Antigonistically Speaking – the Permeability of Governance

In a world too confused by the economic rise of China to question whether democracy will ultimately produce the best results for humankind; in a world where fighting between Sunni and Shia, between secular and religious, between Dinga and Machar dominates the news as much as Catholic and Protestant did in the UK not that long ago; in a world where the after-effects of the Arab Spring result in a literal chaos; in a world where street demonstrations in Turkey, Brazil, Thailand and elsewhere have threatened the rule of “law” – we need to question how our political institutions work and whether they are robust and durable enough to withstand the constant pressure that we put them under. In a “global” environment, in the so-called “west”, we should also question what political systems we are operating under – as we fit perilously into local, national, regional and global systems.

Around 441BC, Sophocles wrote Antigone http://en.wikipedia.org/wiki/Antigone -a Greek tragedy that, as a school kid, I could immediately appreciate – not through the tragic figure of Creon but through Antigone herself. She dared to push against the tyrannical rule of a king at a time when no-one else, let alone a woman, would dare to do so and lost her life as a result. Opposing the law that Creon laid down was, in her view, proper if that law was wrong – if it was tyrannical. I liked that as a pupil in a school where teachers could appear to be on the wrong side of tyranny.

In nearly 2,500 years since Sophocles wrote Antigone, humans have learned and unlearned the story many times. Because we focus on economics so much (i.e. how we generate wealth) we seem no longer sure whether there are other questions that we should be asking. As 2014 gets under way, maybe we should be questioning what the world needs in order to be Antigonistic – being able to prod the rule of law when that law or the implementation of that law is wrong and to understand where it is impossible to do so.

This is not just an argument for democracy but for a system of government and implementation that is permeable – allowing for change. We also should be asking how we fit into the various levels of government – local, national, regional and global.

It is also worth looking at how we understand where the permeability does not exist at all and where gentle prodding is not likely to succeed – for it is there that fractures happen.

Permeability

It is the ability of our human systems to be permeable (in normal times) that enables them to evolve as our needs change. It means that old-fashioned notions can be changed and that structures which are worn-out can be thrown away. When permeability does not exist, then tyranny wins out.

The permeability of authority is applicable to any organization or structure: from corporate to national government and beyond. In the 21st Century, as communication systems and capabilities continue to rise, how such structures take in information and change is a critical factor for our social existence.

The change in governmental structures from strong individuals (appointed by the gods) through the tyrannies of dictators and various forms of democracy can be seen in their permeability to new thoughts and to absorb the thoughts of others.

God-given rights to rule (whether Charles I of England or Louis XIV of France) were thought of as indisputable in the same way that the earth was thought of as flat. Such rights were disposed of in the 20th Century by political “truths” such as communism or fascism. These “truths” swapped god-appointed rulers for political dictators. Elsewhere, the “big man” tradition as shown by Idi Amin in Uganda or dos Santos in Angola is similarly impermeable to change or outside thought.

In China, the story of impermeability is writ large. The civilization state (Martin Jacques) has evolved at the top from god-appointed rule to political dictat but the impermeability remains. Whether the excuse is heavenly authority or communist or legalism, the ability of that nation’s leadership to restrict change through the impermeability of its structures remains.

The Permeability Grid

Any organization can be assessed as somewhere on the grid of permeability. At its worst extreme today, North Korea stands out – completely impermeable to any thought of change or even discussion, it embodies the lunacy of not just tyranny but of the inability to listen to any reason. This is not just about governing but also about the basic rights of its people. North Korea would get 0 on the scale of impermeability.

Of course, moving too far towards complete permeability is towards chaos. The other extreme (100 on the scale) would be where every thought is taken on board and acted on. This represents an organization that has no control – which some would find enjoyable even if chaotic – but often leads to mayhem. An example of this may be Waterworld  or some other dystopian view of the future, but the tendency here is that it leads towards strong group asserting themselves and veering back towards 0.

The balance between tyranny and chaos is commonly held to be democracy and open societies where the key parameters of society allow and enable freedom of thought and opinion with individual and group rights yet within structures that avoid chaos. This is not at the centre politically but may well be at the centre in terms of permeability.

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This grid works in a similar way to complexity theory – the way that complex adaptive systems work. The tyrannies occupy the areas of stasis at the opposite end to chaos. In the middle, where real evolution happens, stands the “edge of chaos” – it is reasonable to assume that the best democratic, open societies or organisations exist here or should have ambition to do so. It is at the edge of chaos that real permeability exists – the ability of groups of people to listen, understand and adjust. This is where evolution happens without revolution.

The Common Threads blog has been all about how we are mired in rigid 19th Century establishments – even in democratic nations like the USA and the UK. There are a myriad of examples. Humans have evolved many ways to do itself down and ruling elites, wherever they are, enforce lack of permeability through many devices.  Even in supposedly open societies like the USA and UK, rigidity seems to be the natural default mechanism. This leads to poor voter turnout and reactions to Edward Snowden as we have recently seen.

Of course, these can be considered minor against other nations which vary from terror to corruption. South Africa, for example, has moved decidedly from one extreme – the tyranny of apartheid (terror) – but is in danger of side-stepping back into chaos.

Mandela shined a light into the darkness

The worldwide sadness that accompanies the death of a great man or woman shines some light into the cavernous darkness of those who do not live by the same high principles. This has been the case with the death of Madiba as was witnessed by the South Africa’s President Zuma when he rose to speak in front of his subjects in the memorial event in Johannesburg.

Jacob Zuma has been accused of corruption – millions of Rands of government money allegedly spent on his own property – an excess now termed Nkandlagate after the name of the region. The Guardian reported on this in November.

Yet, both fought the tyranny of apartheid – where a dictatorship of a minority (mainly of whites over blacks) could have been fractured by conflict but was changed by an eventual collapse of belief by the majority (under pressure from the rest of the world and its own black population) and nurtured to a peaceful outcome by Mandela.

Nelson Mandela was not one to overtly criticize those in the ANC that committed corruption. The ANC was his “home” but Mandela’s spirit of understanding and compassion must have been stretched to the limit when seeing his ANC brothers and sisters involved in enriching themselves at the expense of the mass of poor people in his country.

Andrew Feinstein, a former South African MP and ANC member, has written vividly on the post-Mandela corruption in South Africa in his book: “After the Party

Lighting up the shadows

Under Nelson Mandela’s giant shadow, there lies a worldwide web of corruption that is not just within the borders of his home country. As the boos rang out to embarrass Jacob Zuma, the question is whether they sounded loud enough to make a difference. Can the moments of reflection on Nelson Mandela’s life shine a light into the shadow so that those who see the problem act on it?

Throughout the world, corruption exists in many forms. The recent edition of Transparency International’s Corruption Perception Index showed that South Africa ranked 72nd (along with Brazil) out of 177 nations evaluated. Jacob Zuma and his compatriates may have corruption issues but there are (according to the Index) 105 countries in a worse state.

Nigeria – which is 144th on the 2013 list – has just recently seen a letter from the Governor of the Central Bank of Nigeria being sent to the President asserting that $50 billion of oil revenues has gone missing – representing 70% of the value of such revenues since 2012. Mr Sanusi’s letter calls for immediate audits of the oil accounts.

Whether or not the revenues have been misappropriated, the fact that the Governor of the Central Bank believes that they may have, this points to a society that is prone to corruption – and it is known to be on a grand scale.

Corruption can be seen as the brother of tyranny. Instead of terror, it provides a method of keeping the population quiet. Zimbabwe’s use of income from the Marange diamond fields ensures that the political leadership there is relatively secure and that real democracy / open society cannot permeate.

Angola is another example where Sonangol (the State Oil business) serves to ensure that oil revenues find their right place in the hands of the President and his family and retinues.

In both, terror accompanies the corruption of the resource curse and shows the methodology of keeping stasis – maximising the chances of ruling elites clinging to power and power over the resources of a nation.

How Do we Want to Live?

The rise of China and our continued reliance on economic growth / GDP as the only measure of our success as humans should give us pause – where “us” includes the Chinese as much as anyone else. If those of us in the democracies of the world believe that open societies are important, how important are they to us? How do they compare with a bit more GDP (knowing how unreliable GDP is anyway as a measure of wealth) and how unreliable is it to see economics as the foundation for the quality of our lives? How threatened are we by the non-democratic regimes elsewhere? Does China’s economic success of the past thirty years) threaten their internal structures or the rest of the world’s? Should we react to other nations’ lack of permeability – statis enforced by terror or corruption or legalism?

Common Threads has been about the impermeability of our legal, political, economic and social structures and changes needed in nations like the UK and USA. With the global economy upon us and with world-wide challenges such as climate change and resource scarcity; with G8 and G20 providing economic mechanisms for mutual dialogue; with Arab nations struggling to maintain the Arab Spring against the drive to stasis in places like Egypt and chaos as in Syria and Libya – how hard should we be pushing the “edge of chaos” – democracy – as the right answer throughout the world, knowing that this may cause us economic harm if the Chinese government, for example, don’t like what we say?

Is the alternative to motivating others to our ideals the fear that we could fall into the trap of impermeable extremism (as Golden Dawn in Greece would extol) or even the trap of Tea Party / Ayn Rand rigidity? China, Angola and many other states need an Antigone but it has to be more than brave students at Tiananmen Square. Antigonism will only work when our governments are brave enough to extol our open government world-wide.

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Institutionalized!

Will Self’s excellent new book “Umbrella” (http://www.amazon.co.uk/Umbrella-Will-Self/dp/1408820145/ref=sr_1_1?ie=UTF8&qid=1348396331&sr=8-1) brilliantly describes the torture of individuals put into “mental institutions” and how (until very recently in the UK) they were appallingly treated.

 

Old people in Care Homes have similarly been shown (one example had a miniature camera secured in the room of a care home) to have been malnourished, beaten and generally abused.

 

Maybe it is improper to use these examples of Institutions that have become uncaring and out of control to symbolize the problems faced regularly by all of us, but it is no coincidence. We have all become “Institutionalized” by the edifices that society has created to carry out the basic functions of society. This is not new. Ossification of institutions is a regular occurrence in society. The reason that monarchs are overthrown, for example, is because the institution of monarchy – the rule of society by one person or clique – becomes, eventually, intolerable to society in general.

 

Cracks in the Institutional Wall

 

We are all confronted by Institutions throughout our lives. From hospitals to school, from government departments to businesses, individuals live their lives working in and being confronted by Institutions.

 

Institutions have been defined as: “An institution is a system of rules, beliefs, norms and organizations that together generate a regularity of (social) behavior” (Greif, Institutions and the Path to the Modern Economy: Lessons from Medieval Trade).

 

They provide “equilibria” to society as a method or ordering our behavior. Greif also developed notions of dynamic institutions to show how institutions change through time.

 

Common Threads’ focus is that the institutions developed in the 19th Century for politics, economics, education and other key areas of society don’t work well in the 21st Century. The aim has been to generate some discussion of where the problems may be and look at some potential solutions rather than try to develop a theoretical analysis (when this is being done elsewhere – for example, in the area of economics at ESNIE (European School on New Institutional Economics – http://esnie.org/).

 

Major economic dislocations as we have seen since 2007 in the West – the banking disasters leading to huge debt problems leading to depression in Greece and the potential for this throughout Europe – could presage major changes in the way institutions develop. Often, the cracks in the wall have to be very large before we either build a new wall or try to fill in the cracks – which is what is being done now.

 

The changes in our institutions that are being made – small changes in banking (mainly in terms of individuals) are akin to deck chairs being moved around on the Titanic. Whether in our political institutions or our economic ones (or wherever large organizations have been set up to provide societal equilibrium) the danger is that they do not change enough to enable society to prosper – rather, built on the foundations of the 19th Century, they fail to deal with the issues that face them (and us) today.

 

Building Order out of Chaos – Challenging Entropy?

 

Just like the walls of Jericho were built to keep out intruders (subject to the odd trumpet) and we build firewalls in our computer systems to keep our systems secure, society builds our Institutions also to have effective walls against change and to build ourselves a cover against the outside world. Maybe we are genetically primed – our cells work within walls that allow us to withstand the chaos that would otherwise ensue. The Second Law of Thermodynamics essentially describes entropy – the natural tendency for good energy to dissipate into bad (useless) energy. Our life on this planet is a constant grind against the power of entropy and, maybe, our desire to build this equilibrium is a natural and instinctive drive for order within chaos.

 

This natural tendency to build order exists throughout civilization and can produce stability and contentment. But, as Darwin wrote: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” (Origin of Species).

 

The key is that Institutions cannot be left to ossify but have to change to meet the changes in environment that exist externally. New order has to be developed constantly.

 

In business, in relatively free markets, businesses come and go on a regular basis. The FTSE 100 started in 1984 and today only three companies from those 100 remain in the FTSE 100 – GKN, Rolls Royce and Imperial Tobacco. This is because the FTSE 100 reconstitutes itself every three months. The Dow Jones started in 1896 – who remembers American Cotton Oil or National Lead or United States Rubber? That is not to belittle business – there is a tough economic law that works hard to reward success and punish failure. Companies that don’t work hard to change to meet the needs of the external environment simply fail. Apple is a great example of a company that was close to collapse in the 1980’s but (under Jobs) completely redirected itself so that it is now the highest valued company in the world. But, for how long? Most companies fail (70% in the first three years).

 

Taking Down the Walls

 

Within the rest of society, change is harder. In our fight against the ravages of chaos, we allow pressure to build up, often learning the wrong lessons. This so often leads to an explosion as pressure gets too much. Society is not very good at understanding where the pressure is building. We defend the status quo for too long and then find ourselves unable to contain the whirlwind that attacks us.

 

In the UK, we have prided ourselves on our ability to change gradually so as to release the pressure before it gets too much. Not since the middle of the 17th Century has England fought a Civil War. This is held up to be the result of the changing democratic scene – from Magna Carta through rule by nobles to rule by the Commons (elected nobles); constant enlargement of the vote from 1832 onwards to women in 1918 (as long as they were over 30 and lived in a decent house) to 18 year-olds in 1969.

 

The walls have been dismantled brick by brick and most democracies follow a similar path.

 

The challenge now is that, in an age where developed societies have reached a decent level of economic wealth, politicians are losing any connection with those they are supposed to represent. Only around 50% of the voting population bothers to vote in general elections. More are now linking up with one-issue groups who they believe will push agendas on their behalf rather than hope that a political party will (by the mere casting of a vote every five years) carry out a manifesto that cannot meet most aspirations.

 

This means that the one issue lobbyists are getting greater powers to influence. Their techniques and ability to make change happen is developing constantly. Originally, such groups were primarily labour organizations (Trades Unions) and, in the UK, this developed into the Labour Party. Now, there are groups within the Third Sector that campaign on any range of issues from the environment to health, from taxation to education, from peace campaigners and human rights to fox-hunting (both sides). Organized campaign groups now operate as a key part of society so that individuals are now useful only at elections.

 

This means that more Institutions have been developed to challenge the political parties (it happens throughout the world). This is not a challenge to the political process – it may even solidify it by shoring up the political process within a wall of campaigning institutions.

 

What role for Society?

 

It is in this context that several have questioned the future in which we grow Institutions to work with other Institutions to govern (or run other aspects of our lives). This response to the walls around politics and government may be a natural one but is questionable as the new Institutions (of the campaigners and lobbyers) are run by a small number of people and funded in many ways. They are not accountable in the same way as political parties are supposed to be (and continue as long as they are funded). Their funds come from a variety of sources and confusion exists amongst society in separating out charitable work from campaigning and lobbying. In the UK, there is no register of lobbying so there is no transparency that is at least attempted in the US (which has its own problems owing to funding regulations that allow companies to fund to whatever level).

 

There is a real danger that the way we are evolving the democratic process is anti-democratic. Democracy is supposed to be government by the people. We have a three-tier system now whereby professional politicians are influenced by a small number (relative to the population) of professionally-run organizations throughout a term of office – remembering the individual citizens only when elections loom.

 

Is this the best we can do?

 

Building the Walls from the Bottom Up

 

In Australia (as I have mentioned in an earlier post), The Centre for Civil Society (under Vern Hughes) – http://www.civilsociety.org.au/ – has developed some new insights and a challenge to the norm in http://www.civilsociety.org.au/CivilSocietyPolitics.htm.

 

This is worthy of investigation as one means of providing greater involvement in our own future.

 

Also critical is the use of technology. Changes in the means of communication have always brought with them the means to radically change society. The printing press, the telegraph, the telephone, the TV, the computer and the internet, the mobile phone, wireless comms – all lead to more and faster information and an enabling of the individual.

 

This is a critical cause of concern for leaders of legalist states such as in China but also offers challenges (and opportunities) to so-called democracies.

 

Individuals are now empowered by technology by dis-empowered by institutions. This means that empowerment is taken up by online shopping or social networking rather much more than for social change or betterment. It means that civil society will continue to be badly served by national and international institutions that meet lobbyists in the corridors of power but are insufficiently grappling with society itself (rather the funneling through funded organizations).

 

Yet, power exists. Libya is a exciting example. Just recently, armed militia groups (a powerful central non-government organization) were ousted by people – civil society coming together to say, “thanks for toppling Gaddafi, your work is done!” In Egypt, Tahrir Square was the centre of civil society’s success to overthrow a dictator. Here, the Military Institutions delayed the correct response and we will have to wait to see if the elected President, Morsi, will serve his citizens or other Institutions (including religious).

 

Civil society (we, the people) should see the 21st Century as one where we are allowed to deliver. The forces for 19th Century equilibria often stand in the way of progress – and are standing in the way of serious climate change policies on an international scale. Institutions set up to effect change may be set up for the right reasons but we are now institutionalized and should seriously re-evaluate our reaction to the new Institutions just as we challenge the old ones. If we need a wall, then we should be blowing that trumpet to unsettle the existing ones.

 

From Euro Chaos to Chasm

As Greece Votes

I was on an ethics panel this week – organized by CGMA and Accounting Magazine. This has been arranged to discuss the outcome of CGMA’s recent survey “Managing Responsible Business” http://www.cgma.org/Resources/Reports/Pages/ManagingResponsibleBusiness.aspx

This survey explored the range of issues around business and doing things properly – ethically. It found that most businesses tried to, CEO’s were handing down responsibility for this to other staff, the ability to do so changed by country and there was real pressure not to in some countries.

With elections in Greece on Sunday and the Euro in everyone’s mind, the issue of business ethics seemed mighty small in comparison.

Ethics – moral rectitude, the rules of conduct – are not just about business. It is from society that ethics emerge and it is the destruction of the rules of good conduct that has tipped Europe and many other parts of the world into an economic, political and financial chasm. It is a chasm that threatens our way of life and, deep inside that chasm, there is not a lot of light.

The Chasm is not just a Banking one

 

We are continuously being told by our politicians that the current banking crisis can be resolved with large amounts of cash. The latest attempts are the £100bn on offer by the Bank of England of low rate loans to banks to regenerate lending in the UK and the €100bn on offer to Spain to prop up their banks.

In the chasm, sticking plasters don’t work.

Banking liquidity is not the problem anyway. The problem that banks have in Spain, for example, is solvency – their very being is at stake not their ability to lend in the short-term. They were over-stretched by awful decisions ten years ago to lend to get-rich-quick property schemes that were doomed and, when the tide went out, were shown to be naked. Borrowers across the western world were too highly geared – over-leveraged. While companies have managed to get their act together, individuals have not and while savings are higher, they are still, by normal standards, far too over-leveraged – which is still leading to house price reductions everywhere but London (where funds are rushing in from all corners of worse of countries).

But, the banks are hiding behind the problem in front of them – national insolvency. The transfer from nations (i.e. taxpayers) to banks has been enormous and continues. Well over a trillion dollars was poured into the US banking system and the same in Europe. The estimate is that this needs at least to be doubled. National solvency is at stake throughout Europe (west, south and east especially) and the austerity programmes now in place are a testimony to them.

Like the 1930’s, this is leading to massive unemployment and a risk that the chasm into which nation by nation is being thrown will swallow them whole. In Europe, the answer, we are told lies with Germany – they should assume the debts of all the others with Eurobonds – a financial answer to a financial problem.

But, the chasm is bigger than this.

The Chasm is engulfing Politics, Economics and Finance

Behind the financing of banks and the insolvency of nations lie the root causes. These are the disenfranchisement of the mass of people in most nations – disenfranchised not by their inability to vote every few years but by the paucity of choices on offer.

Greece offers a great example of a nation in economic chaos but the causes and the choices open to the people there are not often recorded.

Whoever read Michael Lewis’s “Boomerang” will understand some of the corruption that underpins the chaos. It is endemic and led by a political elite that have rampaged through the economy and gouged out any life from it. At the same time as The President of Equatorial Guinea is about to meet with four NGO’s (including my former employer, Global Witness) to discuss the rampant corruption inside his country, who is meeting with who to ensure that Greece can emerge with some dignity from its corruption?

Who can blame voters for, at last, running away from Pasok and into the arms of Syriza – the main concern is not the Euro, it is the corruption of the political elite and complete lack of trust in any politicians. The whole political class is tainted.

Outside Greece, the same is true to some extent in Spain and in Italy, where technocrats (unelected) now rule. The paucity of choice for voters – why vote for politicians when they are all the same and as corrupting and corruptible as each other?

The euro problem is much deeper. It is not just about emulating hard-working Germans, it is about serious change needed throughout Europe where leadership is absent or tainted by nations that are corrupt, unable to raise taxation, where the cash culture is rampant. This is true in Greece, Spain, certainly southern Italy and elsewhere. Why would Germany want to pick up the tab for this when the problem is chasm deep – not the surface banking or financial issue that has been painted?

The Ruling Class

In democracies, we are supposed to be able to vote out political parties that do a bad job. What happens when the whole political class is damned? The whole electorate is disenfranchised as a result.

This is true throughout the Eurozone – political parties have joined forces with other powerful elites to seemingly run countries – now, it is clear they have run them into the ground or, worse, into the chasm where conventional politics, economics and finance are drowning.

The ruling classes – politicians of all political persuasion, big business, the public sector – decided to run off with the benefits and have left the rest behind. Somewhere those funds reside in tax havens, well away from the hands of civil society. If it was all about harder effort, there could be some light ahead, but the problem is so deep that it will take years of real change and real hurt to recover to anywhere near where countries thought they were until recently.

From Chasm to ……what?

The European dream of one country living under one flag, which to many is a nightmare, is not a new one as the wars of the twentieth century showed. Now, a war just as savage is being fought – but a war where the fighting is hidden and where the soldiers don’t even realize they are in the trenches. Greek citizens and the young in Spain (where 50% are out of work) probably realize the consequences of the post-war European experiment. Many others don’t yet, but soon will.

Papering over a crack or two is relatively easy. Papering over a chasm is impossible,

The core problems of societies need to be resolved – corruption has to be ended, taxation has to be collected, public servants have to serve the public, politicians have to be credible and respected and people have to believe that if they work hard they stand a chance of being successful. For banks to function, they need finance; for businesses to succeed, they need markets and finance; for an economy to succeed, it needs good business but also a society that works – and that is not riven with insidious corruption of people and dignity.

Many African states (with massive natural resources) are corrupt and wealth is held by small elites. We did not believe that the corruption in Europe was on the same scale and, indeed, it is not the same – but the scale may be greater and just as endemic.

Solutions will not be found purely through the injection of more money into a chasm – the chasm has to be filled first or cleansed at least. Liberal democracy was supposed to be the best solution (the best worst solution). The 21st Century struggle may not be against the same totalitarians as in the last century (fascists and communists) and, hopefully, it may not be sullied by war and death, but, metaphorically, it will be just as bloody and won’t be complete until political elites are brought down to earth and civil society gets inside the tent.