Enterprise Resilience Management Blog

Globalization and Giving -- the Rise of Chinese Philanthropy

With the death toll from China's recent massive earthquake expected to rise to nearly 50,000 people, the world has offered and Chinese leaders have accepted outside assistance. Western experts, for example, are monitoring some Chinese nuclear plants for damage that might have been created during the temblor. Other forms of aid from rescue units to money are also pouring in. One unexpected source of funds has been from the Chinese people themselves ["Chinese Open Wallets for Quake Aid," by Maureen Fan, Washington Post, 16 May 2008]. That may not sound surprising to outsiders (after all, who doesn't want to help when they see neighbors in need?), but as the article's sub-title explains, individual giving is rare "in a Society Long Under Sole Care of the State." This is not the first large natural disaster that has occurred since the Communists came to power, so why are the Chinese people opening their wallets in record numbers? Because, thanks to globalization, they can. Fan reports:

"At the headquarters of the Red Cross Society of China, volunteers turned a boardroom into a makeshift cashier's office Thursday, sending tens of thousands of fluttering bank notes through counting machines and handing receipts to people like Cai Lili, 30, who stood in long lines with bricks of cash to donate to earthquake relief efforts. Since a massive earthquake struck Sichuan province and surrounding regions three days ago, Chinese have donated $192 million to help their countrymen, according to China's Civil Affairs Ministry. The fundraising has come as officials have issued a rare public appeal for cranes and rescue equipment, hammers and shovels, bandages and medicine. In scale, the financial contributions have been unprecedented in China, which for decades taught its citizens that the state and the state alone would take care of them from cradle to grave."

This demonstration of giving is a positive sign for the Chinese government, its economy, and the rising quality of life the ordinary Chinese citizen. You can't give what you don't have. The Communist Party in China has been so concerned about maintaining control that it has banned most organizations that operate independently from the government, including charitable ones.

"There is no organized philanthropy here, and independent nongovernmental organizations are banned. Ordinary Chinese and famous Chinese, including Houston Rockets center Yao Ming, have simply decided to open their wallets to help the estimated 10 million people affected by the earthquake. Many have given as individuals in addition to or instead of giving at the office, saying they were making a statement about their gifts coming from the heart. 'I wanted to separate the collective action from the individual action,' said Cai, a clerk with the Beijing special armed police, who earlier gave $14 at the office, then stood patiently in line Thursday to donate $71 in her daughter's name. 'Although in this diverse society, there are many conflicting values, in the face of disaster we stand together.' On the opposite side of a table stood Zhao Shuangying, 48, sunglasses hanging from the collar of his pink polo shirt, belly protruding over a pair of white loafers. 'It's very simple. I cannot go to Sichuan, so I came here to help,' said Zhao, the owner of a technology company. In his hands were several bricks of notes totaling more than $14,000. 'I want to show that it's me who's donating. It's not connected with anybody else. I'm donating in my own name,' he said."

This show of philanthropy, mingled with individualism, is another indication of how much things have changed over the past few decades. Considering China's long history and how slowly things there normally change, things are now moving relatively fast. The involvement of the people shows a growing feeling of confidence, both in their economic well-being and in the ability to express their views.

"In the days before the ascent of private enterprise, the government compensated the disabled and gave medicine to the sick. And while farmers were often called on to help in government campaigns against insect infestations or rising floodwaters, the paternalistic nature of Chinese society made it difficult to imagine individuals stepping forward to lead or to hold officials accountable for relief efforts. The quake that struck central China, however, has inspired a completely different outlook among ordinary Chinese, many of whom belong to the country's growing middle class. The outpouring of support was partly in response to the unusually open news coverage of the earthquake, especially compared with the limited state-controlled coverage of previous disasters. This time, heartbreaking images, dramatic rescue accounts and humble requests for help have been the subject of nonstop live broadcasts, lengthy online postings and a large display in the lobby of the Red Cross building."

Fan reports that because the government has for so long monopolized every aspect of public life, a real gap in civil society exists. By that she means the ability of ordinary citizens to unite to carry out necessary social activity. The Merriam-Webster Dictionary defines one meaning of civil this way: "of, relating to, or involving the general public, their activities, needs, or ways, or civic affairs as distinguished from special (as military or religious) affairs." The rise of the "general public" in China is heartening to see. As one observer noted, the Chinese general public has longed for a role in civil society.

"Experts said the gifts fill an enormous need in a country that does not yet have a fully developed civil society. 'The Chinese value of helping others is never a problem for the people. The only problem is that there are institutional obstacles that have stopped them from showing this,' said Liu Junning of the Chinese Cultural Research Institute. 'There are no independent NGOs in China; even the foreign NGOs working in China have to register with the government. Real NGOs are more experienced in encouraging ordinary people to help and also in rescue work.' In an acknowledgment that many Chinese mistrust the way the government doles out financial aid, officials have promised to allow public supervision of how donation funds are spent and to submit to an audit process at the end of the relief effort, 'lest misappropriations occur,' said Wang Zhenyao, director of disaster relief with the Civil Affairs Ministry."

This rush to help also underscores a new Chinese nationalism that worries some outside observers. They fear that it will turn from simply being proud of being Chinese into something more belligerent. The fact that outside help is being sought and accepted, might help demonstrate that the world is not anti-Chinese and that the protests that have followed the Olympic torch have more to do with human rights than ethnicity.

"China is also accepting financial aid from other governments. Taiwan, the self-ruled island that Beijing considers a part of China, promised $65 million. Saudi Arabia has pledged $50 million in cash and $10 million in relief materials. The U.S. ambassador to China, Clark T. Randt Jr., presented a $500,000 check from the U.S. Agency for International Development as an 'initial contribution.' Yet it is the public donations that have been notable here. 'China has been through such rapid economic development in the last 30 years. So now it can raise such an impressive amount in such a short time,' said Qian Gang, author of a book about the 1976 Tangshan earthquake, which killed 250,000 people, a death toll that was a state secret for many years. 'Thirty years ago, it would have been impossible to imagine this.'"

Although it is too soon to dismiss a rising Chinese security threat, the signs continue to be mostly positive that the future is more likely to involve economic competition than military conflict. As Qian Gang said, "Thirty years ago, it would have been impossible to imagine this." That is the magic of globalization when it works.

Japan's Demographic Woes Remain Serious

I have written about Japan's demographic situation before [Demographics and Robots]. Blaine Harden of the Washington Post Foreign Service reports that Japan's demographic crisis seems to be growing worse ["Japan Steadily Becoming a Land Of Few Children," 6 May 2008].

"Japan celebrated a national holiday on [May 5th] in honor of its children. But Children's Day might just as easily have been a national day of mourning. For this is the land of disappearing children and a slow-motion demographic catastrophe that is without precedent in the developed world. The number of children has declined for 27 consecutive years, a government report said over the weekend. Japan now has fewer children who are 14 or younger than at any time since 1908."

As I noted in the previously mentioned blog, the Japanese fascination with robots is in large measure due to the hope that they will one day replace workers who, in the future, simply won't be available. The current situation in Japan creates two connected challenges -- too few young and a growing elderly population.

"The proportion of children in the population fell to an all-time low of 13.5 percent. That number has been falling for 34 straight years and is the lowest among 31 major countries, according to the report. In the United States, children account for about 20 percent of the population. Japan also has a surfeit of the elderly. About 22 percent of the population is 65 or older, the highest proportion in the world. And that number is on the rise. By 2020, the elderly will outnumber children by nearly 3 to 1, the government report predicted. By 2040, they will outnumber them by nearly 4 to 1."

Like some European countries, Japanese political leaders are encouraging their citizens to have children, but with little success. The downstream consequences are severe.

"Japan, now the world's second-largest economy, will lose 70 percent of its workforce by 2050 and economic growth will slow to zero, according to a report this year by the nonprofit Japan Center for Economic Research. Population shrinkage began three years ago and is gathering pace. Within 50 years, the population, now 127 million, will fall by a third, the government projects. Within a century, two-thirds of the population will be gone. In what is now being called a 'super-aging' society, department and grocery stores have recorded declining sales for a decade -- and new car sales have fallen for 18 consecutive years."

In some ways, what is happening in Japan foreshadows what is happening in rural areas of mid-American, where once thriving small towns are disappearing.

"Rural Japan, thus far, has borne the brunt of the slide. In depopulated small towns, stores are closing, governments are desperate for tax revenue and there are chronic shortages of doctors and nurses. The government is subsidizing the development of robots as caregivers for the old."

The rest of the world is bound to learn some valuable lessons from the Japanese experience; but for the Japanese, these lessons will come at a dear price. Harden reports that Japan is really becoming a country of big cities and all roads seem to lead to Tokyo.

"To a steadily increasing degree, Japan's future depends on metro Tokyo, the world's largest megalopolis. It is home to about 35 million people, or 27 percent of the country's population. But in Tokyo, children account for just 11.8 percent of the population, according to the new government report. That's the lowest proportion in all of Japan."

Tokyo is not the city you think about when you say "adults only." Inevitably, Japan will have to open its doors to immigrants. It is a policy that they have long postponed because they know that it will change their culture. They shouldn't be too concerned, however, some of the world's greatest cities have a wonderful mixture of cultures and ethnicities that help them thrive. The biggest challenge for Japanese leaders, should they allow immigrants in, will be to get them to settle in those that have for the past quarter century been depopulating. If they can do that, perhaps America can find a model for repopulating some of its rural areas as well.

The Social Side of Technology

The very word "technology" has a certain cold, hard ring to it. Say the word aloud and people conjure up images of computers, machines, and robots. They think about plastic and metal and wires. Yet technology also has a softer side. Telegraphs and then telephones have helped people bridge the miles between them. Social networking sites ring the world. New York Times columnist John Markoff wrote about a new type of non-profit organization that has arisen -- they are called "social enterprises," with the emphasis on "social" ["When Tech Innovation Has a Social Mission," 13 April 2008]. Markoff notes that successful tech companies are often run by leaders who are a combination of social technologists and industrialists. The social technologists, he reports, are the people most likely to turn to social enterprises to find career satisfaction.

"Steve Wozniak built the original Apple I to share with his friends at the Homebrew Computer Club, but it was his business partner Steve Jobs who had the insight that there might be a market for such a contraption. Indeed, for decades, Silicon Valley has been defined by the tension between the technologist's urge to share information and the industrialist's incentive to profit. Now a new style of 'hybrid' technology organization is emerging that is trying to define a path between the nonprofit world and traditional for-profit ventures. They're often referred to as 'social enterprises' because they pursue social missions instead of profits. But unlike most nonprofit groups, these organizations generate a sustainable source of revenue and do not rely on philanthropy. Earnings are retained and reinvested rather than being distributed to shareholders."

These companies are a little like Muhammed Yunus' Grameen Bank which makes profits so that it can help even more poor people. The goals of some social enterprises aren't quite so lofty, but they still believe they offer a public good.

"The new companies, like thousands of Silicon Valley start-ups before them, typically begin as small groups of intensely motivated people dedicated to the goal of building a product or service. The best-known examples are efforts like the Mozilla Corporation, which maintains and develops the Firefox Web browser, and TechSoup, an organization that was started two decades ago to connect technology experts with nonprofit groups. It now distributes commercial software to nonprofit groups in 14 countries. (Mozilla’s mission is to preserve choice and innovation on the Internet, which it considers a social good.) By most measures both companies, with hundreds of employees, qualify as vibrant businesses. Each has revenue in excess of $50 million annually. Moreover, there is also a range of smaller organizations, like the Internet Archive in San Francisco, with smaller but sustainable revenue streams. Significantly, an ecosystem is emerging that involves support groups like the Electronic Frontier Foundation, which provides legal services, and the Internet Systems Consortium, which plays the role of an independent Internet service provider for the community."

Having an "ecosystem" of support is important for any business. It's one of the reasons that I'm always looking for great companies with which Enterra Solutions can partner. As Maxi Priest wrote in his classic song Wild World, "A lot of nice things turn bad out there. Oh baby baby it's a wild world. It's hard to get by just upon a smile."  For the moment, however, there are a lot of smiles in the social enterprises world.

"'There is a lot of discussion taking place right now about a whole new organization form around social enterprise,' said James Fruchterman, president of Benetech, a social enterprise incubator based in Palo Alto. 'Many of these efforts can make money; they will just never make enough to provide venture capital rates of return.' Brewster Kahle, who has founded a number of successful Internet companies, as well as the nonprofit Internet Archive, said: 'If we do this right, I think there is momentum here. The next major operating systems company might be a nonprofit.' ... Mr. Kahle says he is developing a set of principles that he hopes will help formalize his idea that there is a middle ground between the technologists and the capitalists. He ticks off operating guidelines like transparency, staying out of debt, giving away information and refusing to hoard."

Thinking that the next major operating systems company could be a non-profit is pretty ambitious thinking. That is exactly what I would expect from a successful entrepreneur -- entrepreneurs never think small. The success of social enterprises, however, is not assured. Markoff reports that questions remain about whether most social enterprises are sustainable over the long haul.

"Nonprofits with revenue are not new or restricted to Silicon Valley, and there is a great deal of debate over whether they offer a sustainable approach. The new stream of technology-centric and successful nonprofits, however, appears to be driven in part by a set of microelectronics technology trends that have sent shock waves through many industries, from publishing to music and movies. 'Computer technology and the Internet are lowering the cost of doing business,' said John Lilly, the chief executive of Mozilla, the Web browser developer that is being subsidized by advertising revenue from the search engine business. That blends with the strong sense of social purpose held by a number of the best and brightest in Silicon Valley. 'We went through all these decades where we had nonprofits that thought business was evil and sustainability was irrelevant,' said Debra Dunn, an associate professor at the Hasso Plattner Institute of Design at Stanford who advises social entrepreneurs. 'Now there has been an influx of business thought. People are saying, "I have enough money and I care."' Still, most technology-oriented social entrepreneurs acknowledge that the hybrid model is by no means a one-size-fits-all approach, and there is significant debate about how far it can reach. Moreover, the approach hasn't always worked."

There seems to be a growing interest in social enterprises, but as Professor Dunn noted, the successful ones are backed by people with a social conscience and "enough money." The future of social enterprises, therefore, seems to rest in a pool of socially conscience wealthy entrepreneurs. That's not a big pool from which to draw.

Moving Beyond Globalization

Recently, New York Times columnist David Brooks penned an interesting piece on globalization and how people have used it to create paradigms for everything from economics to politics. He thinks it's time to move on ["The Cognitive Age," 2 May 2008]. He writes:

"If you go into a good library, you will find thousands of books on globalization. Some will laud it. Some will warn about its dangers. But they’ll agree that globalization is the chief process driving our age. Our lives are being transformed by the increasing movement of goods, people and capital across borders."

Hard to argue with that opening paragraph. One would swear that globalization, like a chameleon, changes definitions as it changes context. The fact is that globalization probably doesn't change much -- it simply describes the movement of resources, people and capital -- what changes is people's perception of those movements. What you see depends on where you sit. If globalization improves your life, it is good. If you've lost your job, globalization is bad. It is this tendency to define globalization as good or evil that seems to have gotten under Brooks' skin.

"The globalization paradigm has led, in the political arena, to a certain historical narrative: There were once nation-states like the U.S. and the European powers, whose economies could be secured within borders. But now capital flows freely. Technology has leveled the playing field. Competition is global and fierce. New dynamos like India and China threaten American dominance thanks to their cheap labor and manipulated currencies. Now, everything is made abroad. American manufacturing is in decline. The rest of the economy is threatened."

This certainly is the populist line that has been used successfully by politicians to gain votes in once thriving industrial areas and by media commentators looking to increase ratings.

"Hillary Clinton summarized the narrative this [way]: 'They came for the steel companies and nobody said anything. They came for the auto companies and nobody said anything. They came for the office companies, people who did white-collar service jobs, and no one said anything. And they came for the professional jobs that could be outsourced, and nobody said anything.' The globalization paradigm has turned out to be very convenient for politicians. It allows them to blame foreigners for economic woes. It allows them to pretend that by rewriting trade deals, they can assuage economic anxiety. It allows them to treat economic and social change as a great mercantilist competition, with various teams competing for global supremacy, and with politicians starring as the commanding generals. But there's a problem with the way the globalization paradigm has evolved. It doesn't really explain most of what is happening in the world."

To claim that all jobs were lost to globalization and that "nobody said anything," is certainly misleading. Every time someone walked into a Wal-Mart or a K-Mart or a Dollar General to buy low priced goods they spoke loudly and clearly. When people turned to Japanese-made cars because they were built more reliably than American cars, they spoke just as plainly. People spoke with their pocketbooks and not with their mouths. Of course, "the people" to whom Senator Clinton was referring were politicians, not the average American consumer or worker. Brooks continues:

"Globalization is real and important. It's just not the central force driving economic change. Some Americans have seen their jobs shipped overseas, but global competition has accounted for a small share of job creation and destruction over the past few decades. Capital does indeed flow around the world. But as Pankaj Ghemawat of the Harvard Business School has observed, 90 percent of fixed investment around the world is domestic. Companies open plants overseas, but that's mainly so their production facilities can be close to local markets. Nor is the globalization paradigm even accurate when applied to manufacturing. Instead of fleeing to Asia, U.S. manufacturing output is up over recent decades. As Thomas Duesterberg of Manufacturers Alliance/MAPI, a research firm, has pointed out, the U.S.'s share of global manufacturing output has actually increased slightly since 1980."

The fact that manufacturing output is slightly up, doesn't mean that manufacturing jobs have also increased. In fact, as Brooks goes on to describe, technology is primarily responsible for this increase.

"The chief force reshaping manufacturing is technological change (hastened by competition with other companies in Canada, Germany or down the street). Thanks to innovation, manufacturing productivity has doubled over two decades. Employers now require fewer but more highly skilled workers. Technological change affects China just as it does the America. William Overholt of the RAND Corporation has noted that between 1994 and 2004 the Chinese shed 25 million manufacturing jobs, 10 times more than the U.S. The central process driving this is not globalization. It's the skills revolution. We're moving into a more demanding cognitive age. In order to thrive, people are compelled to become better at absorbing, processing and combining information. This is happening in localized and globalized sectors, and it would be happening even if you tore up every free trade deal ever inked."

Look at the curricula of any good technical college today and you will find that it is quite different from what was being taught 20 years ago. New times, Brooks argues, require new skills -- and the U.S. is not keeping up.

"The globalization paradigm emphasizes the fact that information can now travel 15,000 miles in an instant. But the most important part of information’s journey is the last few inches — the space between a person's eyes or ears and the various regions of the brain. Does the individual have the capacity to understand the information? Does he or she have the training to exploit it? Are there cultural assumptions that distort the way it is perceived?'

One of the things that I emphasize in my discussions of Development-in-a-Box™ is the importance of training. Skills are important for both local economies and connectivity with the global economy. Brooks argues, however, that people who see globalization as a job-sucking fight to the death distort the message so badly that people fail to see the right course of action -- one that will turn an apparent zero-sum game into a win-win scenario.

"The globalization paradigm leads people to see economic development as a form of foreign policy, as a grand competition between nations and civilizations. These abstractions, called 'the Chinese' or 'the Indians,' are doing this or that. But the cognitive age paradigm emphasizes psychology, culture and pedagogy — the specific processes that foster learning. It emphasizes that different societies are being stressed in similar ways by increased demands on human capital. If you understand that you are living at the beginning of a cognitive age, you're focusing on the real source of prosperity and understand that your anxiety is not being caused by a foreigner. It's not that globalization and the skills revolution are contradictory processes. But which paradigm you embrace determines which facts and remedies you emphasize. Politicians, especially Democratic ones, have fallen in love with the globalization paradigm. It's time to move beyond it."

I wouldn't necessarily lay the "globalization paradigm" entirely at the feet of the Democrats. There are plenty of populists on both sides of the aisle who find it easy to blame foreigners for America's economic ills. The other slight disagreement I have with Brooks' argument is that it is not universal. It may be time for Americans to "move beyond it," but for many people still mired in poverty, they are still hoping to move toward it. We in the developed world have the means to go beyond it; those in less developed countries generally lack the means to move towards it. Helping them do just that is what the development community is focused on.

The Psychology of Philanthropy

The recent cyclone in Myanmar, the enormous earthquake in China, and even the tornadoes in the U.S. are stark reminders that natural disasters occur with frightening regularity. People affected by natural disasters are generally desperate for immediate help. As most people are aware, the ruling junta in Myanmar has despicably and fatally limited the world's disaster response there. Washington Post columnist Shankar Vedantam examines a different kind of behavior that puts limits on global response -- the reaction of potential donors ["Where the Conscience Meets the Checkbook," 12 May 2008]. Vedantam begins with a great quote from William Shakespeare's "Merchant of Venice": If to do were as easy as to know what were good to do, chapels had been churches, and poor men's cottages princes' palaces. What, Vedantam wonders, moves people to react when disasters strike?

"A few decades ago, a cyclone similar to the one that ravaged Burma last week struck South Asia. As in the case of Burma, the earlier disaster caused widespread destruction among some of the poorest people on the planet. Britain and Australia were among the most generous of the countries that stepped forward with aid, but the philosopher Peter Singer pointed out that Britain's donation was about one-thirtieth the size of its investment in the Anglo-French Concorde jet project. Australia's contribution, Singer added, was less than one-twelfth the cost of Sydney's famous opera house. Going strictly by the numbers, Singer asked whether Britain valued supersonic jet travel more than 30 times as highly as the lives of 9 million refugees. Natural disasters such as the one in Burma, where the death toll is expected to cross 100,000, bring to the fore several paradoxes of human behavior."

Of course, the philosopher's question is, in many ways, disingenuous. The dilemma faced by both countries and individuals is how much help can be provided without hurting the economic engines that actually generate the capital from which assistance comes. Asking a person who is dependent on his or her car for their livelihood if another person's life is worth less to them than the car, puts them in an unfair philosophical quandary. It's the same dilemma that tribal elders in Africa have faced during times of famine. Do you kill your animals to feed your people or let some people die and preserve your long-term chances of survival? Time and again the elders have decided to save the animals and preserve the future. Still, asking such questions can make us delve deep into our consciences and to search our hearts. Vedantam continues:

"Most people and nations do not follow the tugs of conscience about whether to help others in distress. The paradox is not that people are uncaring. Rather, it is that they fail to act in ways that they themselves know they should. Hardly anyone would think twice about leaping into a pond to save a drowning child, if the only cost to them was ruining a pair of $200 shoes. But in that case, Singer once asked, why do people hesitate to write a $200 check to a reputable relief agency even when they are certain it would save the life of a child halfway around the world? Psychological studies suggest the drowning child motivates us to act because a tragedy unfolding before our eyes activates our emotions, whereas abstract statistics about deaths in faraway places fail to engage us viscerally. Another reason we choose to help the child who is nearby is that we feel personally responsible for the drowning child, whereas we feel many other people are potentially responsible for the faraway child."

Studies about this phenomenon are often traced to the highly publicized 1964 murder of Kitty Genovese in New York City which was witnessed by nearly a dozen people, all of whom failed to intervene. Their failure to respond has since become known as the bystander effect. When faced with situations in which a person is the only one who can make a difference, that person generally acts -- often heroically. On the other hand, in circumstances where others could also act, people often hesitate or don't act at all.

"Singer believes our inconsistencies in moral reasoning highlight the importance of a school of thought called utilitarianism, which suggests we should make moral decisions in a coolly scientific manner, rather than rely on intuitions, laws or religious guidelines. The philosophy is controversial because it suggests people are wrong to put the needs of those from their own countries, their neighborhoods -- or even their own species -- ahead of the needs of others. The only thing that matters, Singer argues, is what causes the largest improvement in overall well-being. Singer backs up his words with actions: Over several decades, he has contributed a growing share of his income to charitable causes, such as the Oxfam group. He said he now gives about one-third of his income to such causes. And yet, he said, when he passes a homeless person on the street, although he feels drawn to help, he stops himself because it is not in keeping with utilitarian thinking: The same money can produce more well-being overall when channeled through a group such as Oxfam."

Singer goes on to note that inertia is the biggest challenge that must be overcome when it comes to utilitarian philanthropy. The first check, he said, was the hardest one to write. It became much easier to continue giving. Another thing that affects how and why people give has been called the "CNN effect." People give to causes in the news.

"Fiery Cushman, a graduate student in psychology at Harvard who studies how people's moral intuitions can clash with deliberate reasoning, said the unfolding disaster in Burma highlights another dimension of the warring moral compasses we have within ourselves: People are more willing to help in the case of disasters such as the cyclone than with 'mundane' and ongoing problems that are equally deadly, such as malnutrition or malaria in poor countries."

Cushman believes that Singer's "utilitarian" approach won't work because people aren't wired to be cold and rational.

"Cushman questions Singer's utilitarian approach, because he argues that emotions undergird even our most rational responses. And there is abundant evidence that even though people value reason and rationality, human beings are biologically programmed to react emotionally to visceral moral challenges. Joshua Greene, a Harvard philosopher and neuroscientist who also studies how people think about moral dilemmas, said: 'The difference between Peter Singer and others is not that he does not have normal emotions but that he is able to override his emotions because of his utilitarian values.' In the end, the rules that people choose to motivate their actions might be less important than whether they actually act -- for whatever reason."

I agree with Vedantam. Whether you decide to contribute to the rebuilding efforts in Myanmar, China, or Georgia, or decide to make small loans through a group like Kiva, or decide to help a church group or other established charity that helps others in need, the decision to help is the most important first step you can take.

The recent cyclone in Myanmar, the enormous earthquake in China, and even the tornadoes in the U.S. are stark reminders that natural disasters occur with frightening regularity. People affected by natural disasters are generally desperate for immediate help. As most people are aware, the ruling junta in Myanmar has despicably and fatally limited the world's disaster response there. Washington Post columnist Shankar Vedantam examines a different kind of behavior that puts limits on global response -- the reaction of potential donors ["Where the Conscience Meets the Checkbook," 12 May 2008]. Vedantam begins with a great quote from William Shakespeare's "Merchant of Venice": If to do were as easy as to know what were good to do, chapels had been churches, and poor men's cottages princes' palaces. What, Vedantam wonders, moves people to react when disasters strike?

"A few decades ago, a cyclone similar to the one that ravaged Burma last week struck South Asia. As in the case of Burma, the earlier disaster caused widespread destruction among some of the poorest people on the planet. Britain and Australia were among the most generous of the countries that stepped forward with aid, but the philosopher Peter Singer pointed out that Britain's donation was about one-thirtieth the size of its investment in the Anglo-French Concorde jet project. Australia's contribution, Singer added, was less than one-twelfth the cost of Sydney's famous opera house. Going strictly by the numbers, Singer asked whether Britain valued supersonic jet travel more than 30 times as highly as the lives of 9 million refugees. Natural disasters such as the one in Burma, where the death toll is expected to cross 100,000, bring to the fore several paradoxes of human behavior."

Of course, the philosopher's question is, in many ways, disingenuous. The dilemma faced by both countries and individuals is how much help can be provided without hurting the economic engines that actually generate the capital from which assistance comes. Asking a person who is dependent on his or her car for their livelihood if another person's life is worth less to them than the car, puts them in an unfair philosophical quandary. It's the same dilemma that tribal elders in Africa have faced during times of famine. Do you kill your animals to feed your people or let some people die and preserve your long-term chances of survival? Time and again the elders have decided to save the animals and preserve the future. Still, asking such questions can make us delve deep into our consciences and to search our hearts. Vedantam continues:

"Most people and nations do not follow the tugs of conscience about whether to help others in distress. The paradox is not that people are uncaring. Rather, it is that they fail to act in ways that they themselves know they should. Hardly anyone would think twice about leaping into a pond to save a drowning child, if the only cost to them was ruining a pair of $200 shoes. But in that case, Singer once asked, why do people hesitate to write a $200 check to a reputable relief agency even when they are certain it would save the life of a child halfway around the world? Psychological studies suggest the drowning child motivates us to act because a tragedy unfolding before our eyes activates our emotions, whereas abstract statistics about deaths in faraway places fail to engage us viscerally. Another reason we choose to help the child who is nearby is that we feel personally responsible for the drowning child, whereas we feel many other people are potentially responsible for the faraway child."

Studies about this phenomenon are often traced to the highly publicized 1964 murder of Kitty Genovese in New York City which was witnessed by nearly a dozen people, all of whom failed to intervene. Their failure to respond has since become known as the bystander effect. When faced with situations in which a person is the only one who can make a difference, that person generally acts -- often heroically. On the other hand, in circumstances where others could also act, people often hesitate or don't act at all.

"Singer believes our inconsistencies in moral reasoning highlight the importance of a school of thought called utilitarianism, which suggests we should make moral decisions in a coolly scientific manner, rather than rely on intuitions, laws or religious guidelines. The philosophy is controversial because it suggests people are wrong to put the needs of those from their own countries, their neighborhoods -- or even their own species -- ahead of the needs of others. The only thing that matters, Singer argues, is what causes the largest improvement in overall well-being. Singer backs up his words with actions: Over several decades, he has contributed a growing share of his income to charitable causes, such as the Oxfam group. He said he now gives about one-third of his income to such causes. And yet, he said, when he passes a homeless person on the street, although he feels drawn to help, he stops himself because it is not in keeping with utilitarian thinking: The same money can produce more well-being overall when channeled through a group such as Oxfam."

Singer goes on to note that inertia is the biggest challenge that must be overcome when it comes to utilitarian philanthropy. The first check, he said, was the hardest one to write. It became much easier to continue giving. Another thing that affects how and why people give has been called the "CNN effect." People give to causes in the news.

"Fiery Cushman, a graduate student in psychology at Harvard who studies how people's moral intuitions can clash with deliberate reasoning, said the unfolding disaster in Burma highlights another dimension of the warring moral compasses we have within ourselves: People are more willing to help in the case of disasters such as the cyclone than with 'mundane' and ongoing problems that are equally deadly, such as malnutrition or malaria in poor countries."

Cushman believes that Singer's "utilitarian" approach won't work because people aren't wired to be cold and rational.

"Cushman questions Singer's utilitarian approach, because he argues that emotions undergird even our most rational responses. And there is abundant evidence that even though people value reason and rationality, human beings are biologically programmed to react emotionally to visceral moral challenges. Joshua Greene, a Harvard philosopher and neuroscientist who also studies how people think about moral dilemmas, said: 'The difference between Peter Singer and others is not that he does not have normal emotions but that he is able to override his emotions because of his utilitarian values.' In the end, the rules that people choose to motivate their actions might be less important than whether they actually act -- for whatever reason."

I agree with Vedantam. Whether you decide to contribute to the rebuilding efforts in Myanmar, China, or Georgia, or decide to make small loans through a group like Kiva, or decide to help a church group or other established charity that helps others in need, the decision to help is the most important first step you can take.

Seeking Security and Development in Afghanistan

I have often written about how development and security go hand in hand. Although security generally precedes development, it is not by much. In almost all situations where there is or has been a crisis, you are likely to find humanitarian organizations in place. While many of these groups are concerned with the immediate health and welfare of the victims of crisis, you will also often find non-governmental organizations in the area whose focus is on development and the long-term health and welfare of the local population. In areas where there are absolutely no assurances of security, you are likely to find no help at all. There are, apparently, many such areas in Afghanistan. They are the focus of a recent column by David Ignatius ["Building Bridges in the Back of Beyond." Washington Post, 1 May 2008]. Ignatius focuses on the work being done by Lt. Col. Chris Kolenda of the U.S. Army. Ignatius begins his narrative in Naray, Afghanistan.

"This remote, mountainous patch of Afghanistan is near where Rudyard Kipling set his famous story 'The Man Who Would Be King.' And as you listen to Lt. Col. Chris Kolenda rattle off the names of the region's tribes and subtribes, you realize that he and other Americans here might be Kipling characters themselves. Kolenda's base truly is 'the back of beyond,' as 19th-century British travelers sometimes described this part of the world. It's located in a hauntingly beautiful region of northeastern Afghanistan, a few miles from the Pakistan border -- a land of steep mountains, narrow river valleys and primitive terraced farms. There are no paved roads, and in most villages there is no electricity and no running water. You reach the base by Black Hawk helicopter, soaring above the rushing rivers and isolated canyons of the Hindu Kush."

It is into these isolated, disconnected areas that insurgents and terrorists like to flee. The only way to dislodge them is with the help of the local populace. That is the objective Lt. Col. Kolenda is pursuing.

"Kolenda talks like an amateur ethnologist as he explains the tribal makeup of Kamdesh, an area just north of here where U.S. forces have been trying to woo the elders and mullahs away from the insurgents. He identifies a main tribe, four subtribes and 12 clans, each with its own history of feuds and friendships. If the U.S. military doesn't understand the local culture, Kolenda explains, it will make mistakes in trying to forge alliances that can stabilize the area. The surprising fact is that Kolenda, a Nebraska native, and his soldiers in Task Force Saber are having some success. When he arrived here last June, this area was mostly a no-go zone for U.S. forces. That meant some hard fighting last summer to drive the insurgents away from population centers and deeper into the mountains."

Once U.S. forces had achieved a bit of security, Lt. Col. Kolenda could help local leaders visualize a better future with the promise of development. Like all people, those in the "back of the beyond" want some hope in their lives.

"Once he had pushed back the insurgents, Kolenda's strategy was to re-empower the traditional tribal structure, which had lost sway during 30 years of war to a new elite with guns and money. Working through tribal shuras, or local councils, he offered the elders a deal: If they would provide security, he would bring them economic development in the form of roads, bridges, schools and health clinics. He financed these projects mostly with quick cash from the Commander's Emergency Response Program, or CERP, which has proved to be one of the most potent American weapons in Iraq and Afghanistan. Kolenda gradually won the tribal leaders' trust, traveling to one insurgent haven 16 times to meet with the elders. This year, attacks on U.S. forces in most parts of the region have largely ceased."

Kolenda is performing the work of a group that my partner Tom Barnett calls the System Administration Force. The objectives of such a force are achieved using non-kinetic means (i.e., they don't want to blow things up -- they want want to build things up). Tom's vision of this force is one that is less military and more civilian. There are, in fact, non-military government personnel involved in this work.

"Alison Blosser, a young State Department officer, is using a similar approach to help guide the Provincial Reconstruction Team for Kunar province, based south of here in Asadabad. An Ohio State graduate, she speaks fluent Pashto, which she learned before taking up her previous assignment at the U.S. consulate in Peshawar, Pakistan. Dressed in a head scarf and body armor, she might be a modern version of Gertrude Bell, the celebrated British adventurer and colonial administrator of the 1920s. Blosser and her colleagues have employed what they call a 'roads strategy' to bring stability to Kunar. The biggest project so far was building a paved two-lane road from Jalalabad in the lush flatlands up the Kunar River valley to Asadabad. The road is a magnet for economic development in what had been an insurgent stronghold, and the PRT is planning new roads into what Blosser calls the 'capillary valleys' where the insurgents have fled."

Building infrastructure is a necessary precursor to real development work; but, as Ignatius points out, put in a road and economic development follows. Ignatius goes on to report that the old adage "success breeds success" is just as true at the edges of globalization and beyond as it is in the developed world.

"The tribal elders see the prosperity the new roads have brought and want the same for their villages. 'We say, "Fine, but you have to guarantee security,"' Blosser says. That's the essence of the counterinsurgency strategy U.S. forces are using in Afghanistan. As the military clears new areas, the PRTs follow quickly behind with roads, bridges and schools."

The secret to the success of such programs is that promises made must be promises kept. If they are not, unfulfilled expectations quickly turn into anger. Ignatius concludes:

"Back in Kabul, Gen. Dan K. McNeill, the overall commander of American forces in Afghanistan, reflects on how the counterinsurgency battles have changed the U.S. Army. Back when he was a battalion commander in the 1980s, he says, 'I thought the world was move, shoot and communicate.' The new generation, he says, understands that these traditional warrior skills won't win today's counterinsurgency wars. The modern term for what these American soldiers and diplomats are doing in Afghanistan is 'nation building,' but some of the strategies and skills are reminiscent of the old British Colonial Office. America has had little experience in this kind of faraway struggle but, as McNeill says, the Army is a 'learning institution,' and it's gradually learning how to fight this kind of war. Yet it should be remembered that even the wily British colonial administrators and brave regiments of the Raj couldn't subdue Afghanistan's warlords."

The military has come a long ways over the past decade and a half when it comes to understanding how important nation building is to creating stability. The Bush administration was dead set against nation building when it first came to office. It was not just the Bush administration that had it doubts. As I wrote in a previous post on the SysAdmin force, there was more than a little initial reluctance to nation-building when the term and potential mission first emerged. In fact, it was considered '"mission creep" and was anathema to many military leaders. Clinton Secretary of Defense William Perry remarked, "Generally the military is not the right tool to meet humanitarian concerns. We field an army, not a Salvation Army." There is a much better understanding now about the relationship between humanitarian needs and security. As a result, we are seeing programs breeding success in remote areas where fighting has never achieved peace.

Closing the Tech Gap in the Middle East

When my partner Tom Barnett first published his New York Times best-seller The Pentagon's New Map, the Middle East was near the center of the disconnected group of states he labeled the Gap. Countries in that region (with some exceptions, like Israel) have been slow coming on line, but that may be changing according to a short article in BusinessWeek ["Playing Catch-up in Tech," by Jennifer Fishbein, 28 April 2008 print edition].

"To diversify their economies, Mideast nations have been increasingly investing in technology. According to the latest annual Global Information Technology Report, high-tech readiness has improved more in these countries, some of them major oil producers, than anywhere else."

Tom has argued that it is important for the Middle East to diversify and open up so that it can hold a conversation with the world over something other than oil and terrorism. During the peak of the Ottoman empire, Muslim culture was often the center of the world's dialogue. Everything from Middle Eastern architecture, to poetry, to mathematics was admired and copied. Getting on-line is the first step down a path that could help recapture some of that historical luster. According to experts interviewed by Fishbein, leaders in Middle Eastern countries understand that the current flush times cannot last if they don't take advantage of the current glut of oil money pouring in to prepare for the future.

"'They're realizing the current oil shock is indeed the last one,' says Bruno Lanvin, executive director of the eLab at INSEAD, the French management school, that, along with the World Economic Forum, released the study."

According to Fishbein, the Global Information Technology Report assesses the economies of 127 participating countries on a myriad of topics ranging from Internet bandwidth and the cost of mobile calls to the quality of higher education. Even with marked improvements, Middle Eastern countries still have a long ways to go.

"No Mideast nation ranked anywhere near the top. (Denmark and Sweden took the No. 1 and No. 2 spots. The U.S. was No. 4.) But Egypt (No. 63), a minor oil player, rose 14 places from its rank last year—the biggest jump in the sample—in part because of its efforts to become a locale for outsourcing tech operations. Saudi Arabia, participating in the study for the first time, made it to No. 48."

In a post I wrote last November [Education in Saudi Arabia], I noted that one of the oft-leveled charges against the royal house of Saud is that is has generally failed to invest its vast oil wealth in infrastructure that will help the kingdom and its people once oil revenues start to decline. The post, however, was about King Abdullah's multi-billion dollar bid to catch up with the West in science and technology by constructing the King Abdullah University of Science and Technology. Although the University will be gated community, life inside the walls could well point the way to further cultural breakthroughs there. Fishbein reports there are other efforts in Saudi Arabia as well to become more tech savvy.

"In January, Cisco Systems agreed to provide the tech infrastructure for a 'knowledge economic city' in the country's Al Madinah province, which hopes to attract high-tech multinationals."

Although these are small steps, they are backed by big bucks. The movement is in the right direction and that should be encouraging for people both in and out of the region.

Financial Globalization

Globalization rests on three principal flows: people, resources, and capital. The Economist, however, published an article questioning whether the free flow of capital is really a good thing for developing countries ["Policing the frontiers of finance," 12 April 2008 print edition].

"When Hank Paulson, America's treasury secretary, urged China to liberalise its capital markets earlier this month, he sensed a hardened reluctance in his hosts. 'There's no doubt that what is happening in the US markets is clearly giving the Chinese pause,' he said. America's subprime meltdown is not, it seems, the best advertisement for unfettered finance elsewhere."

The article has a point, it was the lack of regulation of the mortgage industry that created the crisis (along with the anti-savings, credit spending U.S. culture). The article goes on to note that the theory behind financial globalization and the reality of capital flows seem to be different. At least, the article notes, its hard to prove the theory either right or wrong.

"Against this backdrop, Dani Rodrik of Harvard University and Arvind Subramanian of the Peterson Institute, in Washington, DC, have published a timely reappraisal of financial globalisation. They conclude that it is far from obvious that developing countries benefit much from opening up to global capital. In principle, the free flow of capital across borders makes funds available more cheaply to poor countries and, by lifting investment, boosts GDP and raises living standards. The trouble is, economists have struggled to establish a strong link between freer capital flows and speedier economic development. That has not stopped researchers from looking, and many believe a tangible connection will soon be found. Perhaps the effect is not picked up in studies because capital flows are hard to measure accurately, argue the optimists. Messrs Rodrik and Subramanian are not convinced: measurement error bedevils many studies, but that has not barred researchers from establishing that policies to improve education or trade are good for growth."

In other words, if good policies can improve education and trade, good financial policies ought also to be good for growth. The question remains, what is good financial policy? The article continues in its search.

"Perhaps foreign capital helps indirectly—by disciplining policymakers or by promoting reforms that improve the financial system. The authors say it is possible to make the opposite argument and find indirect costs. Plausibly, lifting restrictions on capital flows could undermine the domestic financial system because spendthrift governments can tap a larger pool of funds abroad. Also, the well-off have less incentive to lobby for reforms at home if they are free to store their wealth overseas. Perhaps, then, the gains from globalised finance are latent and will be unleashed once catalysing reforms are in place? Maybe they will. But the wish list of complementary measures is difficult to tick off. Economies might reap the benefits of foreign capital more fully if property rights were stronger, contracts were more enforceable, and if there were less corruption and financial cronyism. But the authors point out that if poor countries could carry out such ambitious reforms 'they would no longer be poor' and financial globalisation would be 'a clearly dispensable sideshow'. With so much else to do first, liberalising capital flows would not be an obvious policy priority."

Reforms must be made and claiming that legal reforms can't be put in place by poor countries sounds patronizing. There is clearly more than one theory, financial or otherwise, at play here. If global capital is simply a credit line for poor countries, then perhaps Rodrik and Subramanian are justified in their pessimism. A certain amount of credit is needed by poor countries -- if they wisely invest it in physical and human capital (roads, education, etc. and on better governance). That's important because some infrastructure needs to be in place to attract the more important capital -- foreign direct investment. FDI is not just a measure of investment it means real jobs for real people. That's how you get a better quality of life. As American's are learning, the "good life" can only be bought on credit until the bills come due. The article continues.

"Foreign capital ought to be good for countries that have profitable ventures that lack funding because of low savings at home. But Messrs Rodrik and Subramanian argue that for many countries, it is not low savings but a shortage of good investments that is the binding constraint. Weak property rights, poorly enforced contracts and the fear that profits will be siphoned away make it hard to conceive of ventures that might generate a reliable return. When investment opportunities are scarce, capital inflows simply displace domestic savings and encourage consumption."

I harbor no disagreements with Rodrik and Subramanian on these points. The work that Enterra Solutions is doing in Iraq is focused on helping find good investments -- companies that can produce goods for sale domestically and internationally. Part of our efforts is aimed at strengthening the financial sector of the country. Rodrik and Subramanian agree that strengthening that sector is important for development.

"Whatever their misgivings about cosmopolitan capital, the authors do not deny that deeper financial markets in general help to foster prosperity. Even in economies short of good investment projects, a sturdier channel connecting domestic savers and borrowers will help growth. The more domestic savings can be put to work, the less need is there for foreign capital, and using local funds helps keep the exchange rate down and promotes export growth. By contrast, encouraging foreign capital to flood in can put upward pressure on the exchange rate, making exports less competitive. In some circumstances, capital controls may be justified if they keep the currency cheap and promote growth."

The key to prosperity argue Rodrik and Subramanian are exports.

"Why do the authors make such a strong case for export-led growth as a means to development in poor countries, even if it is at the expense of more open capital markets? First, they believe, exports are a force for institutional reform. A firm making clothes to sell abroad demands consistent state regulation, reliable transport links and enforceable contracts with suppliers to a degree that a barbershop serving the domestic market does not. Second, exporters foster skills, technology and expertise that can fruitfully spill over to other enterprises."

Bingo! Rodrik and Subramanian have identified many of the puzzle pieces Enterra Solutions is helping put together in Iraq. This effort has to work hand-in-hand with the government. The Chinese are certainly learning a hard lesson about regulation and enforcement. There is no reason that each developing country has to learn that lesson anew. By implementing proven, internationally recognized policies, procedures, and regulations, developing countries can start to worry more about enforcement than enactment. That will help them gain the trust of the international marketplace must faster and make their goods more attractive to a larger audience.

Globalization, Food, and Resilience

Anthony Faiola, writing for the Washington Post, discusses why globalization hasn't fulfilled the hope that it would end world food shortages and the devastation such shortages bring ["Where Every Meal Is a Sacrifice," 28 April 2008]. He begins his report in Mauritania with a visit to a 39-year-old laborer and her family. The woman had just slaughtered her family goat for food, with the full knowledge that in the long-run it would make her family worse off than before. The goat's milk had supplied the family with milk each morning. Once the goat meat is gone, they will be left with nothing. Faiola reports that scenes like this are occurring all over the developed world as the poor try to cope with rising food prices. In an earlier post [Rising Food Prices take the World's Stage], I discussed some of the reasons for the rise in prices (e.g., climate change and increased demand of grain for biofuels). In a later post [Cultivating the Right Biofuel], I added another reason pointed out by New York Times columnist Roger Cohen; namely, globalization's success means that more people can afford to eat better. While true, it is of little comfort to those yet touched by the benefits of globalization. Faiola writes:

"Like most of the world's poorest nations, Mauritania is caught in a global food trap, producing only 30 percent of what its people eat and importing most of the rest. As prices skyrocket, those who can least afford it are squeezed the most as the world confronts the worst bout of food inflation since the Soviet grain crisis of the 1970s. Strong global demand and limited supplies are key factors driving up prices, but perhaps just as important is a massive disruption in the free flow of global trade. In recent months, food-producing countries from Argentina to Kazakhstan have begun to slam shut their doors to protect domestic access to the food they grow. Agriculturally challenged countries are left out in the cold."

Even before food shortages started to worry food-producing nations, globalization had failed in the agricultural area in that developed countries refused to remove agricultural subsidies at home while demanding the removal of tariffs abroad. All of this was supposed to be cleared up with the negotiation of the so-called Doha round of trade talks. Unfortunately, those talks are moribund. In a post about the Doha round of talks [Doha Trade Talks & Globalization's Future], I wrote that special interests had killed it. Quoting from that post:

"The 'special interest' in this case was primarily agriculture. Developing states want tariffs removed from agricultural products imported into developing nations, while farmers in developing states fear that an influx of cheap agricultural products from abroad will ruin the market for domestic products. Emotions always run high whenever domestic food production is discussed. History is filled with tales of famine and death and that specter haunts the collective conscience of most nations. The Economist, however, believes a diminishing commitment to global trade is also at fault.

"'It is not just the narrow business of the Doha round (if narrow is a fit adjective for an ambition to lift millions out of poverty, curb rich countries' ruinous farm support and open markets for countless goods and services) that is at stake. In the long run, the lack of commitment to multilateral trade that sank the Doha round this week will also start to corrode the trading system as a whole.'"

That is precisely what happened according to Faiola:

"Globalization was supposed to eliminate this kind of recurring disaster. With economists radiating confidence about the new efficiencies of the global market, the need for food self-sufficiency seemed almost archaic. In that new reality, global markets would provide the long-term cornucopia that the arid earth here [in Africa] could not, and at reasonable prices. But it turned out that globalization did not really work for food. Countries, especially rich ones, felt compelled to continue protecting their farmers and their domestic food supply even as they pushed for trade liberalization for manufactured goods. It distorted the market, which didn't adjust as global demand surged and production flagged."

In light of the current situation, proponents of protectionism will more than likely trumpet the wisdom of their past actions. There is certainly no argument against the importance of food security, the challenge is how to create food security for those living in areas incapable of producing sufficient food for those who live there and who are too poor to buy it on the open market (even if it were available). Any resilient strategy will include contingency plans for bad times; that is what many African states are currently scrambling to do. Back in September 2006, I wrote a post about how the Bill & Melinda Gates Foundation are teaming with the Rockefeller Foundation to try and create a "green revolution" in Africa [Gates & Rockefeller Foundations Tackle Food Security in Africa] so that countries there are not entirely held captive by the global trading system. Such a revolution takes time, however, and it has yet to bear sufficient fruit to resolve the current crisis. Faiola continues:

"Mauritania knows it must bear more of its own food burden. All around, food-producing countries are barring the doors to foreign trade. Argentina raised soybean and sunflower export taxes to as much as 44 percent. Russia has quadrupled wheat-export taxes to 40 percent. Kazakhstan, one of the world's biggest wheat exporters, halted foreign sales altogether. Rice prices shot to a record high after Indonesia stopped its farmers from selling the grain abroad. At the same time, import-dependent countries that can afford the higher prices are hoarding. Wealthy Singapore is stockpiling rice. Malaysia is creating a new government agency to stockpile foodstuffs. Many countries, including Mauritania, have dropped long-standing import taxes to facilitate trade and lower prices at home. But with global supplies running short, the measures have had limited effect in controlling prices here. Importers in Mauritania, for instance, say they have roughly a 45-day supply of key commodities such as wheat."

Faiola goes on to report that it is not just land-based agriculture that is affecting the food budgets of the poor. Fish stocks around the globe have declined and rising prices for fish means that the best fish are finding their way onto the tables of the rich; once again leaving the poor's table bare. The crisis creates other rippling challenges as well. Men leave family and farm to find enough work to buy food. Often this means a farm lies fallow during the next planting season -- exacerbating the problem. As noted above, those with livestock are selling or eating their future.

There are bound to be a lot of lessons learned during this current crisis. Let's hope they lead to a more resilient food security strategy. Mankind has been trying to eliminate hunger since before recorded history, but we have yet to discover a strategy resilient enough to cover everyone everywhere.

China Discovers Lawyers

In America, lawyers can be ridiculed with humor without touching off any of the "political correctness" alarms raised when other groups are attacked. Attacking lawyers, of course, is nothing new. In the New Testament we read, "Woe unto you, lawyers! for ye have taken away the key of knowledge." Florynce R. Kennedy, herself a lawyer, once said, "The question arises ... whether all lawyers are the same. This is like asking whether everything that gets into a sewer is garbage." Perhaps the most famous line ever written about lawyers is contributed to William Shakespeare. In his play Henry VI, Dick the butcher utters, "The first thing we do, let's kill all the lawyers." The fact is, however, that when lawyers are needed -- to protect their rights or provide defense -- people quickly put aside their negative perceptions and embrace lawyers as friends if not saviors. Still, people elsewhere marvel that America is such a litigious society. Lawsuits are often viewed as a road to an easy fortune. Lawyers are, in part, responsible for creating this culture through advertising, class action lawsuits, and contingency cases. Legal costs, however, are a necessary (and worthwhile) business expense, especially when it comes to copyrights, patents, and protecting intellectual property. This is a lesson the Chinese are quickly learning ["850,000 lawsuits in the making," The Economist, 12 April 2008 print edition].

"Western firms are always complaining about the theft of intellectual property in China. From knock-off designs to copycat brand names, pirated music and fake drugs, China has a well-earned reputation as a free-for-all when it comes to patents and copyrights. Worse, there often seems little hope of redress: the courts are too distant and too incompetent; the laws are too weak or too vague; the culture is too resistant to the very idea of intellectual property. Yet help is at hand, in the form of Chinese firms with patents to defend. Since 2003 the number of trademark applications has grown by 60%; the number of patents has nearly doubled (850,000 are now active) and the number of lawsuits about intellectual property has more than doubled. The government is encouraging the trend in many ways, including signalling to the press to cheer it on."

With Chinese political leaders openly encouraging their scientists and engineers to become more innovative so that China can become a global leader in innovation, this trend is likely to have legs.

"This enthusiasm marks a dramatic change. During the Maoist era, private property of any kind was seen as theft from the masses, and so subject to just expropriation. Only in 1985 did China begin to enact laws to protect patents. It did not enforce them much until 2001, when the authorities promised to crack down in order to win admission to the World Trade Organisation. China has since opened more than 50 courts that deal solely with intellectual-property cases, and Chinese firms are using them. Prominent litigants include a pram manufacturer protecting designs, a soya-milk producer defending an industrial process and a maker of Chinese medicines shielding a name that, roughly translated, means 'mind and blood purge'. As companies in China establish brands and develop products, the incentive to sue will grow, particularly because the cost of bringing a case is minimal. 'If you can afford a car, you can afford a lawsuit,' says Tony Chen, who works in the Shanghai office of Jones Day, an international law firm."

Although there has been an increase in lawsuits by individuals in China, Chinese leaders' enthusiasm for legal action is limited to helping businesses protect their interests. Human and civil rights enforcement are not greeted with the same eagerness. Another difference between the Chinese legal system and America's is that juries are largely uninvolved.

"In America, firms often settle intellectual-property cases out of court for fear of enormous awards by juries. That is not true in China, Mr Chen says, where a judge rules in the majority of cases and damages tend to be small. They normally cover legal costs, however, turning lawsuits into a self-funding method to battle piracy."

That's where the American and Chinese systems share a lot in common.

"Unsurprisingly, the main beneficiaries of the sudden interest in intellectual property are Chinese lawyers. Some reportedly earn more than $5m a year. Non-Chinese law firms sometimes provide advice on thorny cases. But they are not allowed to file patents or appear in court on behalf of a client—a proprietary process that Chinese lawyers are keen to defend."

If the lawyers turn out to be the primary beneficiaries of lawsuits, Chinese jokes about lawyers won't be far behind. For foreign companies that have seen their intellectual property rights ignored by Chinese firms, this new interest in protecting such rights is long overdue. Whether foreign IP rights will be pursued with the same enthusiasm as the protection of Chinese IP rights remains a question to be answered.