The Great Debate UK

from The Great Debate:

Ethics without regulation won’t cut it

– James Saft is a Reuters columnist. The opinions expressed are his own –

There has been a lot of talk in Davos about improving business ethics, and mercy knows there is certainly room for that. The past few years, like the end of most booms, have included plenty of fraud, self-dealing, and general all-purpose unethical behaviour.

James Saft Great Debate

I think it’s fantastic that business should seek to raise ethical standards. It's good business, and not before time. I do understand that a lot of what happened was a social phenomenon, and that a change in mores can only help.

But frankly, a new emphasis on ethics is a sideshow, and among some who propose it, a diversionary tactic.

While I agree that mankind is perfectible, as an investor, a citizen and hopefully some day a retiree, I am not willing to bet my future or the future of my children on it.

from The Great Debate:

The end of the Davos consensus

-- James Saft is a Reuters columnist. The opinions expressed are his own --

James Saft Great Debate It's not exactly a wake, but participants at this year's World Economic Forum have witnessed many of their most cherished beliefs being challenged, upended and sometimes ground in the mud.

Think of it as the "Davos Consensus," a loose alignment of principles that held sway in this Swiss mountain resort and in large parts of the world over the past decade.

from The Great Debate:

Obama and the Afghan narco-state

Bernd Debusmann - Great Debate-- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own. --

To understand why the war in Afghanistan, now in its eighth year, is not going well for the United States and its NATO allies, take a look at two statistics.

from The Great Debate:

Davos debate: What happens to development and sustainability amid crisis?

davos-delegatesDavos leaders have traditionally looked to the long term and have largely been keen on helping all nations of the world to benefit from economic development. But with politicians and businesses tied up with short term concerns about the economic crisis there's a risk at least that efforts to spread development and to ward against the threat of climate change may go on hold, at least for a time. Reuters News asked delegates at the World Economic Forum's annual meeting to share their thoughts on whether we should be concerned about development and sustainability slipping down the global agenda.

from James Saft:

Stephen Schwarzman’s hair of the dog

jimsaftcolumnSo what is Blackstone Group chairman Stephen Schwarzman's prescription for solving the banking crisis?

More leverage and less transparency, apparently.

Schwarzman told a panel at Davos that you can't mandate higher levels of bank capital at the same time losses are mounting and that mark-to-market accounting needed to be changed.

from The Great Debate:

Trust: the commodity in shortest supply

Where do I put my money?
What do I read?
Who do I listen to?
Who saw it coming?
Who made money from it?
Who will make money from it?
Who can I trust?

david-schlesinger-in-the-newsroom
As Davos gets under way, my feeling from chatting with contacts and listening to conversations around me is that one thing the world economy is really suffering from right now is a crisis in trust.

from Davos Notebook:

The shift in power from West to East

One news theme I've asked our journalists to be alert to this year is the shift in power and emphasis from est to East.

The rise of China's economic power during 30 years of reform and opening to the world is just one manifestation of this; the knowledge and service powerhouse that India has come in a globalised world is another. At Davos this year I'm moderating a panel on Asian innovation that will surely highlight software advances in Japan, Korea and Thailand as well.

from The Great Debate:

Building a three-legged stool

lawrence Lawrence Bloom is deputy chairman of Noble Cities and chairman of the World Economic Forum, Global Agenda Council on Urban Management. His views are his own –

The chaos generated by the meltdown of the global economic system provides environmentalists and human rights advocates with utopian opportunities to promote a new economic model, which will not only help sustain life on our planet, but actually increase its quality for many.
As world leaders search for creative solutions to restore global equilibrium, the opportunity for recognising the importance of both human and environmental capital has perhaps never been so possible or achievable.
Recognising all three types of capital: financial, environmental and human, will help us to build the equivalent of a balanced three-legged stool . Hopefully, this stool will be more stable than the current one-legged model of financial capital.
Last week the United Nations Environment Program recommended the business world use the global downturn to press ahead with green technologies that will save firms money and help save the planet. It also recommended using micro-finance loans to help developing countries provide sustainable solutions in such places as Bangladesh where small loans have allowed women entrepreneurs to install solar panels and bring electricity to 100,000 homes.
Society has been operating on the belief that if the engines of capitalism are powered to churn constantly, wealth will prevail and all of human society will benefit. But this system has served to create great income disparities by generating incredible wealth and incredible poverty, and has been the main driver in causing catastrophic environmental damage.
The unregulated, trickle-down financial policy is necessary to generate positive GDP figures, but traditionally these data do not include the cost of rainforest or biodiversity loss. Thanks to the United Nations Green Economy Initiative, and the work being undertaken by Pavan Sukhdev and his colleagues who are engaged in the Economics of Ecosystems and Biodiversity project, we can now put GDP-like values on these losses.
As a result, we are beginning to recognise that the credit crunch in the financial markets is a minnow in comparison to the credit crunch in our environment and biodiversity systems. It appears that we have been “borrowing” $2.5 trillion every year for the last 25 years without any significant compensating payback.
Over time, we may acquire the wisdom to realise that what traditional economics considers “externalities”, as if they were irrelevant, are closer to our survival needs than the creation of economic wealth. The 90 pence we pay for a litre of petrol is divided between government tax and profit for the oil company, but who picks up the tab for the damage that is done by burning the fuel in the atmosphere? We privatise profit and we socialise loss.
We need to start valuing people first, and then we will collectively begin to operate on the principle that the environment is not just another word for commodity market, but that it supports life. Valuing human capital means acknowledging that each person on this planet is entitled to fresh water, nutritious food, proper shelter, healthcare, education, justice and access to capital. This way we can release the creative potential of all of humanity. Only when we are clear on these values can we create a financial system that serves it.
The current financial credit drivers are akin to the booster rockets on a space craft. In the same way as the boosters blast the craft free of the Earth’s atmosphere and gravitational pull, so the current financial system has created wealth, education and freedom for 1.5 billion people. But for many - the remaining 4.5 billion - the cost has been very great and to our ecosystems it has been disastrous. The skill in a space shot is knowing when to blow the explosive bolts, releasing the boosters and continuing the mission with the second stage only. Our skill will be in jettisoning our current economic model and designing a new and more inclusive “second stage”.
What we should be talking about now at a strategic level is urgently restructuring our monetary system into a non-debt, or minimal-based debt structure using Sharia-type finance and complementary currencies with government spending money directly into circulation.
In whichever way we choose as a society to tackle the global financial crisis, we must create a system that protects and nurtures all of humanity and the environment before it is too late.
An inspirational quote attributed to a North American First Nations Chief Seattle states: “We are all connected like the blood that unites one family. Whatever befalls the Earth befalls the sons of the Earth. Man did not create the web of life, but he is part of it, whatever he does to the web, he does to himself.”
These words written more than one hundred years ago speak directly to us today. Will we have the intelligence to listen?

from The Great Debate:

From financial crisis to sustainable global economy

staff_jlash_121- Jonathan Lash is president of the World Resources Institute. The views expressed are his own -

Much of the world's attention is fixed on the brutal effects of the global financial crisis.
But sooner or later - sooner we hope - the global economy will rebound. Markets will recover, and stocks will rise. Nature, on the other hand, does not do bailouts. The effects of today's greenhouse gas emissions - like those of yesterday and tomorrow - will be permanent, at least in the timescales that we care about.

from The Great Debate:

Less social dialogue and more social change

stern_official_5x5a- Andy Stern is the president of the Service Employees International Union. His views are his own -

We are living through the third economic revolution. The first was the agricultural revolution, and it took nearly 3,000 years. The second was the industrial revolution, which took about 300 years. This revolution is going to take 30 years. As we move from an industrial economy based in factories to a knowledge and finance economy that lives on the Internet, no generation of people has ever witnessed so much change in a single lifetime.

  •