Trusting Business

Business is one of areas that provokes binary responses. It seems that we either have to fall into the Donald Trump camp, where all bets are off and somehow it is considered a good thing if business is given as free a rein as possible, or the Guardian camp, where business is some sort of necessary evil, relentlessly pursuing that terrible sin of “short term profits”. As usual, the reality is more nuanced, and we would be better served by recognising that.

Recent headlines have given the Guardian tendency plenty of ammunition. The list of shame is horrifying. Start with Boeing, who seem to have persuaded the authorities that checking plans for safety could be left to them, but then allowed two planes to crash killing hundreds of people when risks were apparent. Volkswagen were caught falsifying emissions tests, and perhaps most of the industry were at it, conning all of us that their cars did less environmental damage than reality and warping the system in favour of diesel. The tobacco industry hid science for years, and the soft drinks industry stole their playbook and still largely get away with it, with Purdue Pharma are just the most egregious example of the same thing with drugs, leading to the opioid epidemic. Takata made faulty airbags for years before reluctantly owning up. Poor Bayer is left to pay the bill for the evils of Monsanto with Roundup. Luckily Theranos was exposed before damage was done to anyone who wasn’t a careless investor.

All of these caused actual early deaths. Financial crimes are lesser in that sense, but certainly harmed many lives. Wells Fargo carried on the proud tradition of financial firms for criminal misspelling to vulnerable people, while Barclays and others fiddled obscure indices with the sole intent of robbing humanity. Kraft Heinz is the most recent example of a firm suspending reality by falsifying data to boost stated results once an (inhuman) strategy had failed. GE has suffered for years for something similar. Goldman has its fingers all over a theft of large chunks of Malaysia’s meagre assets. Enron blazed a trail of greedy irresponsibility, taken up gleefully by Bernie Madoff.

Then there is abuse of workers and customers. Uber set a high bar in this regard. Walmart have fought unions for years, while wilfully paying women less than their value. Amazon gets away with what it can. Facebook takes our data and does not look after it well, enabling crooks like Cambridge Analytica and Vladimir Putin to take advantage. The NFL condemns its players to early deaths while college athletic businesses look on as kids are sexually abused.

I have probably forgotten some of the worst examples. But the list is enough for anybody to wonder how any business could ever deserve trust.

But the Guardian misses the main point in its hate for business. Business drives progress. Without it, the world would be like Russia, where business has been a corrupt state enterprise for 100 years. We would probably not have smartphones, MRI machines, mobile payments, abundant food choices, sneakers or even the internet, and we would all drive Ladas. These and other innovations have lifted billions from subsistence and will lead to continued progress for all humanity (even Russians). Business is good.

Business is also often in the forefront of social progress. Workplace safety first became a priority in the private sector. Technology firms often lead in creating better working conditions. Even Walmart helped to push up minimum wages.

One problem is that we tend to think of businesses as impersonal machines, or sometimes single-person fiefdoms. Businesses, like nations or families, are made from people, and people are complex. It was not that Enron was evil; rather it was a set of managers who showed flaws made mistakes under pressure.

I worked for Shell for 28 years. Many people think of Shell in terms of ruthless exploitation of African resources or of wilful damaging of the environment. It was not like that inside. In my experience, Shell people care more for those things than typical folk, even Guardian journalists.

True, we made mistakes. There were constant trade-offs, between hitting financial targets, serving customers, supporting internal teams and ethical considerations. Usually, ethical norms were not breached. Some situations were difficult. Making a return on investment meant working in places like Nigeria, and that required finding ways to navigate local corruption and business practices. We made mistakes, but we were not inhuman – usually we really did want to improve the lives of local residents there.

Another comparison can also help understand how to handle business, and that is sport. The driving force behind sports, for both entertainment and innovation and performance, is competition. Even in elite sports under extreme pressure, few cheat seriously – we don’t see opposing teams trying actively to break Messi’s leg, even if that would be the most effective strategy to win. So generally humanity wins out.

But cheating happens, and when it does it ruins the sport for everybody. So sports need clear and consistent rules, fairly applied. The rules require quality referees and governing bodies to be effective. These need to evolve, to use technology, and to balance the various priorities involved. If the sport is international, the governance has to be international as well.

Put all of this together and a common sense business policy emerges. It is noteworthy that on this there is a lot of common ground between The Economist and Elizabeth Warren, so there is probably some wisdom in there.

The key to a successful business policy is to foster competition. The implication is to reduce barriers to entry and exit and to minimise monopolies. This involves creativity, evolution, funding for referees and hard work. The EU is current best practice. The US is not. It is noteworthy that Peter Thiel and others have written that the only businesses worth investing in are those where competition is restricted.

Related is to recognise where markets do and don’t work. Deregulation is great when markets can work efficiently. But many markets have natural monopolies, or issues such as limited customer information, or priorities (such as environmental sustainability) that will not be adequately considered without regulation.

Health care is a great example. Markets should be used where they can be effective, such as in drug purchasing (including generics) or equipment supplies. But development of cures and much care provision cannot be effective markets, so regulation has to fill the gaps. The US health care system delivers double the costs and worse and worsening outcomes because of broken markets.

This also points to the biggest pitfall, which is that lobbyists become over-powerful. Just as the NFL has evolved more slowly than rugby because the owners have stifled innovation and competition (no relegation), lobbyists for business try to influence the referees. This is especially a scourge in the US, and I have few solutions to fix the problem. Certainly, don’t trust someone promising to drain the swamp but then expanding it as quickly as he can. And if the same person stifles innovation via nationalism, then that is an even better reason to beware.

The US has many advantages in business, including great scale, military investment and fantastic colleges. We can thank the US for a lot of the global progress achieved through business in the last fifty years. I think I’ll pace my bets on China for the next fifty though.

Business is good, we should never forget that, despite all the scandals. We should give business every chance to drive progress in our world. Our job is to foster competition and where markets are inefficient, fair regulation.   

Against Satan

The bible has a few main characters, many shared by the Torah and Koran. God is central to the plot. Jesus comes to the fore in the New Testament. Some other prophets have important roles. And then there is Satan.

Satan, or the devil, enters right at the start of Genesis, and is all over the Old Testament. It may be surprising to learn that the New Testament has a lot of Satan too, with plenty of plot lines about final judgments, hell and apocalypse. Nowadays, Christian churches tend to de-emphasise these aspects in the readings we hear on Sundays, but studying the gospels show that Jesus was quite big on Satan.

I am with the modern interpretations. I find Satan to be incredible and highly damaging to how we can interpret and gain from religious teaching. I think the time has come to banish Satan once and for all from the way we think.

There are various ways that Satan could have come to prominence. Of course, Satan may literally exist, along with serpents and women created from ribs of men and six day creation epics and St Peter at the pearly gates playing master sorter.

There are other more earthly possibilities. Most start from the idea of an all-seeing, all-powerful benevolent God. That leads clerics to need to answer the toughest question posed by us dumbass mortals: if God is so cool, how come my baby kid died of leukaemia and chunks of Mozambique got wiped out last month?

There aren’t really good answers. Some clerics tell us that there is a bigger story that we can only see a part of, that Tommy’s leukaemia was part of some master plan. Some even hint that Tommy must have committed some sin, or that suffering offers wider benefits. But most blame Satan, pitting God and Satan in some endless cosmic battle that God will win in the end but only after lots of suffering and with a bit of help from little us.

How convenient this storyline is. It can explain away seeming narrative inconsistencies, offer us a role, and help the cause of those people in power who want to cajole the rest of us to accept injustice in the hope of later salvation. But the story still does not add up.

Why should I care about this anomaly when the bible is full of them? Well, actually, the gospels have a lot fewer anomalies than the rest of the bible. True, resurrection and virgin birth are somewhat hard to swallow, but most of the life’s work of Jesus is inspiring and comes from factual sources; I find his teaching to be a strong life guide.

So it is a bit jarring that my hero seemed to put so much focus on this unhelpful villain. Perhaps he didn’t really, but those who wrote up the story were so fixed in their views of Satan that these views infected their narrative. Perhaps Jesus did use the Satan concept a lot, as a sort of marketing compromise so people only took to his wider message. Even modern heroes like Mandela have to do things like that at times.

But my problem is that whereas nearly all the gospel content points us in a good direction, the Satan stuff does the opposite. The passage that comes nearest to being helpful is the story about temptation in the desert that we hear on the first Sunday of Lent. Here Jesus is tempted by the devil, and the temptation is made quite explicit, in the form of hubris, greed and craving for adulation. If we restrict our concept of Satan to a warning to try to avoid such failings, then it can help. That particular message could certainly help a current occupant of a white house in Washington DC, and should help the rest of us in judging such people worthy of leadership.

But Satan goes so much further, it seems even via Jesus, and the rest only causes damage. Satan puts us in the wrong mind set most of the time. Thinking of judgment fills us with fear, emphasises point scoring and tribal, combative behaviour, and prioritises the distant (dead) future ahead of the present. The effects of all this can be seen throughout human history.

Taking the micro level first, Satanic thoughts lead us to be fatalistic, to judge, blame and shame. The most obvious effect is in the handling of illness. In Jesus’ time, lepers were outcasts. It was fair enough to aim to achieve a level of quarantine, but not so fair to equate sufferers with devils who must be sinners and to make no effort to look for cures, except for mystical cures.

That was two thousand years ago, but we have hardly learned. Homosexuality and suicide are persistent examples of damaging action based on flawed thinking. Then there is the whole area of mental illness. Nowadays, at least we don’t suppose the worst sufferers are infected by devils, but we still shun such people, blame them, and are far too slow in looking for cures.

In all of these cases, if our attitude were one of acceptance of difference and difficulty and of seeking ways to support others, we would achieve much better results. Jesus tried to show the way, but the Satan narrative got in the way. Why would we want to reach out to people infected by Satan?

The macro effects of satanic thinking might be even worse. A worldview based around cosmic struggle is not a good way to frame anything. We can take the position that the cosmic struggle renders us powerless or in the control of wider forces, in which case why try very hard to mitigate climate change? Or we can place ourselves as foot soldiers in the mighty war, of course on the side of the good guys.

Foot soldier thinking leads to beliefs of superiority, with all its historical consequences. The crusades started that way. Even in my own childhood, we sang “Onward Christian Soldiers”, somehow accepting its literal call to arms and implied condemnation of unbelievers as savages. The Pence doctrine is key in US current foreign policy, but, even before that extremism, we had the axis of evil. Iran’s narrative of the US as the “great Satan” is just as contemptible. Somehow religious zealotry and tribal nationalism become intertwined and combine to pull us all apart and to take up arms.

It feels credible that the root cause of all of this is doctrine around Satan. Everything becomes binary, absolute and warlike, when the more helpful way to view the world is complex, nuanced and tolerant. The thought for this blog came when I was momentarily at risk of having to sit through the latest Avengers movie last weekend – luckily I managed to dodge it, because I find such fare hard to sit through and anger inducing.

Such movies are everywhere, further feeding our attitudes. We can even argue that individual acts of terror originate with the same doctrine. Either someone is so sure their own side is right that inhuman response in justified, or they deliberately choose a devil-type role, seduced by its glamour and the frustration of more nuanced positions. And we all fall for it and hype it up with our language of good versus evil.

So it is time to kill of Satan. That means the opposite of actively trying to kill Satan, the dominant approach through history. It means casting the idea of Satan aside completely, as the damaging over-simplified tosh that always has been.    

A fair deal with China

I was always taught that there was one critical technique in any negotiation, or even any relationship. The key is to get into the shoes of the other party, to understand life from their side. That way we can talk their language, understand their hot buttons, and find deals that work for all sides.

The US and China are currently involved in a major negotiation, ostensibly about trade but touching on all aspects of the relationship. We are relentlessly fed positions about US goals and complaints, built from statements about China developed from a US angle. So I thought it might be useful to try to look at the situation from a Chinese angle.

I haven’t done a lot of research about this. I don’t have many Chinese friends to talk openly about it either. So I am reduced to some educated guesswork. Still, it is a start.

To a Chinese eye, the central complaint of the US must seem hilarious. China sells a lot more stuff to the US than the US buys from China. After years of lectures about how closed Communist economies were cruel and destroyed value and threatening and evil and lots of other sins, China made a choice in the 1990’s to embrace the US shibboleth of capitalism. It has worked so well that all the US seems to do now is complain about it.

China anticipated market needs and set about supplying them with great discipline, and involving many Chinese moving home and working very hard to build better lives. That the US has built up a voracious demand and a workforce unprepared or unskilled to supply that demand economically is surely a US problem, not a Chinese one. That the US corporate and financial machine has required such greedy returns, and has as result been anxious to sign contracts to enter the Chinese market that have some stipulations about joint ventures and intellectual property is surely just good business by China rather than some form of exploitation. By the way, at least twice in the last five years it has been Chinese action to boost demand and credit that has kept that same US-led global financial edifice afloat.

Now it is perfectly reasonable to ask Chinese firms to act within the law, and even to renegotiate those laws if they are unbalanced. So when the intellectual property transfer has been achieved covertly or illegally that should stop, and China should be happy to agree to enforce that. China should also be ready to agree to rebalance terms of the world trade organisation – but would be fair to point out that it is the US that has blocked the function of the dispute resolution mechanism of that body. At the same time, some other rebalancing might be fair. Why should an American still always chair the World Bank, and a European the IMF?

There is also the question of the role of the dollar. China must have very mixed feelings about that, especially since it holds so many dollars. For any other nation bar the US, the response to persistently growing debt must include devaluation and austerity, and all the US based investors are quick to prescribe that diet for everyone else. But the US instead grows the budget deficit further, and the dollar stays strong, because it is the reserve currency and influenced more by international than domestic factors. Still, the fundamentals are the fundamentals, and one day they will bite. I wonder whether Mr. Xi ever points this out to Donald?

Even with the complication of the dollar, the trade dispute would be resolvable were it only about trade. China will be happy to enforce global standards, so long as it has more say in setting them. And it will also be ready to temporarily buy more goods from the US to massage the trade balance.

But of course this is not just about trade. There are at least three other lenses, all visible to China.

The first lens is politics, specifically US politics. Trump needs his stock market to be buoyant in 2020 and to have some deals to trumpet, so he will make sure there is a deal. China has internal politics too, but can be more patient. And Xi will very likely outlast Trump.

The second lens is about world influence generally, and China’s rising ambition. China will see that trade is just one visible manifestation of a wider gripe and the balance of power. They will be amused that the US does nothing to fix the fundamentals, either economically or diplomatically, where it continues to abuse allies and foes alike and to commit to unwinnable disputes.

China will see special irony through this lens, with the US quick to condemn two Chinese policies. How can the US condemn a modest Chinese military build up, when it has nuclear weapons in bases surrounding China in Guam, Okinawa and South Korea? How can they moan about Chinese treatment of Uighur Moslems when it still has troops all over Afghanistan? Bleating about international treaties must seem ironic, given how the US ignores many such treaties itself. And it is the US that is militarising economics – the Chinese have just been told they can no longer buy Iranian oil. Imagine how that looks to China, given the situation in Yemen and elsewhere.

Then there is Belt and Road. The starting point to objections about that must be “What else would you like us to do with all the money your consumers are transferring to us?” If the world insists on building up debt to China, China has to invest somewhere, and it would not help, nor be permitted, to buy up even more of USA Inc. Belt and Road might have subtle strategic overtones, but it is helping developing nations and building global infrastructure. If the Gates Foundation were doing it, nobody would complain. China might be happy to share some governance with global bodies for Belt and Road, but the west hardly seems to be rushing to offer that.

The final lens is the ugliest one. It must seem to China that the US is just bullying China on trade because it can. For all the shifting long-term balance of power, for now China has little choice but to seek an accommodation. This is the typical reaction of a threatened bully, and of course the natural behaviour of the current president.

It is obvious from history where such behaviour leads. Compliance from the bullied is accompanied by resentment and plotting for revenge, while the bully craves more satisfaction and fails to address anything fundamental. Hopefully this motivation will not outlast Trump, but, even if it doesn’t, the resentment and desire for revenge will still have been built up. And for sure the potential for revenge will ultimately be enormous.

So it is possible to see where a more globally beneficial accommodation between China and US could be reached, and even some paths around the obstacles preventing it. Strong international bodies, suitably rebalanced for a new age, could play a role. Viewing this from a Chinese perspective helps to see the potential, but also how the attitude of current US leaders will prevent any of this potential from being realised, and indeed how this will ultimately boomerang.

Getting into the shoes of another party remains a great tool. My thoughts about China have been clarified by this exercise. We can all use the tool in matters great and small. It can improve all of our relationships.