POLITICAL FORCES and PHYSICAL FORCES MKTG_485

POLITICAL FORCES

Anarchy – etymology
“an” – without
“arkhos” – ruler
Definition: Absence of a formal system of government
What is your opinion of anarchy as an organizing principle for society? Does it have appeal? Consider the “State of Nature”. In “nature”, don’t you have a right or license to everything on earth? Government places limits on individual rights, e.g., cut a tree, dig a hole, drive car, register a birth, sign up for the draft, start a business, pay taxes, get shots, drink alcohol, hunt, take drugs, have sexual freedom, build a house, own and use a gun, etc.

Let’s consider two opposing views regarding government:

HOBBESIAN VIEW

The state of nature is far from perfect. Want something? Make it and protect it, or take it.

“Life is solitary, poor, nasty, brutish and short.” 

Accordingly, whether the system of government be monarchy, aristocracy, or democracy, it should be absolute. The Leviathon, Thomas Hobbes (1588-1679)

PROUDHONIAN VIEW

The first person to call himself an “anarchist”. “Anarchy is.. the absence of a master, of a sovereign.” “Property is theft.” “Anarchy is order.” "Capital"... in the political field is analogous to "government"... The economic idea of capitalism, the politics of government or of authority, and the theological idea of the Church are three identical ideas, linked in various ways. To attack one of them is equivalent to attacking all of them . . . What capital does to labour, and the State to liberty, the Church does to the spirit[He was irreligious, apparently.]. This trinity of absolutism is as baneful in practice as it is in philosophy. The most effective means for oppressing the people would be simultaneously to enslave its body, its will and its reason.”
Pierre-Joseph Proudhon (1809-1865) wrote The Philosophy of Poverty
Proudhon was overshadowed by Karl Marx in his own time.

6 SYSTEMS

1. ANARCHY
2. SOCIALISM
3. COMMUNISM
4. FASCISM
5. NATIONAL SOCIALISM (NAZISM)
6. DEMOCRACY


H.G. WELLS- 1911
NATIONALIZATION Will be the Magna Carta of the 20TH Century.

Actually, PRIVATIZATION
was the driving economic force.

COMPARATIVE LOOK AT EAST GERMANY & WEST GERMANY

THE RISE OF MARKET CAPITALISM AND FREEDOM

FIRST GREAT GLOBALIZATION OF TRADE, CAPITAL AND INFORMATION- 1870-1914 (WWI) SECOND GREAT GLOBALIZATION OF TRADE, CAPITAL AND INFORMATION- Second half of the 20TH Century to present
EXAMPLES:
Somalia 1960 average personal income 10% higher than in South Korea- Today Somalia’s per capita income is less than 1/10 of S.Korea.
200 years ago, Argentina was richer than the U.S. Today it is about 30% that of the U.S.(GDP/CAPITA) The average income/capita of W.Europe was 40% of that of the U.S. in 1950; today it is 70%.
South America’s average I/C in 1950 was 28% that of the U.S. Today,it’s 22% that of the U.S.

There are only 3 countries in the world, today, with widely diversified share ownership.

• UNITED STATES
• UNITED KINGDOM
• JAPAN

In the U.K., the IPO of BRITISH TELECOM ALMOST DOUBLED THE NUMBER OF STOCKHOLDERS IN THE COUNTRY.
In Japan, nearly 2/3 of companies listed on the Nikkei Dow hold their annual stockholder meetings on the same day. Why?
The Invisible Hand of Adam Smith vs. the Visible Hand of government- What is the efficiency and effectiveness of government?

PUBLIC CHOICE THEORY IN ECONOMICS 

Looks at the decision-maker through the lense of classical economics-Man is a rational agent, acting in his own self-interest. Doing good is only a by-product. James Buchanan won a Nobel Prize for this analysis.(G.Tullock) CALCULUS OF CONSENT 1962
Generally speaking Public Choice Theory suggests that there is little interest in efficiency in government relative to self-interest. Self-interest trumps government decision-making.
Ludwig von Mises and F.A. von Hayek, free market economists, who argued that for an economic system to function properly, incentives must be structured so that dispersed and often conflicting knowledge can be mobilized to obtain gains from exchange and innovation. Individual incentives & decentralization can foster innovation and effective outcomes- Adam Smith’s Invisible Hand.

PRIVATIZATION

The transfer of ownership (or operation) from the public sector to the private sector. When operations are transferred, the public sector should maintain responsibility for proper governance. In vogue, today, are public/private partnerships (PPP’S, not to be confused with the bailout, circa 2009). Examples include Chicago’s Skyway Tollway Bridge 99-year lease to Cintra/Macquarie,
The Indiana Toll Road, Pocahontas Parkway in VA, and Highways 121 and 130 in Texas. Macquarie also owns, maintains, operates and develops airports in locations such as the UK, Thailand and Italy.
In late 2008, Chicago’s Midway Airport, run by the city, was licensed to a private company for 99 years for the sum of $2.5 billion(fell through).
The bailout of Wall Street by the government in late 2008 involved following the Swedish model of a few years ago in buying an equity stake in selected banks. In this U.S. effort the Treasury invest hundreds of billions, perhaps upwards of a trillion dollars. This is a form of nationalization, but one hopes the government will eventually divest itself (sell) of the stocks as the situation allows. During this bailout period, the UK is acquiring up to 50% in its banks.
Larry Diamond of Stanford in his book, Spirit of Democracy, indicates that 23 countries today derive at least 60% of their revenues from oil (Russia, Venezuela, Iran, Nigeria, etc). These states are for the most part authoritarian, leading Diamond to coin the term, “petro-authoritarianism”. Most of these states use their petro-dollars to secure their regimes.
Freedom House, an NGO, tracks democratic trends, and has found that in 2009, 42 states had declining freedom scores, and only 10 had increased scores-the worst global performance since the Cold War.

IRREDENTISM

SORBS FOR A FREE LUSATIA

IRREDENTISM

- (literally, “unredeemed Italy”)
A TERRITORY HISTORICALLY OR ETHNICALLY RELATED TO ONE POLITICAL UNIT BUT PRESENTLY SUBJECT TO ANOTHER

“One of the biggest political challenges of the 21st Century will be irredentism.”
Daniel Patrick Moynihan

Society is pluralistic. It consists of many players, large and small. Business as an institution is an especially important player economically, and its leaders have special responsibilities. Among their responsibilities is the impact of operations on the environment, a part of what is called CSR (corporate social responsibility).

EFFORTS TO UNDERSTAND NATURE

ATBI’S – (All Taxa Biodiversity Inventory)
Background information-
Binomial Taxonomy Carolus Linnaeus- Karl Linne- Swedish Scientist Systema Naturae 1758

ENVIRONMENTAL ETHICS

1. Instrumental Value Ethic
2. Intrinsic Value Ethic

ENVIRONMENTAL/HUMAN DISASTERS
-Minamata, Japan-Chisso Mfg (Mercury)
-Bhopal (Union Carbide accident)
-Chernobyl
-Alaskan Oil Spill
-Hungary Tisza River (Danube)
-Songua/Amur Rivers China/Russia-
2006 -12m ton of benzene spilled when a plant exploded in China.
FUELS- COST- 1MILLION BRITISH THERMAL UNITS (BTU’S)

OIL APPROX. $9
GAS APPROX. $6
COAL $1.85
NUCLEAR .50

THE SPECIAL CASE OF COAL
Scherer Plant
Juliette GA- Largest coal-fired plant in the western hemisphere
4000 MW – Coal from the Powder River Basin, Wyoming (Called the “Saudi Arabia of coal”)
The Scherer Plant “eats” 3.5 coal trains/day,1300coal trains/year,
2000 miles of coal cars-Scherer is the biggest polluter in the U.S.
But on the global scale, Sherer may look small. Planned global coal-fired plants will stunt Scherer- A 12000MW plant is going on line in Orissa State, India

FUELING OUR CARS
ETHANOL- CORN OR CELLULOSIC (SUGAR CANE, SWITCH GRASS,
JATROPHA)
E85 – 85%GAS? OR 85% ETHANOL?
ETHANOL HAS ONLY 60-70% OF THE ENERGY OF GASOLINE, THUS PROVIDES WORSE MILEAGE AT THE SAME OR HIGHER PRICE. THE ENERGY NEEDED TO PRODUCE ETHANOL IS ABOUT EQUAL TO THE ENERGY IT PROVIDES. LARGE QUANTITIES OF WATER (AN INCREASINGLY SCARCE RESOURCE) ARE NECESSARY TO PRODUCE ETHANOL. ANOTHER ISSUE IS THAT FOOD IS TURNED INTO FUEL. IS THAT A GOOD IDEA? CORN PRICES HAVE DOUBLED (FROM $2 TO $4/BUSHEL, CIRCA 2007) GOOD FOR THE CORN FARMER, BUT…
ALSO, ALL PRODUCTS USING CORN ARE GOING UP IN COST/PRICE (cereals, tortillas, corn meal, grits, beef, etc).Soy beans have become more scarce
and lucrative for growing because so much land had been diverted to corn production.
ARE HYBRID CARS THE ANSWER?- AT PRESENT THEY HAVE REPRESENTED ONLY ABOUT 3-4% OF PURCHASES IN RECENT YEARS. WHY?

THE CASE OF BIOSPHERE II-
ATTEMPT TO CREATE A WORLD IN A MICROCOSM
BY SEALING VOLUNTEERS AND NON-VOLUNTEER FLORA AND FAUNA IN A MICRO-WORLD ENVIRONMENT. FAILED!
ONLY ONE UNAUTHORIZED SPECIES SEEMED TO HAVE FLOURISHED.

Are we messing with the planet?
Are we destroying life on earth? (Caution must be used in deciding this as the case of Rachel Carson’s Silent Spring illustrates. Based on questionable reports of scientific studies, DDT was banned. A sane balance needs to be struck regarding nature’s resources and mankind’s welfare.)

Is global warming a fact?
Perhaps, at this time, although data for the past ten years show global cooling. The recent (2009) forest fires in California were due to global cooling. Cold water in the Pacific dries out California, which has a natural dry climate. Many jump to the conclusion that man creates it and that man can prevent it. Both ideas are suspect. What is incontrovertible is that environmental science has been politicized domestically and globally. Have not Earth’s natural forces changed climate for eons, with dramatic effect? You may be too young to have experienced it, but 1816 is called “the year without summer”. The cause was a huge volcanic eruption in Indonesia the year before. Can you identify the volcano?_____________

Tambora, in 1815. When this volcano erupted it spewed millions of tons of sulfur dioxide crystals into the upper atmosphere, each one acting as a tiny mirror reflecting the sun’s rays. This material spread around the earth, cooling tempatures dramatically. Rivers froze in August in the northern U.S. Crops failed or failed to grow much. People starved in some parts of the world. And the eruption even resulted in the eventual publication of Mary Shelly’s Frankenstein. Let’s consider some of Earth’s changes in geologic time.

GEOLOGIC TIME

EONS
ERAS
PERIODS
EPOCHS

Geologic Time

• EON- Phanerozoic
• ERA- Cenozoic
• PERIOD- Quaternary
• EPOCH- Holocene

5 Great Extinctions

Cretaceous-Tertiary 65 million years ago dinosaurs becam extinct-
Chicxulub Crater
Yucatan Peninsula

End Triassic Extinction - 200 million years ago
Permian-Triassic Extinction - 251 million years ago-
Bedout Depression
Late Devonian - 364 million years ago
Ordovician-Silurian - 439 million years ago

A SIXTH EXTINCTION?
Modern Man – the only species not to live in a local ecosystem
100,000 years ago –mass dispersion of modern humans
Europe-40K years ago Neanderthal lasted only about 10,000 years
12,500 years ago North America
Mammoths, Mastodons, Buffalo species became extinct
10,000 years ago Agriculture-Most profound ecological change
8000 years ago Caribbean lost larger species
A new name offered to replace Holocene Epoch-
Anthropocene Epoch

WHAT CAN BE DONE?
Plant a tree?
Switch to CFL?
Conserve? (Sheryl Crow’s famous 1 square of toilet paper)
Reuse? Limit consumption?

Raise energy prices so that earth friendly technologies can be cost effective?
(This appears to be the government’s strategy, e.g. refusing to allow drilling on the 85% of our coastline now deemed off-limits, claiming that the answer is clean energy [solar, wind] when such a transition will take decades, if not generations; not promoting nuclear power, no drilling in ANWAR, pushing consumers into smaller vehicles through tactics such as raising the CAFE standard when the auto industry is bleeding jobs and losing money, etc)

Use all the available energy we can get and try to get it cleanly? Drill here, drill now? Build nuclear plants on a large scale?

ONE SUSTAINABILITY
OPTION
“REMAN”

Remanufacturing

Caterpillar (Corinth, MS) Started recycling diesel engines as a favor to client Ford but found that the process had potential. (New material represents about 70% of the cost of an engine. Remanufactured material is about 40% of the cost of an engine; thus, total cost is lower. Cat, Corinth, has been getting 17 truckloads/day of old diesel engines (75 reman engines/week) the engines can have 2-3 lives. In 2005, sales were about $1 billion, and anticipated annual growth is 15%.

Recycling extends to many product categories:

1. Cameras (disposable)
2. Copiers
3. Cell phones
4. Printers
5. Ink cartridges
6. Even carpet tiles
7. And numerous other products

SUSTAINABILITY

Former Norwegian Prime Minister Gro Bruntland defined sustainable development as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs". Historical reference- Iroquois Confederacy and their Great Law of Peace- included SEVEN GENERATION PLANNING. What will be the impact of our decision seven generations from now? (more than 100 years) Today, this is used by some environmentalists as “SEVEN GENERATION SUSTAINABILITY”. Even businesses often plan for the long term. Matsushita, now renamed Panasonic, is famous for its long-range planning, implementing a hundred year corporate plan. In fact, many cultures have had features consistent with conservation and avoidance of waste, e.g. depression era thrift in the United States (examples?), the concept of “mottainai” in Japan.

SOME CORPORATE CSR INITIATIVES:

WAL-MART
Compact Fluorescent Lights (CFL)
Energy efficient stores
Fleet efficiency
Pressuring suppliers to report CO2 emissions
Labeling of green products
Organic Food line

DELL
Footprint- 385,000 Metric Tons of carbon emissions- 2006
Has asked suppliers to publish carbon footprints-Those who don’t or who are excessive will be “penalized”???
Became “carbon neutral”?
10% of energy usage at hdqtrs. from renewable resources
Had “Plant a tree for me” program; now it is “Plant a forest for me.”

ORGANIC FOODS

Setting aside the possibilities of fraudulent claims of purity, are organic foods an answer to improving the world environment? Some claim that the use of organic coffee and organic bananas would improve the efforts to save the songbirds. Both crops are fertilizer-, pesticide- and fungicide- intensive products. Monocrotophos, methamidophos, and carbofuran are all pesticides used for crops and are classified as Class I toxins by the World Health Organization (WHO). Such applications are said to kill 7-25 songbirds per acre. It is likely that this claim is true, but can the world’s consumers use only organic products? Is that sustainable. Frankly, the amount of resources necessary to produce organic products (vastly increased acreage need, excessive human labor), is costly and relatively inefficient, meaning that most cannot afford these products and that organic foods cannot be produced in sufficient quantity to feed the world. They are, in effect, a wasteful luxury.

The“GreenRevolution”, beginning in the 1950’s, increased crop yields dramatically through the judicious use of fertilizer, proper irrigation techniques, and quality seed selection. These yields are still increasing today, but at a rapidly decreasing rate (1-2%).
Genetically Modified Organisms (GMO), dubbed “Frankenfood” and decidedly NON-ORGANIC, appear to be the only technology likely to prevent mass starvation.
With present technology, everyone on the planet cannot live at the same standard as the developed countries.