Tuesday, September 27, 2005

The morality of corporate compliance

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Western corporations operating in the third world often face a conflict of values in carrying out business. Examples include the following:

  1. Congo: Anvil Mining complies with a government request to transport troops, despite the dubious morality of the action.
  2. Myanmar: Some French companies have sought to explore for oil in Myanmar despite the military junta in power violating the rights of its people.
  3. China: Yahoo and Microsoft have censored words like "democracy" and "Dalai Lama" from the Chinese version of their blogging software.

There is no argument that in these countries that the freedoms that we take for granted in the west only partially exist or don't exist at all. The question is - Are corporate executives obliged to act by western moral or legal standards in foreign markets? The answer is - No! Even where there is no threat to life. It would be understandable if executives complied with the existing government directives if company life or property was threatened. But in the case of Anvil, it provided vehicles which allowed the government to apprehend suspects. If a government is so reprehensible, then the western government should prohibit western companies from dealing in these markets in a way that benefits that nation's interests.

What are the practical benefits of sanctions?

Western governments have been applying sanctions for years with dubious results. Sanctions applied to Myanmar have denied local people of prosperity and forced those countries into the illegal drug trade. Part of the problem is that these sanctions are applied at a time when these countries have no money to buy foreign goods. Also its pointless to apply western standards of morality when they are not supported by the citizens of the country. Part of the reason that statist regimes exist is that the population has no better idea than government. Tyranny is part of their way of life, and they are just as prone to support the efforts of one tyrant to replace the encumbent. By preventing trade with these countries we are likely denying the local population the opportunity to develop their own defense:

  1. Commerce allows the flow of ideas, evolution of higher standards or expectations by way of comparison with the westerners they interact with, and thus facilitating personal growth. The Burmese nationals need to get their understanding from westerners because they will not get it from their government.
  2. Commerce can finance government,

What if the proceeds of commerce are expropriated by statist governments? The reality is that western governments similar expropriate wealth from their citizens, so there is nothing new about that. Its not valid that cutting off their source of tax revenues will actually help Burmese nationals, or move the country towards democracy. On the contrary, a statist regime lacking external finance will be inclined to be more repressive, and seek to finance itself in more desperate ways. It can only increase the extent of repression.

The reason that western governments don't want to support tyrannies is that prospect that they might pose a greater danger by virtue of gaining more power. This can occur because:

  1. They develop or acquire nuclear weapons
  2. They resort to drug cultivation to finance their administration
  3. They engage in mass murder of citizens

Statist regimes pose other problems as well:

  1. Politicians feel compelled to do something about the callous deaths of people in these countries
  2. Politicians are reluctant to engage in military action unless there is a clear defence or commercial benefit
  3. Politicians are more likely to take action if there is a refugee displacement issue, eg. Refugees washing up on their shores.
  4. Politicians are more likely to take action if there is a local ethnic community in the western nation fighting for the welfare of their fellow citizens

The reality is that no country becomes a democracy overnight. It took the West 400 years to achieve their current values - and they are far from perfect. It is a little precious to expect the third world to embrace democracy overnight when it tries to force democracy upon them. You cannot expect to establish a stable democracy if there is no respect for rule of law. Respected or feared leaders are a precursor therefore to democracy.

Its compelling for the west to support 'liberty' campaigners, but the values of these zeolots do not embody the values of the general populous. Opposition needs to be repressed before it can be encouraged to grow. As long as the people's expectations are higher than those of government, it will factionalise the population. Repression tempers demands.

Western democracies tend to hold democracy on a pedestal - but democracy is not necessarily a value. It is itself still collectivist - in the sense that it makes little difference if your government has a 25% or 75% popularity if they are acting immorally. Reason is ultimately the standard that needs to apply, and whilst it cannot be forced, it needs to be encouraged. Nothing grows without first creating the right environment. Its noteworthy that it was British (and other imperialists like Germany & France) that established the tradition of repression and authoritarian government in these countries. These imperialists repressed local opposition for the sake of securing their colonial trade and military interests. The Burmese junta has done the same. Unlike Britain - they are holding no political contradiction, but they are holding a more fundamental contradiction - the belief that there is any efficacy in repressing personal liberty.

Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com

Sunday, September 25, 2005

The achievements of George Bush

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George Bush is by no means the least popular president in US history. Strangely the President is very popular
in his own country, but not so outside it. His popularity stems from:

  1. Communicating a simple message which evokes the shared Christian values of the electorate
  2. Values-driven: The President has steadfastily dealt with issues that other presidents would often walk away from.
  3. Leadership: He has been able to lead on a number of issues. eg. Free trade, third world debt relief, anti-terrorism
His unpopularity stems from several issues:

  1. Mismanagement of political crisis and natural disasters reflected poorly on him as leader - or at least on his capacity to delegate effectively. eg. Hurricane Katrina & the Iraqi War
  2. Lack of strategic direction - There did not seem to be a strategy in place for Hurricane Katrina or the Iraqi War
  3. Financial mismanagement: Under George Bush the US public and private debt burden has blown out

Perhaps the greatest legacy of the US administration under President George Bush Jr will be his efforts to:

  1. End the debt spiral for 28 of the poorest global economies
  2. Fighting terrorism
  3. Contributing to the freeing up of trade - this remains work in progress

Some of the credit for this progress - primarily the free trade agenda - should go to the media, whose journalists have supported this. They have been better advocates of complex intellectuals more so than Bush, who hasd fumbled in his message.

Third World Debt Spiral

The US government is urging the G8 Group of Nations to carry 70.2% of the debt relief program that would remove the $US42.5 billion debt from the world’s 38 most heavily-indebted countries. Most of the debtors are located in Africa, with their debts owed to the World Bank and other agencies. This is an important issue because debt repayments are a considerable annual burden on these countries. It seems likely that these governments will need to adopt some conditions if these debts are to disappear. Research??

Trade Reform
Bush has made a pledge to abolish tariff and farm subsidies that distort international trade, but only if other rich nations join him. France is likely to reject the ‘opportunity’. Bush has argued that terrorists have fed on the anger & resentment towards the West for preserving such policies. But really there is more to it than that. The WTO Accord reached in late 2001 achieved trade liberalisation, but the agreement exempted agriculture to ensure a consensus would be reached. While the US is trying to get Japan & the EU to join his pledge, the Bush administration has opposed sugar imports and retained subsidies. The WTO also ruled that its cotton programs cited by Brazil breached guidelines. Regardless a lot of US grain farmers are already successfully competing in global markets.

As far as rhetoric is concerned, John Howard has done more to progress global free trade, since Australia has liberalised markets in key markets which will prove the viability of opening trade without decimating farming sectors. This progress will provide the evidence for other countries to go further. Australia has reached FTAs with Singapore, New Zealand, Malaysia, Thailand and the USA, and is working on similar agreements with Japan and China. Australia of course has the benefit of being a small market, offers disease-free agricultural product markets and less competitiveness than the Third World liberalisation. These FTAs could then be a precursor for more or less free trade.

Reason is the standard for debate.

- Andrew Sheldon www.sheldonthinks.com

Wednesday, September 21, 2005

The benefits of 'real' tax cuts

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Indonesian President Sasilo Bambang Yudhoyono has pledged to reduce corporate and personal tax rates to stimulate higher levels of investment. The Indonesian president has recognised the contribution that tax cuts have made to some of the emerging growth economies such as:

  1. Turkey has achieved real economic growth of 7% between 1985-89 and 9% in 1990 after lowering the lowest marginal tax rate from 40% to 25%, and the top marginal tax rate from 75% to 50%.
  2. South Korea recorded growth of 9.3% between 1981-89 are adopting tax cuts and expanding the range of tax deductions.
  3. Ireland was the fastest growing member of the OECD in the 1990s after it reduced taxes

Some tax cuts are more real than others. Consider that the US government offered tax cuts but neglected to cut spending, in the process burdening the country with a large public deficit running at 6% of GDP annually. The Australian government’s tax cuts made little contribution to the economy since they merely gave back to private citizens what inflation-inspired ‘bracket creep’ had taken from rises in nominal income. In contrast to the real gains made in the Turkish & Irish economies, the expansion in the US and Australian economies was the result of easy monetary policy and cannot be sustained.

The argument then should be - if tax cuts are a burden on economies - why not replace them with user-pay fees on services provided by governments, and allow citizens the choice as to whether they need them. Who could argue with that policy if they are so critical 'public goods'.

The facts for this article were derived from the Japan Times, though I’ve taken it upon myself to present the article in a better context. The original article suggested tax cuts are always good….an over-simplification.

Reason is the standard for debate.

- Andrew Sheldon http://www.sheldonthinks.com/

Wednesday, September 14, 2005

Fascists in Western Democracies

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When people speak of fascism their mind goes back to Hitler and racial tyranny and instances of invasion by one country by another. These are not events that we attribute to 'modern' western democracies. There are no doubt peace activists who might criticise Bush & Blair for being rogue militarists, but what undermines these critics is that they share the same ideological roots as those they criticise. They are in fact the opposite side of the same collectivist coin. Just as its reprehensible to violate the rights other other people (or countries), its equally reprehensible not to defend your own rights, or those of your nation. They are the pertinent values, but are they being meaningfully applied in this context.

The problem is that standards for civilisation are set by the modern democracies. Tyranny grabs hold of the small pockets of the world that western nations are not interested in. By default neglected countries become hostile ones.

The US has demonstrated its capacity for turning around markets. eg. Consider the role of the US in making Japan possible. Japan, and to a lesser example HK and Singapore, were Asian countries that learned by example. South Korea, Taiwan, Thailand, Malaysia saw the success in Japan and wanted a piece of it. The same lead was provided in South America by Chile. Is there an opportunity to establish a similar precedent in Africa? Perhaps that is Ghana...but there are no stand-outs. There are several countries doing well.

The problem with this 'leading by example' was that it was based on a pragmatic desire to catch up to the western by a narrow economic measure. If one looks at Japan, its a hollow victory when you consider the way in which the society is structured to sacrifice the interests of the individual to those of the government and corporations. There is a hierarchy and salarymen and housewives are at the bottom. This hierarchy extends pervasively through the whole of society, whereas in western nations its a concession made by voters who begrudgingly accept their middle class guilt. It does not permeate all of our time. We are for the most part concerned with our own lives even if we rationalise otherwise. That does not mean what we pursue is necessarily in our interests. In nations where values are considered subjective, its inevitable that people would slip up in any of the following respects - by not acting in their self interests because:

  1. Failing to understand the nature as a human being, eg. What they accept as their cognitive tools, eg. They might regard emotions as equally valid as a cognitive tool as rational theory, or they might accept evasion or decoupling from negative thoughts as acceptable, and to this end they can be supported by peers, with a similar interest (set of values)
  2. Hierarchy of values distorted by negative life experiences
  3. Priorities that reflect a distorted sense of life, eg. A sense of scarcity rather than abundance
  4. Poor definition of values, wich undermines their integrity

All these issues are important because they are the foundation upon which fascism is based. Hitler was not created in a day, and he did not exist in a vacuum. He was the product of German philosophical thought that permeated that culture during the 1800s, with intellectual influences like Hegel and Immanuel Kant, which undermined the efficacy of reason as a tool of cognition, and elevating passions, emotions and its corresponding ethics of self-sacrifice.

Looking at society today, these 'dangerous' foundations are evident in our society. There is no conspiracy to introduce socialism or any variant, the political direction of any economy is just people acting as they please, often with little thought to where they are going. The dangerous signs are evident when you analyse events, so lets consider the following in Australia.

Roots of collectivism in Australia

Australia was established as a colony in 1788. From the beginning prosperity did not come easily since the colonies struggled to introduce crops that would grow under the conditions. These hardships necessitated that public-funded governments would carry the burden. Australia was not as fertile or well-plenished with water as the New World (USA) and certainly Australia did not have the early successes with tobacco, cotton and sugar that the USA had. Moveover the hardship in the USA was carried by African slaves, not as with predominately free settlers in Australia. More importantly, the US was established largely in opposition to the tyranny of British monarchy, whereas Australia embraced it. The US had alot easier path to developing export markets with Europe, whereas Australia was far more remote. These early experiences entrenched the values of the 'nanny state' taking care of the citizenry.

Eventually prosperity came because Australia found a niche supplying the Old World

So what have we learned in the modern era. Well by default, the Conservatives in Australian politics have been able to stear the economy towards liberalisation - a global trend stimulated by Margaret Thatcher in the modern era, but really it was purely pragmatic benefits of wealth creation that gave it the momentum, and its been an 'alliance by stealth' between governments, the media and 'big business' representatives that has entrenched this trench, but purely for self-serving objectives. By delivering on wealth creation for those that mattered - big business since their investments determine where jobs are created, incomes are boosted and spending is undertaken. That has brought prosperity, but not without victims.

TALK ABOUT JOHN HOWARD - peace activist deported, Pauline Hanson, political processes, emergency powers

But lets not forget our own ethical principles whilst we are sending troops to the Middle East to defend theirs. Why are we fighting there? Why defend values without explaining why you are there, without providing any explanation. At the same time the Australian Attorney General Philip Ruddock has deported the American peace activist Scott Parkin, of Houston, Texas because he participated in a recent protest against US energy company Halliburton, whose commercial interests benefit some members of the US executive. He has not committed a crime, and what risk does he pose by opposing war or highlighting threats to good government. This is on top of the arrest of Pauline Hanson.

Not finished

Reason is the standard for debate.

- Andrew Sheldon www.sheldonthinks.com

Sunday, September 11, 2005

Comments on "Fahrenfeit 9/11" Movie by Michael Moore

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This was perhaps the most ill-balanced piece of smeer I've ever seen, but nevertheless one can not discount all the information provided. I make the following comments:

  1. Bush as an executive: Bush is evidentially a lazy president, but then the role of president is not to do the hard work, but to make sure he gets it done. Maybe by his standards he is doing an adequate job, not by mine. I dont mine him playing golf if he's an effective leader.
  2. Performance on terrorism: Bush cut funding on terrorism before 9/11. Its unfair perhaps to attribute this directly to Bush since the decision would have been made by subordinates. He might never have read the documentation. It was the first instance of terrorism in the US, and there have been none since.
  3. Relationship to Bin Laden: There is or was an inappropriate relationship between the US government & the Saudi Bin Laden business interests. Having said that - the conflict lies with George Bush Senior - not the current president. As a former president he is entitled to view military intelligence, and its plausible that it couild be passed on to Saudi interests - for the sake of personal 'business' interests. Of course you'd hope for national patriotism, and accountability. Is it there? It seems not when you consider that some 1444 Saudis were allowed to exit the US without restriction - without giving any evidence, without being questioned. Particularly this was important because this flight hosted 41 members of the Bin Laden family. Today some Bin Laden members retain contain with Asama Bin Laden. Of course, it has since arisen that 14 of the 19 terrorists were Saudis. It has to be appreciated that partly Asama was likely anti-American because of the Saudi-US relationship, and that would take on a personal dynamic as far as his family.
  4. Integrity of the President: Its critical that the President of the US has alot of integrity. Thats not apparent when George Bush Jr breached insider trading rules by selling about $850,000 of shares in Harken Energy Corp, of which Bush is a director, prior to that company announcing a $23mil loss. His legal counsel later became the Ambassador to Saudi Arabia (according to Michael Moore). Was he lying? Its a strong possibility. Is he loose with the facts? Its a possibility.
  5. National Conflict of Interest: It is important to recognise the importance of the Saudi relationship at two levels: Financial - The Saudis have invested $8600billion in the USA, equal to about 6% of the NYSE market capitalisation.
  6. Leadership: It took President Bush 2months to get troops on to the ground in Afghanistan. This is perhaps an unfair criticism. Whilst the US might have lost the surprise, its better to optimise planning to ensure the safety and strategy. Particularly since many are critical of US strategy and vision. Its a valid point though that there is a conflict of interest with Bush Senior & Cheney as directors of Halliburton & Unocal. Though one would think there would be a whole range of interests fighting over these issues, such that there would be accountability. But clearly the US administration has done a poor job dispelling those concerns.
  7. Congress hypocrisy: Michael Moore approaches congressman, inviting them to send their children to Iraq, as only 1 congressman has a child in the war. Its a cheap stunt. Its not the role of any parent to assert want career direction their children should take. Congressmen tend to be wealthy, and their children have options. Military life is generally a career choice for people with no options - the poor. It was thus cowardly of Michael Moore to ambush these congressmen. Also more money is spent on protecting US military by utilising the latest technology than any other country, or any prior war. Far fewer people are being killed in the Iraqi War than previous wars. Any loss of life is regretable, but the value is worth it, if there is a consistent & well-articulated strategy to achieve a 'foreign policy' objective. The US is laxing in this respect.

The movie was a depictation of facts, yet it was poorly researched and a heavily biased historical record. It starts by asserting that " '9/11th' was the worst attack on US soil" - but what about Pearl Harbour - that was on a far bigger scale. A legitimate comparison would look at the difference is lives lost and the real (after inflation) cost of damages.

Michael Moore is guilty of hypocrisy as Bush is guilty of laxed integrity. Both are modern-day mediocrats, mediocre and media-philic. Both want their rays of stardom.

As far as what should be learned from the movie:

  1. People should be pushing for greater levels of accountability in government, just as Bush has adopted corporate governance laws. Why is government exempt from such laws.
  2. The US administration lacks integrity and a clear purpose. These are qualities not just lacking from the US administration, but a great many of their people - the populous whom elected them.

Reason is the standard for debate.

- Andrew Sheldon www.sheldonthinks.com

Friday, September 02, 2005

Western attitudes to China

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A divergence of thinking appears to be developing between the conservative Australian (John Howard) and US (George Bush)-led governments. Bush wants Howard to work on pushing China to universal values. Howard saids the relationship is not just opportunism. Howard saids he sees it as building on the things they have in common, and not being obsessed with the things that make them different. For Howard, values and power are separate. In contrast, Bush will only allow countries that share its values to have power in Asia.

Both leaders have a legitimate position since there are several issues to consider - both moral and strategic:
  1. China has made considerable progress shifting towards a modern free market. Market structures are changed by governments, but the values of the participants change more slowly and only implicitly. A great many Chinese still live in rural areas. They have more entrenched collectivist values and are thus prone to view east coast capitalism negatively - in terms of wealth disparities.
  2. China holds alot of US debt. Coersion by China might well result in a threat to repudiate that debt.
  3. Militarily - both countries are in a stalemate - neither willing to test the other. China could only move on North Korea.
  4. The Industrial Revolution that swept the 1600s Western World took 400 years to take hold, yet the US is expecting the same to occur in China in less than 10 years. It takes time for values to change.

Howard`s response seems somewhat mypoic though.

Reason is the standard for debate.
- Andrew Sheldon www.sheldonthinks.com

ConvinceMe.Net - Anyone up for a debate?