Passing Comments

The sentiment, “It’s the economy, stupid,” apparently also holds prime position in the hearts of Europeans when money troubles hit, according to the results of a European Union survey just released this week (“Spring 2010 Eurobarometer: EU citizens favour stronger European economic governance” Aug 26, 2010).

Survey results show that 75 percent of Europeans favor more coordination of economic and financial policies among countries belonging to the EU, the 2010 Spring Eurobarometer reports. The survey, conducted earlier this year at the height of the European debt crisis included more than 26,000 people in 27 EU member states.

“The clear majority for enhanced European economic governance shows that people see the EU as a decisive part of the solution to the crisis,” said Viviane Reding, Vice-President of the European Commission, who is also in charge of Communication. “Our spring survey – conducted at the height of the crisis – reflects the difficult times and challenges that Europeans faced during the past months…

See full report here.

Lawrence Lessig brilliantly explains once again how there’s serious trouble in river city — the river being the Potomac and the city, Washington D.C.

To learn more about Lessig and the campaign to reform Congress, go to Fix Congress First!

Online media, hard to believe, still endures shovels full of badmouthing and tsk tsking from its detractors. The blogosphere in particular is routinely chopped up, skewered, fried and refried by its critics.

And that cyberspace represents the killing of journalism itself, well that’s a grumble still coming from some.

So the praise served up today for journalism and online media by Henry Blodget (rehabilitated) is a fine, fine thing to see (“On Our Third Birthday, Some Thoughts On Digital Media And The Future Of The Newspaper Business” Business Insider, July 20, 2010).

Excerpt:

The future of journalism, in fact, is bright.  Despite the struggles of many newspapers–and the pain that many newspaper folks have experienced in the past 10 years–the world is vastly better informed than it was only a decade ago.  Thanks to millions of blogs, experts, organizations, causes, digital media companies, print media companies, electronic media companies (Bloomberg, Reuters), Twitter, Facebook, and other next-generation information outlets, the world is now awash in primary and secondary information.

It’s true that this the information often appears in a rough, unedited, or incorrect form.  But within seconds, millions of online fact-checkers descend upon it and hammer it into shape.  This participatory, conversational journalism is certainly different than what came before, but it’s vastly more powerful…

Blodget’s praise is the summing up of a piece about the turbulent future of the newspaper business. He focuses in particular on the New York Times. There are some dismaying facts and figures that he says newspaper bosses aren’t telling their staff (read more here).

Illuminating.

UPDATE: Recent news story from Bloomberg Business Week on Henry Blodget and Business Insider (“Henry Blodget’s Risky Bet on the Future of News” by Andrew Goldman, July 8, 2010)

P.S. Really appreciate the free cartoons (see above) from Dave Walker at weblogcartoons.com

In a recent talk for the RSA Society, social theorist David Harvey asked if the time has come for a new social order that would be more humane and responsible than capitalism. The video above is a special excerpted portion of Harvey’s 31 minute talk — accompanied by an entertaining cartoonist’s animation (full version here).

Harvey is a Distinguished Professor of Anthropology at the Graduate Center of the City University of New York (CUNY). His most recent book, “The Enigma of Capitalism,” was published in April of this year.

I’ve transcribed a short excerpt from the ending portion of Harvey’s talk:

Any sensible person right now would join an anti-capitalist organization. And you have to. Because otherwise we’re going to have the continuation. And notice it’s the continuation of all sorts of negative aspects. For instance, the racking up of wealth.

You would have thought the crisis would have stopped that. Actually more billionaires emerged in India last year than ever. They doubled last year. The wealth of the rich — I read something this morning — in this country has accelerated. Just last year, what happened was the leading hedge fund owners got personal remunerations of $3 billion each. In one year.

Now, I thought it was obscene and insane a few years ago when they got $250 million. But they’re now hauling in $3 billion. And as the famous statement — I think it was by Andrew Mellon — way back… ‘In a crisis,’ he said, ‘assets return to their rightful owners,’ i.e., him. And that, in effect, is the plug of the financial world right now. ‘Yeah, the assets are going to return to us.’ Now that’s not a world I want to live in. And if you want to live in it, be my guest.

But you’ve got to start thinking. And what bothers me about academia… I don’t see us debating and discussing this. I don’t have the solutions. I think I know what the nature of the problem is. And unless we’re prepared to have a very broad based discussion that gets away, you know, from the normal pablum you get in the political campaign and — you know, everything’s going to be okay next year if you vote for me — it’s crap. You should know it’s crap and say it is.

And we have a duty, it seems to me, those of us who are academics and seriously involved in the world, to actually change our mode of thinking.

I know I’m pretty sick of pablum. But I do think it’s not only academics who need to change their mode of thinking. We all need to (see more here).

Yesterday a friend tried to send me a copy of an article in the Times, the UK newspaper that is now secreted behind a paywall, its online content available to paid subscribers only.

The article, so my friend wrote, was an interview with someone whose life story reminded her of a personal situation I had discussed with her recently. So, being a good friend, she took the trouble of scanning the article into an email for me.

Unfortunately some technical glitch messed it up, and all I got was html code instead of text. I asked her to try again and I’m waiting for the re-send.

In the meantime, in spite of knowing about the paywall, I clicked on the Times website to search for the article. Immediately, up popped a page saying either pay us or go bye bye.

Annoyance compounded! How do I mean this? Months ago when I read about media mogul Rupert Murdoch’s insistence that his News Corp newspapers be swaddled behind a paywall, I felt vaguely, though truly, annoyed by what seems to me a clear outbreak of Ludditus

But yesterday, I felt a personal sting from this imposition by Murdoch that access to information be only available to those able to pay. It feels a violation of what more and more seems to be a crucial human right — open access to a free flow of information. And, furthermore, the idea that a simple paywall can restore profits in today’s complex media-scape of vast options doesn’t seem probable.

Newspaper paywalls (I hope!) are futile wishful thinking for the claustrophobic old days when circulation and audience markets were sitting ducks. Readers and viewers were imprisoned by a relatively small number of news and entertainment outlets — it was quite awful for those of us who were there and remember.

So I perked up today when I came across an interview with Internet technologies expert Clay Shirky in the Guardian (“Clay Shirky: ‘Paywall will underperform – the numbers don’t add up’” by Decca Aitkenhead, July 5, 2010). I noted especially the following segment:

Rupert Murdoch has just begun charging for online access to the Times – and Shirky is confident the experiment will fail.

“Everyone’s waiting to see what will happen with the paywall – it’s the big question. But I think it will underperform. On a purely financial calculation, I don’t think the numbers add up.” But then, interestingly, he goes on, “Here’s what worries me about the paywall. When we talk about newspapers, we talk about them being critical for informing the public; we never say they’re critical for informing their customers. We assume that the value of the news ramifies outwards from the readership to society as a whole. OK, I buy that. But what Murdoch is signing up to do is to prevent that value from escaping. He wants to only inform his customers, he doesn’t want his stories to be shared and circulated widely. In fact, his ability to charge for the paywall is going to come down to his ability to lock the public out of the conversation convened by the Times.”

I like that last sentence so much, I want to pluck it out and highlight it again:

In fact, his ability to charge for the paywall is going to come down to his ability to lock the public out of the conversation convened by the Times.

Raise your hand if you want to be locked out, again.

UPDATE – July 20, 2010: “Murdoch’s First Newspaper Paywall Not Off to a Great Start” by Henry Blodget, Huffington Post

Harvard Law Professor Lawrence Lessig gave a talk last week at the Yahoo! campus (“Innovation Corruption” May 20, 2010). He spoke about how corruption in government and business are blocking innovation in the U.S.

In case you think this has always been the case and isn’t getting much worse, Lessig explains how this isn’t so. The details he provides are more than a little disheartening to hear. But…

His plea to the audience was to not be passive – that the public is very much a part of the problem when clearly there are patterns but no one does anything about it. As a major player in the Internet world, he’d like to see Yahoo! pushing for competition in the IP world. As far as the government is concerned, Lessig would like to see a return to citizen-funded elections – a concept born during Teddy Roosevelt’s term in office. Such a system would eliminate money from the economy of influence – the underlying cause of corruption and ultimate roadblock to innovation.

If you really want to understand precisely how the system goes so incredibly awry, you will learn here.

And if you agree with Lessig, you can go to his website, ChangeCongress.org, and sign up to participate in helping him bring our political leaders back to serving the common good. Lessig’s organization is non-partisan — its sole bias is for the good of “we the people.”  I think Lessig has a great idea here.

Must read investigative journalist Matt Taibbi provides an unvarnished play-by-play of what (and how) the U.S.Congress is and  is not doing to reform the country’s financial practices (“Wall Street’s War” Rolling Stone, May 26, 2010).

Congress looked serious about finance reform – until America’s biggest banks unleashed an army of 2,000 paid lobbyists.

I really like the article yesterday –”The left is trying to take back centre ground in Europe” — in the Netherlands newspaper nrchandelsblad International.  Reporter Marc Leijendekker nails down some of the meatier issues at the center of the accelerating conversation about social democracy versus free market capitalism.

To begin with he addresses the paradox of a voting public in Western democracies that often enough has drifted to the right in recent elections even after the worldwide financial crisis

…laid bare the faults in an economic model in which free market thinking takes centre stage and the state plays a supporting role.

Leijendekker explores some of the reasons for voters’ choices, a well-known and most unpleasant one being that in many cases it was the political leaders of the left who pushed the hardest for freer markets (See Tony Blair’s Third way and Bill Clinton’s Triangulation).

Division of wealth is a focus of the second half of the article, plus a glance at the upcoming June parliamentary elections in the Netherlands where “opinion polls show things are going well for social democracy…”

Europe’s reputation was damaged at the beginning of the recent eurozone crisis, but now everyone is backing the euro, former Italian Prime Minister Romano Prodi said in an interview today with Bloomberg Television.

He added that it would have been better if the European Union had not taken so long to make its decision, but now the clear decision is that there is no alternative.

The delay has had very, very high costs, you know, but to build Europe, you need time, as you know, Prodi said.

To see the full interview (7:33), click on thumbnail above.

When I began listening just now to the video of the commencement address that Nobel Prize Laureate Muhammad Yunus gave yesterday to some very lucky students at Duke University, my intention was to excerpt only a few sentences to accompany the video posted here. But Yunus’ words and ideas are so extraordinary that, as you can see,  I couldn’t stop transcribing.

With occasional wry touches of humor,  Yunus describes his kind of capitalism in action. It is astounding. This is a capitalism that is nothing like the rather awful deformity that is dominating our world now.

(The talk was less than 20 minutes — my transcription begins about four minutes in)

…I am very happy to be receiving this honorary degree. Not too many people are giving honorary degrees to bankers anymore…

You have just heard about my work, creating Grameen Bank. When I went back to Bangladesh, teaching economics, I had no idea that I would someday get involved in banking. I had no idea about banking. I didn’t have any learning about banking. But circumstances forced me into it. And since I didn’t know anything about banking, that became a big help for me. I didn’t have to follow their rules. I just looked with my eyes and saw what was there and tried to respond to the problems that I saw, and created a banking system that now looks like exactly the opposite of the conventional banks.

If I knew the rules, probably I would not be able to break those rules. Since I didn’t know it, I didn’t have any problem creating new rules and breaking all of them. Conventional banks go to the rich, we make sure we go to the poor. The poorer you are, the more attractive you are for us. If you are the poorest, we kind of celebrate that we found you. And it’s our job to find resources for you so you can change your life.

And we created a bank where we emphasize the women. Conventional banks mostly go to men, we decided to go to women. It changed their lives, it changed their families, it changed the country. The most dramatic thing that happened in Bangladesh in the last 25 years — any visitor to Bangladesh will tell you this — it is the empowerment of women. The status of women has changed so much from how it was 25 years back. One after another you see the differences that it made to people’s lives and the whole society.

And we created a bank, unlike conventional banks which are owned by the rich. We made the Grameen Bank owned by the poor. And owned by the poor women. So all the borrowers of Grameen Bank own the bank. Unlike the traditional way of thinking that you have to have donations and assistance from the government to run something for poor people, we defied that. We created a bank which runs by its own money. We just take the profits, just like any other bank, and lend that money to the poor women. We lend out $100 million a month, and all this money comes from the profits of the bank. And the bank makes profit, the profit goes back to the borrowers as dividends because they own the bank.

We concentrated on the children of the borrowers of Grameen Bank. We wanted to make sure they do not remain illiterate like their parents, who are totally illiterate. We made sure all the children go to school. And we’re very happy that we succeeded in that. And then we saw streams of these children going up the levels of education and coming to higher education. We gave them education loans to continue with higher education. So we have thousands and thousands of students in medical schools, engineering schools, universities all around the country. Many of them have completed their Ph.Ds.

And sometimes when I meet these young people, try to understand their problems, one common frustration they come up with, they say “We have education, we are finishing that. But what about our jobs? There’s no jobs in the country.” So I started telling them, “Look you are very privileged young people. You are privileged because your mother owns a bank. Why should you be looking for jobs? You should be taking a pledge. And that pledge will be, I’m not a job seeker, I’m a job creator. And prepare yourself to be a job creator. So change your mentality from just being in the employment market, to finding a job, looking and knocking at everybody’s door. If you feel frustrated that you don’t know how to start a business or something like that, you just look at your mother. She’s an illiterate woman. Many years back she joined Grameen Bank. She was scared to death taking this money in her own hand… but she overcame those fears and she became a successful business person. What good is your education if you are not better than your mother? So why can’t you at least do something with what your mother does, ten times as big, fifty times as big or 100 times as big, if you don’t have any new idea? And gradually you will come up with new ideas.

So we look at these young people, the son and the daughter, and then look at their mother, side by side. And I always come up with the same thought, that I always feel — the mother could have been a doctor too, like her daughter. But she couldn’t even go to school. Is this her fault? Is this something lacking in her? No, nothing is lacking in her. Simply, society never gave her the opportunity to go there.

So I sum up by concluding — poverty is not created by the poor people. Poverty is created by the system that we all built, in which we have to live. And that’s what created poverty. Seeds of poverty are not in the person, seeds of poverty are in the system. Look at the banking, what it does. Refuses to extend its services to the majority of the world population.

Two and a half years back, we started Grameen program in New York City because we were challenged that it could not be done in this country. I always said it could be done anywhere on this planet. So taking that challenge, we started it in Queens, New York in 2008, in January. That’s the year the financial crisis hit the world. So we had an amazing situation — in Queens, the Grameen program with no collateral, no guarantee, was flourishing… On the other side of the street, big banks were collapsing. These big banks told me back in 1976, “Banks cannot lend money to the poor because they are not creditworthy.” So I started asking people in New York, “Can you tell me who is creditworthy now?”

Journalists asked me, “What do you want to achieve in New York City by lending this little money to poor people? I said, “I just have one idea. I hope I can succeed in doing that. If we succeed in New York City — I hope we do — then there’ll be no payday loans in New York City. All these payday loans will be done, finished, with 1000 percent interest, 1500 percent interest. I said, “we are looking for a day when there will be no pawn shops in New York City. There will be no check cashing companies in New York City.” It became successful, we have opened a branch in Manhattan and Brooklyn, another branch in Brooklyn. This year we started in Washington D.C., and San Francisco…

The problem of the system is also in this conceptualization of what we are as a human being. In business, human beings are conceptualized as moneymaking machines. Business means business to make money, nothing else. And on top of it, you have to maximize profit. Except human beings are not a one-dimensional being. Human beings are a multi-dimensional being. They are not just money-making machines. If you can interpret the true human being within the framework of economic theory, then the world would be very different.

So I’m suggesting that we create another kind of business. The existing business is built on the selfishness of human beings. Everything is for me, nothing for others. But there is selflessness in all human beings. Every human being has this quality. And we create a business on the basis of selflessness. Everything is for others, nothing for me…

You have options now as young people graduating. You’ll be coming up with the idea, “What do I do? Do I work for a profit-making company or do I work for a social business? Or do I create a social business or do I create a profit-making business?” It’s up to us to decide. It’s an option, it’s not something anybody’s forcing on you.

A social business is a business dedicated to solve the problem. Any problem you see can be solved with a creative mind. Individuals become very powerful.

I was in Glasgow, and one of the problems they were discussing with me — they have thousands of families in Glasgow City who are on third-generation unemployment. I said, “How come?” They said, “Because of our welfare system.” I said, “That’s a shame. If I was one of those who is in third-generation unemployment, I’d be suing the government for crippling me. I’m not a crippled person, I’m a fullbodied human being. I have the creative energy, I can take care of myself.”

So in the discussion we decided to start social businesses to get unemployed people who remain unemployed for generations, to get them into opportunities and get out of the system they are forced into. So you see around us, whatever problem we see, we can create a social business. That’s the creative energy you all have as an individual. Each individual, each human being has the power, enormous power to change the world. And you have it. Are you going to use that to change the world? That’s the question I raise with you.