on their part, while they recognize the value of distributive justice, that is, a fairer distribution of economic outcomes, like the conservatives, they fail to deliver contributive justice, that is, to convincingly articulate the idea that all work contributes to the common good, irrespective of its monetary reward or content.

A culture that ignores the contributive value of work is what we find on the dark side of the division of labor.  While division of labor is an efficient arrangement, it unavoidably relegates people to different jobs that depending on the times and society’s priorities and biases may confer unequal payoffs and social esteem.  Emile Durkheim, founder of modern sociology, saw that danger when he argued that the division of labor can be a source of social solidarity, provided everyone’s contribution is remunerated according to its real value for the community, that is, its contributive value.

The classical economists were keen to recognize two kinds of value: exchange value and use value.  The former was the market price a good, including labor, fetches in the market.  Use value is the intrinsic worth of a good.  In the case of labor, its use value is Sandel’s contributive value.  Unfortunately, exchange value and use value rarely coincide.  We saw this in the darkest days of the pandemic.  The only work that mattered was that of doctors, nurses, hospital aides, ambulance drivers, delivery persons, food store clerks.  Except for doctors, the rest were workers of modest salaries.  In ordinary times, other occupations, from education to caregiving and public safety to manufacturing and science, provide us with essential services.  But think how their exchange value compares to that of executives and experts in business, finance, and the tech industry.  And why are professionals, whose only job is to help wealthy people minimize or evade their taxes, so much better compensated than essential workers?

A self-serving industry of consultants and celebrity agents assiduously promote the talents of their clients and why they deserve their high remuneration.  Educated elites from top universities have convinced us that only their cohorts should represent us in corporate boardrooms, the Congress and government, and top courts.  That was not always so.  FDR’s administration had citizens with humble credentials who excelled, and Truman never finished college.  Sandel calls this the worship of credentialism that also raises a divide between the well- and less-educated citizens.  The irony is that over the last forty years the US has stumbled from one economic or foreign policy crisis to another while it has been run by these highly credentialed people.  

The divide between the professionally successful and well-educated people and those of the lower income and educational rungs has shaken social cohesion in many countries beyond the US shores.  The challenge of those at the top is to carry success without hubris and not let it be the yardstick for measuring work dignity.  Also, by recognizing that the true value of work is not reflected only in its market value.   Even better, societies will be served well if their priorities align with the true contribution different jobs make to the common good. 

To support workers’ incomes in the wake of the pandemic in 2020, the US government extended regular unemployment benefits and also threw in an extra $600 per week.  This year, the aid to the unemployed continued with $300 of extra weekly benefits.  However, after a below- expectations net hiring in April, economists and politicians raised concerns that the extra and prolonged unemployment benefits may work as a disincentive to work.  As of now (June 2021) 25 states have heeded these concerns and have discontinued the extra benefits.

The concerns about the link between government support of workers and willingness to resume work is a debate about the supply of labor.  However, to limit the debate only to labor and ignore the supply of capital offers a narrow and incomplete view. 

In general, more is supplied the higher the price or payoff.  In the case of capital, whether it is invested in real business assets and operations or in financial assets, its supply depends on the magnitude of business profits or the returns (dividends or interest) of stocks, bonds and savings.  But its supply also depends on how its payoffs are taxed and how its deployment is regulated.  This is where politics and government policies enter.  Since the 1950s, there has been a dramatic drop in the corporate tax rates along with the adoption of various provisions that shield corporate income from taxes.  In addition, personal income from the appreciation of capital assets is being taxed at lower rates than labor income.  All this amounts to an extraordinary government support of capital on the premise that it stimulates its supply and in turn this helps the economy in terms of jobs and wages.

The empirical observation, however, shows that lavishing tax givebacks to capital does not necessarily lead to a better economy just as, conversely, tax increases do not kill economic growth.  Lower taxation of capital has instead contributed to the inordinate income and wealth inequality of the last quarter century.  The capital supply theory also ignores the importance of the other indispensable production factor, that of labor.  If labor is in short supply, capital alone is not sufficient to boost the economic output.  The present situation is arguably just that.  Businesses have jobs but not takers.

The labor supply also depends on its price, that is, wages.  Like capital, labor supply is affected by taxes, but also by other factors unique to labor.  Capital, real or financial, has no attitude or a family behind it and doesn’t catch a cold.  Labor instead has all that and more.  Work has to compete with leisure, taking care of children or elderly family members, and is affected by physical and mental wellness.  We value work for its wages but our willingness to work takes into consideration the cost of those other factors.  Lowering the total charges against labor income ought to push its supply up, just as lowering the charges against income from capital ought to boost its supply.

If that’s so, why don’t we treat labor and capital income the same way?  The present situation is forcing us now to consider this question with greater urgency.  So, let’s return to the initial question whether enhanced unemployment payments hold back workers from accepting jobs.  The accumulated evidence so far is inconclusive.  It is true though that there are workers who make in unemployment more than they would make working.  This is mostly true in service sectors, like restaurants, hospitality and retail, where wages are low.  Some would interpret this as proof that government subsidies undermine the incentive to work.  Others, however, would argue that wages in several sectors are so low that fail to match the subjective worth workers assign to their labor.  Their refusal to return to work is a way to signal their dissatisfaction.

There are also workers who could make more money if they returned to work but prefer to draw unemployment benefits.  What holds these workers back?  Several possibilities could matter here.  One is fear of getting Covid.  Another is expensive childcare for both preschoolers and school-age children who have not returned to school.  Or the fact that the pandemic has disproportionately sickened older people and the cost of outsourcing elderly care would offset any additional income from work.  Prospective workers are also utilizing their relative financial security, thanks to the enhanced unemployment benefits, to search for jobs that offer better scheduling, more paid-time-off for vacation or sickness, as well as other fringe benefits.  The present situation is a unique opportunity for American workers to reset the terms or at least signal their disapproval of the heretofore relationship between capital and labor.

And for good reason.  In all those factors that potentially support the supply of labor, like affordable childcare, pre-K education, parental leave, and paid-time-off, the US either lags other advanced economies or is near the bottom.  At the same time, the US is experiencing a declining labor force participation rate.* Since 1999, and except for Hispanic women, the labor force participation has fallen for White and Black men and women.  And the picture will get bleaker as the growth of the working-age Americans is projected to rise by only 0.4% annually till 1930.

The pandemic, in particular, has drawn attention to the number of women that dropped out of jobs to care for children and elderly relatives.  These reasons also keep women from returning to work at the same rates as men.  For American women, the labor force participation peaked just before 2000 and has been declining ever since for reasons still not fully understood.  In contrast, the female labor force participation in countries like, France, Germany, Denmark and the UK, has risen over the last ten years.  The lack of adequate support of families in the US also deprives American women of the privilege to have a free choice between staying home and going to work.  Their right to work should not be constrained by the high cost of caregiving.

Looking at how the economy and government have treated labor in the US, we see three developments that warrant attention and remedy.  First, since 1972 there has been a decoupling of wages from productivity that has kept incomes stagnate.  Second, while US governments have lavishly supported the supply of capital they have failed to do so for labor.  Third, the labor force participation rate has been declining for quite some time holding back  economic growth.

Just cutting unemployment benefits to force workers to take jobs is a very narrow-minded and unbalanced approach to solving the problem of labor supply in the US.

*The labor force participation rate is the percentage of the civilian noninstitutional population 16 years and older that is working or actively looking for work.

Recent news about slowing or even negative population growth in many countries around the world seems to have raised alarms and anxiety on several levels.  Already the usually cautious and deliberately moving Chinese government endorsed a three-child family policy to avert its projected downsizing from a country of 1.4 billion people to one with 730 million by 2100.

Economists and demographers in the US have also expressed their discomfort after the 2020 census revealed the US population had grown only by 7.4% since 2010, almost as low as the 7.3% growth rate between 1930 and 1940.  A number of countries, including South Korea, Singapore, France, Australia, Canada, Russia and Poland have adopted incentives to boost birth rates.  It is doubtful though these policies will achieve their objectives given current dynamics.

As I wrote in an earlier post two months ago, population growth is a complex issue with beneficial and harmful consequences.  As the title of the present post suggests I see population growth as a global issue that, like climate and the natural environment, calls for more comprehensive solutions.  Before I continue, I would like to put forth two realizations I have come to believe they should be part of the debate on population growth.

First, we cannot be pro-population growth without also advocating ecological balance.  Second, we cannot support population growth without addressing the depressing nexus between poverty, high birth rates and infant mortality.  Population growth is not a free lunch.

The first concern was succinctly articulated in a letter to the New York Times editor this way: “People [with fewer or no kids] might say something like this: ‘There are already too many humans on planet Earth, and it is time to begin a transformation to a stable, smaller human footprint.”  In a 2017 statement, 15,364 scientists from 184 countries declared rapid population growth as the primary drive behind many ecological and even social threats.  The transformation needed to reduce the human-based carbon-dioxide footprint includes: fewer children, fewer vehicles, limited air travel, and adopting a plant-based diet. 

I am not sure that as of now families consciously limit the number of offsprings to achieve the above results.  At some point though we may come to this conscientious decision.  Or we may hope that our technological prowess will enable us to survive with most of our modern comforts and in peace with nature.  So far, however, technological progress has burdened our natural environment rather than preserved it.  There is no guarantee future technologies will do better if left unchecked.  Therefore, we do need to bring ecological considerations into the discussion of population growth.

As of now the momentum is against any restraining of human expansion into nature.  I recently read that in the US the road system is so extensive that every part of what we call nature is within 20 miles of some road.  The pandemic is making this encroachment worse.  To avoid the confines of city life, families are leaving the big cities for open-space places.  Reducing residential density adds to the burden of the natural environment.  People must travel longer distances and more land is taken from nature.  It’s questionable whether work from home will offset longer commuting times.  Infrastructure projects like roads, rail systems, ports, dams, etc. are considered “progress” unless you ignore their impact on natural life and the climate. 

Individual life-style preferences and powerful economic interests by businesses and labor hinder the adoption of serious environmental conditions on land use for residential and extracting purposes.  I present these examples to highlight the difficult challenges we face and how, no matter how gradually, we inexorably move toward unsustainable future realities by doing what appears to be a good thing right now.

Counter to conventional thinking, poverty and high birth rates coincide.  Due to limited information and means poor people apply less effective birth control practices but they also experience higher rates of infant mortality.  Moreover, they see children as a supply of labor and family income.  Therefore, their cost-benefit analysis drives them to have more kids.  Conversely, this cost-benefit analysis drives more affluent people to have fewer kids.  Parental aspirations for their children’s future require more expensive education and upbringing.  Indeed, in parts of the world that live on $2 a day, families have on average 5 children compared to only 2 in higher income-level populations. 

Population projections show that already by 2040 we will experience a movement from the poorest level of global population to the two middle levels, those with incomes between $4 and $16 a day.  These income levels will number 6.9 billion people up from 5 billion today.  Thus, there will be two countervailing forces.  Birth rates will decline as incomes and parental aspirations rise.  Since, however, income, spending, energy usage and encroachment of nature move together, we should expect a heavier environmental burden if all else is left as things are now. 

Rising global prosperity will slow birth rates down so that, according to population projections, the number of children up to age 15 will be the same as now, that is, about 2 billion.  Which means the segment of people over 60 will increase faster.  This is what gives economists and governments nightmares and drives nation-based approaches that ignore the consequences of higher population growth on our planet.   The countries with serious aging trends can rely on a couple of possible solutions.  One is to admit more immigrants to achieve a better demographic balance.  Developed countries can also rely on the growing purchasing power of the rest of the world to generate the wealth they will need to take care of their aging population.

What all this tells me is that public officials and we citizens must become a lot more cognizant of the intricate relationships of population trends, demographic shifts, distribution of prosperity, human footprint, and ecological impact. 

Note:  Most of the population trends come from Factfulness of Hans Rosling (2017).