Nationalism, Multiculturalism, Assimilation, and Patriotism

August 5, 2009

Could I have someone to relate to? See, I’ve been travellin’, travellin’ forever, and now that I found a home, feels like I’m in Heaven.
~Hans Zimmer (The Traveling Song)

Anybody that has been in this planet the last fifteen years have heard how the world is getting smaller: Globalisation, global citizenship, the global village, and the flat world. Pundits are announcing the end of the nation-state, the end of the local community, and the upcoming era of the global person. They claim that nationalism is dead, and that ethnicity will only matter in history books. Nicholas Negroponte went as far as stating that nationalism is a disease. There are voices claiming that “The debate on national identities has become obsolete”.

I’ve been around the world in the pourin’ rain,
Feelin’ out of place, really fellin’ strange,
Take me to a place where they know my name,
Cuz I ain’t met nobody that looks the same

As a student of sustainability, it is very important to understand the social fabric of a given society. We target three bottom lines: Economic, Ecological, and Social, and you cannot target the social bottom line with a “one size fit all” culture that the Western in general, and the United States in particular, pretend to impose. Legions of immigrants come to Europe and Angloamerica, and they integrate, and they prosper, and for some, nationalism is a matter of the past, since they want to belong to their new home. But for every successful immigrant, there may be another ten who did not prosper, and there are thousands who are still in the homeland, keeping their own culture alive.

The United States still possesses the unique ability to assimilate new citizens of every race, religion, and culture into the fabric of its national and economic life, but the United States is not the world. Jerry Z. Muller declares:

Americans also find ethnonationalism discomfiting both intellectually and morally. Social scientists go to great lengths to demonstrate that it is a product not of nature but of culture, often deliberately constructed. And ethicists scorn value systems based on narrow group identities rather than cosmopolitanism. But none of this will make ethnonationalism go away. Immigrants to the United States usually arrive with a willingness to fit into their new country and reshape their identities accordingly. But for those who remain behind in lands where their ancestors have lived for generations, if not centuries, political identities often take ethnic form, producing competing communal claims to political power. The creation of a peaceful regional order of nation-states has usually been the product of a violent process of ethnic separation. In areas where that separation has not yet occurred, politics is apt to remain ugly.

I’m a fish out of water, Lion out of the jungle,
(He a fish out of water, loin out of the jungle)
I need my peoples, my peoples, take me to my peoples,
(He got jungle fever, show him some love, show him love)

Nationalism leads to wars. In Europe, after the conflicts of 1914 and 1939, a web of transnationals institutions were created, first to integrate Germany in a trade-dependent Europe, then to resist Soviet pressure, and finally to become a supra-state. Educated Europeans and North Americans like to think that nationalism is behind and that the globe is now a village. However, for the thousands of Latin Americans, Asians, and Africans who die every year trying to reach the promise land, the frontiers are not so open.

Just gotta have someone, gotta have someone, to relate to, to relate to,
(I found a brand new home)

In 1900 there were many states in Europe without a dominant nationality, by 2007 there were only two: Belgium is close to break up, and Switzerland, where the domestic ethnic balance of power is protected by strict citizenship laws. We also have Canada, where the ethnic division between French and English is a constant burden to Canadians.

Ethnonationalism has played a larger role in modern history than is commonly understood. Look at the post cold-war conflicts: Yugoslavia, Rwanda, the partition of Czech and Slovaks… Some places inside the Francophony only welcome francophone immigrants, and even in cities like Toronto, they are huge areas where people from one ethnicity dwell.

There are two ways of thinking about national identity. One is that all people who live within a country’s borders are part of the nation, no matter their origins. The other one is ethnonationalism, which defines a nation as a shared heritage, a common language, a common faith, and a common ethnic ancestry. Québec was recently recognised as a nation by the Prime Minister of Canada. Ethnonationalism draws much of its emotive power from the idea that the members of a nation are part of an extended family, ultimately united by ties of blood. It is the subjective belief in the reality of a common “We” that counts.

The end of the British mandate of Palestine created Israel, where two ethnics, Jews and Palestinians. Israel has been unable to live in peace for 61 years. The independence of Algeria saw the end of the Algerian-European ethnic, which was forced to go back to Spain and France. In Sudan, a civil war between the Islamic North and the Black South is still hot.

We, as promoters of sustainability, need to take the idea that nationalism is dead into serious consideration. The worlds elite, that probably includes all my readers (Westerns with access to internet and an interest about social issues) and fellow bloggers, belongs indeed to a supranational, non-ethnic world, but for each of us there are thousands and thousands who still believe that they only be home when everybody look like them.

Travelin’ the world like a tourin’ man,
Been around the planet in a foreign land,
I’ve seen things that I thought I’d never see,
Take me to a place where they look like me.

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What is you label?

March 2, 2009

Labels are for cans, not people.
~Anthony Rapp

I was having dinner last night with some friends, and the conversation moved to political stances, neo-hippies labels, and driving cars. One of them even told me that he can see who I am referring to when I write in this humble media.

I assure to my rich readers (breaking the 150 a day record!) that I never have someone in mind when writing, unless I actually say so. The interesting part of the conversation was when another friend asked me how do I label me. “I am above labels” I answered, “everybody has a label” she replied.

According to one test I took in Facebook, I am a class-3 liberal. That means nothing when you can be a Class-10 liberal, or even a Class-10 conservative (Horror!). But I find more often than not that lot of  people like to put labels on themselves, and those labels, though providing a sense of belonging, limit their ability to think (note: I stopped talking about my friends here, do not send me hate e-mail!). I find people in the streets that join causes just because they are liberal, or because they are perceived as “just”, without further thinking. Can you be a liberal and a conservative at the same time? Can you be a leftist with a brain, and a rightist with a heart? Let’s ask ourselves the following questions:

  • Can you be pro gay marriage but against abortion?
  • Can you be socially liberal but fiscally conservative?
  • Can you support the efforts in Afghanistan but be against the Iraq campaign?
  • Can you give money to the World Wildlife Foundation while hoping that the guys at Greenpeace get soon real jobs?
  • Do you support welfare programs but are against a big government?
  • Can you drive a car but at the same time be an ecologist?
  • Do you think that a biker that rides on the side walk, run red lights, and go against traffic is actually worse person than a driver that obey the law?
  • Can you support genetically enhanced crops and still think that organic crops have a place on the market?
  • Can you be a meatarian but support vegans?
  • Can you work on Bay St (Canada’s Wall St) and still support the ideals of Mohammed Yunus about banking to the poor?

If you answer to YES to more than three questions, I welcome you to the unease world of thinkers that do not know all the answers, but actually may make a difference. The world is more complex than simple labels make us think!


Global Corporate Citizenship

June 11, 2008

Corporate governance is how a company behaves when nobody is looking
~Klaus Schwab

I always find curious the attitude of some people that advocate for certain actions but cry foul when a corporation actually engage in such actions. We want the world to go organic, but we do not like when Walmart sells organic food. We want Fair Trade coffee, except if it comes from Starbucks.

Michel Porter and Mark Kramer stated that “Corporations are not responsible for all the world’s problems, nor do they have the resources to solve them all. When a well-run business applies its vast resources, expertise and management talent to problems that it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philanthropic organization.”

We can think of organisations as evildoers looking to predate the world. Certainly, the Rational Theory advocates for companies only looking after their shareholders; but Rational Theory has been challenged nowadays and we can look at companies not only responsible for their shareholders but for all the stakeholders involved in the company’s environment and sphere of influence.

The new vision for companies as global citizens incorporates a host of concepts and practices, including the necessity for adequate corporate governance structures, the implementation of workplace safety standards, the adoption of environmentally sustainable procedures, and philanthropy. We tend to use the umbrella term”corporate social responsibility” to explain the new vision, but this concept is an oversimplification that has led to a great deal of confusion. Klaus Schwab distinguishes four different categories or behaviors:

  • corporate governance
  • corporate philanthropy
  • corporate social responsibility
  • corporate social entrepreneurship

A new attitude for business will be described as “global corporate citizenship”. Companies not only must be committed with stakeholders but need to become themselves stakeholders, side by side with governments and civil society, The logic being:Global issues impact business -> Global issues impact the bottom line.

Global citizenship is then part of a corporation’s self-interest, hence, it is sustainable. It is not an act of charity, is a business model.

Companies are getting involved in the health of workers, the education of employees and their children, and the pensions that sustain them in retirement. Corporations have an impact on everything from air quality, to social justice, to life-saving drugs availability. It is normal then, and justified, to look to corporations with request for help and criticism for wrongdoing the same way we looked upon governments.

The focus of much of the civic action of NGOs has naturally been corporations. After initial confrontations, some of the critics came to appreciate that many business leaders are engaged in society.In 1971, the World Economic Forum identified the stakeholder concept: the idea that a company has a clear responsibility to the community beyond its shareholders. In 1973 it became the cornerstone of the Davos Declaration, Five core concepts -corporate governance, corporate philanthropy, corporate social responsibility, corporate social entrepreneurship, and global corporate citizenship- define the different types of business engagement.

Over 3,000 companies in 120 countries have signed on to the UN Global Compact: Ten core principles to guide business behavior in areas such as human rights, the environment, labor practices, and corruption. Some others are subscribing to the Global Reporting Initiative, launched in 1997, to institute international guidelines for sustainability reporting, the publishing of an organization’s economic, environmental, and social performance and impact.

Corporate philanthropy is engagement that does not go beyond writing a check or handing out donated goods. Social investing is a special form of corporate philanthropy, in which a company invests in organizations or programs that have broad social appeal, such as inner-city housing projects or funds for student loans.

Corporate social responsibility is measured through so-called triple bottom-line accountability, according to which a company reports not only on its financial results but also on what it is doing and what it is not doing in meeting stakeholder expectations of its environmental and social responsibilities.

Corporate social entrepreneurship is strictly defined as the transformation of socially and environmentally responsible ideas into products or services. The role model of these social entrepreneurs, Muhammad Yunus, the inventor of microcredit, received the Nobel Peace Prize in 2006

Global corporate citizenship goes beyond the concepts of corporate philanthropy, including social investing; corporate social responsibility; and corporate social entrepreneurship in that it entails focusing on “the global space,” which is increasingly shaped by forces beyond the control of nation-state. It means engagement at the macro level on issues of importance to the world: it contributes to enhancing the sustainability of the global marketplace.

Nestlé voluntarily takes measures to reduce the water it uses in its operations. As Nestlé engages with governments and NGOs to reduce water use in a broader way, it also offers an example of global corporate citizenship. If the company gave free water to a community, it would be engaging in corporate philanthropy. And if it sold recycled water in biodegradable bottles, that would be an act of corporate social entrepreneurship.


Globalisation Blues

September 25, 2007

Free markets, free people
~Wall Street Journal’s editorial motto

In economy, it is widely believed that market forces will correct any economic mischiefing. Adam Smith called it the invisible hand: “a free competitive market ensures that those goods and services perceived as most beneficial, efficient, or of highest quality will naturally be those that are most profitable. Thus, self-interest striving for profit has the side-effect of benefiting everyone by increasing standards” (The Wealth of Nations, 1776).

This same assumption is taken by Globalisation’s promoters as the way the open economy benefits all countries today: In the long run, they argue, everybody will be better. In the other hand, globaliphobics insist that the rich countries are getting richer on the back of poor nations.

Indur M. Goklany points out, correctly, it is a myth that the advent of globalisation has been accompanied by a rise in poverty and inequality. Revision of UN, World Bank, and IMF data about GDP per capita, paired with distribution curves, shows that the percentage of the world’s population that is poor has actually fallen over the past two decades and inequality has declined at some extent. “The surprisingly persistent picture of globalisation as a process whereby the developed world exploits and immiserates the developing one is just wrong”(James Surowiecki).

However, the number of countries that had improved their standards of living is surprisingly small, and they are mainly in Asia. Economic growth is the base for improving the state of the world, but globalisation has not done a very good job of figuring out how to spread the benefits of that growth around the globe. The economies of sub-Saharan Africa and the former Soviet Union have not just stopped growing but shrunk over the past 15 years. Most of Latin America has seen only marginal economic growth since 1980, and even Asia’s little tigers (Indonesia, Malaysia, and Thailand) have spent much of the present century recovering from the damage wrought by the 1990s Asian financial crisis.

Most of these countries have seen their human development indicators improve, thanks to the diffusion of technology and health care. But outside of Asia (and a few places such as Botswana and Chile), the economic benefits of globalization have been hard to find, which is why there has been such a backlash against what has come to be known as the Washington consensus. It makes makes sense to attack globalization if there is evidence that rich countries are getting richer on the backs of the poor, but it should not surprising that people are made unhappy by the sight of others getting richer while they stay the same or actually get poorer.

Goklany suggests one response: “the problem is that there has been too little globalisation, not too much, and that what governments need to do is step out of the way and let the market be free. There is no doubting the virtue of the free market as a wealth-creation machine, and it is certainly the case that in many countries bad policies (often designed to protect established interests) have discouraged entrepreneurship and scared away capital. Nonetheless, here, too, the evidence is far more ambiguous than The Improving State of the World implies”.

China and India, which together are responsible for almost all of the reduction in poverty in the world in the past two decades are great success stories, but when it comes to understanding what they say about how to attain economic growth, they are complicated rather than simple stories. China is a long way from a true free-market economy, and it has followed almost none of the rules that the Washington consensus set down:

  • A huge number of its enterprises remain state-owned
  • the allocation of capital in the country remains largely determined by politics
  • the country’s capital markets are not truly open
  • there are limitations on foreign ownership
  • the currency is not convertible

In the case of India:

  • has got massive tariffs
  • strict legal restrictions on foreign ownership and on new businesses
  • it is an aggressive regulatory state

The point is not to return to the old days of protectionism and import-substitution industrialization but rather that we know a lot less than we thought we did, for example Chile and Botswana are two of the only non-Asian developing countries to enjoy meaningful, sustained economic growth since 1990. Chile, under the dictator Augusto Pinochet, implemented many free-market reforms, and the privatization of its social security system has made it the daring boy of free marketeers. But a good part of Chile’s richness comes from its copper holdings, which even Pinochet did not privatize. And Chile also limited the flow of volatile capital into its markets.

Is it the following of free markets rules or the deviations from them that it is the cause for Chile’s success? or is it the combination of the two? No one is sure. Botswana, similarly, has followed orthodox economic policies and has a limited state and low levels of corruption, all of which surely have something to do with its success. But Botswana also happens to have huge diamond supplies, which account for around 40 percent of its annual output. Botswana’s efficient economic policies have helped it to receive greater benefits from this, but this is hardly a model that other nations, unless they can back up their growth plans with massive diamond supplies, too.

So, until we can define better the factors that are helping countries to reap the benefits of globalisation or planetary economic growth, and then apply them to the countries that are being left behind, we will keep hearing about anti-globalisation, protectionism movements, and no truly be able to respond to them.


The Emerging Markets Century

June 14, 2007

Then, without realizing it, you try to improve yourself at the start of each new day; of course, you achieve quite a lot in the course of time. Anyone can do this, it costs nothing and is certainly very helpful. Whoever doesn’t know it must learn and find by experience that a quiet conscience makes one strong
~Anne Frank

There is a common agreement that the First World produce high tech, high skill work while the Third World produce low tech, labour intensive work. Antoine Van Agtmael propose that the situation has changed for a while; in The Emerging Markets Century: How a new breed of World-Class Companies is Overtaking the World, he collect a series of success histories of 25 companies that produce from appliances to soap operas. They are not only successful, but also global-class firms that buried the over-complacent idea that technology flows from North to South.

The countries listed include:

Argentina (Tenaris)
Brazil (Embraer, CVRD, Aracruz, Petrobras)
Chile (Concha y Toro)
China (Lenovo, Haier)
India (Infosys, Ranbaxy, Reliance)
Korea (Samsung Electronics, Hyundai Motor, Hyundai Heavy, Postco)
Malasya (MISC)
Mexico (Cemex, Grupo Modelo, Televisa, Telmex)
South Africa (Sasol)
Taiwan (TSMC, Hon Hai, High Tech, Yue Yuen)

These companies continue to grow in the international markets, and not by relying in protection at home -that is impossible while abroad- but by engaging in international markets. Poverty is beaten while each individual takes himself out of it.


The paradox of democracy

May 28, 2007

Democracy is a process by which the people are free to choose the man who will get the blame. 

~Laurence J. Peter

Countries with a democracy system are somehow similar to companies in the stock exchange; The latest think on a quarterly basis, and try to give quarterly reports that raise the stock price. The former think on a election basis, and try to give results that will gain votes for the next election. A lot of the decisions taken have more to do with the short term implications that with the long term welfare.

This is why undeveloped countries with a democrat government have it so hard. The necessary measures to improve the over all economy usually hurt the poor, who in turn will vote against those measures, and, being majority, will reverse those measures.

The system works somehow like this:

1) A democratic, undeveloped country sets new reforms to improve their economy: reduce fiscal imbalance, increase expenditures in education, and raises new taxes.

2) The country, being undeveloped, has got the majority of population living in harsh conditions, and the new measures hurt them. Market-based policies meant to increase the efficiency of the aggregate economy frequently generate short-term dislocations and resentment.

3) The majority may understand the long-term benefits of the measures, but feel the short-term pain, so they vote against the government on the next elections, and elect a populist government which is going to cut taxes and increase spending.

4) All the populist measures increase deficit and inflation. The people understand how bad is the populist government and in the new election vote against it for a conservative government, which sets new reforms to improve their economy: reduce fiscal imbalance, increase expenditures in education, and raises new taxes. GO TO STEP 2

This is deadlock. Liberalizing the economy within an established democratic order are not inherently contradictory terms, but there are tensions between them that the country’s leaders will have to manage carefully. Ashutosh Varshney found that, in western society, three factors helped to avoid this situation:

1) Universal suffrage came to most Western democracies only after the Industrial Revolution, which meant that the poor got the right to vote only after those societies had become relatively rich

2) A welfare state has attended to the needs of low-income segments of the population

3) The educated and the wealthy have tended to vote more than the poor

While we can consider the democratic value a long-term asset, the need of be voted each four or six years places important constraints in the maneuver margin of present developing and under developing democracies. These factors will be very important when studying development and policy in the third world.


Protection Barriers; The Canadian Experience

May 15, 2007

You cannot protect something by building a fence around it and thinking that this will help it survive.
~Wim Wenders

People advocate for trade barriers when they feel that:

1) Local industry needs protection from abroad

2) Industry from abroad is playing dirty tricks (i.e. dumping, protecting their own industry, sending lower quality products)

3) The industry is of strategic importance (i.e. banking, communications, farming)

What are the cost of proteccionism? Let’s analise the Canadian Experience. In 1878, Sir John A. MacDonald’s conservative government introduced the National Policy. The idea was to encourage investment and economic growth within Canada, as well as build an east-west flow of goods to tie the country economically. The policy had two simple components: high tariff on manufactured goods and open market for foreign investment.

The tariff were imposed to encourage the growth of central Canada’s manufacturing industries, hoping that they would reach a scale to compete internationally. Some machinery was exempt, like those needed by the natural-resource industries. The Canadian companies will sell more to other Canadians, increasing the east-west commerce and hence helping to build the very needed TransCanada Railway.

The open-investment policy was intended to attract foreign capital, since locals had not got enough resources. The first invertors were British lending money first to other British, then to Canadians. During the 1900s however, Americans replaced British as the main capital source, and this was not in the form of debt, but equity. The reason is clear in retrospect, the Americans couldn’t sell in Canada due to the tariff, but they were able to open Canadian subsidiaries, which, being Canadian, could benefit from the protection.

The consequences are still affecting us, 130 years after. The Canadian manufacturing sector became a branch plants with no incentive to compete internationally, since they will compete against their parent companies.

A second legacy of the National Policy was the concentration of the wealth on very few hands. the National Policy make Canada a very comfortable place to compete; once established, they were protected by the tariff, and the incentive to be productive was limited. For the Canadian Companies, the profits were huge and resulted in very concentrated industries for each sector: Beer is dominated by Molson and Labatt, retail was dominated first by Eaton’s and Simpsons, then by The Bay and Sears. We only have five banks. You can count one or two large companies concentrating the national production for each sector.

Foreign ownership is not a matter of national pride, but economic sense: The typical organization have a profit of 10% of the revenue, but the lion’s share of the expenses is that 90% used on research, salaries, production, marketing campaigns… and, being branch plants, all those process take place on the main headquarters, outside Canada, so Canada is not only losing the 10% of the revenue, but an important component both of economic and strategic value. While there are exceptions, like companies doing an entire process in their Canadian branch (Pratt and Whitney, ICI explosives), this rule applies to the oil producers, the automotive manufacturers and so on.

The three final consequences of the National Policy enacted in 1878 are, that in 2007:

1) Canada has a very concentrated industry, so the free market rules, where supply and demand set the price, are not valid here, because when one or two companies dominate the market, they are price setters, no price takers. That is why is cheaper driving to Buffalo and buying your stuff there, that going to Eaton Centre or Yorkville and being fleeced up.

2) Canada’s wealth is concentrated within a handful, where 100 individuals or families have got a collective net worth of $141.6 billion

3) Canadian companies are not producing the world’s leading technology. We haven’t got any Microsoft, Hewlett Packard, or Intel. I don’t really now how much Research in Motion is licensing technology or really creating new one, so I cannot comment in this one, but the general rule is new technology being developed somewhere else and then being copy or license here.

So, protectionism has resulted harmful in the long way for Canada. We will measure some other trade barriers soon.