The Economics of Happiness and Meaningful Work

Recently, one of the community activist groups in our area hosted a screening of the prize-winning movie, The Economics of Happiness, followed by a Skype interview with Helena Norberg-Hodge, one of the co-directors and founder and director of Local Futures – Economics of Happiness, formerly known as the Institute Society for Ecology and Culture (ISEC).

It’s definitely worth seeing, if you haven’t already done so. In addition to information available on the Local Futures website, a YouTube film clip offers a quick overview of the main themes explored in the movie: The Economics of Happiness – Official Trailer.

In her commentary on the Skype call, Ms. Norberg-Hodge emphasized the importance of launching and supporting community-based initiatives that rebuild the local food economy and deliver education for action.

She encouraged attendees to mobilize democratic action and draw upon the power of the electorate to influence politicians to enact, rescind, or amend laws regarding taxes, subsidies, and regulations so that locally-sourced products have an even playing field with their globally-sourced alternatives.

Her rationale suggested that the resulting decentralization of corporate and governmental structures would increase the number of jobs. It would also provide community members with meaningful work based on values and skills resurrected from a nearly lost ancient wisdom inherent in our cultural roots. In many instances this worthy work translated into farming using simple tools and adhering to millennia-old agricultural practices.

While Ms. Norberg-Hodge did not openly discount technological developments, the significance of them as a defining force on the pace and degree with which our civilization continues to advance received short schrift.

The loss of jobs today comes primarily as a result of technology. The machine replaces human labor–period. Our challenge is to figure out what we do with our time as the machine continues to eliminate the need for us to spend it in drudgery. The increased redistribution of power as decentralization takes hold opens the door for a new definition of meaningful work WITH the machine, not against it.

No doubt, localization will give us the opportunity to learn how to invest our time in our personal development, care and support for one another, and adaptive community cultures. That would be a dream worth making a reality. But if the future of localization means becoming reacquainted with a shovel, rake, and hoe for hours on end, that seems more like a nightmare! Better to master the machine for our well-being rather than our destruction.

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Wednesday, August 8, 2012

The Problem of Power

Since humanity began its odyssey out of Central Africa millennia ago, hierarchy is the only consistently adopted structure for distributing power within a social system. This structure holds intact the social system in which it exists. To do so, it exercises three roles:

  1. Define “boundaries” – territorial, birthright, and behavioral – that determine who’s in and who’s out
  2. Provide security that protects the boundaries, preserves the lineage, and maintains the behavioral guidelines
  3. Respond to changing circumstances so that the primary social system persists

Hierarchy is easy to install since it begins when one person assumes a dominate position relative to another. It is efficient. The dominant one sets the boundary conditions and subordinates operate within them. When coupled with fear of consequence if one does not stay within the boundaries and the promise of reward if one meets or exceeds expectations the vast majority of members comply with the dictates of the hierarchical social system.

Members of hierarchical social systems participate in governance, free enterprise, and non-governmental affiliations. The rulers set the parameters in which members operate so that government has the resources to assure security, enact rules of conduct, ownership, and commerce, and provide a system of jurisprudence in the event that members do not follow the rules or violate the rights of members. Property owners, business owners, and those who contribute their skills, time, and energy are compensated, pay some percentage of their profit and income to government so that it can function, and voluntarily give to community-based organizations that benefit the commonweal and care for those who cannot contribute. It is a system of cooperation, choice, and commitment that is simple and elegant.

Hierarchy is a structural “tool” for managing social systems. It is the integral framework upon which all institutions – governmental, business, or non-governmental / not-for-profit – are built. As such, it becomes a common denominator that cuts across society in all its endeavors. Like any tool, it is neither good nor evil. How people use hierarchical structure within their institutions and throughout their social system is what imbues it with certain characteristics of morality, ethics, and fairness and places it on a continuum of social justice ranging from barely evident on one end to being a matter of course on the other.

The driving force that shifts a social system along the scale of social justice is the use, or abuse, of power. Hierarchical social systems concentrate power in the hands of a minority number among the overall population. As Lord Acton stated, “Power tends to corrupt, and absolute power corrupts absolutely.” In other words, when holding a dominant position, some are seduced by the power they have over others. This prompts them to do the following:

  1. Stay in their positions of power
  2. Keep the hierarchical social system intact so that the positions of power they hold are preserved
  3. Curtail affiliation among those who are disenfranchised by the system so that the threat of insurrection is quelled.

Basically, people who are so affected are drawn by the possibility of extracting even more profit or garnering more control. They limit choices for subordinates and force compliance to rules and conditions that are not beneficial to members. In addition, they attempt to keep the system as it is so that their gain is consolidated and ideally, continues to grow.

As an example, approximately 50% of the world’s population earns less than $2 / day per capita through subsistence agriculture. The hope of a higher quality of life is dashed each day eking out an existence under the harshest of circumstances. Leadership in these countries is averse to mechanize and modernize agriculture because those displaced would venture to cities in an effort to find work. This would overburden the already congested and over-stressed infrastructures in these urban areas elevating discontent and unrest. Better to keep people where they are so they are contained having to care for themselves. Meanwhile, the economies grow and the top echelons gain wealth.

Another example: according to an article in The Open AIDS Journal entitled, “HIV Infection and AIDS in Sub-Saharan AfricaUNAIDS report,” Sub-Saharan Africa is home to 70% of all people afflicted with HIV in the world. This area holds some of the world’s richest natural resources, yet the population is in grave peril, health-wise, including leaders. In fact, that is the point. The world has known about AIDS / HIV in Africa for nearly 30 years and has only in the last five mobilized efforts to do something. All indications suggest it is too little, too late. Millions have died from AIDS already and millions more will do so over the next two generations as the endemic unfolds. Sub-Saharan governments are rendered ineffective due to a lack of competent, experienced leadership, citizens are not able to care or fend for themselves, economies slow their growth, and property ownership and control shifts to foreigners. Colonies once lost due to revolution are reclaimed – without firing a shot.

As yet another example, consider genocide. In his 1994 book, Death by Government: Genocide and Mass Murder since 1900, author R.J. Rummel defined and documented “democide,” e.g., atrocities committed by governments on their citizens. Of the nearly 170 million who died at the hand of their governments during the 20th Century, 130 million, over 75%, were victims of four regimes: Soviet, Communist Chinese, German, and Nationalist Chinese. This does not include Rwanda in 1994. And genocide continues as the people from Darfur have borne witness every day this year. A weakened population becomes weaker. Those who hold the most power in the world act as though they are powerless as these horrific injustices go unchecked. The reality is there is nothing to be gained by intervening and much that could be lost if circumstances go awry. The people of Darfur, like the millions before them, are collateral damage in an economic power struggle of global proportions.

In his unsettling essay, “Waiting for the Lights to Go Out ,” published in the October 16, 2005 edition of The London Times, Bryan Appleyard posits a rather grim future wherein civilization is doomed to return once again to the Dark Ages. The central theme of his essay is the meltdown of society as we know it due to our insatiable addiction to oil, the inevitable depletion of oil reserves, and our woefully inadequate and untimely response to that eventuality. At the heart of his thesis is that human nature has not progressed very far since we began our migrations throughout the world from our African origins. Appleyard states, “Our aggressive, tribal nature is hard-wired, unreformed and unreformable. Individually we are animals and, as animals, incapable of progress. The trick is to cage these animal natures in effective institutions: education, the law, government. But these can go wrong.” Not particularly encouraging!

Rulers enact laws that are increasingly restrictive, militaristic, and draconian or become arbitrary in their decisions. Owners pull more profit, become more risk averse, and offer fewer benefits. Having less voice and impact, non-governmental organizations become more fanatical and close-minded; their ratios of administrative overhead to pay-out increase, and beneficiaries receive less real assistance.

In summary, the thirst for power and the specter of losing it becomes a corruptive force that undermines the fundamental tenets of a system that is given to efficiency and effectiveness if used honorably. People suffer for lack of true justice. Is there any way institutions, no matter how well-intended, can escape the slippery slope into corruption and injustice? Or is this simply the dark underbelly of hierarchy which must be accepted until people have more distance in time from their early violent struggle for survival as Homo sapiens? What is your opinion?

Originally posted to New Media Explorer by Steve Bosserman on Monday, December 12, 2005

Pareto and the Pyramid of Power

The year 2006 marks 100 years since Vilfredo Pareto noted that 20% of the population owned 80% of the property in Italy. This conclusion combined with the analysis methods that support it led to the formulation of the “Pareto Principle.”

The tools and techniques associated with this principle have widespread application in circumstances where a small subset of one category causes a significant effect within a large subset of another category. During his work with industry, Dr. Joseph Juran coined the phrase, “the vital few and trivial many,” to describe the effect of the Pareto Principle in the business setting. For example, a company has a staff of ten sales representatives. Of the ten, the three highest performers generate 60% of the sales made during a reporting period, the five middling performers bring in 35%, and the two lowest performers contribute only 5%. Armed with this information, responses can be developed that are tailored differently for each of the three groups in an effort to increase overall sales performance for the least investment or cost. Another example is in a set of 100 manufacturing operations where the overall defect rate is .1%. There are 10 operations that cause 90% of the defects. Addressing those 10 are going to have a much more positive effect on the performance of the whole than focusing attention on combinations of the remaining 90 operations. Like most rules of thumb, the Pareto Principle can be misused; but in general it helps prioritize activities, separate the important from the pesky, and focus limited energy on the items that are going to make the most difference.

The Pareto Principle had it birth in economics, a social science. Given this background, there is another application for the Pareto Principle that covers additional ground. When this basic postulation – a small percentage of the population owns a large percentage of the property – is bracketed by two corollaries – a small percentage of the population enacts and enforces a large percentage of the rules that govern the behavior of the overall system and a small percentage of the population receives a large percentage of the compensation awarded by the total system – the resulting triad describes a fundamental truth about social systems: a small percentage of the population controls a larger percentage of the power within the whole system.

The exercise of power in a social system establishes an individual or group in a dominate role and subordinates the larger population of individuals or groups within that system. The population size can range from two – one person in relationship with another as in a marriage – to one over millions as in a country ruled by dictatorship. Regardless of population size, structure is required to maintain a requisite level of control over myriad dominate-subordinate relationships in the system so that the system persists. This structure is hierarchy.

Hierarchical social systems impact the people within them in three key ways:

  1. Each person belonging to a hierarchical social system has hierarchical relationships with all others in that system
  2. Each person has concurrent membership in multiple hierarchical social systems and can hold positions at different levels from one hierarchical social system to the other
  3. All hierarchical social systems concentrate power in the hands of a select few.

The universal symbol for a hierarchical structure is the triangle. Authority is held at the top, then distributed in varying degrees, level by level from the top to the bottom. However, a more appropriate geometric symbol for a social system is a three-sided pyramid (reference image below). One side of the pyramid is the hierarchical structure of governance. People participate in governance by making / changing the rules, enforcing the rules, and obeying the rules. Of course, there are always those who choose not to obey the rules. They are subject to some consequence levied by those who enforce the rules in the interest of what is called justice. The net result is that only a few operate at the top of the governance triangle to set and manage the rules while the clear majority obeys.

Another side of the pyramid is free enterprise. People participate by doing work that adds value for which they are compensated. They exchange that compensation for other goods and services they need and want. Wrapped up in free enterprise are concepts of property and ownership, money and capital, business and entrepreneurship, markets and customers. Wealth, in the form of assets, rests in the hands of a few.

The third side of the pyramid is affiliation. People participate by joining different groups and organizations which represent shared beliefs and ideals, customs and traditions, principles and values. These groups carry out activities that promote “causes” shaped by their worldviews. They provide forums for members to have voice and presence concerning their perspectives and interests. Those having the greatest access and influence are those who have the highest positions in the hierarchies of these organizations and represent the strength in numbers or vantage point of their memberships.

These three arenas: governance, free enterprise, and affiliation define the landscape in which organized human endeavor is conceived and carried out. The pyramid they form is a pyramid of power that develops and deploys human intelligence, energy, and skill to build, adapt, and sustain civilizations. While the three are vitally important as standalone systems, the interrelationships among them determine the effectiveness and efficiency of the whole. People vote for their leaders in governance. People make and buy based on supply and demand. People form non-governmental organizations to give body and shape to their views and interests. People derive power from the pyramid in unequal portions from the three triangles but regardless of the combination, the power they get is sufficient to stay in the system and work together so that the system persists.

Originally posted to New Media Explorer by Steve Bosserman on Saturday, December 10, 2005

A Philosophy of Solutions

There are myriad ways in which we humans understand ourselves and our needs and wants within our experiences of the world around us. Self-awareness coupled with the dissatisfaction resulting from unmet needs and wants motivate us to influence circumstances in an effort to have a more favorable experience—to find a solution. Contentment, if ever achieved, is fleeting. The viability of a solution just found crumbles in the face of curiosity, “antsiness,” or ennui as further needs and wants rush in to renew the cycle. While this predicament may appear to be a routine fueled by frustration, the continual search for solutions is the creative impetus that advances every aspect of human civilization.

Solutions exist at multiple levels. The one most familiar to us, personally, is at the mind level. Despite our immediate circumstances we can always dream about a reality quite different from our current condition. In the realm of the imagination all realities are possible. Even though I may not have the details, the mental world in which my solution is envisioned is different than what I experience in the physical world; and it is preferable. This reality envisioned is a powerful construct, that when acted upon externally has the potential to bring a solution into existence at other levels.

Solutions stated are externalized. Whether verbalized, graphically represented, or physically demonstrated, the act of moving a solution from the mind to the surrounding world externalizes the solution. It becomes an agenda item in a forum outside myself and initiates conversation with others. Those in my family or community or workplace react to it by doing nothing or something, but react they must.

Solutions experienced externally are virtual or material. For instance, I can play soccer on a real field in a real stadium with real teammates and a real opposing team or I can play soccer on a virtual field in a virtual stadium with virtual teammates and a virtual opposing team. In the first case I am required to be somewhere at a specific time with the proper equipment and be prepared to expend a great deal of physical and mental energy for the duration of the game and run considerable risk of getting exhausted or injured. In the second case, I have an avatar who responds as I dictate within a virtual space wherein my teammates and the opposing team are similar representations. The game can start whenever and be played by whoever shows up online or I can make up my own players and have my own game independent of others. Fatigue and injury are still possible. However, eye fatigue from staring at the screen too long and injury to fingers and wrists due to excessive rapid maneuvering of the joystick are of a different nature!

The cost of designing and developing the material solution dictates the use of a virtual solution. When the cost of the material solution is quite high and testing is essential to manage risks, modeling that solution virtually at the outset carries significant value. Buildings, equipment, vehicles, appliances, even construction and manufacturing systems are likely candidates for designing and developing the virtual solution first to prove the concept before converting it into the much more expensive material solution.

Virtual and material solutions are transactional. Once solutions are expressed in the external world by whatever means other people experience those solutions and have conversations about them. Our desire to see our solutions be successful defines needs and wants for information, resources, and authority beyond what we can muster by ourselves to fulfill our solutions in the virtual or material realm. These needs and wants lead us to conduct conversations with others in transactional patterns to gain their understanding of, agreement with, and commitment to or permission for our solution to advance. Many times the world easily accommodates our efforts to advance our solutions and the transactions required to carry them out are minimal. Other times, though, the social and natural systems are perturbed by our solutions such that we are compelled to engage in numerous transactions to move forward with our solutions.

Transactions are economic. I need or want information, resources, or authority that others have and I must negotiate with others to get it. Either they give it to me through some altruistic motivation or we come to an agreement where I get it in exchange for something I give them. The nature and type of transactions I conduct to get what I need and want are directly related to the importance and urgency I have for my solution to be successful. As a result, transactions are governed by social convention, ethical and moral frameworks, conversational skill and savvy, and immediate personal circumstances. Transactions constitute the medium of exchange within an economic system by which solutions are externalized within the political and business arenas.

Originally posted to New Media Explorer by Steve Bosserman on Sunday, September 18, 2005 and updated on Saturday, September 24, 2005