Sir John Anderson

Document Sample
Sir John Anderson Powered By Docstoc
					Sir John Anderson Speech 11 October 2006

NEW ZEALAND BUSINESS & PARLIAMENT TRUST FORCES, CONSEQUENCES AND THE FUTURE

THE HON. MARGARET WILSON, BARRY DINEEN, MEMBERS OF PARLIAMENT AND MEMBERS OF THE NEW ZEALAND BUSINESS AND PARLIAMENT TRUST. THANK YOU FOR INVITING ME TO SPEAK TO YOU TONIGHT ON THE TOPIC OF FORCES, CONSEQUENCES AND THE FUTURE. THE FRENCH PAINTER AND WRITER GAUGUIN, IN THE 1890‟S, RAN AWAY FROM PARIS, HIS FAMILY AND A STOCK BROKING CAREER, TO PAINT (AND BED) NATIVE GIRLS IN THE TROPICS. IN 1897, A STEAMER DOCKED AT TAHITI BRINGING HIM TERRIBLE NEWS, GAUGUIN‟S FAVORITE CHILD ALICE, HAD DIED SUDDENLY FROM PNEUMONIA. AFTER MONTHS OF POVERTY AND DESPAIR THE ARTIST HARNESSED HIS GRIEF TO PRODUCE A VAST PAINTING. HE WROTE THE TITLE BOLDLY ON THE IMAGE, THREE CHILDLIKE QUESTIONS, SIMPLE BUT PROFOUND.

”OU VENONS NOUS? QUE SOMMES NOUS? OU ALLONS NOUS ?”
WHERE DO WE COME FROM? WHAT ARE WE? WHERE ARE WE GOING? TODAY, I WOULD LIKE TO FOCUS ON GAUGUIN‟S QUESTIONS, IN A REFLECTING CONTEXT ON NEW ZEALAND, THE WIDER FINANCIAL AND ECONOMIC MARKETS, AND MORE PARTICULARLY THE FORCES THAT HAVE AND WILL INFLUENCE OUR EXISTENCE AND OUR FUTURE. THE BUSINESS, ECONOMIC AND FINANCIAL MARKETS IN NEW ZEALAND IN THE 1970‟s WERE DOMINATED BY REGULATION GOVERNMENT TOOK ALL THE RISKS; AND RULED THE MARKET‟S BEHAVIOUR WITH AN IRON HAND. THE REAL ASSET MARKETS SUCH AS SHARES AND PROPERTY, HAD LANGUISHED FOR SOME TIME, THE CURRENCY WAS FIXED, AS WERE DEPOSIT AND LENDING RATES. THIS PERIOD WAS DOMINATED BY GOVERNMENTS WHO ENDEAVOURED TO KEEP NEW ZEALAND IN A COCOON OF SAFETY, PROTECTED FROM THE WINDS OF CHANGE THAT WERE SWEEPING THROUGH THE WESTERN ECONOMIES AND WORLD MARKETS. THE GOLD STANDARD HAD BEEN DROPPED, OIL PRICES HAD SURGED, AND INFLATION‟S BLOATED TAINT WAS SPREADING ITS TENTACLES INTO UNSUSPECTING NATIONS AND THEIR ECONOMIES. BY THE EARLY 1980‟s THE NORTHERN HEMISPHERE ECONOMIES WERE WELL PREPARED TO DEAL WITH INFLATION. NEW ZEALAND‟S LONG PROTECTIONIST AND REGULATED ENVIRONMENT FOUND NEW ZEALAND DEFICIENT IN SKILLS AND EXPERIENCE TO DEAL WITH SOME OF THE SEVERE CONSEQUENCES OF THESE CHANGES. PERHAPS THE 70‟s AND THE 80‟s ARE THE PERIODS TO START TO ADDRESS GAUGUIN‟S FIRST QUESTION, WHERE DO WE COME FROM? AND TO DO THIS PERHAPS A PEEK AT SOME SNAPSHOTS FROM A PRIVATE DIARY FROM THE 80‟s, GIVE A FLAVOUR OF THAT DECADE AND THE EFFECTS ON SOCIETY, BUSINESS AND THE COMMUNITY:SNAPSHOT INTEREST RATE REGULATIONS  ALL THE REPRESENTATIVES OF THE FINANCE INDUSTRY WERE CROWDED AROUND THE TABLE, EXCEPT FOR THE SMALL BUT CHARISMATIC FIGURE, WHO SAT ALONE AT THE END, OOZING AND EMANATING POWER AS HIS GAZE WENT AROUND THE ROOM. “YOU BANKS, YOU KNOW THE RULES, YOU PLAY THE GAME OR YOU WILL SUFFER THE CONSEQUENCES.” HIS GLINTING EYE THEN SETTLED ON US. “WELL, HE BARKED, MERCHANT BANKERS, WHAT DO YOU HAVE TO SAY FOR YOURSELVES?”

“PRIME MINISTER, WE ARE THE PRICE TAKERS, YOU AND THE RESERVE BANK ARE THE PRICE MAKERS” SHAKING HIS HEAD LIKE A BULLDOG HE SNARLED “WE WILL SET THE RATES, YOU, AND ALL OF YOU, KEEP TO

THEM…..OR ELSE”

REGULATION IN IT‟S FINEST HOUR. SNAPSHOT THE FLOAT  THE DAY WAS FINE AND WARM, THE SUN STREAMING IN THE WINDOW AT THE CITY END OF THE DEALING ROOM. THE NOISE WAS LOUD, WITH SHOUTING FROM EVERY DESK. PANDEMONIUM HAD BEEN CONTINUOUS SINCE THE FLOAT ANNOUNCEMENT FOUR DAYS AGO, TELEX MACHINES CLATTERED INSISTENTLY IN THE BACKGROUND. THEN FROM THE HUBBUB A SHRILL VOICE WAS HEARD “BROADBANK NEED $5 MILLION, THEY ARE OFFERING

1200% OVERNIGHT, WHO CAN BOOK ME 5.”

FURTHER VOICES JOINED IN FROM THE FIXED INTEREST DESK

“I HAVE $10 MILLION 2 YEAR GOVERNMENTS AT 35%” “DFC HAVE 90 BILLS AVAILABLE AT 230%”
THEN THE CURRENCY TRADER CHIPPED IN “NZ/US RATE UP ANOTHER 150 POINTS.” THE VOICES, AND THEIR PLANTIVE SING SONG, LASTED WELL INTO THE NIGHT SNAPSHOT THE FLOAT AFTERMATH  SIR SPENCER SAT PERFECTLY STILL – FLANKED BY ALL HIS RESERVE BANK OFFICIALS - IT WAS ONLY THE SMALL TENDRIL OF SMOKE FROM HIS EVER-PRESENT CIGARETTE THAT BROKE THE AIR. ACROSS THE TABLE GEOFF THOMPSON, BANKERS‟ ASSOCIATION CHAIRMAN, WAS IN FULL FLIGHT, “THESE RATES ARE KILLING US, IT‟S BEEN 18 DAYS, THE BANKING SYSTEM IS IN DISARRAY, YOU HAVE TO ACT NOW.” SPENCER LIFTED ONE EYEBROW, AS HE WAS WONT TO DO, AND SHIFTED HIS GAZE “GOVERNOR IT DOES NOT

SEEM LOGICAL TO SIMPLY TRY AND PUNISH THOSE WHO LEFT FUNDS OFFSHORE BEFORE THE FLOAT, AND IN DOING SO PUSH THE WHOLE FINANCIAL SYSTEM INTO A SYSTEMIC RISK POSITION THAT COULD CAUSE THE FINANCIAL SECTOR TO COLLAPSE.”
BASICALLY IT WAS TIME WE STOPPED ACTING LIKE A BANANA REPUBLIC SNAPSHOT INVESTMENT COMPANY COLLAPSE  THE BRISBANE DAY WAS HOT AND BALMY, AS IT NORMALLY WAS IN JANUARY. WHILE THE AIR CONDITIONED BUILDING WAS COOL, THE STENCH OF SWEAT STRUCK US AS WE ENTERED THE 19TH FLOOR BOARDROOM AND NERVOUS TENSION ELECTRIFIED THE AIR. FIFTY BANKERS, WHO HAD BEEN WAITING FAR TOO LONG, RINGED THE ENORMOUS TABLE “GENTLEMEN,

APOLOGIES FOR LATENESS. YOU ALL REPRESENT $2.63 BILLION OF UNSECURED DEBT OF ARIADNE. IF ANY ONE OF YOU TAKE ACTION TO RECOVER YOUR DEBT, YOU AND THE REST OF YOU WILL SUFFER HUGE LOSSES, IF NOT YOUR TOTAL LOAN CAPITAL. THERE IS A WAY FORWARD TO SALVAGE THE POSITION, IT‟S KNOWN AS A LIFEBOAT….”

2

SNAPSHOT DFC  THE JAPANESE BANKERS WERE NORMALLY IMPECCABLE IN THEIR MANNER, HOWEVER THIS WAS NOT THE CASE TODAY. THEIR HANDS TWITCHED AND THEIR EYES WIDENED AS THEY MADE THEIR SUBMISSION ONCE MORE. “WE LENT TO DFC WHEN IT WAS OWNED BY THE GOVERNMENT, DFC ARE STILL OWNED BY THE GOVERNMENT,

THROUGH THE GOVERNMENT SUPER FUND

PLEASE EXPLAIN WHY THE GOVERNMENT WILL NOT STAND BEHIND DFC NOW AND SETTLE THEIR LOANS WITH US, PLEASE EXPLAIN…….. PLEASE EXPLAIN!!! ”
SNAPSHOT MEAT INDUSTRY REGULATION  CLEAR AS A BELL, THE CLOCK STRUCK SIX. WEARILY HE GAZED AROUND THE BOARDROOM ONCE MORE, THE PORTRAITS OF HIS PREDECESSORS – GREAT CHAIRMEN IN GREAT AGES OF PIONEERING, INDUSTRY DEVELOPMENT AND PROSPERITY. THE DEALMAKERS HAD ALL LEFT, THEIR EXCITED VOICES CLAMMERING, HIS BOARD MEMBERS HAD SCURRIED AWAY, EYES AVERTED, AFTER THE LONG AND AGONISING MEETING. IT WAS NO CONSOLATION THAT THE SHAREHOLDERS GOT FAIR VALUE. THIS WAS HIS GREATEST ROLE, NOW IN RUINS, AS HIS HAGGARD AND WAN FACE PEERED OVER THE NOW EMPTY ROOM AND GAZED UPON HIS BELOVED WHAKATU. THE LARGEST AND FINEST MEAT WORKS IN NEW ZEALAND NOW TO BE SCRAPPED. TO MOVE TO GAUGUIN’S SECOND QUESTION – “WHAT ARE WE?” THE 1990’s- THE DETERMINANT OF WHAT WE ARE TODAY BY THE MID 1990‟s THE CONSEQUENCES OF CHANGE FROM THE 70‟s AND 80‟s WERE DEALT WITH AND NEW ZEALAND WAS MORE IN STEP WITH THE WORLD ECONOMIES AND MARKETS. FROM 1994 NEW ZEALAND HAS EXPERIENCED AN ALMOST TRANQUIL PERIOD OF GROWTH AND PROSPERTY. THE PREVIOUS GLOBAL ISSUES NOW SEEMED ALMOST IRRELEVANT:   INFLATION HAD BEEN TAMED IN WESTERN ECONOMIES. FREE MARKET POLICIES WERE NOW IN A BETTER BALANCE WITH REGULATION. THERE WAS A BETTER UNDERSTANDING THAT REGULATION WOULD EBB AND FLOW OVER TIME, AS IT HAD OVER PREVIOUS GENERATIONS. THE RISE OF ISLAM, AT A TIME CHRISTIANITY WAS IN DECLINE, WAS NOT NEW, THE JUXTAPOSITION BETWEEN THESE TWO FORCES HAD BEEN THE SUBJECT OF CONFLICT OVER PAST CENTURIES.



HOWEVER THE NEW FREE MARKETS, NOW FREE OF THE SHACKLES OF TWO WORLD WARS AND THEIR AFTERMATHS WERE SPAWNING NEW INFLUENCES THAT HAVE HAD, AND WILL CONTINUE TO HAVE, FAR-REACHING CONSEQUENCES FOR NEW ZEALAND AND THE WORLD. THE MAJOR INFLUENCES ARE AS FOLLOWS: THE ADVANCE OF TECHNOLOGY THAT HAS TRANSFORMED ELECTRONIC COMMUNICATION WORLDWIDE.

AND;  THE ONGOING MOVE IN WESTERN ECONOMIES BY BUSINESSES TO A DIFFERENT BUSINESS MODEL.

THE BRIEF FEATURES OF THIS MODEL ARE WORTH EXAMINING, AND THE CONSEQUENCES WHICH ARE STILL WITH US.

3

FOLLOWING THE WORLD‟S REAL ASSET PRICE COLLAPSE OF THE LATE 80S, THE NEW CADRE OF MANAGEMENT CONSULTANTS IN THE NORTHERN HEMISPHERE ACTIVELY ADVISED MAJOR WORLD CORPORATIONS THAT INSTEAD OF STAKEHOLDER VALUE BEING THE PRIORITY, RATHER SHAREHOLDER VALUE ALONE WAS THE PURPOSE FOR WHICH COMPANIES SHOULD OPERATE. CORRESPONDINGLY THE “ANGLO/U.S.” MODEL WHICH I WILL REFER TO AFTER THIS AS THE “U.S. MODEL” EVOLVED WITH THE FOLLOWING MAIN FEATURES:   BOARDS SHOULD SET FINANCIAL TARGETS OF ANNUAL EPS GROWTH THAT MET OR EXCEEDED THE MARKET EXPECTATIONS. THIS WOULD ENSURE THE MAXIMUM SHARE PRICE WILL OCCUR, AND CAPITAL GROWTH OF THE STOCK PLUS DIVIDENDS WOULD MAXIMIZE THE COMPANIES SHARE PRICE IN THE SHORT TERM. TO ENSURE MANAGEMENT ARE FOCUSED ON THIS OBJECTION, HUGE INCENTIVES, MAINLY IN THE FORM OF STOCK OPTIONS/SHARES AND CASH BONUSES, WERE PROVIDED TO MANAGEMENT IF THEY REACHED OR EXCEEDED THE TARGETS.

BASICALLY THE MODEL RESULTED IN SELF-INTEREST DRIVING BEHAVIOURS, AT THE EXPENSE OF FUTURE EARNINGS, INFRASTRUCTURE INVESTMENT, GROWTH AND THE COMMUNITY. ONE MIGHT SAY “SO WHAT”, SELF-INTEREST HAS ALWAYS BEEN A PART OF THE INCENTIVE SETS THAT DROVE BEHAVIOUR IN ANY INDUSTRY OR PROFESSION. HOWEVER THE MATERIAL DIFFERENCE IN THIS CASE IS THE EXTENT OF SELF-INTEREST. AS THE PUBLICATION „GOVERNING THE CORPORATIONS‟ HIGHLIGHTED “THE WORLD IS INCREASINGLY CYNICIAL AND DISILLUSIONED BY

A SYSTEM THAT PAYS CEO‟S AND SENIOR EXECUTIVES 400 TIMES MORE THAN THE COMPANY‟S AVERAGE WORKER WHEN THERE IS SIMPLY NO ECONOMIC THEORY THAT CAN JUSTIFY THIS LEVEL OF INCOME IMBALANCE”.
THE CONVENTIONAL BUSINESS MODEL HAD BEEN THE RHINELAND MODEL, WHICH INSTEAD OF FOCUSING ON SHAREHOLDER VALUE ALONE; RATHER A COMPANY INVESTS MONEY IN ITS CUSTOMERS, EMPLOYEES, THE ENVIRONMENT AND THE REST OF SOCIETY. INSTEAD OF WORRYING ABOUT QUARTERLY RETURNS, IT CHALLENGES THE FINANCIAL MARKETS BY INSISTING ON TAKING A LONG TERM VIEW. IT FOCUSES ON CUSTOMER SERVICE AND LOOKING AFTER ITS EMPLOYEES. CONCEPTS LIKE FUN, FAMILY, VIRTURE AND VALUES ARE EMBRACED. GAYLE AVERY, FROM MACQUARIE UNIVERSITY, HAS SINCE 1999 RESEARCHED A LARGE NUMBER OF NORTHERN HEMISPHERE COMPANIES AND THE OUTCOME OF THE DIFFERENT MODELS AND SUMMARISED THESE IN HER BOOK „LEADERSHIP FOR SUSTAINABLE FUTURES‟. THE OUTCOME WAS STARTLING. THE RHINELAND MODEL SHOWED THAT BOARDS AND EXECUTIVES WERE ABLE TO LEAD THEIR ORGANISATIONS TO GREATER SUSTAINABILITY ON SHAREHOLDER VALUE OVER A LONG TERM PERIOD. IT ALSO SHOWED THE U.S. MODEL WILL ALWAYS BE A SUNSET MODEL ONCE ECONOMIC DOWNTURNS OCCUR IN THEIR INDUSTRIES OR IN GENERAL. IT ALSO HIGHLIGHTED HOW THE MODEL ENCOURAGED EXECUTIVES TO ACT IN THEIR OWN FINANCIAL SELF-INTEREST, AND AT A COST TO THE COMPANY, THE INDUSTRY, THE LAW AND SOCIETY. HOWEVER THE U.S. MODEL CONTINUES TO GATHER MOMENTUM AND THE CASCADE EFFECTS ON WORLD MARKETS AND GOVERNMENT POLICY ARE BECOMING A REAL CONCERN. WHAT ARE SOME OF THE CONSEQUENCES OF THE U.S. MODEL? CLASH WITH GOVERNMENTS FREE MARKET IDEOLOGIES   THE 1980‟s AND 1990‟s EVIDENCED THE ROLLING BACK OF THE STATE SECTOR IN BRITAIN, NEW ZEALAND AND OTHER WESTERN ECONOMIES. THE IDEOLOGY WAS BASED AROUND THE PREMISE THAT GOVERNMENTS SHOULD NOT OWN AND MANAGE BUSINESSES, RATHER THE PRIVATE SECTOR WOULD ACHIEVE MORE EFFICIENCY AND EFFECTIVENESS, THEREBY BENEFITTING THE PEOPLE.

4

 

IN PART THIS WAS TRUE, PARTICULARLY WHERE IT APPLIED TO ANCILLARY BUSINESSES, THAT WERE NOT ESSENTIAL UTILITIES UNDERPINNING THE STRUCTURE AND FABRIC OF SOCIETY. AN EXAMPLE OF THE CLASH IS THE REFORM OF THE U.S. ENERGY MARKETS FROM THE 1980‟s, WHICH FOLLOWED THE MARKET MODEL. HOWEVER WHEN THE CONVERTS OF THE U.S. BUSINESS MODEL BECAME INVOLVED, THE CONSEQUENCES WERE SCANDALOUS. CONSEQUENCES - SNAPSHOT

FOR THOSE WHO HAVE STUDIED THE ENRON STORY YOU WILL KNOW HOW THEIR ENERGY ENERGY TRADERS, HAVING SECURED THEIR MARKET POSITION, ORGANISED FOR ENRON‟S GENERATING PLANTS TO BE CLOSED FOR MAINTENANCE, ALMOST ALL AT THE SAME TIME. THE CONSEQUENCE WERE SEVERE BLACKOUTS IN CALIFORNIA AND PRICES MOVING FROM US$10 A UNIT TO US$1,000 PER UNIT. OVERALL A PROFIT OF US$2 BILLION A YEAR RESULTED. THOSE TRADERS RECEIVED HUGE BONUSES WHILE SOCIETY SUFFERED BOTH THE DAMAGE, INCONVENIENCE AND COST. CONSEQUENCES - SNAPSHOT THE FIGHT AGAINST INFLATION IN THE EARLY 80‟s WAS NECESSARY AND IMPORTANT, WITH BUSINESS AND CONSUMER BEHAVIOUR ADJUSTING TO HIGH INTEREST RATES. HOWEVER FROM THE EARLY TO MID 90‟s, IN THE ENHANCED COMMUNICATION AGE, THE POLICIES SO EFFECTIVE IN THE PREVIOUS DECADE, WERE NOW SUBJECT TO ATTACK FROM THE NEW BUSINESS WORLD. CENTRAL BANKS, IN TROTTING OUT ITS PRESCRIBED FORMULA FOR DEALING WITH INFLATION, NAMELY HIGH INTEREST RATES AND A LOW INFLATION TARGET, BECAME PREY TO THE HEDGE FUNDS AND CURRENCY SPECULATORS, WHO IN EFFECT HAD A ONE-WAY BET WITH NO THOUGHT FOR THE CONSEQUENCES ON NATIONS ECONOMIES. GEORGE SOROS BECAME FAMOUS FOR BRINGING INDONESIA AND THE BANK OF ENGLAND INTO SERIOUS MONETARY DISADVANTAGE AND LOSSES. SMALL ECONOMIES, SUCH AS NEW ZEALAND, HAVE PROVIDED EASY FEEDING GROUND FOR THESE FINANCIAL SHARKS, AND AS WITH THE CALIFORNIA ELECTRICITY USERS, SOCIETY HAVE PAID THE COST WITH ARTIFICIAL INTEREST RATES AND EXCHANGE RATES, DISTORTING THE ECONOMY AND INTERNATIONAL TRADE. AS THE BASLE-BASED BANK OF INTERNATIONAL SETTLEMENTS ARGUED IN ITS ANNUAL REPORT THIS YEAR

“GLOBALISATION HAS CHANGED THE WORKINGS OF ECONOMICS IN WAYS THAT MAY FORCE CENTRAL BANKS TO OVERHAUL THEIR STRATEGIES RADICALLY, AND TO SEEK NEW TOOLS TO HELP TO ENSURE STABILITY. THEY QUESTIONED BOTH THE PURSUIT OF LOW INFLATION AS CENTRAL BANKS PRINCIPAL GOAL, AND THEIR RELIANCE ON INTEREST RATES AS THE SOLE INSTRUMENT TO ACHIEVE THIS. PURSUIT OF LOW INFLATION HAD DELIVERED ECONOMIC PERFORMANCE, BUT REPEATED BOOM TO BUST FINANCIAL SHIFTS AND THE BUILD-UP OF „CREDIT – FINANCIAL IMBALANCES‟ SHOWN BY BUBBLES IN THE PRICES OF ASSETS SUCH AS HOUSES, SHOW A BIGGER TOOLKIT OF POLICIES IS NEEDED.”
CONSEQUENCES - SNAPSHOT NEW ZEALAND EXPLORED COMPULSORY SUPERANNUATION, IN THE EARLY 70‟s AND EARLY 90‟s, BUT FOLLOWED DIFFERENT OPTIONS WITHOUT A FULL UNDERSTANDING OF THE LONG TERM CONSEQUENCES. IN THE EARLY 1990‟s AUSTRALIA DID INTRODUCE COMPULSORY SUPERANNUATION AND THE CONSEQUENCES ARE HUGE. BY 2010 AN ESTIMATED THREE TRILLION DOLLARS OF SAVINGS WILL HAVE ACCUMULATED, BY 2020 THE AMOUNT WILL BE FOUR TIMES ALL THE TRADING BANK DEPOSITS IN AUSTRALIA. ALREADY IN NEW ZEALAND THE OVERFLOW OF INVESTMENT FUNDS FROM AUSTRALIA, RIDING THE ARTIFICIAL LEVELS OF THE NEW ZEALAND DOLLAR ARE NOW CHANGING THE VERY NATURE OF OWNERSHIP AND SOVEREIGNCY OF NEW ZEALAND COMPANIES, WHICH IN TURN FOLLOWING THE US MODEL, HAS SERIOUS CONSEQUENCES FROM THE CLASH BETWEEN COMMUNITY AND BUSINESS OBJECTIVES.

5

CONSEQUENCES - SNAPSHOT U.S. THE WORLD‟S MOST POWERFUL ECONOMIC NATION SINCE THE SECOND WORLD WAR, HAS IN RECENT TIMES TAKEN A SHIFT IN ENVIRONMENTAL POLICIES, THAT HAVE ALIGNED THE GOVERNMENT TO THE U.S. MODEL IN DEVELOPING POLICIES. FOR EXAMPLE, SINCE TAKING OFFICE ON 9 JANUARY 2001, THE ADMINISTRATION HAS DISMANTLED THE NATION‟S ENVIRONMENTAL LAWS, DELIVERING THE GOVERNMENT DEPARTMENTS AND AGENCIES RESPONSIBLE FOR DELIVERYING THE NATION‟S AIR, WATER AND PUBLIC LANDS, INTO THE HANDS OF ANTI-REGULATORY ZEALOTS, MANY OF WHOM CAME FROM THE SAME POLLUTING INDUSTRIES THEY ARE CHARGED WITH REGULATING. THE US MODEL FAVOURS OLD TECHNOLOGY WHICH IS MAINLY BASED ON THE USE OF FOSSIL FUELS. IT IS MORE PROFITABLE TO BURN COAL, THAN RELY ON OTHER ENERGY ALTERNATIVES THAT ARE NOT DESTRUCTIVE TO THE ENVIRONMENT. AS INDIA, AND IN PARTICULAR CHINA, WITH IT‟S HUGE OPEN CAST MINES, FOLLOW THE CHEAP AND PROFITABLE ROUTE TO SHORT TERM GROWTH THE CONSEQUENCES ARE DIRE. TO SUMMARISE PERHAPS AS TO WHERE WE ARE:WE ARE STUCK IN A DOMINANT WORLD BASED ON THE INDUSTRIAL AGE THAT IS DIAMETRICALLY OPPOSED TO WHERE WE HAVE EVOLVED TO BE SUCCESSFUL. THE INFLUENCES OF THE NEW BUSINESS PARADIGM IN WESTERN ECONOMIES HAS SPREAD FAST, AND WITH ENHANCED COMMUNICATION AND TECHNOLOGY, THE EFFECT ON SOCIETIES IS MATERIAL. THE EFFECT ON BEHAVIOURS IS HOWEVER MORE SERIOUS, THE ENRON, WORLD COM, FANNIE MAE AND OTHER SCANDALS OF UNETHICAL AND ARROGANT CULTURES OF PROFIT MANIPULATION, PERHAPS PALE IN COMPARISON WITH THE GLOBAL CONSEQUENCES AS BUSINESSES AND GOVERNMENTS GRAPPLE WITH THE NEW FORCES. WE NOW HAVE GAUGUIN‟S LAST QUESTION:-

“WHERE ARE WE GOING?”
WHAT ARE THE CONSEQUENCES OF THE FORCES THAT ARE CURRENTLY DOMINATING BEHAVOUR? PERHAPS THE MOST SEVERE CONSEQUENCE IS FACING US. RONALD WRIGHT, IN HIS CANADIAN SERIES OF LECTURES IN CANADA, HAD THIS VIEW:-

“WHAT WE CANNOT OVERLOOK IS THAT WE ARE PART OF A WORLD CIVILISATION WHERE, OVER THE PAST 30 YEARS THERE HAS BEEN A MASSIVE ONSLAUGHT OF PROGRESS AND DESTRUCTION. WHILE IN THE WORLD WE STILL HAVE DIFFERING CULTURES AND POLITICAL SYSTEMS, AT THE ECONOMIC LEVEL THERE IS ONLY ONE BIG CIVILISATION, FEEDING ON THE WHOLE PLANET‟S NATURAL CAPITAL. IF CIVILISATION IS TO SURVIVE IT MUST LIVE ON THE INTEREST, NOT THE CAPITAL, OF NATURE. IF WE READ THE FLIGHT RECORDERS IN THE WRECKAGE OF CRASHED CIVILISATIONS, OUR PRESENT BEHAVIOUR IS TYPICAL OF FAILED SOCIETIES AT THE ZENITH OF THEIR GREED AND ARROGANCE.”
IS CIVILISATION GOING TO TREAD THE PATH EPITOMISED BY THE EASTER ISLANDS? ONCE A BOUNTIFUL PLACE FORESTS, BIRDS AND ABUNDANCE. SETTLED DURING THE 5TH CENTURY AD, THE SETTLERS MULTIPLIED OVER SIX CENTURIES TO TEN THOUSAND PEOPLE. THE CLANS EACH HONOURED THEIR ANCESTRY WITH IMPRESSIVE STONE IMAGES. EACH GENERATION OF IMAGES GREW BIGGER THAN THE LAST, DEMANDING MORE TIMBER AND ROPE FOR HAULING TO THE ALTARS. TREES WERE CUT FASTER THAN THEY COULD GROW, UNTIL AT LAST THE WOODS HAD BEEN UTTERLY DESTROYED, AND TODAY THE ISLANDS ARE DESOLATE AND BARE EXCEPT FOR THEIR WIND-SWEPT GOD-LIKE IMAGES. THE PEOPLE HAD BEEN SEDUCED BY A KIND OF PROGRESS THAT BECOMES A MANIA.

6

IN THEIR EPILOGUE TO THEIR BOOK EASTER ISLAND IN 1992, THE ARCHEOLOGISTS BOHN AND FLENLEY ARE EXPLICIT “THE ISLANDERS”, THEY WRITE – “CARRIED OUT FOR US THE EXPERIMENT OF PERMITTING

UNRESTRICTED POPULATION GROWTH, PROLIFERATE USE OF RESERVES, DESTRUCTION OF THE ENVIRONMENT AND BOUNDLESS CONFIDENCE IN THEIR RELIGION TO TAKE CARE OF THE FUTURE.”

THE RESULT WAS AN ECOLOGICAL DISASTER LEADING TO A POPULATION CRASH…..DO WE HAVE TO REPEAT THE EXPERIMENT ON A GRAND SCALE? IS THE HUMAN PERSONALITY ALWAYS THE SAME AS THAT OF THE PERSON WHO FELLED THE LAST TREE? WHAT ARE THE ALTERNATIVES? THERE ARE MANY EXAMPLES OF GOVERNMENT AND SOCIETY WORKING TOGETHER. PERHAPS ONE OF THE FINEST IS THE EXAMPLE OF VENICE, WHERE THE RULING DOGE‟S AND THE MERCHANTS CREATED A TRADING EMPIRE THAT LASTED A THOUSAND YEARS, ONLY BOUGHT DOWN BY NAPOLEON‟S CONQUEST IN 1797. PERHAPS FUTURE DIRECTION OF GOVERNMENT AND BUSINESS IS TO CHALLENGE THE SELF-INTEREST MODELS, AND WORK TOGETHER IN ACHIEVING LONG TERM SUSTAINABILITY OF OUR ENVIRONMENT AND OUR SOCIETIES. CERTAINLY ONE MUST QUESTION THE IDEA THAT THE WORLD MUST BE RUN BY STOCKMARKETS FOR SHAREHOLDER VALUE ALONE, WHICH IS AS MAD OF A THEORY AS ANY OTHER FUNDAMENTALIST DELUSION OR IDEOLOGY. WE ARE NOW IN “THE AGE OF CONSEQUENCES” AND IT IS ESSENTIAL THAT ALL SOCIETY UNDERSTANDS AND FACES THIS REALITY. TO CONCLUDE I RETURN TO WHERE I STARTED, GAUGUIN‟S VAST PAINTING AND HIS VIEW OF THE FUTURE. GAUGUIN‟S PAINTING IS A PANORAMA OF ENIGMATIC FIGURES AMID SCENERY THAT MIGHT BE THE GROVES OF TAHITI OR AN UNRULY GARDEN OF EDEN, WORSHIPPERS OF GODS, CATS, BIRDS, A RESTING GOAT, A GREAT IDOL WITH A SERENE EXPRESSION AND UPLIFTED HANDS SEEMING TO POINT TO A CENTRAL FIGURE – EVE – THE MOTHER OF MANKIND AND GODDESS OF THE FUTURE, WHO IS NOT SHOWN AS A VOLUPTUOUS INNOCENT LIKE OTHER WOMEN IN GAUGUIN‟S WORK, BUT A WITHERED HAG WITH A PIERCING EYE INSPIRED BY A PERUVIAN MUMMY.

 _______ 

7


				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:21
posted:11/9/2009
language:English
pages:7