Archive for February, 2012

Fixing inequality requires more than finger pointing – push the share-the-spoils button

Which of these three scenarios best fits your workplace or, big picture, the way you figure the NZ economy works?

1) A game to collect marbles where you happily and freely share the spoils because you feel the other player has cooperated in the goal of getting more marbles.

2) The marbles are distributed without having to play a game – finders keepers no matter how unfair the distribution of marbles.

3) A variation on 1. Instead of players cooperatively collecting marbles, it becomes clear to participants that getting the marbles doesn’t involve cooperation. Even though the players do equal amounts of work, some players are unfairly awarded more marbles.

[Hat tip - Jonathan Haidt, a psychology professor at the University of Virginia]

By the way, this is my promised response to the Salvation Army’s report “The Growing Divide” on poverty and crime.

This post has sat around unfinished for a few days now because I couldn’t nail what I wanted to say, which was originally, that the report provided an unsatisfactory villain of the piece: the “economic rationalism” of the last 20-30 years.

Scenarios 2 and 3 above of course look a lot like the game played under the rules of economic rationalism – that is a faith in markets to sort out most of life’s issues without too much attention to fairness.

Scenario 1 is an approximation of economic conduct from the mid 1930s to the 80s.

So I think the Sallies are right to point the finger at economic rationalism when it comes to looking for a guilty party for the jump in income inequality between the 1980s and now.

But there are other things going on as well as The Herald’s Brian Fallow points out.

It can’t be as simple as laying blame for the “the growing divide” solely at the feet of the economic rationalists. Slay the economic rationalists and inequality and poverty will disappear.

I’m not so sure because it overlooks root causes – why did most of the Western World slip from scenario 1 to scenarios 2 and 3 in the 1980s?

Disturbingly the scenarios above were parts of real life psych tests done with children (remember kids are more selfish than adults). The tests indicate that even if we acknowledge that 2 and 3 are unfair, and lead to inequality, it won’t be enough to kick start sharing.

We need a game changer. We need new circumstances.

Jonathan Haidt, the psychology professor who’s my source of the three scenarios, says his parents were from a generation that went through the Great Depression. He was a teen during World War II and then lived under the shadow of the Cold War.

Government control, he said was seen as necessary for the common good in these testing times. Social norms controlled exorbitant pay and insisted on a solid safety net for the less fortunate.

This social compact to collaborate started to bunny hop when we all began to feel the old way was failing, which in some ways it was.

Commenting on scenarios 2 and 3 (and I guess what can be done to end their dominance) Haidt says: “…the ‘share-the-spoils’ button is not pressed by the mere existence of inequality.”

The kids missing out on the marbles mostly didn’t complain and of course, the winners were just fine.

The ‘share-the-spoils’ button, he believes developed around 500,000 years ago as humans started to forage and hunt co-operatively. These “teams” achieved more than individuals.

So, if we are to get rid of inequality we need to fundamentally change the conditions that allow scenarios 2 and 3 to thrive.

This happened in the 1930s after the upheaval of the Depression.

To slot back into scenario 1 we need to find that sense of combined purpose that’ll tap into half a million years of thinking.

Hopefully nothing a big as last century’s shocks.

admin, 26th February 2012 | Filed under: Uncategorized

How “school local” can bridge our real divide – the social one

Our local college is a decile 5 school – a five because it’s a catchment of extremes, neighbourhoods that are either wealthy or poor with not much in-between.

It’s not a bad college, and is on the rise, but mostly the kids from the feeder upper decile primary schools skip it. Around these parts you don’t “school local”.

The kids are bused and ‘trained’ north, south and east to what are obviously judged to be better schools.

You can’t criticise this choice because these parents know what’s best for their children. And the choice can be seen as the safe one, like buying a product with a trusted brand.

But their decisions, however unintentional, are bad for the school, bad for the neighbourhood and bad for NZ society.

It’s probably not going to be bad for the kids – most will be successes in life, though as we shall see, that depends on your definition of success.

Maybe “school local” remains a better choice for everyone concerned: the school, the neighbourhood, society and ultimately the kids.

That’s because the wealthy, by turning their backs on local schools, are widening a social divide that’s in a way much uglier than the wealth divide which seems to get all the attention.

Perhaps it’s because the social gap is seen as a consequence of the wealth gap. Reduce income disparity and all will be okay. I’m not so sure.

This social divide is, I figure, feeding inequality because there’s no empathy or understanding of how the other half lives.

I’m pointing at the occupants of the smarter city suburbs here. The divide belongs to them (umm us, though I don’t live in this type of suburb). We created it and only we have to power to fix it.

We are the ones with the choices – we have the money and the power.

From cradle to the grave, the more privileged among us often unconsciously (but sometimes not) widen this social divide. We trip through pre-school care, primary, college, parties, sport, university, our offices and friendships barely casting a shadow on the other side.

NZ schools were once mixing pots. So was rugby. Now we have flight to “better” schools and football.

An example of where this leads is US Republican millionaire presidential candidate Mitt Romney’s ‘what planet’ statement that he was “not concerned about the very poor. We have a safety net there”.

I can’t find any public statement by a Kiwi with a similar sentiment, but (my white middleclass readers) you wouldn’t have to look very far among your colleagues and friends.

But maybe it’s just ignorance. When the TV3 documentary on poverty screened before the last election, the reaction seemed to be outraged surprise that this was happening in God’s Zone.

These people need to get out more. This response was the social divide revealed.

There’s a hell of a lot of mythology around NZ’s egalitarianism, but there was a time when the myth was more honoured in the observance than in the breach.

Now it’s more honoured in the breach.

We all need to be big and brave about the choices we make.

admin, 17th February 2012 | Filed under: Uncategorized Tags: ,

What are the creativity lessons for organisations from the rugby sevens?

Unbelievably it seems the costumes of Wellington rugby sevens’ fans manage to be more creative and innovative than the previous year.

Personal favourites for 2012:
- The Lego men
- The jami army
- The Monopoly set (post GFC).

So what is it that drives this year-on-year leap in standards of creativity and innovation among fans? Off the top of my head:
- Competition – wanting to stand out in the crowd when everyone else is trying to do the same thing. This is huge.
- Brand – Wellington sevens now have an incredibly strong brand which organisers have nurtured. The punters buy into it.
- Learning – the power of observation. What worked last year (well, what’s remembered); what am I up against this year?
- Time – where do people get the time to do this stuff?
- Fun – big time.

And most of this happens while the fans are sober.

Finally I don’t think it’s about money. The above are more important.

Organisations should look at the Wellington sevens when they consider ways to increase their innovation and creativity.

admin, 4th February 2012 | Filed under: Uncategorized Tags: ,

Kiwi James Cameron – a big endorsement of Sir Paul Callaghan’s idea of NZ as a place where “talent wants to live”

I’m a fan of the ideas of Sir Paul Callaghan. He’s one of the best – and clearest – thinkers about the future shape of the NZ economy.

One of his ideas is to make NZ a place “where talent wants to live”. James Cameron’s decision to move to the South Wairarapa I guess is a big endorsement of the idea.

Callaghan is deeply sceptical that our economic salvation will come from squeezing more out of current big ticket foreign exchange earners such as commodity agricultural products, natural resources and tourism.

Our wellbeing, he says rides on how well we can create a knowledge economy, one based on high earnings per worker. Callaghan’s well-worn example is that a McDonald’s worker produces US$9389 of value to the company; an Apple employee creates US$1.3 million.

So we need to create more jobs in ventures that generate high levels of wealth off relatively low levels of investment in raw materials, bricks and mortar and other increasingly scarce resources.

In the long run he’s right. But what happens in the meantime?

The trouble with knowledge-based businesses (in NZ at least) is that they take forever to reach a size that’ll register on the overall level of national wealth.

Fisher and Paykel Healthcare, which has been around since the old parent company entered the respiratory care market in 1971, is only just approaching $500m in revenue

Forty years to hit half a billion by one of the brightest stars on NZ’s business stage.

We haven’t got this much time to sit around and wait for the knowledge-based economy get some traction.

By the time it does, at our present rate of falling behind in wealth, we won’t be a place, where “talent wants to live”.

Talent will largely shun us for the same reason it shuns other Pacific paradises – the infrastructure is way too bad, the schools poor and healthcare good only if you can afford it.

To avoid this we need businesses that can generate more wealth if not now, in the next few years.

And that I’m afraid is more cows, mining, oil exploration, tourists…

How we do this is important because I think Callaghan’s idea of creating a country where “talent wants to live”, though very likely elitist, is a good way of figuring out ways through the maze of our economic choices.

Just ask: is it good for talent?

The assumption of many would be that mining ain’t. For sure our clean and green environment is a big talent drawcard, but we need more wealth to maintain that environment.
It’s the poorest countries that have the worst environmental records.

And supporting talent costs money, lots of money. It requires capital, R&D infrastructure, quality education facilities, real broadband…

Finally living in a “poor” country is a turn off.

This isn’t an argument to do nothing. Our natural resources are finite, and some shouldn’t be touched. But some could be if the benefits to NZ outweigh the costs.

We do need to be laying the groundwork for creating a knowledge economy by being clever about how we encourage talent to stay, and new talent to call NZ home.

admin, 2nd February 2012 | Filed under: Uncategorized Tags: ,