Decoding the new economy

Taking care of our own

Our governments can’t fix every problem or address our every need. We need to take matters into our own hands.

“The council ought to do something” growled a friend who’d been stuck in a peak hour traffic jam.

That innocuous comment illustrates the fundamental challenge facing the developed world’s politicians – that we expect our governments to fix every problem we encounter.

In the case of the local traffic jam, the cars creating gridlock are parents driving their children to two nearby large private schools.

Despite the problem being caused by the choices of individuals – those decisions to send their kids to those schools and to drive them there – our modern mindset is “the government aught to do something” rather than suggesting people should be making other choices.

Socialising the costs of our private decisions is one of the core beliefs of the 1980s mindset.

Eventually though the money had to run out as we started to expect governments to solve every problem.

We’re seeing the effects of this in the United States where local governments are now having pull up black top roads, close schools and renege on retirement funds as those costs become too great.

As a society we have to accept there are limits to what governments can do for us.

Increasingly as the world economy deleverages, tax revenues fall and the truth that a benign government can’t fulfill our every need starts to dawn on the populace, we’ll realise that expecting politicians and public servants to save us is a vain hope as they simply don’t have the resources.

Bruce Springsteen puts this well in his song “We Take Care Of Our Own.”

The truth today is the cargo cult mentality of waiting for governments or cashed up foreigners to come and save us is over.

We’re going to have to rely more on our own businesses, families and communities to support us in times of need.

The existing institutions of the corporate welfare state are beginning to collapse under the weight of their own contradictions.

Joe Hockey knows this, but as a paid-up agent of the establishment he doesn’t dare nominate the massive cuts to middle class welfare and big business subsidies that are necessary to reform those institutions.

Waiting for the council to fix the local roundabout is nice but it doesn’t address the bigger problems.

It’s up to us to build the new institutions around our local communities and families. This is not a bad thing.

Are we prepraed to embrace risk?

The world is a dangerous place, can governments protect us?

It’s safe to say the Transport Security Administration – the TSA – is one of America’s most reviled organisations.

So it’s notable when a former TSA director publicly describes the system the agency administers as “broken” as Kip Hawley did in the Wall Street Journal on the weekend.

More than a decade after 9/11, it is a national embarrassment that our airport security system remains so hopelessly bureaucratic and disconnected from the people whom it is meant to protect. Preventing terrorist attacks on air travel demands flexibility and the constant reassessment of threats. It also demands strong public support, which the current system has plainly failed to achieve.

The underlying question in Kip’s article is “are Americans prepared to accept risk?” The indications are that they aren’t.

One of the conceits of the late twentieth Century was we could engineer risk out of our society; insurance, collateral debt obligations, regulations and technology would ensure we and our assets were safe and comfortable from the world’s ravages.

If everything else failed, help was just an emergency phone call away. Usually that help was government funded.

An overriding lessons from the events of September 11, 2001 and subsequent terrorist attacks in London and Bali is that these risks are real and evolving.

The creation of the TSA, along with the millions of new laws and billions of security related spending in the US and the rest of the world – much of it one suspect misguided – was to create the myth that the government is eliminating the risk of terrorist attacks.

It’s understandable that governments would do this – the modern media loves blame so it’s a no win situation that politicians and public servant find themselves in.

Should a terrorist smuggle plastic explosive onto a plane disguised as baby food then the government will be vilified and careers destroyed.

Yet we’re indignant that mothers with babies are harassed about the harmless supplies they are carrying with them.

It’s a no-win.

This is not an American problem, in Australia we see the same thing with the public vilification of a group of dam engineers blamed for not holding back the massive floods that inundated Brisbane at the end of 2010.

While we should be critical of governments in the post 9/11 era as almost every administration – regardless of their claimed ideology – saw it as an opportunity to extend their powers and spending, we are really the problem.

Today’s society refuses to accept risk; the risk that bad people will do bad things to us, the risk that storms will batter our homes or the risk that will we do our dough on what we were told was a safe investment.

So we demand “the gummint orta do summint”. And the government does.

The sad thing is the risk doesn’t go away. Risk is like toothpaste, squeeze the tube in one place and it oozes out somewhere else.

While Kip Hawley is right in that we need to change how we evaluate and respond to risk, it assumes that we are prepared to accept that Bad Things Happen regardless of what governments do. It’s dubious that we’re prepared to do that.

Reinventing activism

The ghosts of Graham Greene and Vietnam resonate in the Stop Kony campaign

In the late 1960’s the Biafran War appeared on the front pages of the world’s media partly due to a well co-ordinated advertising campaign using the relatively new broadcast marketing techniques.

During the mid 1980s the Ethopian famine was bought to prominence by Live Aid and Bob Geldof using music videos and live television made possible by huge leaps in broadcasting technology.

Nearly thirty years later we see an African tragedy – this time the Lord’s Resistance Army in Central Africa – again bought to the West’s attention through new media and advances in video technology.

Each time there’s been an outpouring of outrage and determination by those of us in the West to ‘fix’ Africa’s problems. We demand our leaders do something so we march, we donate and these days we retweet or like an online video.

In many ways we’re like Alden Pyle, the idealistic and well meaning anti-hero of Graham Greene’s The Quiet American who believed a ‘third force’ can fix the problems of Vietnam in the 1950s.

At the time Graham Green wrote The Quiet American in the late 1950s, the Eisenhower Administration had several hundred US military advisers in Vietnam, sent by President Truman at the beginning of the decade.

Today, at the time of the Stop Kony campaign in 2012, the Obama Administration has ‘about’ a hundred advisors in Central Africa.

Sometimes we don’t reinvent anything; we just use modern tools to repeat our grandparents’ mistakes.

The clique

Who is putting your interests first?

A Fortune story about the inner workings of social media service Facebook reportedly claims the business is increasingly dominated by friends of the Chief Operating Officer.

On Sheryl Sandberg and the circle of friends she has brought into the company: “There’s a term spoken quietly around Facebook to describe a cadre of elites who have assumed powerful positions under the leadership of Zuckerberg’s chief operating officer: They’re FOSS, or friends of Sheryl Sandberg.

Most tellingly is the quote, “‘You can’t really cross a FOSS,’ says one former senior manager.”

While this may not be true at Facebook – the reporters are quoting anonymous sources so their story can’t be taken as gospel – when a small, interconnected clique runs an organisation things usually don’t turn out well.

It’s bad enough when it’s a government agency like a police force or a not for profit like a charity, but in big and small business things are usually worse.

The main imperative of clique is to protect its members regardless of the damage they do to their organisation or even the global economy, as we saw in the banking crisis of 2008.

Inside the clique, you often have incompetence, corruption and almost always a strong thread of nepotism. None of this makes for an effective organisation or efficient business.

As investors, employees, suppliers, customers and taxpayers we have to be on guard against these cliques as they rarely act in the interests of those outside their circles.

It may not be the allegations at Facebook are true, but this is happening at other organisations right now. It’s probably happening in your government as well.

When history bites

Our social media past can easily come to haunt us.

In a strange way Peter Watson, the Australian Labor Party election candidate disendorsed and expelled for his homophobic views, is a trend setter for his generation.

Mr Watson was caught out by the unsavoury views he’d posted on Facebook and other online forums. That he defended what he had written “when I was like 14, 15 years old, so we’re talking about four, five years ago” made matters worse.

Our digital footprints – material about us on the web or in social media sites – sometimes show we’ve strayed into places we’d rather admit to.

There’s plenty of others who have posted things that will bite them later when they apply of jobs or seek political office.

It will be interesting to see how society and the media adapt to our histories and the dumb stuff we did as teenagers being freely available, Mr Watson is an early casualty of that adjustment process.

One of the more disturbing aspects of the Peter Watson case is his political party’s failure to do the most basic of checks on their candidate’s background. Something that again illustrates just how out of touch the nation’s political structures are with modern society.

When we talk about disruption, we often focus on the jobs, business and social aspects of that change. One thing we often forget is that social upheaval directly affects political parties.

Political parties who fail to adapt to the needs of their society become irrelevant and fail.

So maybe Peter Watson has, through sheer dumb luck, found himself on the right side of history in being expelled from a political party that doesn’t know how to use Google search.

Is Twitter’s censorship a good thing?

National laws are a reality for web based businesses

Since Twitter announced they were going to start blocking messages on a country by country basis if required by the laws of that land they have received a lot of criticism.

Most of this criticism of Twitter revolves around the belief that every message should only edited or deleted by the person who posted the tweet.

Anything else a breach of free speech and a threat to the underlying principles of the internet.

That utopian view of the Internet doesn’t translate into real life; the online world is as subject to laws as any other part of life and social media companies have to comply with the same laws as newspaper organisations or fast food chains.

Regardless of what you think of those laws – and in many countries they certainly are unreasonable and oppressive – they do matter.

Were Twitter not to comply then the entire service would be at least blocked in those countries and, should an action be enforced in a US court, then the tweet removed anyway for every user around the world.

By introducing country specific blocking, the service can let the rest of the world see a tweet that would otherwise be lost and in countries with restrictive or authoritarian laws, local people can still use the service.

A particularly clever way of dealing with removal requests is to note that the specific message has been blocked in a country. This adds a level of transparency and accountability to the actions of courts and governments that want to close the service.

We can see that being particularly effective in jurisdictions like the UK where British judges have been quick to apply “superinjunctions” preventing the merest mention of something by anybody.

Should Britain’s overeager judges start demanding Twitter block tweets, those in the UK will quickly realise something is amiss. The effect will probably be to increase the interest in the blocked tweets that can be seen anywhere around the world.

Despite the utopian view that transparency and openess will solve the world’s problems, we don’t live in that world right now and people can – rightly or wrongly – ask that false, defamatory and damaging posts on the Internet can be removed.

Interestingly Google this morning announced they will be introducing a similar system to deal with country specific problems on their blogger platform.

Twitter’s handled this in the best way possible, in many ways this could be a step forward for social media and the Internet in general.

Category: society

Taking care of our own

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