Tuesday, May 11, 2010

The intellectual decline of the business sector

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The Australian government is threatening to adopt a new Resource Rent Tax. In protection of its interests, miners are saying things like "You will stop us creating jobs" - the government is saying 'we will create more". The miners are saying "But we pay more tax than the banks", the government is saying "Not according to our calculations". The government is saying 'resources are a public asset', the miners are replying 'we already state royalties'. Resources are of course regulated by the states, thus if the Federal government takes a cut, it will undermine new projects, which will undermine the State tax receipts as well. Not that WA or Qld will have a shortage, but they might appreciate the excess, and certainly other states will be missing out.

All this political 'energy'. Sometimes I think the world is just not worth all the effort. Some people seem just not worth the effort. But what else is there to live for but to complain to various interest groups, to get the best possible outcome. I frankly would prefer the mining industry, as useless as they are, to retain the profits rather to witness the frustration of governments falling over themselves to waste the money. I still feel this way, even after the following dialogue with a mining industry executive over the last few days. It goes like this.
1. Soliciting interest in Resource Rent Tax issue
I raised the issue of the Resource Rent Tax issue, suggesting this would be a huge impediment to the Australian economy, and would ultimately prove to be another unsavoury move towards fascist. I also suggested that on these issues the mining industry was its own worst enemy. His reply was supportive and positive:
"What we are seeing with Rudd and co is indeed fascism. They believe they know what is best for us all and that they can have a command economy. This is much worse than the Whitlam years which were bad enough. I don't see how anyone with half a brain could be anything but sceptical about climate matters. The miners do not present well. We are dealing with really evil people in Federal government just now. I will copy this to .......... who will be interested in what you are up to. They are very much "on the case" of this latest taxation proposal, as they are attacking the ETS".
Ok, we have established that he is politically correct. My concern is here that any effort has to display integrity, otherwise your argument falls apart. I am a bit disappointed with my reply to him because I should have taken more time writing it. I am overwhelmed by all the things I am trying to achieve, so I often tend to under-invest in important points...but this was my reply in part...The problem is I tend to presume or hope that I will be having a dialogue with people who have healthy self-esteem and a primary respect for facts. In fact, I get defensiveness and vulnerability...and I must admit I did not put my best foot forward.
2. Going slightly off track
"You mentioned that Rudd was bad, and I agree, but if it was just Rudd I would not care because he would be replaced within a year. Howard's First Home Buyers Grant is an example of government over-stimulating the economy for its own advantage. Its no better than India's price controls. Rudd then 'doubles up' when he joined the roulette table. This is more serious because it is a succession of political failures which reflects upon a poor system. Representative democracy is a 'false promise', we need a consensus based democracy where reason is the standard of value, not arbitrary vote buying, concessions, extortion. Certainly we need to remove the duopoly if there is to be good policy".
He probably didn't have a problem with that. The problem I have with it is that I am trying to educate him because I lack confidence in people's ability to grasp ethical principles. My 'defensiveness' comes after years of treading softly around people's egos....well their presumption of one. Its the next section where I should have worded it better.....I've altered it slightly to remove a personal reference....as this is intended to educate not disparage.
3. Establishing ethical framework
"I don' think ...... was selfish. This is a flawed conception amongst the general community, including business. Philosophers never challenge it; they assume it. That it is moral to serve others. Its the ethics underpinning socialism and fascism (Hitler: You are nothing, your nation is everything). Capitalism is selfishness - 'trading value for value'. But people stop there. Integrating with that moral concept is Masalow's hierarchy of values, and Rand's theory of values. The issue is not just that you act in your self-interest, but that you possess a coherent framework of values, so you 'know what constitutes your self interest'."
4. Fixing up my mistake
In fact philosophers don't so much assume it, they rationalise it. It is however probably my attempt to personalise it where I went off track....and condescending. Hmmm... well I actually don't know how to breach this topic without making people feel vulnerable, but sure as hell this comment did not help. Kind of embarrassed to disclose it, but in fairness to the counterparty..... I was trying very hard to be conciliatory...like stepping on stones to avoid bruising his ego...but on reflection I did a bad job of it. Really bad :( Unsurprisingly it had the opposite effect. I really ought to proof read this stuff. My comment was - some context missing:
"Very healthy I'm sure, but to the extent that your moral standard is 'perhaps superficially' altruism (non-selfishness) is good, then you might be placing yourself in a moral conflict as well, and perhaps carrying some guilt for that. You are selfish, and you should be proud of it, though I might suggest being tactful about how you present that knowledge. There is a difference between being altruistic and generous. Your success has met all your needs, so you are in a position to be 'generous'.
If you identify it as Rudd's moral high ground, you are actually living or affirming Rudd's conception, the conception of 2000 years under pre-science religion. If you can appreciate that, then you might appreciate the battle miners have is not political, its actually in the fields of epistemology-ethics. Miners tend to be a pragmatic lot like yourself".
Well - poor grammar to be sure, though mostly correct. Its just poorly argued. I might add that my dubious efforts to convince a business executive that the business community cannot win (and has not won) a battle against government by fighting at a political level. It has in the process conceded the realm of ethics, values and ideas to government. But it goes further because wealthy CEOs around Australia are - from a longer term perspective - shooting themselves in the foot by failing to support ideas which provide them with an ethical defense as well as a 'pragmatic' one because ultimately they cannot win the political contest without a moral code. Since most CEOs are mere managers, then ultimately the cost is being borne by shareholders. The reply was the following:
"I wish you well with all this but frankly I don't have time to be engaging in this sort of analysis. I truly wish you luck in putting the blow torch to the belly of the government but could not give a stuff about a lot of the other matters to which you are applying your superior intellect, eg. what is "selfishness" or what isn't. I believe I use the word correctly, end of story".
The implication is that CEOs and all Australians are financing the enemy. They pay taxes which are used to fund academics who are attacking their best interests. The government also uses its tax dollars to develop new taxes. Consider the following papers:
1. Paper 1 - The theoretical or ethical justification - It argues in essence that we need to turn away from selfish rationality and embrace cooperation and reciprocality. Anyone who has a sound understanding of markets, psychology will recognise that cooperation is selfish, its simply a broader perspective of self interest that incorporates others needs. This is what I was trying to communicate to the executive above. i.e. We give to get. If we don't get we stop giving. We initiate giving because we trust the counterparty. If we don't have trust in them or the process, then we don't initiate. This does not dawn upon academics because they feel compelled to provide a rationalisation for altruism. After all how are they to they justify living off expropriated wealth if they do not have the values to support the 'common good'. Their flaw goes even deeper than the CEOs. Alas, we will all pay the price.
2. Paper 2 - The practical or political execution - Treasury report on the Resource Rent Tax
It is rare that you will find a report by industry defending itself. If you do its likely to be about how many jobs they create, exports they generate...tax they already pay. This is amusing...they make a virtue of paying tax (i.e. sacrifice). This justification comes from Adam Smith. It was a novel idea back in the 18th century, however its time to develop a theory of values. Hehe. Rudd must be laughing "Allow us to make you more virtuous, you haven't sacrificed enough though". The industry is too busy making short term money to worry about their long term enslavement. I have no doubt that Hitler had the same easy path to infamy. I might add that, just as people only start worrying about kids when they start breaking laws, so the community only starts worrying about their government when it starts killing people. Rest assured you will not miss the first few hundred. The US only complained about political killings by its 'ally' government in the Philippines after they killed over 600 political opponents. I guess it could be argued those dissenters were collectivists, but by no measure is the Philippine government defenders of freedom. The Church was one of the last to end its support for Hitler....just as it was one of the last to acknowledge child abuse. All these philosophical perspectives - apart from mine - has one thing in common - a lack of respect for truth (or the facts of reality).
Remember however that owner CEOs have more invested than 'manager' CEOs, and yet these people are not really stepping up. People like John Talbot (Macarthur Coal), Andrew Forrest (Fortescue Metals) and a great many others have a great deal more reason to adopt the right strategy. I think one of the biggest problems with capitalism is the fact that 'managers' control the assets more than owners. It ought to be good reason for people to invest in 'owner' companies. Though they also present risks since society is structured on the wrong ethical principles.
Some will be critical of my interpretation because its just one man. He is surely not representative of the rest. Well I will let you know how many others step forward. As Dr Phil says "This is not my first rodeo". Incidentally, his psychology is underpinned by the same ethical conflict. I don't expect any. Not totally their fault. Their education system is the same as yours and there is great practicality in being "goal-orientated". But you need a breadth of knowledge to see around corners.

Perhaps the bigger issue is that this guy probably loathes me more than the academics who he is obliged to finance because of government-instigated tax expropriation. They live off his 'enslaved hide', but I guess I took something more valuable to him than money (which he has plenty of). I took away his pretense of cognitive efficacy. Not that he is an idiot. He is a smart guy. Just he is not mindful of what is important. Ethics. Not that he's criminal...just he does not have an explicit appreciation of his values.
So what do I need from such people? Credibility certainly. A good argument gets you so far. Under the current political system; reason is not the standard of value. But how do you get people to listen when you have no authority. Frankly I don't want power, I just want government to renounce its coercion. I don't need money from these people. Unlike the bureaucrat and academic I can support myself. Of course I'd love to be able to fight a High Court case to defend liberty, but honesty that is for people who have greater diplomatic skills than me. Ultimately that is the biggest aspect of making money these days. Friends with shared goals and values. I can't say not being validated with endorsements or praise by others is a little frustrating, but ultimately I guess its a hard slog and I've not earned it. My people skills are not there yet. Frankly I can't be bothered, so hopefully there is a diplomat among you who will carry that torch. I will however chisel away at the coal face hoping that someone will be burning the stuff at the surface. More probably it will just rot, just as there were unused stockpiles of product in Stalinist Russia rotting....waiting for some customer.

Ok, I apologised to the executive concerned for my condescending manner....which was actually not intended, since I respect the guy. He responded...
"No problem and no apology required. You are trying to achieve a good outcome and have good values. I do admire that. And you have tenacity which is great".
This leaves a question in my mind...is he just being polite/diplomatic, or does he really mean it? I think he means it because he is the type of guy who speaks his mind. This prompts me to ask - am I good in a selfish way, or an altruistic way, since I think selfishness is good, and he thinks it's bad. By that I mean selfish in the 'principled' enlightened way. I also think he is selfish, but in the guilty, apologetic, conflicted way. Mixed economies persist because good men do nothing....well nothing to reconcile mixing of values. Enuf said.

Andrew Sheldon

ConvinceMe.Net - Anyone up for a debate?