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Brute Capitalism and America’s Struggling Middle Class

A trendy movement in institutional investing is ESG investing to promote better outcomes in the environment, society and governance.

In the U.S., market opportunities have provided investors with profitable financial plays in the ownership of family homes to rent them out. Squeezing families into rentals over owning their own homes has deleterious effects on “society” and constitutional “governance.”

You can find a consideration of these dynamics of a “brute” capitalism here.

Please Join Us for In-person Round Table on “Infrastructure: A Public Good or Private Good? How Do We Get Value for Money?” – Tuesday, June 29

What is “infrastructure?” What are its social benefits? What should it cost? Are social and human capitals part of a society’s “infrastructure?”

With Senator Joe Manchin yesterday declaring his principled opposition to one party hegemony in a constitutional democracy, which respects minority opinion, President Biden will now have greater difficulty getting his plans for spending trillions on “infrastructure” approved by the Congress.

President Biden’s proposed spending on “infrastructure” raises, yet again, the institutional question of where is the sweet spot for optimal symbiosis between free market decision-making and government provision of public goods via regulation or rent transfers?

What are “public goods” anyway? How valuable are they?

From the Caux Round Table perspective of moral capitalism, getting the definition of “infrastructure” seems basic to system optimization of both capitalism and stakeholder outcomes.

Please join us for an in-person celebration of the ending of the pandemic round table discussion on “infrastructure” at 9:00 am on Tuesday, June 29, at the Landmark Center in downtown St. Paul.

Cost to attend is $10.00 per person.

Participation will be limited to the first 20 registrants.

To register, please email Jed at jed@cauxroundtable.net.

The event will last about two hours.

When “Equity” Becomes Unethical

What is social justice? Is it a moral capitalism? What ethics should constrain the power of rulers? What is the fitting status for individuals in society – pawn or king? In chess, pawns are often sacrificed to protect higher status players.

In the U.S. today, we have opened a very acrimonious debate over the meaning of social justice, asking what is right and proper. The issues are complicated; the way forward not obvious; the various narratives internally confused. The particular setting for our contentions is a heritage of slavery, civil war to end slavery, prejudice on the part of a majority against one particular discrete and insular minority, a civil rights movement and success in life outcomes for some with that minority status, but setbacks and disadvantages experienced by others with that same status.

“What is to be done?” we ask, borrowing a challenge to the status quo asked by famous proponents of social change in Russia.

A new term has been put front and center in our debate – “equity.” But what does “equity” mean? Fairness? But that is only the surface of the conundrum. How much of what will make for fair outcomes? Fairness to whom? Who will benefit? Who should pay for those benefits? Does fairness in life require personal diligence and commitment to excellence?

As former President Jimmy Carter said: “Well, as you know, there are many things in life that are not fair, that wealthy people can afford and poor people can’t. But I don’t believe that the federal government should take action to try make these opportunities exactly equal, particularly when there is a moral factor involved.”

The Caux Round Table Principles for Government look to individuals as the unit by which to measure the actuality of justice.

But that is not how many American advocates now use the term “equity.”

Getting social justice right is a challenge for all cultures and societies. Invidious distinctions and different lived experiences among groups and individuals are as old as the tribal origins of our species. How should wealth, power and privilege be distributed? By fiat, through competition or with a little help from our friends?

I have reflected from the perspective of individualism, drawing on Aristotle, Chinese ethics and the practice of equity over the centuries in the courts of England in the comment which you can read here.

Your comments regarding “equity” would be most appreciated.

New CRT Initiative: Monthly In-person Round Tables at Landmark Center

With the help of Zoom meetings, during the past year, the Caux Round Table (CRT) has, to an acceptable extent, successfully kept up the pace of situational engagement and contributing to thought leadership in most unusually circumstances. However, the dynamics of online round tables to me cannot replicate the quality of in-person discussions. The ideas and reflections seem more formal and there are fewer “ah hah” moments of insight and connection of dots as participants around the table easily engage in flowing exchanges and uninhibited contributions to the discernment process.

Thus, with the ending of restrictions on gatherings and meetings and with Landmark Center reopening to the public, we’ve scheduled a series of round tables for the last Tuesday of each month (except November) starting this month.

The proposed topic for consideration and its date are:

-“Infrastructure: A Public Good or Private Good? How Do We Get Value for Money?” Tuesday, June 29

-“Climate Change: What is the Problem? What is to Be Done and By Whom?” Tuesday, July 27

-“Social Media: Does Social Media Need a Code of Ethics?” Tuesday, August 31

-“Does Corporate Media Need a Code of Ethics?” Tuesday, September 28

-“The Financialization of Everything.” Tuesday, October 26

-“The New Racism: Normalizing a New Discourse Regime.” Date TBD

-“2021: The Year That Was.” Tuesday, December 28

These topics have been proposed as being worthy of reflection and deserving of sound intellectual analysis and policy recommendations. The topics implicate both caring for the common good and the CRT’s Principles for Business and Principles for Government.

All events will be held from 9:00 to 11:00 am in the Landmark Center in room 317.

Participation will be limited to 20 participants to allow for continued social distancing.

Registration fee is $10, which can be paid at the door.

To register for our June event on infrastructure, please email Jed at jed@cauxroundtable.net.

If you would like to register for additional round tables now, please email Jed.

Comments on Entropy and Our Times from Dutch Businessman and Politician Herman Wijffels

Our colleague, Herman Wijffels in The Netherlands, just sent me some of his thoughts on how high entropy correlates with many of the distempers and institutional dysfunctions we see around us.

If the analysis has explanatory power, which I suggest it does, then our task is to reduce entropy in culture, society, economics and politics.

Herman is a retired Dutch politician of the Christian Democratic Appeal party and businessman. He served as Chairman of Rabobank, Chairman of the Social and Economic Council and as Dutch Representative/Executive Director at the World Bank Group.

Here is Herman’s email to me:

Dear Steve,

Thank you for sharing this thoughtful paper on entropy with me. I enjoyed very much reading it and agree with your findings. To be honest, my interest in entropy was not so much focused on the personal level, but especially looking at it at different levels of the collective. So, your considerations are a real addition to my understanding of the phenomena.

Let me share some of my thoughts at different levels:

-Energy is one of the most important gifts of Creation/God/Source/Big Bang. Energy is the main input for evolution, for translating potential into reality. By using energy, some of it gets lost, so in the logic of evolution, it has to be used as productively as possible, in a dynamic equilibrium between stability and chaos. As a reference, I would think here of the cosmic path, the harmony of the spheres of the Doa and also of the golden ratio. At this point in time, at the planetary level, we are in a situation of disequilibrium, between mankind and the planet and between people, ecologically and socially. A lot of energy is not used productively, creating chaos, entropy.

-This global situation is reflected at the level of the nation state. Democracies suffer increasingly from polarisation. Parties develop a truth of their own, turn inside and are less inclined to an open dialogue, thus creating entropy and chaos at that level. Energy is wasted in a power struggle, instead of used to further the common good.

-Looking at our economic system, capitalism, the ongoing focus on financial goals, on wealth accumulation, is depleting and destroying natural capital and undermining social capital. Too much focus of energy on internal goals of businesses and too little on external, societal goals is misusing it. Stock buybacks are a case in point.

-Many organizations, as well in the public as in the private sector, are suffering these days from an overload of bureaucracy. Too much energy is needed internally to keep things going at the expense of external orientation and effectiveness.

-All of this is typical for the choices that have been made in the industrial age, ultimately leading to a culture in which egocentrism is a central feature at every level, also at the level of the individual. Unbalanced use of energy and entropy are a logical consequence of this culture at every level, from the planetary all the way down to the personal level.

-Looking at it from this perspective, we are in need of a transition to a new culture, a next civilization, in which common interest and maintaining the ecological and institutional commons do play a more central role. More energy will have to go into sustaining the condition in which life on this planet can flourish.

What Have We Americans Learned Since May 25, 2020?

I want to share with our global network some reflections on the past year since the death of George Floyd here in Minneapolis while in police custody. His death triggered both protests, some peaceful, some not, demands for restricting formal policing in cities, a remarkable increase in crime and murders in those same cities, a rise in divisive resentments between many in elite sectors and those less fortunate with respect to education and wealth and accusations of a kind of fundamental criminality in American culture – white racism.

The distemper among many Americans contributed, in my judgment, both to the surge in support for Donald Trump in the 2020 election and an opposing turnout for Joe Biden.

Institutions have pivoted to prioritize “inclusion, diversity and equity” in an effort to seek atonement for something for which they may or may not be personally responsible. Many schools have affirmed critical race theory to rejuvenate racist thinking in American culture, only this time, making “whites” the objects of racial denigration.

A year later, one cannot say that there has been any genuine rapprochement between “whites” and “BIPOC” individuals.

There is no convincing evidence that American police are “racist,” as charged. Even the prosecution of Derek Chauvin, the police officer convicted of callously letting George Floyd die, could not accuse him of being a racist. Appropriately, as far as I could tell, since he had married a Hmong wife.

It has just been made public that in the Floyd case, the local medical examiner, under pressure, changed his conclusion as to the causes of Floyd’s death, adding to his original written report the words “compression” of Floyd’s neck from Chauvin’s knee restraint, directly implicating Chauvin in the death. Evidence of this change was not presented to the jury in Chauvin’s trial.

The immediate and impressive rise in the killing of African Americans in their neighborhoods after accusations of systemic police racism and calls to “defund” the police is most depressing. Here in Minneapolis, a couple weeks ago, three little black girls were shot as random collateral damage inflicted by what is believed to be young men with guns. One died. There were no protests over the death, no rallies formed to “say their names.”

In my city of St. Paul, last week, two young men were shot to death in a new, very well built and equipped neighborhood recreation center. The center was built to provide an alternative to policing in turning young men away from guns and violence through new opportunities for friendly sport competition. But rather than have the center change the neighborhood’s culture of violence, the culture took over the center.

There are important lessons to be learned from all this. But really, there is nothing new to learn here. The ancient learning about human nature and how to promote the moral sense in each of us still applies.

Educational achievement for African American students in our public schools has not improved, given the impact of lockdowns and the need for distance learning. If there is in America anything that I see as actually, year-in and year-out, systemically preventing many African Americans from growing up ready to participate in what the country can offer in income and wealth accumulation, it is our inner-city public schools. But we have not drawn the correct lessons from this manifest truth, which is so obvious and all around us.

We have learned that our major media companies, like the New York Times and Washington Post, can no longer be trusted to provide factual reporting and dispassionate judgments. A preference for personal narrative and storytelling without ethical restraint has replaced the professional standards once honored by journalists. Thus, Americans have become unnerved, not knowing what is true or whom they can trust.

We have accordingly retreated back into our own subjective “truths” and closed our doors to dialogue with those who think differently. We do not have even the courage of our own selfish convictions to engage openly and fully with others across our many divides.

We have learned that political divisions have deepened and that reconciliation will not be achieved anytime soon. Accusations of unacceptable ignorance, lying, being toxic, having mean intent, lacking good faith and not deserving of freedom of thought and speech are multiplying. We are experiencing elite failure across the board, but have no frames of thought by which to talk about such collapse. It is unprecedented in our lifetimes.

As was written long ago in the Book of Ecclesiastes:

“What a heavy burden God has laid on mankind! I have seen all the things that are done under the sun; all of them are meaningless, a chasing after the wind. What is crooked cannot be straightened; what is lacking cannot be counted. I applied myself to the understanding of wisdom and also of madness and folly, but I learned that this, too, is a chasing after the wind. For with much wisdom comes much sorrow; the more knowledge, the more grief.”

Video of U.N. Event on Covid CRT Participated In

On April 13, I participated via Zoom in “After Covid-19, New Thinking on Creating Real Value and Financing the SDGs?,” which was a side event on the margins of the U.N.’s Economic and Social Council’s 2021 Financing for Development Forum.

The video of the event can be found here (my comments begin at the 24:45 min. mark).

Other panelists included Professor William Black of the University of Missouri-Kansas City; Professor Steve Hanke of Johns Hopkins University; Professor Stephanie Kelton of Stony Brook University; and Joe Oliver, former Minister of Finance and Minister of Natural Resources for Canada.

It was moderated by Daniel Mitchell, Chairman of the Center for Freedom and Prosperity.

The event is about an hour and a half in length.

It was conducted by the Convention of Independent Financial Advisors and co-hosted by the Permanent Mission of Uruguay to the U.N.

And the Future of Higher Education in America is….?

For centuries, Western civilization has relied on “colleges and universities” to create very important modes of social capital. Now, in the U.S., such institutions for forming elite social capital are under stress and are less and less trusted by the middle and lower social “orders” as able to provide “good value for money.”

Recently, I shared with you some comments by Professor John Adams.

Another colleague, Professor Robert Kennedy of the University of St. Thomas, sent me his reflections on what is happening to our institutions of higher education. You can read Bob’s insights here.