Dave Pollard's environmental philosophy, creative works, business papers and essays.
In search of a better way to live and make a living, and a better understanding of how the world really works.


August 31, 2004

THE CHEMICAL SOUP WE LIVE IN

Filed under: How the World Really Works, Preparing for Civilization's End — Dave Pollard @ 15:24
baby bottleUp to now, I’ve avoided writing about the impact of untested chemical poisons on people (especially children) and the environment. After all, we grew up in an even less regulated environment — lead toothpaste tubes and Matchbox toys, thermometers full of mercury that we broke open and played with as kids, creosote-treated wood in the fireplace, DDT and 2,4 D on dandelions, and so on. And we’re OK, right? Kids today just don’t have the same hardy constitution we did. We ‘built up immunity’ to these substances from heavy early exposure. Today’s kids are just overmedicated wimps. There are more reports of problems because we’re more aware of the problems, that’s all.

That, of course, is what the chemical industry would like you to believe. Truth is, we can’t possibly be very aware of the problems and causes because there is simply no data on most of the chemical substances in everyday use. None. There are so many new chemicals being introduced each year, in raw form or as ingredients in new or reformulated products, and as waste and byproducts of petrochemical and mineral processes, that even the US government has cried ‘uncle’ and put a floor level in place for any testing. If production of a chemical is below that threshold, they just don’t test it at all. The regulators just don’t have the resources. And even when it does test, the EPA does short-term testing only. They feed massive amounts of these poisons to laboratory rats, to dogs and to one wild animal, as a surrogate for its effect on ‘pests’, ‘domestic animals’ and ‘animals in the wild’ respectively — and as a surrogate for its impact on humans. They measure the diseases and symptoms from these artificial tests, and if they are not too bad, they deem the product safe for human use. If the resultant diseases and symptoms are bad, the regulators indicate what safety warnings must be put on the label when it is applied. They disavow responsibility for assessing any longer-term impact, which they never have adequate time to assess. For example, in their product testing report on Deet, the product so many of us are slathering all over our skin in record amounts this year to protect ourselves from West Nile-carrying mosquitos, the EPA says:

Scientists have gathered no evidence that indicates harmful reproductive effects to human users. No direct relationship between DEET use and carcinogenity in humans has been established. The EPA needs further animal testing data to completely evaluate DEET.

They do admit it causes birth defects in chicks and “increased mortality rates” in baby rats. Of course, although we can torture millions of helpless animals to come up with this wisdom, we really don’t know what the impact would be on humans because it would be unethical to subject humans to the type of savagery that we inflict on other animals to come up with these informative reports. Bottom line: We don’t have the faintest idea how dangerous this, or any chemical is. And this product is a “level 4″ product — one of the very few chemicals deemed safe enough, after extensive animal cruelty, to approve it for contact with human skin.

Let’s look at what its manufacturer, Monsanto Pharmacia, those swell guys who brought us Agent Orange, PCBs and undisclosed, privately patented GM foods, say themselves about a somewhat more dangerous chemical, Roundup, the top-selling herbicide in the world, which it encourages you to spray on walkways and driveways to get rid of those pesky weeds in the cracks:

KEEP OUT OF REACH OF CHILDREN. CAUSES EYE BURNS. May be harmful if inhaled. Avoid contact with eyes, skin or clothing. Wear long sleeved shirt and pants, or coveralls, chemical-resistant gloves and eye protection. Wash thoroughly with soap and water after handling. Avoid direct applications to any body of water. Do not contaminate water by disposal of waste or cleaning of equipment. Spray solutions of this product should be mixed, stored and applied only in stainless steel, aluminum, fibreglass, plastic and plastic-lined steel containers. DO NOT MIX, STORE OR APPLY THIS PRODUCT OR SPRAY SOLUTIONS OF THIS PRODUCT IN GALVANIZED STEEL OR UNLINED STEEL (EXCEPT STAINLESS STEEL) CONTAINERS OR SPRAY TANKS. This product or spray solutions of this product react with such containers and tanks to produce hydrogen gas which may form a highly combustible gas mixture. This gas mixture could flash or explode, causing serious personal injury, if ignited by open flame, spark, welderís torch, lighted cigarette or other ignition source. Avoid contamination of seed, feed, and foodstuffs. Make the empty container unsuitable for further use. Dispose of the container in accordance with provincial requirements. For information on the disposal of unused, unwanted product, contact the manufacturer or the provincial regulatory agency. Contact the manufacturer and the provincial regulatory agency in case of a spill, and for clean-up of spills. Do not apply this product using aerial spray equipment. AVOID CONTACT WITH FOLIAGE, GREEN STEMS, OR FRUIT OF CROPS, DESIRABLE PLANTS AND TREES SINCE SEVERE INJURY OR DESTRUCTION MAY RESULT. Do not allow spray mist to drift since even minute quantities of spray can cause severe damage or destruction to nearby crops, plants or other areas on which treatment is not intended, or may cause other unintended consequences. Do not apply when winds are gusty or in excess of 8 kilometres per hour or when other conditions, including lesser wind velocities, will allow drift to occur. When spraying, avoid combinations of pressure and nozzle type that will result in fine particles (mist) which are more likely to drift. DO NOT USE IN GREENHOUSES.

Yes, I know, this wording is all written by lawyers to protect poor Monsanto from frivolous litigation by unscrupulous consumers. In fact, for the benefit of farmers who don’t want to go through all this bother, Monsanto has now developed, and will sell you each year, genetically modified seeds that are resistant to Roundup (in other words, they sell both the disease and the cure), so you can ignore these warnings and just drown your crops in this toxic poison, secure in the knowledge that the Frankenstein crops Monsanto has sold you are the only thing that will live through it. Meanwhile, in public pronouncements Monsanto Pharmacia has described this product as “as safe as table salt”. And the US National Forest Service, in an attempt to make its life easier, has started spraying National Forests with massive doses of Roundup “to reduce the frequency of forest fires”. There has been no study of the impact of this chemical dumping on forest ecosystems. Meanwhile, after years of aerial spraying of tons of Roundup on suspected coca-growing areas of Colombia, destroying the ability of much of that country’s soil to support any plant life, the drug growers have simply genetically engineered a new coca plant that is Roundup-resistant, so US taxpayer dollars are now going to be providing these drug-growers with free herbicidal spraying that will make cocaine growing simpler and maintenance-free. Thank you, Monsanto! No wonder so many people love you.

If only Roundup were the only product we had to worry about. But there are over seven million chemicals commercially available, and most of them have undergone no testing whatsoever. Even the testing that is done is heavily dependent on the industry’s own test findings, which are inevitably biased and self-serving: Monsanto and most of its competitors have been convicted of concealing and falsifying test results. And they pay cash-strapped universities handsomely for ‘objective’ tests supporting their arguments that their products are safe.

These chemicals are used in many commercial applications: food and cosmetic additives to provide colour, texture, taste or extend shelf life, pesticides, herbicides, fertilizers, plastic products and plastic containers, building materials, insulation, paints, wood preservatives, rubber, and many others. Many of the most dangerous chemicals aren’t used in any commercial applications at all — substances like dioxins are merely hazardous byproducts of the chemicals that are produced for commercial use.

AIG Insurance, one of the largest insurers of chemical companies, lists the many dangers that the production, disposal and use of chemical toxins give rise to, which they of course insure. The descriptions of these dangers make interesting consumer reading, coming as they do from an organization that makes its living understanding risk and has no vested interest in understating them. Here are just a few of the groups they insure, showing the many health and environmental dangers their products and processes are responsible for:

The CDC, in a marvellous example of understatement, says:

Children are uniquely vulnerable to toxicants in the environment. Pound for pound, children eat more food, breathe more air, and drink more water. Their hand-to-mouth behaviors and their activities close to the ground increase their chances for exposure to hazardous substances. Their metabolic pathways are immature, so they detoxify and excrete pollutants less efficiently than adults. In addition, children are growing and developing rapidly, which can be disrupted by hazardous substances in the environment. After childhood exposure, they can get diseases that can take many decades to develop. The use of some hazardous substances to meet social and economic goals often prevails over environmental health concerns. Lack of effective policy and regulations to prevent exposures to hazardous substances often stems from a lack of scientific information necessary for accurate risk assessments and from the general public’s lack of education about environmental health effects. Globally, disadvantaged populations are more exposed to hazardous substances as a result of exposures in the workplace, environmental contamination, unregulated disposal in garbage dumps, and a lack of knowledge about how to avoid exposure.

New York’s organic farming association has pulled together a depressing analysis of the quantity of pesticides that we each consume daily, and some indication of the health consequences. In Canada, a physicians group, alarmed at lack of government regulation in the face of overwhelming evidence of their hazards, has documented that evidence and called for an all-out ban on pesticides except in health emergencies.

Most of us have no idea just how often and to what degree we’re exposed to chemicals that we really don’t know the dangers of. The known dangers include: birth defects, alterations in sexual and functional development, neurologic disorders, diabetes, allergic reactions, immunologic and immune deficiency disorders, cancers, leukemia, respiratory disorders, endometriosis, structural abnormalities in the reproductive, prostate and pituitary system, thyroid disorders, non-Hodgkin’s lymphoma, organ damage, skin diseases, reduced physical stamina, developmental, behavioural and mental disorders, anger, inattention, decreased mental capacity, learning disabilities, dyslexia, hyperactivity disorders, autism, propensity to violent behaviours, reduced motor skills, and deterioration in gross and fine eye-hand coordination. The incidence of infant and childhood cancers in particular is rising at an astronomical rate.

Here’s a day in the life scenario of a typical child:

The child sleeps in a bed made of plastic, covered with synthetic sheets that are treated with fire-retardant, and washed in harsh detergents containing toxic synthetic chemicals. Sheets are dried at high temperature creating dioxin from the chlorine bleach residue. The mattress cover’s flexibility is from plasticizers and it’s treated with an antibacterial agent. The room’s new synthetic carpeting and freshly painted walls offgass toxins. Snugly fitting disposable diapers contain toxic ingredients such as sodium polyacrylates, and ethylvinylacetate-based glues, resins, softening agents and antioxidants. His skin lotion contains phthalates, which are known to mimic and damage hormones. His drinking and bathing water contains high levels of chlorine, fluorine, toxic metals, nitrates and possibly coliform. His food has been drenched in a variety of pesticides, herbicides, and fungicides, then wrapped in plastics, coated with sealants, or canned. It’s heated in, eaten from and eaten with plastic. Warm leftovers are saved in plastic and refrigerated. While being driven about town, the child sits in a car seat made of several types of plastic in a car that has that new car smell, which is off-gassing of plastics. Dry-cleaned clothes, perfume, hand cream, deodorant, hairspray, nail polish, lipstick, and perhaps indirect cigarette smoke are also part the car’s air. Driving behind a diesel truck, fine particulate matter carrying carcinogens and endocrine disrupters are forced deep into the child’s lungs. They drive through factory fumes to pick up the father, who does auto body repair, and has just finished using paints and plastic filler. They stop to fill up the car’s gas tank and the fumes flow through the open window along with the odour of the degreaser the mechanic uses. During the summer ozone levels are high and smog is thick. In the winter, oil, gas, coal, and/or wood combustion byproducts permeate the air. When the child goes to school by diesel bus he is exposed to 23 to 46 times the cancer risk considered “significant” by EPA and under federal environmental laws. The air in rural areas will be laced with pesticides, herbicides, fertilizers, dust, and diesel fumes. Jets fly overhead, sometimes dumping jet fuel at high altitudes, which vaporizes before reaching the ground. At school, the child will sit at a plastic desk, on a synthetic floor covering, within walls covered with a vinyl material, under vinyl covered ceiling tiles and fluorescent lighting. The school has air conditioning with no fresh air supply, recycling stagnant air through dusty, damp, mould ridden ducts. Old insulation flakes from the ceilings and walls into the air. The teacher’s perfume mixes with the accelerants of the whiteboard markers. Many surfaces are treated with pesticides, bleach and antibacterial liquids. The grounds are covered with pesticides, herbicides, and synthetic fertilizers that can contain just about any kind of toxic waste. Dozens of potent chemicals are used in the swimming pool. For lunch, the child eats and drinks highly processed, pesticide-ridden, irradiated foods with synthetic preservatives, colourings, and a score of unnamed substances whose only purpose is to extend the food’s shelf life. The food is often prepared at another location miles away, transported in plastic, served on, and eaten with plates and utensils made of polystyrene. Before eating, the child’s hands are washed using a soap that is antibacterial/antimicrobial, using chlorinated/fluoridated water.

What’s the answer? There’s one solution that’s quite simple, and utterly radical. It’s called the Precautionary Principle, and it says: “When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause-and-effect relationships are not fully established scientifically.”

This principle shifts the onus of proof from citizens (who must today prove conclusively that a chemical caused personal injury to them) to producers (who would have to establish, beyond a reasonable doubt, the safety of a chemical before it could be produced or marketed commercially). Better safe than sorry, in other words. If you think this would be unduly onerous or economically catastrophic, please read the FAQ in the link above. It was crafted by scientists and lawyers to be simple and yet practical. It can work. In fact, San Francisco has already legally adopted the principle, and other municipalities have or are considering following suit.

Another answer is to just say no: Refuse to buy products with chemicals in them. Use natural alternatives to chemical cleaners, pesticides and herbicides (there are many, many websites listing such alternatives). Buy local, organically-produced foods. Avoid dangerous plastics like polycarbonate, polystyrene, BPA and PVC. And never flush chemicals into toilets, sinks or septic systems.

A third answer is political activism. This is most effectively done within your own community. Lobby your municipal government to ban “cosmetic spraying” of lawns and other large areas with pesticides and herbicides, as many municipalities have already done. Find out who the big polluters are in your community: Just type your zip code into the Environmental Defense website in the US, or your postal code into the Pollution Watch site in Canada, to see what’s being released into your local air and water supply, and by which companies, and lobby to have these companies cleaned up or shut down.

The fourth answer is awareness and vigilance. Learn the facts about chemicals — how they’re used and how they’re dangerous: If you know, for example, that Bisphenol A (BPA) is a dangerous chemical found in many plastics, including baby bottles, you can take appropriate action. Stay abreast of what we’re starting to learn every day about chemical dangers by subscribing to aggregators like Environmental Health News. If you have to use chemical pesticides, study the dangers first before you choose.

We’ve let the chemical pollution of our world get out of control. It’s time to take that control back, for the sake of future generations, and for our environment.

August 30, 2004

A THEORY OF KNOWLEDGE, AND HOW IT COULD SAVE THE WORLD

Filed under: Preparing for Civilization's End — Dave Pollard @ 16:38
theory of knowledgeDuring my ten years as a Chief Knowledge Officer, I spent a lot of time trying to figure out how people should use knowledge, and to some extent how people learn, but it never occurred to me to develop an overarching ‘theory of knowledge’ until I decided to write a book called The Cost of Not Knowing. This article summarizes that theory.

This is not a new epistemology. I am disinterested in academic arguments that use language, a clumsy and artificial abstraction, to try to justify theories that to me are needlessly complex, counter-intuitive and of no practical use. For students of philosophy, and I’m sure this will come as no surprise to my regular readers, my theory is consistent with Maurice Merleau-Ponty’s phenomenological view of epistemology. For those interested in the philosophical basis for this theory, I would recommend David Abram’s Spell of the Sensuous, much of which is devoted to explaining Merleau-Ponty’s philosophy. I’m merely interested in its practical implications, in work and in life.

My theory starts with learning. Learning is the process of direct and indirect experience and observation, and knowledge is simply the personal, collected, internalized result of learning. We learn in different ways (fig.1): The best way is through active participation, which engages all our senses in the learning experience. Next best is observation, where we see or hear but where some of our senses are not engaged. The least effective way is second-hand, through communication of reports from someone else. When a squirrel learns, by personal trial and error, how to defeat a baffle on a bird feeder, this is powerful knowledge, well retained and employed. When that squirrel instead watches another squirrel show how to do it, the knowledge is less valuable, less credible. The observing squirrel may not be able to replicate the other squirrel’s moves, and the method may not be the best one for the observing squirrel, which may have a different body-weight or dexterity than the demonstrating squirrel’s. And if one squirrel merely tells another, unfamiliar squirrel of the presence of food in a bird-feeder ‘over there’ that can be accessed by navigating around the baffle, that knowledge is even less valuable. The squirrel listening may doubt whether the baffle was or even can be overcome — perhaps this second-hand report is merely bragging or a ruse on the part of the reporting squirrel.

In human activities, we now get almost all of our knowledge second-hand, through books, newspapers, television and online, and its relative lack of credibility causes us to develop and assign a trust ‘rating’ to different sources, based on how often, in our experience and that of others we trust, that report has turned out to be accurate or useful. A blogroll is one manifestation of that need to rate the trust-worthiness of second-hand sources of knowledge. Schools, unfortunately, now provide almost all learning second-hand, and it is not surprising that ‘field trips’ are so loved by students — an experience to learn something first-hand. It is also not surprising that the most effective and credible form of second-hand report is the story, which conveys knowledge in a way highly analogous to the way we might have experienced it personally.

Why do we learn? The squirrel learns in order to survive — by direct participation at first in play and then, often by observing its parents, in gathering food, building a nest etc. The squirrel draws as well on instinctive knowledge, which is coded in its DNA as an evolutionary advantage, which ‘teaches’ it the knowledge of its ancestors, for example to ‘freeze’ when it senses a predator species, which is often more effective than fleeing predators whose eyesight is attuned to motion, more than shape. That instinctive knowledge also tells it at what point, as the predator approaches, to flee, based on its ancestors’ cumulative learnings of that point at which the probability of evasion through flight begins to exceed the probability of non-detection by the predator. Instinctive knowledge doesn’t need to be learned, so it doesn’t appear on fig.1 above. We’re born with it.

In natural systems, where the community, the physical area in which animals spend their entire lives, is small and almost completely ‘knowable’, we learn only to survive and make a living, and because nature has evolved us, as an adaptive mechanism, to find learning fun (fig.2). In such closed systems, we can get almost all the knowledge we need from direct experience and observation, and from our instincts — there is little need to rely on second-hand reports as a source of learning. As that physical area that we need to know to survive increases, we can no longer get by with direct experience and observation, so we need to evolve languages to convey more and more knowledge second-hand. Our society becomes inevitably more interdependent, and in addition to survival there are now three more reasons to learn:

  • To be a responsible citizen of that society we need to know as much as possible. Crows have fairly sophisticated and interdependent social structures, with ‘travellers’ that move back and forth between different crow communities, carrying information about the location of food and predators with them, and they have developed appropriately sophisticated languages to convey that second-hand knowledge. In fact, they have developed ‘body’ languages and sounds that communicate the location of food to other species (notably wolves and indigenous humans) on which they depend (since their claws are not strong enough to tear flesh and kill, they locate food for other species that can, and then eat the leftovers).
  • To be an intelligent consumer we need to know enough to evaluate our choices. In a society where you don’t just eat what you kill and live where your ancestors did, there are often more choices than we can try out through direct personal experience.
  • To understand our purpose we need to learn as much as possible about our physical world and the history of life in it. We have an instinctive desire to understand how and why things are, which serves an evolutionary purpose — it helps us to survive. As we assimilate more and more knowledge we assemble patterns and theories about how and why things are. These are belief systems (fig. 3). When early man observed how nature automatically corrected population and resource imbalances quickly and painlessly, he began to believe in a higher power. When more recently he invented civilization, a ‘man-made’ way to live apart from nature, he developed new, anthropocentric belief systems to justify and explain this new ’separate’ purpose for living. Belief systems so powerful that they allow us to tolerate, and even celebrate, incredible suffering, and to ignore and disregard our intuitive knowledge, which is inconsistent with these belief systems.

So where does all this get us? Of what practical import is this theory? My prospective book is about the cost of not knowing, and that is the ’so what’ of this theory:

  • Because we did not know the degree to which extreme and sustained suffering and outrage perverts the human mind, and the malleability of those minds, we allowed the slaughter of nearly a million innocent civilians in Rwanda in 1994, and of nearly 3000 in the US in 2001.
  • Because we did not know the consequences of reliance on catastrophic agriculture, we allowed millions to die in the Irish potato famine, eighty million more to die of starvation in China during Mao’s Great Leap Forward, and the horrendous threats posed today by BSE (Mad Cow), the Asian bird flu, and as-yet-unevolved diseases and pests that prey on massive concentrated quantities of astonishingly homogenous, vulnerable human foods.
  • Because we did not know that nature uses diseases to winnow overcrowding, and that these diseases will always evolve faster than we can prevent or treat them, we allowed half the people of Europe to die in the Plague, and more than one billion to die of Smallpox, and despite ‘clues’ like AIDS of what is to come, future diseases we do not yet know, we still have not taken drastic steps to reduce human overcrowding on our planet.
  • Because we did not know the impact of our wasteful and thoughtless burning of hydrocarbons and forests on our planet’s climate, we now face cataclysmic global warming and the paradoxical early triggering of the next ice age.

Not knowing led directly to the loss of biodiversity and much of the carrying capacity of our Earth, the demise of Enron and its auditors, the Great Depression, the dot com bust, the atrocities of Stalin, and the Great Extinctions that regularly obliterate much of life on our planet. And because we still don’t know these things for sure, we allow ourselves to hesitate, to do nothing, to hope these problems will magically go away, to allow the conditions that almost certainly gave rise to these and other disasters to continue, to in fact continue to get worse.

I had dinner last evening with some of our neighbours, and we were talking about some of these immense problems, and one of my neighbours, a student of history, said that no problem in history has ever been solved until it got so bad for so many that there was a spontaneous revolution. What would it take, he asked, before these problems — overpopulation, famine, oppression, violence, disease, resource scarcity, pollution, war, suffering, cruelty, misery — got bad enough that people would rise up and demand immediate resolution?

I think the massive unrest and strife we see everywhere in the world indicates that we have already passed that point. However, in order to have a revolution there must be (a) consensus on the need for change, (b) consensus on the change that is needed, and (c) a simple process to bring about that change. Historically, the solution has been political — to oust, violently if necessary, an identifiable oppressor, the cause of the problem, and replace him (or them) with new leaders committed to the consensus solution. And although billions have shown that they see Bush’s corporatist imperialism, and the oligopolists’ ‘free’ trade and globalization, to be causes of some of the major problems we face, once we get rid of these scourges, most of the biggest problems will remain. These more intractable problems have no identifiable enemy and, as yet, no consensus solution. They are systemic problems that can only be changed by a radical change to our entire global economic and political systems. And changes to these massive, entrenched and leaderless systems have historically almost never come about by political means, but rather by introduction of disruptive technology innovations that undermine the existing system, as the agricultural and scientific and industrial revolutions did. It is tempting to believe that scientists, not collective human energy and collaboration, are the only hope we have for saving us from ourselves, of rescuing us from our colossal ignorance.

What is the cost of not knowing when, even if we could communicate enough knowledge to achieve global consensus on the need for change and the change that is needed, there is still no simple process to bring about that change? If we were to magically and suddenly be able to bring knowledge to bear that would persuade the vast majority of people on the planet that unless we quickly reduce human population below one billion and reduce each human ecological footprint to no more than one eighth of the current Western footprint, would that be enough to precipitate a combination of voluntary abstinence, intense social pressures, and (over the objections of the very powerful elite) laws and taxes and sanctions, to ensure that these targets were met? We did bring about the end of slavery this way, and the end of the Vietnam War, and in much of the world women’s suffrage. Is the intractability of our greatest problems really the lack of a simple, known solution, or is it rather the lack of consensus on the problem, and of its severity and urgency and what needs to be done to find a solution? — The cost of not knowing.

Until the reactionary cult of leadership took over business thinking a few short years ago, there was a consensus that the best way to run a business was to agree on and articulate the business’ objectives, get each employee to define their role in achieving those objectives, remove the obstacles that prevented them from fulfilling those roles effectively, and otherwise stay out of the way and trust the Wisdom of Crowds to produce better results than the arrogance of a few. Could the same principle, applied to the world’s most challenging and threatening problems, work in society as a whole? And if not, why not?

It is the examples of slavery and the 60s peace movement and women’s suffrage that have caused me, insufferable optimist that I am, to think that there is hope. The solution of reducing human population by 90% and ecological footprint by 10% (in the third world) to 90% (in the West) is daunting, but it’s also a simple, clear, measurable objective. And if we have six billion people working on it, convinced that this is what must be done to save the world, there’s no reason why it shouldn’t be achievable. Women choose not to have babies if they know pregnancy would put their lives in danger, why wouldn’t they choose likewise if they knew it put their world in danger? Would knowledgeable people agree to participate in an annual lottery for the right to have a baby, and live with the results, as they now compromise so many of their ‘rights’ for the greater good? Would they agree to a 100% tax on all wealth beyond sustainable consumption levels, to be distributed to the poor? Would they shut down permanently businesses that knowingly damage the environment? Would they abandon urban sprawl and big centralized governments in favour of self-managed, self-selected, self-sufficient communities if it could be shown that these are more socially and environmentally responsive, and responsible, political units? Would they wrench power, by citizen and consumer action, from unrepentant corporatists who refused to give up their excessive wealth and influence?

It is hard to give up old paradigms. I know a lot of people that see the salvation of the world in global government, to which all states will cede authority. I see no reason to believe that bigger more powerful governments, which largely got us into this mess, and which are more removed from the people they supposedly represent, would do anything but make the problems worse.

But as the Internet has shown, the real power in any system remains at the ends: The front lines, the communities, where people learn by direct experience what works and what does not, what makes sense and what does not. It is as individuals and as members of small communities that we define ourselves and establish our belief systems and commit ourselves to action and to change. As citizens and consumers and members of communities, if we only knew, we could accomplish what needs to be done.

It is time for a bloodless coup, the taking back of power and authority from central corporatist political and economic institutions and its reinstatement in local communities and in individuals. To bring it about, we need only accomplish these four daunting tasks:

  1. We need to communicate to everyone on the planet, one person at a time, that there is a better way to live: happier, healthier, safer, more egalitarian, more harmonious, more responsible, and sustainable for future generations. We need to tell everyone a new story of our planet’s destiny.
  2. We need to achieve, by a great deal of open conversation, discussion, and sharing of knowledge, a huge consensus that there are two root causes underlying all the problems we face today and preventing us from achieving that better way to live: Overpopulation and overconsumption, and to set and agree upon deadlines and targets for solving these two problems. Just as in past we agreed that slavery and imperialism and suppression of women were our global enemies, we need to agree that overpopulation and overconsumption are our global enemies, a threat to everything we believe in and a threat to our future. With the right mix of empirical and intuitive knowledge, we can achieve this agreement.
  3. We need to organize six billion people to use their collective wisdom to tell us how to meet these deadlines and targets, and then free them to work in their communities to make it happen.
  4. We need to help each other clear away obstacles to success. That means a lot of humanitarian and peacemaking assistance, helping to build new infrastructure that will work in the new community-based world, redistributing resources from the rich to the poor, and disarming those that will try to establish new wealth and power hierarchies.

So maybe knowledge is power after all. About two centuries ago some new stories arose that were so compelling that they became the world’s dominant religions, the basis for everything the vast majority of people on our planet believed, and still believe today. Those stories spread person to person, by word of mouth, before the printing press accelerated their influence. At that time the people of our planet were struggling with the new problems of civilization, like famine, disease, poverty, addiction and violence, and they were desperate for new knowledge, a new story, something to give them faith, purpose and direction. Today we face much greater problems on a much greater scale, but we also have powerful new resources for spreading knowledge, for telling a new story. We also have a much better sense of what the root causes of, and solutions to,  our problems are, and knowledge offers the most potent, perhaps the only, means to achieve global consensus and global mobilization to solve these problems.

The cost of not knowing is the end of our world. It’s too great a cost to pay, and the answer, if we use the power of knowledge, is within our collective reach.

August 29, 2004

WHY ‘FREE’ TRADE DOESN’T WORK

Filed under: How the World Really Works — Dave Pollard @ 14:30
zapatistas
When I was younger, I was both a socialist and a supporter of ‘free’ trade. Both concepts make eminent sense in an ideal world. Take away the complexity of real world affairs and debate the benefits of either concept strictly philosophically, and the ‘no’ side doesn’t stand a chance. Unfortunately, or fortunately if you have an ideological opposition to either or both concepts, neither concept works in the real world — in fact, they both backfire and make things worse. The problem is that the elite wealthy and powerful who control the media and most world governments are violently opposed to socialism and selfish supporters of ‘free’ trade. So while the myth of the viability of socialism as a workable political system has been soundly and widely discredited, the myth of the viability of ‘free’ trade as a workable economic system is cynically perpetuated by the powers that be.

I’ve written at length about why ‘free’ trade doesn’t work: Why in a world of massive, hidden government subsidies it creates a hugely unfair playing field, how it leads to unaffordable prices for medicines in the third world and hence causes immiseration and death, why it leads to a ‘race to the bottom’ of social and environmental standards worldwide, how it encourages unsustainable agricultural and manufacturing processes at the cost of sustainable ones, how it leads to an inexorable deterioration in quality of products and services etc. But some of my readers still say that by advocating the repeal of ‘free’ trade agreements and replacing them with import duties on goods and services that cannot reasonably be produced domestically, I’m encouraging the continued impoverishment of the third world.

So here is an article, written late last year by Timothy White of Dollars & Sense magazine that shows that for Mexico, a country that has embraced ‘free’ trade openly and honourably, whose people have done everything they can to make it work, and whose government and people had such high hopes for it, NAFTA and ‘free’ trade in general have been an unmitigated disaster. If you want to know the real truth about ‘free’ trade, please read the article in its entirety — it is free of economic jargon and political rhetoric, and full of astonishing data on the cost of ‘free’ trade to that country.

Here is the synopsis at the end of the article, emphases mine:

  • NAFTA took effect in 1994, but the “neoliberal” experiment began in the mid-1980s following Mexico’s 1982 debt crisis. Ten years into NAFTA and nearly twenty years into neoliberalism, the track record, drawn from official World Bank and Mexican government figures, is poor:
  • Economic growth has been slow. Since 1985, Mexico has seen average annual per capita real growth of just 1%, compared to 3.4% from 1960 to 1980.
  • Job growth has been sluggish. There has been little job creation, falling far short of the demand from young people entering the labour force. Manufacturing, one of the few sectors to show significant economic growth, has registered only marginal net job creation since NAFTA took effect.
  • The new jobs are not good jobs. Nearly half of all new formal-sector jobs created under NAFTA do not include any of the benefits mandated by Mexican law (social security, vacations, holidays, etc.). One-third of the economically active population now works in the “informal” sector.
  • Wages have declined. The real minimum wage is down 60% since 1982, 23% since NAFTA’s inception. Wages in all sectors have followed suit.
  • Poverty has increased. According to Mexico’s most respected poverty researchers, the number of households living in poverty has grown 80% since 1984, with nearly 80% of Mexico’s people now below the poverty line, up from 59% in 1984. Income distribution has become more lopsided, making Mexico one of the hemisphere’s most unequal societies.
  • The rural sector is in crisis. Four-fifths of rural Mexicans live in poverty, over half in extreme poverty. Migration levels remain high despite unprecedented risks due to increased U.S. border patrols.
  • Imports surpass exports. The export boom has been outpaced by an import boom, in part due to intrafirm trade within multinationals.
  • The environment has deteriorated. The Mexican government estimates that from 1985 to 1999, the economic costs of environmental degradation amounted to 10% of annual GDP, or $36 billion per year. These costs dwarf economic growth, which amounted to only $9.4 billion annually.

This is a story that could be told and re-told in almost any third-world country. African and Asia agriculture has been devastated by heavily-subsidized European crops just as Latin American agriculture has been crippled by heavily-subsidized North American crops. The environmental destruction wrought by business in the third world, and the criminal, dangerous, inhumane working conditions of workers, mostly run by manufacturing and mining businesses owned by or dependent on Western imports, is a global disgrace. ‘Free’ trade is in fact a massive fraud designed to further enrich a small number of multinational corporations and the governments they control. There is a reason for the huge, spontaneous global demonstrations against ‘free’ trade and globalization: People around the world directly affected by it know it is a scourge, a power and wealth grab by those who already have far too much of both. The multinationals are attempting to get additional ‘free’ trade agreements signed before the rest of the world wakes up to the reality of their enormous cost and inequity. They continue to argue about the theoretical benefits of ‘free’ trade, and blame its failings on corrupt third world governments. This is a smokescreen, and White’s article eloquently shows the real motive for wanting ‘free’ trade agreements signed: pure greed.

The alternative to ‘free’ trade is not no trade, it is trade regulated for the benefit of the world’s people. Regulation is not a dirty word, no matter how aggressively neocons try to paint it as such. It is our only protection against corporatists who put profit before people.

August 28, 2004

HUNGRY FOR MORE

Filed under: How the World Really Works — Dave Pollard @ 10:02
jaybabies
Some interesting weekend reading for you, mostly about politics:

The UK’s Neil Crofts has written a book about making a living happily as an entrepreneur instead of as a wage slave, but he takes a completely different tack from the one I take in Natural Enterprise. The key, he says in Authentic, is to get back in touch with yourself, your true feelings, and discover your true calling. Take a look at his compelling introduction What is Authentic Business and tell me what you think.

The NYT calls for the firing of religious bigot and deputy secretary of defense William Boykin. The infamous “Preacher-General” does offend the Islamic community with his sermons equating their god with satan and calling for new crusades.

Philip Agre’s article What is Conservatism and What is Wrong with it? makes some interesting points. What I like best about it are the arguments that conservatism destroys conscience, and that we need new, accessible, articulate, young liberal pundits to at least make the term ‘liberal’ respectable again.

And finally, just for fun, if you haven’t already seen it, take a look at Gregg & Evan Spiridellis’ hilarious This Land animation at their site Jib Jab.

(Thanks to Mike McInerney and Jon Husband and whoever told me about Authenticity — I know, my filing system sucks — for the links. The photo is not mine — it’s from a .pps file called ‘FantasticPhotography’ that’s been circulating by e-mail but doesn’t ID the photographer. Anyone know where they originated?)

August 27, 2004

Awfully Personal Question for August 28, 2004

Filed under: _ Uncategorized — Dave Pollard @ 08:08
christinaWelcome to That’s Awfully Personal, an opportunity for blog writers and readers to reveal a little more about themselves than might normally happen during the daily blogging process, and hence get to know each other a bit better. It’s a little like the late, great Friday Five, but more challenging. Each week our Awfully Personal Panel will post one or more new questions for you to answer on your blog, or in the comment space below if you don’t have a blog.

 For more on how That’s Awfully Personal works, please see the How to Play section below. Here is this week’s Awfully Personal Question:

What will your next car be? What does your choice say about you? How long would you expect to keep it? And if your choice is practical (tempered by financial or weather reality), and money and weather were no object, then what would your choice be?

If you could design your own car, what would it be like?

How to Play “That’s Awfully Personal”:

  1. Subscribe to (i.e. join) this Yahoo group to get the weekly question(s) sent to you automatically by e-mail each Friday.
  2. On Saturday, or whenever you get around to it, post one of the questions and your answer to it on your weblog or web site.
  3. Then come back here (you may want to bookmark this site) and click the ‘comment’ button under the question(s) of the week. If it’s your first time, you’ll be asked to enter your e-mail and the URL of your blog or website. Then just note that your answer is up. Other readers will then be able to read it on your site by simply clicking on your name in the comments thread. You can check out other people’s answers at the same time. Or, if you don’t have a blog or website, you can post your answer right in the comment box.
  4. If you have questions or observations about “That’s Awfully Personal”, or would like to become part of our Awfully Personal Panel that selects the weekly questions, e-mail us.
  5. If you have a suggestion for Question of the Week, e-mail us and our Panel will review it and, if selected, they will acknowledge you as the author with a link to your blog. Questions should ideally be challenging, so that the answers will be revealing (when answered honestly). But this isn’t Truth or Dare — we want people to want to answer honestly and to have to think a bit before they do.
  6. “That’s Awfully Personal” was developed when The Friday Five closed down. The questions are more thought-provoking and, well, more personal than most Friday Five questions. If they’re too serious for you, here’s a group that is resurrecting The Friday Five, which you might enjoy instead.

AUSSIE BREAKTHROUGH ON SOLAR ENERGY?

Filed under: Our Culture / Ourselves — Dave Pollard @ 08:06
Cstate hydrogen
Last year I waded through Jeremy Rifkin’s The Hydrogen Economy and wrote a blog post that explained what’s promising about hydrogen as a fuel, and its two major drawbacks. I used two charts, reproduced here, to explain how it works and what’s holding it back.

The chart above shows the energy economy we have today. Red boxes are non-renewable, polluting and environmentally damaging energy sources and green ones are clean and renewable. Whether we use hydrocarbon fuels or electricity to light, heat and cool our homes, it’s likely that non-renewable, damaging sources are producing it. Our cars likewise burn fossil fuels, and although hybrid cars are certainly an improvement, they still depend on fossil fuels to create (’reform’) the hydrogen that the fuel cells convert into electricity.

The chart below shows the energy economy in twenty years, if we can solve the two major dilemmas of the hydrogen economy.
FState hydrogen
Under this scenario, hydrocarbons are replaced by solar, wind and other renewable, non-polluting, non-damaging energy sources. The central hydro utility is replaced by a local energy co-op, which produces energy for your community from its own solar collectors, wind turbines etc. The compressed hydrogen used to power next-generation pure hydrogen vehicles is produced from some of this electricity, and distributed through local service stations. The excess electricity produced by these cars can be used to provide light, heat and cooling to the home or sold back to the local energy co-op. The cars themselves will have no engine, no pedals, clutch or gearshift, make no noise and produce no harmful exhaust. The entire process will require no burning, no pollution, and no grid at the mercy of multinationals and sheikhs.

What are the two catches? First, the current cost of electricity produced from non-renewable sources is very expensive, and the process is cumbersome and not yet terribly efficient. Even more problematic is the $100 billion cost of building the infrastructure to generate, distribute and store the electricity and hydrogen, obsolescing a comparable amount of existing energy infrastructure, and probably causing some consternation to and resistance from the owners of that infrastructure.

titanium cellYesterday the University of New South Wales predicted that by 2010 a new generation of photovoltaic ‘harvesters’ based on titanium dioxide ceramics will both collect solar energy and use that energy to produce compressed hydrogen from water. A 10m square array, such as that depicted at right, mounted on just half the households in a sun-rich country like Australia, could produce the entire country’s energy.

This would allow an even more distributed, decentralized model than that depicted above: With each household able to produce its own energy, the local energy co-op might be nothing more than a virtual market, and the need for local service stations selling or even producing compressed hydrogen would be obviated. We’d all change from consuming to producing energy.

The university has even higher hopes for the titanium dioxide technology behind this advance: They believe it will allow innovations in other areas such as “water purification, anti-viral and bacteriacidal coatings on hospital clothing and surfaces, self-cleaning glasses, and anti-pollution surfaces on buildings and roads”.

Anyone know anything about titanium? I know it’s a metal, but is it plentiful and easy and clean to extract? Is it recyclable? Durable? Toxic in landfill sites? I sense a bit of grandstanding and breast-beating by UNSW here. Is there another catch they’re not telling us about?

August 26, 2004

MANAGING YOUR BUSINESS’ CASH FLOW AND WORKING CAPITAL

Filed under: Working Smarter — Dave Pollard @ 14:21
(Thirteenth instalment of the upcoming book Natural Enterprise. List of previous instalments here.)

Nat EnterpriseEnterprises fail for two main reasons: They make poor business decisions, or they run out of cash. Much of Natural Enterprise has been about how to make business decisions knowledgeably and intelligently, taking the risk out of selling and marketing by doing thorough advance research on what people need and by letting your customers ‘virally’ market for you, and taking the risk out of financing by doing it yourself, organically. This chapter is about managing cash.

While it’s obvious that if your cash outflows consistently exceed your cash inflows, eventually your business will be bankrupt, many businesses still run out of cash because either (a) they are overly optimistic in forecasting cash flow and budgeting expenses, or (b) they don’t track cash carefully enough and find themselves with a brief, but catastrophic, shortfall. And as we all know, if you need cash quickly and urgently, that’s precisely when lenders are most reluctant, and cost is highest.

A company I advised a few years ago in the computer systems business found itself in a cash crisis because it was too successful. The entrepreneur was well connected, knew his product line well, and priced his products fairly yet competitively. As a result, his business grew explosively. After starting with small and medium sized customers, he moved up to large enterprises and public institutions like schools and hospitals. His revenues were growing at 15% per month, quintupling each year. The problem was, his large customers, especially those in the public sector, often took two or three months to pay for their systems once they’d been installed, the larger systems took longer to install (he couldn’t hire competent people fast enough to keep up with the demand), yet the manufacturers insisted that this new ‘upstart’ company pay them within 30 days. The entrepreneur was going back to the bank every month to negotiate larger and larger loans to finance his receivables and inventory. Eventually they balked, and he had to negotiate more expensive financing with a technology financing company, with some major concessions if his company defaulted or exceeded their credit limit. Despite my counsel, he refused to turn away business to slow down his rate of growth to a manageable level. He was getting backed up with expensive inventory sitting waiting for other system components to come from other vendors, some of which were now demanding cash on delivery, and was accumulating a lot of products returned under warrantee for repair and replacement, which vendors, instead of buying back, instead credited to his (overdue) account. Some customers got impatient with delayed deliveries or faulty components and cancelled orders, leaving large amounts of unsellable stock in inventory. Additional, expensive warehouse space was rented. To try to speed up repairs, a massive quantity of unbudgeted repair parts was stocked. The lender was now reviewing the company’s receivables and inventories weekly, writing down the 90-day-old receivables from school boards that took months to approve and disburse capital expenditures, and from customers refusing to pay for incomplete or unsuccessful installations, and writing down also the inventories of returned parts and repair parts. Lending was frozen, and the company was warned that unless debt was reduced they would exercise their option to seize the assets, convert their debt to voting control of the company, and/or place the company in the hands of a receiver. Desperate, the entrepreneur, who was now spending all his time looking for secondary financing instead of running his business, made the worst possible decision: He called in the employees and announced that he would have to delay payroll for two weeks. Stressed-out employees quit in droves, and the business collapsed.

It takes enormous self-discipline to say ‘no’ to customers you’re just not scaled up to handle. Good cash flow management processes can help you exercise that discipline. The CCH Business Owners’ Toolkit breaks cash flow management into six components:

  1. Understanding cash flow: The components, critical business decisions and calculations that comprise and impact cash, the true ‘bottom line’ for most entrepreneurs.
  2. Analyzing cash flow: Looking at both historical and forecast cash flow, detecting possible problems and opportunities for improvement.
  3. Budgeting cash flow: Creating a flexible, current cash flow budget that will prevent and detect cash flow problems.
  4. Improving cash flow: Techniques to deal with cash balances that are dangerously low or reduce your buying flexibility.
  5. Filling gaps in cash flow: What to do when you don’t have enough.
  6. Handling surplus cash flow: What to do when you have too much.

Let’s start with a bit of Accounting 101.

The term working capital refers to cash and securities, plus receivables (amounts due from customers) and inventory (raw materials, work in process and finished goods), less payables (amounts due in the next month or other operating cycle to creditors). The term liquidity describes your ability to sell inventory at its retail value, and collect receivables on a timely basis, to pay current payables (also called current liabilities). The net amount of your working capital (after adjusting for receivables you don’t think you can collect and inventory you don’t think you can sell) is a measure of your business’ solvency: If this net amount is a negative number, you are technically insolvent, and depending on the terms of your arrangements with creditors, you may be forced into receivership or bankruptcy.

A cash flow budget starts with your opening cash balance, adds expected receipts for each period, and subtracts expected payments for each period, to forecast a closing cash balance. Cash receipts consist of cash sales proceeds, amounts you expect to collect on outstanding receivables, and proceeds from any loans or capital injections. Cash disbursements consist of cash purchases, amounts you expect to pay on outstanding payables, loan or capital repayments, and new investments. So your cash flow budget, forecast, and actual statement looks something like this:


 Period 1
 Period 2
 …etc.
 Total
A. Opening cash balance (row E from previous column)



B. Cash receipts:



B1. Sales (cash + credit)



B2. Receivables, beginning of period (row B3 from previous column)



B3. Receivables, end of period



B4. Loan proceeds and capital injections



B5. Interest and other investment income



B6. Total receipts (B1+B2-B3+B4+B5)



C. Cash disbursements:



C1. Expenses and inventory purchases (cash + credit, exclude depreciation expense)



C2. New capital expenditures (equipment, premises etc.)



C3. Payables, beginning of period (row C4 from previous column)



C4. Payables, end of period



C5. Loan and capital repayments



C6. New investments



C7. Total disbursements (C1+C2+C3-C4+C5+C6)



D. Cash flow for the period (B6-C7)



E.  Ending cash balance (A+D)



So for example if you buy a new machine that costs $50,000 but finance $40,000 of it through the bank, the $50,000 is included on line C2, and the $40,000 on line B4, so the net cash impact for the period is $10,000 (your down payment); as you make payments on the new loan, those payments go on line C5. The numbers that go in row B1, C1 and C2 will come from your sales forecast, your expense budget and your capital budget respectively. (My book Natural Enterprise will include downloadable cash flow spreadsheets with additional detail). A brand new business will often include a ‘Period 0′ column to show start-up capital and start-up expenses before operations begin.

This model is adaptable to businesses in almost any industry, and depending on the volume of receipts and disbursement the periods can be as short as a day or as long as a year. The calculations are the same. As the business operates, you can overwrite the budget data with the actual data (or show them side-by-side) to see how accurate your forecasts were, and to update them. Accountants prepare a similar cash flow statement as part of the annual financial statements, except that they segment ‘operating’ items (B1, B2, B3, C1, C3, C4) from ‘financing and investing’ items (B4, B5, C2, C5, C6) to compute separately ‘cash flow from operations’ and ‘cash flow from non-operating activities’.

Once you have your cash flow budget done, the most important thing to do is shop it to your business colleagues and others you trust for their assessment of its reasonableness. You should have both accountants (who can check the math and the assumptions) and people who understand your business (who can check the plausibility of your forecasts) look at your cash flow budget regularly — this will help make your forecast more accurate, without which it’s not of much value.

It won’t take long for you to learn to analyze the budget and actual data and find danger signs and opportunities. If cash flow varies significantly from your forecast: Were your sales and expense forecasts reasonable? Is cash being collected faster or slower than expected? Are bad debts (receivables you cannot collect) different from expected? Is inventory moving faster or slower than expected? Are inventory writedowns (products you cannot sell for full retail) different from expected? Regardless of the reason for the variance, does this suggest you need to revise your budget for future periods?

If collections are slow or bad debts high, you may need to change your credit terms for some or all customers. This is a balancing act: If your credit is too tight, you’ll lose customers and business, but if it’s too loose you’ll end up writing off receivables, which is even worse. Some businesses offer discounts to customers who pay promptly, and again the rate needs to be chosen carefully: Too high and the discounts cut into your margin, too low and customers won’t be incented to pay their bills promptly. And collecting interest on overdue accounts is a difficult and often futile process. In some cases you can even accelerate your cash receipts from customers further by getting deposits (cash before delivery), issuing progress billings (getting part payment for work you haven’t finished yet), asking for cash on delivery (usually only practical with small, retail customers and customers with poor credit ratings), or asking for an annual retainer (common in professional services businesses). Depending on the nature of your customers, you may want to have them sign credit agreements (that improve your position if they are slow or if they default) and/or do credit checks on them (either yourself or through an agency). In some businesses, the sale of receivables to a third party (called factoring) is common. This can significantly accelerate your cash flow, but depending on the quality of your customers can carry a heavy, even prohibitive, price tag (the factor’s fee can cut significantly into your profit margin). Some factors merely collect receivables for you, leaving you with the bad debts, while others pay a percentage of the receivable up front and accept some or all responsibility for accounts they can’t collect. Talk to a financial advisor before factoring, and check the factor’s credentials with other customers.

If the sales cycle (the period from first customer interest to actual purchase) is longer than expected, look at ways to make it easier for the customer to buy. While this depends on the product and customers, consider helping them with financing, offering delivery, taking credit cards or debit cards or PayPal type online credit and cash clearance options, offering layaway, or using other attractive and creative sales initiatives. But be cautious about lowering your prices: If you’ve done your homework following the advice in this book, you should have set your price correctly in the first place, and lowering it is unlikely to help you sell more, and will lower all customers’ perceived value of that product or service. And if your customers catch you raising prices later, reasonably or not, they will probably resent it. Look at your own processes as well: If you offer credit, get your bills out promptly and make it easy to pay (e.g. offer prepaid return envelopes). It can sometimes even be worthwhile to visit a customer in person just to pick up a large cheque. If you sell business-to-business across the country or beyond, consider arranging ‘lockbox’ accounts in each major city so that the local financial institution credits your account the day payment is received, and money isn’t tied up in the mail.

If your cash flow shortfall is due to higher-than expected inventory levels or write-downs, you may need to revisit your contractual arrangements with your suppliers. Will they sell to you on consignment (i.e. will they take back, at full price less a restocking fee, what you are unable to sell to your customers)? Are the vendors’ return provisions and warrantees reasonable? Remember, you’re the middleman between your vendors and customers, and no matter what your sale terms, customers expect you to look after their problems, and will be unhappy (and stop buying from you) if they’re foisted off on an uncaring or unreasonable manufacturer further up the supply chain. Careful inventory management is critical to businesses that sell someone else’s product. There are two additional keys to good inventory management: (a) Calculate and buy ‘economic order quantities’ — the amount that qualifies for volume purchase discounts but doesn’t give you more than you can sell in a reasonable time period, and (b) Maintain for each product just enough so that the costs of carrying inventory (costs of financing and stocking it) equal the costs of not carrying it (missed sales) — yet another balancing act. Many entrepreneurs err on the side of having too much inventory and holding it too long before selling it off at a discount. All of these practices and decisions have a major, and often unexpected, impact on cash flow.

Likewise, ensure you taking advantage of volume and early-payment discounts from your suppliers. Both these discounts sacrifice short-term cash flow for larger, longer-term cash flow, but if the discounts are significant you will want to take advantage of them — if your cash flow will allow it. Negotiate the longest payment terms you can with your suppliers, but never abuse their trust — if you’re slow paying it will soon start showing up in the price you pay. And consider leasing rather than buying to defer the cash flow impact of capital purchases — but check the implicit interest rate in the lease first — some of them are usurious.

Is your ending cash balance for each period high enough to avoid the need for unbudgeted loans or cash infusions? If not, or if your cash balances jump around a lot from period to period consider setting up a ’sweep’ account — an account that will provide reasonable-cost overdraft protection for short periods, and will automatically transfer longer-term shortages to lines of credit and longer-term surpluses to higher-interest accounts. This can free you up from making day-to-day decisions about cash shortages and surpluses, and lets you take a longer view of cash and business management. If cash balances remain very high, which is common among entrepreneurs with the wisdom to set aside a ‘cash reserve’ early on, consider whether the excess can be invested in something that will allow you to liquidate it if and when you do need the cash.

If cash balances remain unexpectedly low, diagnose the reasons and use the cash and working capital management techniques listed above to try to solve them. Don’t let unsatisfactory cash flow drag on and just hope for the best — if your business isn’t generating the cash flow you expected despite all your advance research, you need to go back and look at the business plan and reassess the viability of the enterprise. I’ve seen entrepreneurs pour some of their own money back into a business which no longer fills an unmet need, and end up needlessly personally bankrupt. Talk to people you know — accountants, other entrepreneurs, even competitors, and objectively assess why your enterprise isn’t performing as expected. And fix the problem before you throw more cash away.

If your business is international, there’s an additional cash headache to consider: foreign exchange costs and fluctuations. If you do a lot of business in a foreign currency, set up an account denominated in that currency and only transfer occasional large sums between it and your domestic account, to avoid much of the arbitrage costs of constant conversion. If you have significant assets, inventories, receivables or loans denominated in a foreign currency, you might want to consider hedging against foreign exchange fluctuation. This won’t give you a windfall if the foreign currency moves in a propitious direction, but will protect you if it goes in the opposite direction. If you do this, get expert advice — hedging is a complicated and sometimes expensive process.

Managing cash is one of the most tedious aspects of entrepreneurial business, but it’s an essential one, and one that should not be left up to your accountant or outsourced. It’s the pulse of your business’ financial health, of customer satisfaction, and of the value that your enterprise is providing. Just like every other aspect of your business, with proper planning and management it can be a ‘no surprises’ experience — which is exactly what you want it to be.

August 25, 2004

DARFUR: A COCKTAIL OF SUFFERING AND GENOCIDE

Filed under: How the World Really Works — Dave Pollard @ 10:32
darfur
Sudan has a great deal in common with Afghanistan. Both countries are horrendously overpopulated relative to their carrying capacity, and have exploding populations — Sudan’s population of 40 million people is doubling every 25 years and that rate is not slowing, raising the spectre of its population topping a half billion by the end of the century. Both Sudan and Afghanistan are also desperately poor, with only 7% of Sudan’s land and 12% of Afghanistan’s capable of supporting agriculture. What’s worse, over-farming, over-grazing and global warming are producing chronic drought, which in turn causes massive famine and desertification. Encroaching desert has already halved arable land in Afghanistan since 1975, and the same phenomenon  is happening in Sudan. Both countries have long legacies of brutal and repressive dictatorships, foreign occupation, savage and interminable civil war, lawlessness, genocide and, in the case of Sudan, slavery. And both countries provided safe harbour for Osama bin Laden.

What is happening now in the Western Sudanese provinces of Darfur is merely a continuation of a centuries-long legacy of misery, poverty, conflict and violence. In this week’s New Yorker Pulitzer Prize winner Samantha Power reports from Darfur, with first-person interviews with government and rebel leaders and the victims caught eternally in the middle. Some of the information she reveals in telling the agonizing story of this impoverished and hopeless nation:

  • The military dictatorship that governs Sudan is desperate to end US sanctions so that its newly-found oil, which came onstream only five years ago, can start generating revenue for the bankrupt nation, so much so that it agreed to end its long and savage civil war against the rebels in Southern Sudan (where the oil is), and exempt Sudanese Christians from Sharia law.
  • That Southern war has cost two million lives, and the Bush Administration was active in brokering the peace for three reasons: (a) many of the casualties were Christians, which led to pressure from American evangelical churches, a bastion of Bush support, for US action, (b) the US would have access to an additional source of much-needed oil and (c) peace would have allowed Bush, in an election year, to portray himself as a peacemaker as well as a ‘war president’.
  • Plans to announce the peace were undone when the Western Darfur provinces, suffering from horrendous drought, rapid desertification, increasing tension between Arabs and non-Arabs for scarce land, and long government neglect, began to clamour for independence (Darfur was an independent Sultanate until Britain annexed it into its Sudanese colony); the government, tapped out militarily and not wanting to jeopardize the possible end of sanctions, responded by outsourcing military retaliation against Darfur’s six million people to local Arab sheiks, warlords and tribal leaders, who they financed and armed heavily and supported with aerial bombing raids in key areas occupied by the pro-independence Sudanese Liberation Army.
  • These local Arab leaders used this power and military might to launch a genocidal attack on all non-Arabs in Darfur, deputizing murderous gangs of Arab bandits called janjaweed, whose intimidation tactics include burning whole villages, gang-raping women, decapitation, burning children alive, mass public executions, ransoming community leaders, burying victims of atrocities and precious wells in sand, and kidnapping women and children. The bandits steal everything of value in the destroyed villages as compensation for their ‘enforcement’ of government authority. As a consequence over a million Darfur residents have fled their villages to massive refugee centres elsewhere in the provinces, where there is at least safety in numbers (50,000-75,000 per camp), and in neighbouring Chad.
  • USAID estimates that the death toll from genocide, starvation and disease will, even with humanitarian and peacemaking intervention now, exceed 300 thousand and could, without intervention, top one million by the end of this year. The UN has already established a food program that has reached 900 thousand of the 1.5 million affected in Darfur, but the threat to the safety of both Darfur natives and humanitarian workers is severe.
  • There are all kinds of reasons for Western reticence to get involved: Darfur is an all-Muslim area, so the genocide is ethnic, not religious, and it is resource-poor, unlike the oil-rich South. European leaders, not wanting to give Bush a smokescreen for his foreign policy blunders and rebukes of its allies, have been perversely reticent to support US humanitarian efforts in Darfur. Arab sheiks and tribal leaders in Darfur and elsewhere in Sudan have announced they will consider any intervention by the West in their ‘internal dispute’ as an unwanted foreign invasion, which they will liken to the US invasion of Iraq, and will use it to recruit zealous young Arabs to kill all foreigners, including humanitarian workers and peacemakers, producing a fiasco similar to the one that occurred in Somalia. One recruiting brochure says “We call upon you to head immediately to Darfur and dig the ground deep for the mass graves of the crusader army”. Darfur’s refugees say that bringing peacekeepers from the African Union won’t work either, because “African troops are too susceptible to bribes”. And the Sudanese government is probably both unwilling and unable to rein in the local sheiks and warlords and the rogue janjaweed gangs. And the only non-Sudanese body with authority to bring thm to justice for genocide is the International Criminal Court, which the US government has repudiated.

What can be done? Samantha argues that, despite the danger, we have a global responsibility to bring in peacemakers and protect the people of Darfur (and, if the detente with the Southern provinces falls through, which appears likely, the people of the South as well). But, just as in Rwanda ten years ago, how can that be done over the violent opposition of the ruling government of the country? You can only make peace where there is a desire from both sides to achieve a workable peace. Without that, peace efforts will constantly be sabotaged by the side uninterested in peace, which will produce retribution and escalate into full civil war.

What about invading Sudan? Its government is much more popular, at least in the North, than the government of Afghanistan, and the end result of an invasion would inevitably be the same as what we see in Afghanistan: Tyranny replaced by anarchy, the retrenchment of the power of local warlords, massive resentment by the locals of the invading force’s inability to bring order or build infrastructure to allow even the promise of a normal life. Intractible civil war and strife. And quagmire for the invaders.

Should we arm the non-Arab people of Darfur so they can defend themselves? After all, the weapons used in the genocide against them came from the West and from Russia, so can two wrongs make a right? And we can’t disarm the janjaweed — in Sudan, as in Afghanistan, there are so many weapons that disarmament is an impossible objective. This was, of course, how we dealt with the earlier problem in Afghanistan — providing arms to the Taliban and other extremists to allow them to defend themselves from the invading Russians. We all know how successful that was.

Should we relocate a million or two million people to Chad, and pay Chad to take them in, and protect their borders? This was how we dealt with the persecuted Jews after World War II, helping them build a new homeland in Israel. That, too, has been a political nightmare. Why would the people of Chad, itself overpopulated and struggling, be willing to give up part of their homeland to accommodate a huge exodus of destitute foreign refugees?

The sad reality is that there is no answer. The problem is that there are too many people and not enough land, water, or resources to support them. Throughout human history, the maximum sustainable population has been 160 people per arable square mile (1 person per 4 arable acres), which would mean that Sudan should have no more than 11 million people, a quarter of its current population. By the end of the century it could have fifty times this maximum sustainable population, and if desertification isn’t halted, it will be even worse. If we think democracy, ‘free’ trade, education and technology are somehow going to prevent this situation from being catastrophic, we’re wildly deluding ourselves.

What’s happening in Sudan, now, is foreshadowing what will happen worldwide by the end of this century if we don’t address massive overpopulation, unsustainable resource consumption, and all the consequences that these two excesses produce: famine, war, destitution, lawlessness, epidemic disease, terrorism, tyranny, oppression, suffering, genocide, and ecological collapse. Sudan is a country out of control, and while we must of course provide humanitarian aid to its needy masses, and do everything we can to persuade its government to allow us to help it broker a lasting peace, this is only a stop-gap. We must convince the government and the people of Sudan that it must reduce its population and start stewarding its resources in a sustainable and responsible way. Otherwise the next war, the next genocide, the next famine, the next epidemic, the next oppressive government, will be incomparably, unimaginably worse. They say you can’t get blood from a stone, but there seems to be no limit to how much blood can be wrenched from an ocean of sand.

Photograph of a Darfur refugee camp from this remarkable online portfolio by Bruno Stevens at New Yorker online.

August 24, 2004

MEASURING ENTREPRENEURIAL SUCCESS

Filed under: Working Smarter — Dave Pollard @ 16:19
Natural Enterprise(Twelfth instalment of the upcoming book Natural Enterprise. List of previous instalments here.)

Enterprises today have a dizzying selection of performance measurements to choose from. While at one time measuring financial profitability, growth and asset management effectiveness were considered enough, businesses are now told that they need broader metrics to avoid the landmines that may not show up in a simple financial report card.

How does an entrepreneur decide which measures to use? The decision ultimately comes down to which measures best reflect and assess the achievement of the enterprise’s objectives. As we explained in an earlier chapter, in a Natural Enterprise these objectives are more personal and less restricted than in a traditional company beholden to absentee shareholders and creditors, whose needs usually (and tragically) trump those of the people who actually operate the enterprise. In fact, Natural Enterprise recognizes that each member/partner will have different personal objectives, and attempts to accommodate those objectives, unlike traditional companies that merely contract for services of employees and make no attempt to assess those employees’ individual needs (often at the cost of their best people). Some individuals may want or need to earn a significant income to meet personal financial obligations, while others may be prepared to trade off income for more time for non-business activities, and still others may not care about either financial reward or time demands, as long as they’re having fun working with people they love.

Just as the selection of members for a Natural Enterprise is a self-brokered juggling act (ensuring members’ skills are mutually exclusive yet collectively sufficient), so too is the measurement of Natural Enterprise success a balancing act — choosing measures that assess each member’s achievement of his or her personal objectives and needs, yet still ensuring that the enterprise as a whole remains viable and sustainable. For that reason the selection of measurements needs to be a collective decision, one that optimizes everyone’s desires and needs in a fair and objective manner. If one member has a huge mortgage that can probably only be serviced if everyone in the enterprise works longer hours than they want to, for example, this needs to be hammered out early, to avoid inevitable conflicts (and resignations) later.

While the measurement process described in this article is designed for Natural Enterprise, it can also work in any entrepreneurial business with a democratic spirit. Just be forewarned it takes a bit more work than the traditional business success measures, and requires a lot more accommodation of individual employees’ needs and aspirations than most entrepreneurial managers are accustomed to!

Although there are many accepted sets of measures that attempt to look at enterprise success holistically, in my opinion none of the widely-used templates is flexible enough to meet the needs of entrepreneurs who are not fixated on maximizing profitability and growth. My recommendation, then, is that you start by having each member of the enterprise articulate his or her own personal objectives for being part of the enterprise, and then as a group reconcile and optimize them to create a set of enterprise-wide measurements. I’ve developed two tools to do this, the Personal Enterprise Success Scorecard and the Enterprise Success Scorecard. Those who have worked in large organizations that use Norton & Kaplan’s Balanced Scorecard will recognize this as similar to the process used to reconcile personal goals to enterprise goals, but with an important difference: While in traditional companies this reconciliation is a top-down process (”describe how your personal goals and improvement objectives for the next year will contribute to each of the organization’s Balanced Scorecard goals”), in Natural Enterprise the process is bottom-up. Here’s how it works:

  1. Have each member of the organization complete a Personal Enterprise Success Scorecard (see Fig.1), honestly and independently.
  2. Circulate these Personal Scorecards among all members of the enterprise, and allow time for one-on-one discussions and exchange of suggestions to ensure all Scorecards are fair, reasonable and consistently filled out.
  3. Get the group together to develop a plan that will achieve everyone’s Minimum Need Targets, and get as close as possible to achieving everyone’s Ideal Targets. This will require considerable consensus-building skills — it has to be a highly respectful and accommodating process with no bullying, intimidation or reluctant compromise. You might even have to rethink your membership if you realize that no matter what you do, someone’s going to be unhappy enough to leave.
PERSONAL OBJECTIVE
 MEASURE
 TARGET (MINIMUM NEED)
 TARGET (IDEAL)
Meet personal financial objectives
 Personal monthly cash flow (income)
 $X/month
 $Y/month
Time for important non-work activities
 Average weekly work hours
 max. X hours/week
 max. Y hours/week
Work hours flexibility
 Ability to choose which hours to work
 avoid working X-Yam and X-Ypm
 unlimited flexibility
Work autonomy, authority, responsibility
 Ability to make decisions affecting my role
 $X spending authority
 unlimited autonomy
Personal learning
 Time allotted for learning activities
 X hours/week
 unlimited at my discretion
Creative outlet
 Time & $ allotted for innovation activities
 X hours/week + $X/month
 Y hours/week + $Y/month
etc.

Fig. 1  Sample Personal Enterprise Success Scorecard

  1. Drawing on the Personal Enterprise Success Scorecards, and adding other holistic objectives of the enterprise, compile an Enterprise Success Scorecard (Fig. 2).
  2. Put in place processes to capture the data (qualitative — surveys etc., and quantitative) needed to assess the achievement or non-achievement of the collective targets.
  3. When a minimum-need target is not achieved, convene the group to discuss implications for individual members and remedial actions to achieve the target in future, or changes to the target.
ENTERPRISE OBJECTIVE
 MEASURE
 TARGET (MINIMUM
NEED)
 TARGET (IDEAL OR
BENCHMARK)
 ACHIEVEMENT/
REMEDIATION INITIATIVES
Meet members’ financial targets
 Cash flow distributed/month


Meet members’ work hour targets
 Total hours worked/month


High product/service quality
 Score per customer survey


High business process quality
 Down time & wasted time


High member/employee satisfaction
 Score per employee survey


High customer satisfaction
 Score per customer survey


Strong relationships
 Face time with members of networks


High connectivity
 Number of contacts with networks


High enterprise value
 Computed valuation


High sustainability & agility
 Meet above targets even in weak economy


Social & environmental responsibility
 Buy local, employ local, no waste/pollution


Community responsibility
 Outreach to schools & charities


High market/customer share
 % of total market in areas served


High innovation
 % of sales from new offerings


etc.



Fig. 2  Sample Enterprise Success Scorecard (column headings based on Norton & Kaplan’s Balanced Scorecard)

Most of these measures are contingent on others. For example, a member may be willing to work more hours if he or she has greater flexibility over when those hours are worked. So optimizing the needs and objectives of all members is not only a balancing act, it’s an iterative process. And over time the demand for and costs of the enterprise’s products and services may change for reasons outside your control, which will require a re-optimization of members’ and the enterprise’s scorecards again.

Some of the objectives in the sample Enterprise Success Scorecard above are quite grandiose and abstract, and sometimes you need to employ some more readily measurable intermediary metrics to get a clear idea of whether you are achieving, and will likely continue to be able to achieve, some of the higher-level objectives. For example, achieving a cash flow target means achieving certain revenues and/or cost minimization targets. So there is still a place in this measurement process for the traditional financial and operating measures like margin and turnover, and like ‘eyeballs’ and ’stickiness’ measures of e-commerce sites. You can find information on some of these traditional measures at About.com, at NetMBA, or at the UK Small Business Service site. While these ratios aren’t terribly useful to most entrepreneurs as raw data, they can be very useful in identifying trends that may indicate problems or opportunities, in diagnosing the cause of problems, and in comparing your enterprise to companies in a similar business that are outperforming the market. Trends in intermediary metrics can also have great predictive value: I know of several businesses who noticed modest drops in gross margin or inventory turnover, and discovered that they signalled important (negative) shifts in customer perception of their products, early enough to take vital remedial action.

If you are interested in knowing how much your business is ‘worth’ (at least on paper), I published a Primer on Business Valuation last year on my weblog.

Norton & Kaplan’s famous Balanced Scorecard, which you can learn more about on their site, breaks the measurable enterprises objectives into four major categories: Financial, Customer, Internal Processes and Learning, Growth & Innovation. Many variations of these classifications have since been published, adding Knowledge (Intellectual Capital), ‘People’ (Human Capital) and Technology categories, among others.

No matter what objectives you choose or how you categorize them, it is essential that they meet three criteria:

  • Measurability — If you can’t measure attainment of the objectives, or even come up with compelling intermediary metrics that can serve as credible surrogates for what you’re trying to measure, there isn’t much point in listing it as an objective, because you’ll never know if you’ve achieved it.
  • Actionability — You need to be able to identify remedial actions you can take if you fail to meet your targets. If your measures aren’t actionable, there’s limited value in taking them.
  • Analyzability — You need to be able to understand why you are, or are not, meeting your targets, in order to be able to act on them.

My book, Natural Enterprise, will include some real-life examples of entrepreneurial measurement systems, and some success stories and horror stories about business measurement.

I’ve spent much of my career being paid to measure enterprise success, and in my experience most entrepreneurs know instinctively how well their business is doing, and many rely on one overarching measure — daily cash flow — to confirm or challenge their business instinct. I’ll be describing how to manage cash flow in the next article in this series. In the meantime, some final thoughts about measurements:

  • Don’t get obsessed with them — they’re a means to an end, namely the achievement of your business objectives (not your accountant’s!), not an end in themselves.
  • Make sure that the measures you use are timely, and that you take them continuously; I’ve seen businesses fail because they made decisions based on obsolete, misleading data.
  • Make sure the measures are meaningful and the process used to collect them ensures accurate data. Before you make major decisions based on your interpretation of a surprising or disappointing measure, get some others to provide their interpretation.
  • Choose a few, meaningful measures over a mass of numbers that are hard to digest.
  • Don’t focus solely on short-term measures — they can make you too impatient, and cause you to over-react.

It’s been said that “what gets measured, gets done”, and there is some truth to that. But nowhere in business is the ‘conventional wisdom’ so likely to lead you astray than in business measurement. Measure your success on your own terms. It’s all that counts.

August 23, 2004

MAKING POLITICS POLITICALLY CORRECT

Filed under: How the World Really Works — Dave Pollard @ 13:58
mankoff
We went out for a delicious dinner last night at a wonderful, and completely packed, restaurant in downtown Toronto (it’s called Mildred Pierce, for those who live in the area), and spent some of the time unobtrusively eavesdropping on the conversations at nearby tables. The discussions, much like the one at our own table, vacillated between the very personal (who’s dating who, personal anecdotes) and the impersonal (entertainment, sports, weather). But not a single word was uttered about politics: Nothing about Canadian politics (collapse of the right), Ontario politics (health care and education strikes threatened), Toronto politics (’new deal’ for cities in peril), US politics (Bush/Kerry), or international politics (Iraq etc.) Not a word. This was a Sunday night so there were no obvious business reasons for steering away from the subject. It just never came up. And it occurred to me that at our annual neighbourhood BBQ on Saturday night no one talked about politics either. Is politics just too boring in Canada or has it become tacitly PI to talk about them, because of the political polarization that seems to be happening everywhere? Is the left-right gulf getting too wide to even try to broach in ‘decent conversation’?

I appreciate that there is less urgency about politics here in Canada than there is in the US, at least. The election here is over. And I’m told that at least 40% of Americans know personally at least one person on active duty in the Mideast, and that, I would expect, would probably make it a more likely topic of conversation. But some of my American readers tell me that talking about politics in face-to-face conversations is just too uncomfortable for them these days as well — too likely to lead to arguments. So outside of political rallies and other meetings of like minds they don’t talk about it much either.

What does this mean? First, it means the end of true political debate — I don’t mean those phony, scripted events where politicians roll out their rehearsed one-liners, I’m talking about articulate exchange of political views and information between real people. If you don’t talk with others about politics, how do you form your viewpoints and where do you get your information? From attack ads? I don’t think so — maybe I’m naive but I don’t think they work; most people know when they’re being manipulated, and won’t fall for it. From radio talk shows or editorials or blogs? Most of them are only for people who have already formed an unwavering political opinion on everything, and are merely looking for reassurance and justification for their belief. From television news and the print media? There isn’t enough information content in the sound bites and newswire rehashes in most of them to allow an informed decision or point of view on anything.

It seems to me that, on almost any political issue, 50% or more of the population is completely disengaged — even if they care, they don’t think anything they do or say or feel will have any impact, so they can’t be bothered to voice, or sometimes even form, any strong opinion on it. And the rest are in two, polarized camps, each believing that the other is irrational or immoral or misinformed, hopelessly so, so that meaningful discussion with the ‘other side’ or with the disengaged majority is impossible or fruitless. So except for the one-way palaver from the political flaks and political advertisers and partisans and oversimplifying mainstream media, there is no political information flow. And there is no discourse, no exchange of ideas or views, no balanced presentation of opposing views, no true political conversation. Because what purpose would it serve?

I see an astonishing paradox in modern society — in an era with unprecedented access to information, most people are ignorant of even the basic facts on most political issues, from the connection between 9/11 and Saddam, to the causes and implications of global warming, to the political situation in Sudan and Venezuela and Chechnya (not to mention parts of the world less in the news), to the numerous ecological and humanitarian crises that everyone from the Union of Concerned Scientists to Amnesty International is shouting about. Why are so many so ignorant? I think because they choose to be uninformed. Why? Perhaps either because they they can’t relate to the issue, or because they don’t think there’s any point in getting stressed about issues they feel they can do nothing personally about. So you end up in a vicious cycle: The less people know about a subject, the less inclined it is to come up in conversation, so the media conclude there is no interest in it, so they don’t cover it, so people know even less. And if they do know about it but feel helpless or disinclined to do anything about it, they don’t share their knowledge with others, and eventually with enough indifference the situation gets worse and the solutions become more intractable so people feel even more helpless and disinclined to try to do anything. Political disengagement is infectious, and it’s reached epidemic proportions, especially among the young.

All of this supports Richard Manning’s argument in Against the Grain that politics was and is designed to protect and entrench the status quo. As a result, nothing pleases those with power and money and influence more than massive political indifference and disengagement — what Gene McCarthy in the 1960s during the fight against the Vietnam War called ‘acedia’ — a Greek word meaning spiritual torpor, lack of care, apathy and inactivity in the practice of virtue. Unlike the 1960’s, the numbers of politically disengaged is inversely proportional to the age bracket — it is the young who I love so much and have such great hopes for who are least engaged in the political process, who infect each other with their indifference to global issues. But I don’t think it’s that they don’t care. Most of the young people I know are overwhelmed and intimidated by how much those of us who are politically active know about global issues. My teenage granddaughter has read my blog, but says she “doesn’t understand it”. The young focus their energies and their passion instead on issues in their own networks, local things, things that they can do something about.

We need to show them the way to do more. We, who have been in the streets, need to reach out to the young and not-so-young who have given up on the political process (often before they began), and stop drowning them in facts and laying guilt trips on them and filling them up with bad news and instead:

  • Ask them what’s important to them (open-ended questions with no preconception of the answers) and listen to their answers,
  • Tell them stories about how the political process has brought about important and positive change,
  • Teach them how the system works, in the context of how it could work to deal with the issues they said were important to them, and
  • Encourage them, starting with something small, to make the system work for them.

If we do that, if we can re-engage even a fifth of the people who never vote, who never read about politics or world affairs, who have lived their entire lives in political passivity, we will have started a revolution. Not only will they infect other disengaged peers with the zen of political activism, they will shake the diehard leftists and diehard right-wingers as well, because all of a sudden these new political activists will be up for grabs by whichever group that makes the most articulate, balanced and credible arguments, not by the blowhards who preach to the choir. And these new political activists will, on many issues, hold the political balance of power.

The real ’swing voters’ are the ones who have never voted before and don’t expect to vote in future. Rhetoric won’t bring them to the polls. If we can ‘activate’ them, then conversations about politics will no longer be politically incorrect, and political activism will spread like a virus. As those who fought against the Vietnam War can tell you, political activism is as infectious as political apathy. The defenders of the status quo will be shaking in their boots.

And then the revolution we all need, the revolution to save the world, can begin.

Cartoon by the incomparable Robert Mankoff (from the New Yorker, of course)

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