The global slowdown is on the mind of investors anxiously awaiting news of a US stimulus and bank bailout. Despite the bleak economic reality, protectionist sentiments were quelled in the US Senate last week after President Obama warned Senators not to violate existing trade agreements by passing 'Buy American' provisions. Last week also saw a spate of reports and announcements indicating that jobless rates are climbing at an alarming rate in North America and around the world. Today the Wall Street Journal announced that Nissan would be cutting 20,000 jobs worldwide. The week ended with news that the US stimulus package was trimmed in an effort to gain some bipartisan acceptance. To counter Republican opposition, the President is going on the road today seeking grassroots support for his stimulus package.
After eight years of reckless Republican spending in a tragic and ill timed display of pure partisanship, Republicans are now attempting to restrict the government stimulus program as they resurrect their long forgotten and rarely practiced conservative fiscal policy.
Green is a powerful catalyst for growth, but some Green advocates suggest that trade itself is the enemy. With ongoing corruption scandals and reports of obscene corporate bonuses, it is easy to see how these old ideas could gain traction. Contrary to these well intentioned yet misguided views, trade is not the enemy. The world's trading infrastructure represents the most expedient mechanism for disseminating the Green agenda.
Traditionally, people who subscribe to religion believe that there is only one way to do something, conversely, relativism suggests that anything goes. The Carnegie Council for Ethics and International Affairs, 95 year old institution in New York City, advocates a balanced approach premised on three principles: fairness; rights and responsibilities; and pluralism. As stated in the Fairer Globalization blog, "people generally will prefer a fair outcome over one that benefits them unfairly or disproportionately." This approach advocates "a better way to address problems. It’s bringing everyone to the table, it’s creating a more sustainable and a better-informed solution."
Executives have a fiduciary duty to produce a profit, but this should be expanded to include the welfare of people. A good corporate citizen exercises prudence and enacts long-term strategic thinking. The author references a study of intangibles which indicates that ethical, social and environmental leadership have the greatest impact on valuation and brand.
Carnegie advocates a golden mean fair trade policy, where trade is not completely free, nor is it completely regulated. There are "three freedoms that we might think about truncating or limiting or sacrificing: the freedom to trade with anybody; the freedom to trade anything; and the freedom to trade with impunity. [Y]ou should be responsible for your actions that result from the trade that you make. There is a great deal of business literature...which suggests that if you’re benefiting from the externalities of your business relationships, then you do in fact have a duty to ameliorate them."
Free market purists have been chastened by failures arising as a consequence of deregulation. But those who seek to do away with free markets are as anachronistic as laissez-fair capitalists. Radical ideas like zero growth may be premised on laudable ideals, but they are hopelessly disconnected with political, social and psychological realities.
As explained by the author of the Fairer Globalization Blog, "[Y]ou can’t force people to be ethical on their own, rather you have to embed incentives in the system to encourage people to be ethical, you have to create a system of incentives that are based themselves on ethics, and that’s the challenge."