There are a lot of things in the economic sphere that are necessary but, in practice, imperfect. For example, competition is necessary, but it is imperfect. Markets are necessary, but they are imperfect. Government oversight of the economy is necessary, but it is imperfect. Keynesian intervention is often necessary and effective, but it too is imperfect.
What is perfect, then? Authentic, unbiased compassion is perfect. But how can we enact compassion in the economic sphere? In most general terms, we can do so through the six economic virtues of generosity, ethics, tolerance, diligence, focus, and wisdom. More specifically, we can do so by creating a Civil Endowment System (CES).
At the core of the CES is civil capital, a base of resources permanently invested for the common good of humanity. It is not asserted here that civil capital could be perfect in execution. What is asserted is that it is perfect in conception. George Soros talks about the radical fallibility of human actions, and there is actually nothing in this assertion that contradicts that principle. What is asserted is that something in the realm of pure idea can be perfect, just as the mathematical formula for, say, a circle is perfect, and even though an absolutely perfect circle could never be drawn.
To understand why this is important, or even worth talking about, we need to go back to Folkert Wilkin's brilliant characterization of capital. He broke it down into two simple parts. The first is geist, a German term that can be translated as spirit or idea. This is the mental component of capital, the part that not only generates a business plan in its practical manifestation, but is also the spirit that governs the behavior of the capital altogether. The second aspect is wealth or financial power. This aspect, usually embodied in money, is the means by which the geist is put into action. There is a common assumption that the only geist of capital is to provide financial return on a selfish basis to the parties that provided the money. This assumption needs to be challenged. The logical outcome of applying universal unbiased compassion to the capital geist is to arrive at a form of capital that benefits the universal beneficiary.
The idea that the income or productivity of a body of capital could be assigned to the universal common good is, from a social and legal point of view, no different than designating a specific beneficiary of a trust fund. The macroeconomic effects of such a system could be truly transformative. Indeed, every major problem that we face globally in the economic sphere could be positively addressed by the formation of a CES. I do not say solved, here, because there remains the question of scale and implementation. This is not a Utopian proposal.
Though the Socially Responsible Investment (SRI) movement is a step in the right direction, it is not a complete transformation of the capital geist, since those who invest the capital are still the recipients of its productivity, albeit profits that are more ethically earned than with “reptilian” capital. As we consider the possibilities of civil capital, we should also keep in mind that the proposal for the CES (also called the Special Proposal) is an open-society initiative. One important implication of that is that nothing in it is meant to prohibit anyone from investing for their own benefit. What is challenged is merely the assumption that selfishness is the only geist available in the operation of capital.
Since geist resides in the sphere of mind, we can talk about the perfection of geist. The leap to a geist of universal benefit brings capital to its perfection. It is perfect in the sense that it is the most beneficial. As well, it completes the very conception of capital, so to speak. I use the term “perfection” here somewhat in the sense of the Tibetan term dzogpa, which also means completion. Thus, the notion of perfection of capital means not only civil capital, but also means recognizing the full extent of the range of qualities of geist behind it, from the least beneficial (pure selfishness) to the most (pure universal compassion).
Granted, it could be argued that it is an unproven assertion to state that authentic, unbiased compassion is the perfection of capital geist. However, the attitude of compassion in general is in accordance with, not just Buddhism but, I would argue, all the major spiritual traditions. Ultimately, one's acceptance or rejection of this idea is a personal matter, but in any case it is the basis for the assertion that civil capital is the perfection of capital.
Wednesday, February 3, 2010
Compassion from the Edge
The Special Proposal in an outline of a structural economic innovation called the civil endowment system. Such a system, which could function as a civil-society initiative within an open society economy, carries a great deal of potential for addressing the urgent issues of our times. Because this approach looks at things from a whole-system perspective, there is always a danger that it could be confused with traditional leftist collectivist thinking and policies. In fact, the Special Proposal does not depend on any sort of idealism about the social unity of mankind, nor does it place the responsibility on government to structure the economy or even to address economic problems.
Instead, the basis of the Special Proposal, at the most basic level, depends on just three conditions. First is a recognition of the system character of the economy as a planetary whole. This means seeing the interrelationship and interdependence of the people, the economic processes, and the environmental context of our life on this planet. Second is concern and compassion toward this whole, which really means concern for each and every individual that makes up the human whole, and recognition that the common good, to greater or lesser extent, is a factor in the wellbeing of each of us as individuals. Third, is simply generosity based on this concern. If each one of these condition is genuine, meaning that it arises from correct understanding and wisdom, the next condition will come about naturally. For example, if you really see the interdependence of all things, you will come to compassion. If you don't have compassion, you haven't seen it deeply enough. And if you really have compassion, you will have generosity.
With that said, of course, it is possible for the civil endowment system in practice to foster a greater sense of human brotherhood. Indeed, this would be a most welcome outcome. However, it is very important to distinguish causes and effects. If a pre-existing and universal spirit of human oneness and cooperation is necessary to fix the global economy, transition to a renewable energy economy, end severe poverty, and so on, it would seem that these goals are not going to be achieved. We simply don't have enough spirit of unity right now. On the other hand, it is possible to remain optimistic about a positive future for humanity because that is not what is needed.
The mistake of leftist collectivism for the last two hundred years or so is to believe that true human solidarity can be achieved either on the basis of idealism or imposed by law. It can't.
To explain the difference between conventional leftist collectivism and the civil endowment proposal, I have coined the phrase “compassion from the edge.” What is meant by “the edge” in this phrase requires a bit of explanation. In simplest terms, it means our relationship to a system of which we are a part, an individual perspective on something larger than ourselves. Of course, an egotist's perspective is that we are at the center of the world, or the universe for that matter, but a more realistic perspective is that we are, metaphorically, on the edge of it. (It should be clear here that these terms like “center” and “edge” are metaphorical throughout, in an attempt to talk about systems in plain language.) When we, as individuals, look at a system as vast and complex as the planetary eco-economy, our perspective is that of the edge. Saying we are on the edge does not imply that we are on the outside looking in. We are in the system. An easy way of think about this is to imagine one person standing in a room full of people, looking out over the room. In this example, the individual's perspective is “the edge,” the people in the room (including the observer) represent humanity and whatever humanity is doing, and the room represents the environment.
One implication of this line of thinking is that, despite our immersion in our world, the human mind is capable of looking at situations as a whole. This is not the same, however, as to say that our perspective from the edge constitutes an objective reality. Our interpretations of what we see are not necessarily accurate, even in a relative sense. A paranoid looks at his social universe and thinks, “they're all out to get me.” This is whole system thinking, actually, though most likely inaccurate. But the possibility of inaccurate interpretations does not negate the fact that we are capable of thinking in terms of whole systems.
Now, from that edge perspective, there are several psychological “stances” we could take. We could take a neutral, detached stance, for example. The other types of stance we will talk about here are the selfish one, and finally, a compassionate one.
From the neutral, detached perspective, the big picture of the planetary eco-economy tends to look a lot like a slow-motion train wreck -- completely out of control, a chaotic mix of selfish and incoherent human actions and natural processes. Indeed, if we look at things with any degree of scientific insight and environmental awareness, all the trends look quite bad right now. A neutral perspective does not necessarily have any answers to the challenges we face, but it does have the virtue of dispassionate honesty.
Then there is the stance of selfishness (or, in the language of economics, self interest). The notion of self interest applies not just to individuals, but to organizations and to nations as well. We can even talk about the self interest of humanity in general versus, say, nature. People make this last sort of argument all the time in fact, such as when some tiny endangered species stands in the way of a logging operation. The argument is not made about “this corporation and its workers vs. the tiny bird.” It is always, “which is more important, mankind or this animal?”
There is a great deal of disagreement and confusion on both sides of the ideological divide about the question of self-interest. Advocates of classical/neo-classical economics, the school of thought coming down from Adam Smith (and more lately, for example, the Chicago School) assert that the freedom to pursue self-interest individually (namely, on the edge) is a good thing, and fact it is all that is necessary.
I agree that individual economic freedom is fundamentally a good thing. It is not only good for the individual, but it also creates an essential system efficiency in the wider economy. Much can be said about the good that comes from freedom, and from our ability to exercise self interest. At the same time, much of what we do in the name of freedom and self interest is actually not in our self interest, or anyone else's, because it is based on delusional, egoistic thinking. Thus, although we need it, and need to preserve it, there are unarguably dangers and abuses associated with freedom at the edge. With all that said, my disagreement with the neoclassical economists (one shared by countless thinkers these days) is a more technical one. For all that I endorse economic freedom, it cannot be regarded as a single-factor solution to all economic woes. To regard it as such in today's world is, to put it kindly, stubborn.
I believe that most reasonable people could agree with thinking along these lines: There is, in fact, a justifiable self-interest, and it is actually not just a right, but a universal responsibility. We are responsible for ourselves. And we have a right to take care of ourselves. And furthermore I believe we could agree that where problems arise, they result from the misinterpretation and misuse of self interest, and particularly from gross inequalities of economic power.
Thus my rejection of the market fundamentalism of contemporary neoclassical economic thinkers is not a rejection of self-interest, but of unjustifiable self interest. And it is a rejection of what could be called the sufficiency of self interest, which leads to the spurious economic mysticism of “the invisible hand.”
Finally, it is entirely incorrect to assume that freedom is only exercised in selfish ways. Despite the fact that we all have to operate on the edge of a system of which we are a part, our attitude does not need to be one of simple (and possibly delusional) self-interest. We do not need to operate on the basis of mere self interest. The basic insight that we are in fact part of the system that we observe is a keyhole to the wisdom that goes beyond such a stance.
This leads to the key point of this discussion, which is is this: we can generate an attitude of compassion at the edge. We are free to do so. And interestingly enough, one of the most direct ways to get to some sort of accurate whole-system view about human beings is to develop compassion for them, because we can be quite sure that human beings desire happiness. In developing compassion, we recognize this fact and, in fact, we endorse it.
Compassion from the edge is all that is needed to build the civil endowment system. Not revolution, not new laws, not a utopian breakthrough, not a supernatural transfiguration. Compassion.
Though the compassion we are talking about is, in fact, unbiased and “for everyone,” it does not need to be “by” everyone. Because it is from the edge, not everyone needs to have compassion, and it need not be imposed on anyone. No particular person needs to endorse, accept, understand, or even be aware of it. There just needs to be enough of it.
This is a brief explanation of why the Special Proposal not only lacks the features of socialism, it lacks the features more generally of collectivism altogether.
Instead, the basis of the Special Proposal, at the most basic level, depends on just three conditions. First is a recognition of the system character of the economy as a planetary whole. This means seeing the interrelationship and interdependence of the people, the economic processes, and the environmental context of our life on this planet. Second is concern and compassion toward this whole, which really means concern for each and every individual that makes up the human whole, and recognition that the common good, to greater or lesser extent, is a factor in the wellbeing of each of us as individuals. Third, is simply generosity based on this concern. If each one of these condition is genuine, meaning that it arises from correct understanding and wisdom, the next condition will come about naturally. For example, if you really see the interdependence of all things, you will come to compassion. If you don't have compassion, you haven't seen it deeply enough. And if you really have compassion, you will have generosity.
With that said, of course, it is possible for the civil endowment system in practice to foster a greater sense of human brotherhood. Indeed, this would be a most welcome outcome. However, it is very important to distinguish causes and effects. If a pre-existing and universal spirit of human oneness and cooperation is necessary to fix the global economy, transition to a renewable energy economy, end severe poverty, and so on, it would seem that these goals are not going to be achieved. We simply don't have enough spirit of unity right now. On the other hand, it is possible to remain optimistic about a positive future for humanity because that is not what is needed.
The mistake of leftist collectivism for the last two hundred years or so is to believe that true human solidarity can be achieved either on the basis of idealism or imposed by law. It can't.
To explain the difference between conventional leftist collectivism and the civil endowment proposal, I have coined the phrase “compassion from the edge.” What is meant by “the edge” in this phrase requires a bit of explanation. In simplest terms, it means our relationship to a system of which we are a part, an individual perspective on something larger than ourselves. Of course, an egotist's perspective is that we are at the center of the world, or the universe for that matter, but a more realistic perspective is that we are, metaphorically, on the edge of it. (It should be clear here that these terms like “center” and “edge” are metaphorical throughout, in an attempt to talk about systems in plain language.) When we, as individuals, look at a system as vast and complex as the planetary eco-economy, our perspective is that of the edge. Saying we are on the edge does not imply that we are on the outside looking in. We are in the system. An easy way of think about this is to imagine one person standing in a room full of people, looking out over the room. In this example, the individual's perspective is “the edge,” the people in the room (including the observer) represent humanity and whatever humanity is doing, and the room represents the environment.
One implication of this line of thinking is that, despite our immersion in our world, the human mind is capable of looking at situations as a whole. This is not the same, however, as to say that our perspective from the edge constitutes an objective reality. Our interpretations of what we see are not necessarily accurate, even in a relative sense. A paranoid looks at his social universe and thinks, “they're all out to get me.” This is whole system thinking, actually, though most likely inaccurate. But the possibility of inaccurate interpretations does not negate the fact that we are capable of thinking in terms of whole systems.
Now, from that edge perspective, there are several psychological “stances” we could take. We could take a neutral, detached stance, for example. The other types of stance we will talk about here are the selfish one, and finally, a compassionate one.
From the neutral, detached perspective, the big picture of the planetary eco-economy tends to look a lot like a slow-motion train wreck -- completely out of control, a chaotic mix of selfish and incoherent human actions and natural processes. Indeed, if we look at things with any degree of scientific insight and environmental awareness, all the trends look quite bad right now. A neutral perspective does not necessarily have any answers to the challenges we face, but it does have the virtue of dispassionate honesty.
Then there is the stance of selfishness (or, in the language of economics, self interest). The notion of self interest applies not just to individuals, but to organizations and to nations as well. We can even talk about the self interest of humanity in general versus, say, nature. People make this last sort of argument all the time in fact, such as when some tiny endangered species stands in the way of a logging operation. The argument is not made about “this corporation and its workers vs. the tiny bird.” It is always, “which is more important, mankind or this animal?”
There is a great deal of disagreement and confusion on both sides of the ideological divide about the question of self-interest. Advocates of classical/neo-classical economics, the school of thought coming down from Adam Smith (and more lately, for example, the Chicago School) assert that the freedom to pursue self-interest individually (namely, on the edge) is a good thing, and fact it is all that is necessary.
I agree that individual economic freedom is fundamentally a good thing. It is not only good for the individual, but it also creates an essential system efficiency in the wider economy. Much can be said about the good that comes from freedom, and from our ability to exercise self interest. At the same time, much of what we do in the name of freedom and self interest is actually not in our self interest, or anyone else's, because it is based on delusional, egoistic thinking. Thus, although we need it, and need to preserve it, there are unarguably dangers and abuses associated with freedom at the edge. With all that said, my disagreement with the neoclassical economists (one shared by countless thinkers these days) is a more technical one. For all that I endorse economic freedom, it cannot be regarded as a single-factor solution to all economic woes. To regard it as such in today's world is, to put it kindly, stubborn.
I believe that most reasonable people could agree with thinking along these lines: There is, in fact, a justifiable self-interest, and it is actually not just a right, but a universal responsibility. We are responsible for ourselves. And we have a right to take care of ourselves. And furthermore I believe we could agree that where problems arise, they result from the misinterpretation and misuse of self interest, and particularly from gross inequalities of economic power.
Thus my rejection of the market fundamentalism of contemporary neoclassical economic thinkers is not a rejection of self-interest, but of unjustifiable self interest. And it is a rejection of what could be called the sufficiency of self interest, which leads to the spurious economic mysticism of “the invisible hand.”
Finally, it is entirely incorrect to assume that freedom is only exercised in selfish ways. Despite the fact that we all have to operate on the edge of a system of which we are a part, our attitude does not need to be one of simple (and possibly delusional) self-interest. We do not need to operate on the basis of mere self interest. The basic insight that we are in fact part of the system that we observe is a keyhole to the wisdom that goes beyond such a stance.
This leads to the key point of this discussion, which is is this: we can generate an attitude of compassion at the edge. We are free to do so. And interestingly enough, one of the most direct ways to get to some sort of accurate whole-system view about human beings is to develop compassion for them, because we can be quite sure that human beings desire happiness. In developing compassion, we recognize this fact and, in fact, we endorse it.
Compassion from the edge is all that is needed to build the civil endowment system. Not revolution, not new laws, not a utopian breakthrough, not a supernatural transfiguration. Compassion.
Though the compassion we are talking about is, in fact, unbiased and “for everyone,” it does not need to be “by” everyone. Because it is from the edge, not everyone needs to have compassion, and it need not be imposed on anyone. No particular person needs to endorse, accept, understand, or even be aware of it. There just needs to be enough of it.
This is a brief explanation of why the Special Proposal not only lacks the features of socialism, it lacks the features more generally of collectivism altogether.
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