Sunday, February 23, 2014

Margin(alized) Truth

 According to the Australian Presidency of the G-20 concept paper, approximately 600 million young people around the world are neither working nor studying.  Without addressing confidence and employment there is no way to “lift people out of poverty and build national prosperity.” 

But if you turn the metaphoric page (to page 4) you see some interesting inconsistencies that seem to insure that employment doesn’t grow.  The economies of the world need to “improve productivity and competitiveness”; the former has a negative effect on employment and the latter suppresses global economic growth.  The plan calls for greater commitment to building ‘infrastructure’ (a highly variable employment enterprise typically incentivized by the public sector) while suggesting that priorities must be placed on structural employment.  A few pages later, Australia points out that the G-20 wants to “fight corruption and work to address its negative impact on economic activity.”  It went on to state that corruption, “increases costs for business and deprives developing countries of up to $40 billion each year.” 

Each year, I read the G-20 statement and find myself musing about the monotony of what passes for “thought leadership” at the helm of the globe’s self-proclaimed elite.  And it was probably this last point on corruption (one I find particularly amusing given the Australian corporate involvement in countless global mining deals rife with corruption) that made me pause to reflect on the illusion that is the G-20 summit cycle.  Corruption – bribes, greedy officials, concessions, and general unfair practices – is conveniently placed at the feet of marginalized countries.  Most of these countries have extensive mineral, energy, or land exploitation value to the G-20 industries and it is the G-20 private sector which fuels the corruption engine.  Bribes only work when someone pays them.  If the G-20 really wanted to get serious about corruption, it would enforce laws prohibiting corporations from engaging in corruption by facilitating the same. 

But let’s take a bit closer look, shall we?  Unfortunate businesses have inconvenient “costs” due to corruption and a paltry $40 billion is lost to the world’s most economically disadvantaged.  That’s bad, right?  I mean, seriously, $40 billion is like two times the value of WhatsApp, the Silicon Valley firm being acquired by Facebook after being started by “two geeky” ex-Yahoo guys.  And let’s put this in a little more context:  $40 billion is just over half of the profits Apple alone ‘shielded’ from U.S. taxes.  So the WHOLE corrupt world’s market consequence is about half of what one celebrated (corrupt) U.S. corporation does on its own account.  Is it just me or does it feel like we don’t really care about corruption given the fact that the G-20 explicitly says that it needs to come up with ways for the private sector to have a more ‘favorable’ operating environment so that it can build private sector employment?  As we’ve watched global corporate tax rates fall as much as 30% from 2000 to 2011 with effective tax rates plummeting even further, is it any wonder that the current puzzle facing corporate leadership is not questions like, “How do I employ more productive people?” but rather, “How do I hire the best accountants and financial analysts to optimally shield my profits?”  Which leads me to the obvious and missing conclusion from the G-20 report: we should simply take all 600 million underemployed youth; train them on tax loopholes and Excel or QuickBooks and tax shield and base erode ourselves into prosperity. 

If we’re really serious, we could save ourselves the tediousness of pretending to care.  We don’t want a world with less poverty – we just want poverty contained and remote.  We don’t want a world without economic shocks – they provide a fabulous way to move public sector funds into private sector accounts.  We don’t want more transparent trade regimes – we want trade negotiations done out of the public eye like the Trans-Pacific Partnership Agreement (TPP).  And when you look at who the TPP covers (U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) you don’t have to guess which countries’ see themselves as benefactors and which are seen as beneficiaries.  In case you’re not up to speed on the global flows of trade, the U.S. has a negative trade balance with Canada (-$32.5 billion), Japan (-$76.3 billion), Malaysia (-$13.1 billion), Mexico (-$61.3 billion), and Vietnam (-$15.6 billion) so you can clearly see why all these countries should be forced to accept our intellectual property and trade regimes for their benefit.  Oh, that’s right.  They WOULDN’T if their populations knew what was being done.  But this signature trade agreement of the Obama presidency is being negotiated in the dark because it couldn’t survive under public scrutiny.  Its only hope is secrecy, ignorance, and corruption – all of which the G-20 seeks to combat.

While you’re reading this post, it’s fairly likely that a secret faction of your government is either directly negotiating, or complicit in the negotiations of, treaties to preserve the imbalance in the current system.  And while all the media coverage on the G-20 meeting Down Under provides the cover story of global concern for a more sustainable world, the same very entities are actively engaging in agreements that conflict every piece of the cover story.  And this works as long as we marginalize our pursuit of knowledge and understanding.  Our problem is not unemployment; rather it is our incapacity to engage in a world that is fueled by accountability and productive engagement.  Our problem isn’t the lack of infrastructure; rather it’s our capability to engage our ecosystem in sustainable scale.  Our problem is not ‘developing world’ corruption; it’s our view that corporate profits are the panacea for our social challenges.  By reading and sharing this conversation, you’ll take at least one small step away from the disdain of the anonymous ‘others’ and find a possibility to elevate humanity into a more transparent and constructive alternative.

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Thank you for your comment. I look forward to considering this in the expanding dialogue. Dave