Saturday, July 17, 2010

America's Failures in Foreign Policy: The Role of Our Virtual Culture

Is America failing itself by being unable to develop complex models for our foreign policy objectives and behavior? It appears so, given the great similarities in how we attempted change, but failed, in Vietnam and Iraaq, and now again, it seems,in Afghanistan.

This blogger proposes the fault for our failure to achieve foreign policy success in these past cases, and future failures unless we change something, derives from the virtual, reduced-in-complexity, plots and worlds of America's pop culture which provides us with the models that shape our mental vision of the world and pre-selects the methods we repeatedly and ineffectually, use to intervene abroad and pursue our global interests.

As for our American culture and how it influences our foreign policy, Americans seem to be perpetually stuck with our heads in TV virtual (and incomplete) worlds written to provide immediate gratification for audiences and commercial sponsors. We then "grow up" (and not necessarily mature)trying to make foreign peoples, cultures and problems conform to some familiar, simplistic Hollywood script. The problem is our elected officials, in order to gain admission to office, have to play to the cultural electorate who have been reared on this stuff.

Richard Haass, Newsweek correspondent, writes about the need for America to reformulate it's mission, tactics and objectives in Afghanistan. A segment of his article was preleased in a Huffington Post article by Nicholas Graham,
"Richard Haass In Newsweek: Rethink Afghanistan Because Nation Building Is Not Working And We're Not Winning ":
Haass:
"After nearly nine years of war, however, continued or increased U.S. involvement in Afghanistan isn't likely to yield lasting improvements that would be commensurate in any way with the investment of American blood and treasure. It is time to scale down our ambitions there and both reduce and redirect what we do. ... The war the United States is now fighting in Afghanistan is not succeeding and is not worth waging in this way. The time has come to scale back U.S. objectives and sharply reduce U.S. involvement on the ground. Afghanistan is claiming too many American lives, requiring too much attention, and absorbing too many resources. The sooner we accept that Afghanistan is less a problem to be fixed than a situation to be managed, the better."
We americans always seem to carry with us, around the world, a false, video game, bad guys-good guys interpretation of conflict and disagreement whereby we insist on forcing any foreign "issue" into a format looking like a 40 minute TV drama, full of blood and guts and ending in a simplistic "win" and a kiss, and "losers" who are usually blown up or at least killed off in some entertaining way. Have Americans lost our sense of reality? Is it always necessary to "win" in easily perceived terms? What about more subtle foreign policy successes?

Has America, because of its perpetually adolescent, immediate-gratification, short-term attention span, TV culture, become unable to think log term or subtly?

Are we stuck in a foreign policy point of view that de-emphasizes a real-world pursuit of complex policy objectives and instead focuses on promoting more easily (to Americans) understood, titillating gadgetry, TV-video-game features that usually consist of fancy or quasi-speculative "war toys", viz. Drone UAV's (unmanned aerial vehicles), huge main battle tanks, fancy anti-personnel weapons of all sorts, exotic framed B-2 flying wing bombers ala some "Terry and the Pirates Face Lost Nazis" film, and so on?

All the above suspicions seem to hold water. Our foreign policy, our economics, our energy "planning" - all lack a mature and steady, long term approach. We will continue to make this mistake while our culture remains overwhelmed by virtual foes, unreal weaponry and heroism, and of course while we still have deep bench money make man-sized versions of our cultural fantasies.

Friday, July 9, 2010

The BP-Deepwater Oil Spill: A Rationale for International Coordination of Resources

The April 20, 2010, BP-Deepwater oil spill in the Gulf of Mexico appears to have consequences that extend beyond the shores adjacent to the failed drill rig, and have impact on the national and global scale. This regulatory-ecological-resource extraction-adverse event raises issues this blogger attempts to address concerning: (1) corporate powers and autonomy, (2) resource planning, (3) corporation-government-public liasing, (4) local, national and international resource planning, risk assessment and approvals for resource extraction, and (5) possible structures of coordinating organizations.

The Deepwater Gulf oil spill has raised the above issues plus questions about corporate power and autonomy, corporate self-regulation and the future of relations (conflicts) between corporate and public interests.

Some related questions:
(1) As we now know from the BP-Deepwater disaster, future resource-extraction adverse events may well involve damages that exceed the ability of just one corporation to pay. Is there a need for accountable industry collectives fund, identify resource locations, plan extraction and cover liabilities?

(2) What about damages that extend beyond just monetary compensation, i.e global scale damage to the environment, economies and populations? How can this case be covered and what organizational formats, policies and protections might be required? When is a resource plan appropriately denied because of these dangers? Wand who shall make this decision?

(2) Are these corporate-activity adverse events expected to get worse? Can they be prevented? What kind of organizational structures can serve to answer these questions?

The Deepwater Gulf oil spill raises significant issues, accusations, doubts and questions about corporate power and autonomy, corporate self-regulation and the future of relations (conflicts) between corporate and public interests. Yet these issues must be successfully met if humans are not to sanitize, sterilize and kill the planet's life and habitability.

At the time of this blog, estimates are from 100 million to 150 million gallons of crude have been released into the Gulf of Mexico. Being driven by Gulf currents, the oil spill is expected to inundate the beaches of US Gulf shore states. As of July 7, 2010, all 5 Gulf states are receiving tar balls on their shores - Alabama, Mississippi, Louisiana, Florida, Missouri. If the spill is not stopped, it is expected to eventually drift South along the Florida coast and then up the eastern seaboard of the United States. If still not stopped, the spill is expected to eventually impact Greenland, Iceland and northern Europe. Where ever the oil impacts, it will damage or destroy sea life, estuaries, wetlands and beaches. Regional economies may be decimated and populations might have to be relocated owing to the toxic nature of the oil components (benzene and similar hydrocarbons), the accompanying methane gas, the chemical dispersants used to break up the balls of crude oil, and even perhaps the radioactive nature of deep-origin crude oil itself.

But apart from "fault" or "how", there are perhaps larger issues generated by some simple "why's": why did deep water oil drilling occurr in the first place, and in general "why" does it appear there is trend towards inceasingly risky methods and scenarios linked with the search for scarcer and scarcer oil and other resources required by our national and global economies?

These "issues" lead to further questions that focus on the national and global scale and even give reason for changing the way nations and corporations relate to each other, and suggest organizational structures that might implement these relationships.

-have we reached a critical thresh hold in the (convenient) availability of raw materials required by national economies? (Are raw materials becoming more scarce and hence more difficult to extract from the planet? Are there increasing dangers of nation-to-nation conflict over depleting and/or more extraction-difficult resources?)

-Beyond the critical thresh hold of difficulty of extraction, are we seeing as with the BP-Deepwater oil spill a tremendously expanded potential for tangible (cost valuated)damage? In retrospect, did the original cap on BP's liability, $75 million (just 1.3% of BP's 2010 first quarter profits, $5.6 Billion), even approach a reasonable liability considering the global damage now projected?

-Are we seeing damages from careless, or even careful...it does not really matter anymore, business activities so huge they are beyond what one corporation or even an industry sector operating collectively can pay? (BP now has agreed to estblish a $20 BILLION catastrophe fund to cover lost wages, health problems, etc. resulting from the released oil.)

-More, are we now experiencing a thresh hold of business activity damages beyond which lie immense and terrible intangible consequences that are beyond compensatory (money) valuation, i.e. damages to global stability and habitability either not recoverable in a time frame we humans are comfortable with, or not recoverable at all. (The Gulf may be oxygen-stripped (lifeless) in part or whole for decades.)

- Has the scale of tangible and intangible damages resulting from business activities expanded beyond even what a single nation or even a group of nations can cope with as damages and required efforts to recover, or adjust, extend beyond national boundaries to involve the entire globe?

As corollary questions:

-have we reached, and rapidly going beyond, a critical, national and global population threshhold?

-are national governments and even industry sector collectives sufficient structures to effectively protect humanity from its business life?

There are conclusions and suggestions relative to the future of making use of the planet's resources - an evaluation and review process for the use and extraction of the planets resources:

- Organization of industry into related sectors who develop resource proposals, or long term plans, starting at the level of individual corporations, and with cooperation with national resource agencies, and eventually with an international strategic global resource planning and coordinating council.

- National resource management agencies who coordinate with local businesses, industry sectors, and evetually an international (global)combined resource planning and coordinating council.

-International Resource Management Council responsible for review and approval of resource plans and proposals from nations and industry sectors. Members of the Council represent industry sectors, nations and independents(non-profit ecological impact study associations, natural resource and animal preservation groups, etc.)

- a top level global coordinating body (evolved United Nations, etc.) whose jurisdiction might extend off-planet to monitor, codify and effect outer space leasing of planetary and asteroid territories and the extraction of their resources.

This blogger believes all of these structures will come into being sooner than later because the problems and damages with other Deepwater-like activities are looming right now and if they occur will add even more terrible and geographically widespread damages and threats to human life and the planet's habitability.

Tuesday, July 6, 2010

MBA Follies: The Gulf Oil Spill: BP's Corporate Decision Making and Accountability, Human Culpability and Dereliction, And the Fallacy of Self- Regulation

The April 20, 2010, British Petroleum-Trans Ocean oil spill in the Gulf of Mexico, only 40 miles offshore from Louisiana, has the potential to devastate the economies and sea life of the Gulf shore states and perhaps even impact the eastern United States and eventually Europe. The question of how the spill occurred, or who might be at fault has not yet been determined although there are indications that BP's, or the leasing company Trans Oceanic's, corporate cost-benefit decision making (risk analysis) at the least was a contributing factor that resulted in less expensive, hence weaker, equipment being in place when drilling penetrated a highly pressurized and highly explosive pocket of crude oil-methane gas at almost 20 thousand feet below sea level (15 thousand feet below sea bed).

The pricipal issue of this blog:

Has corporate decision-making wrecked the Gulf region and made it unlivable long term? (As of July 7, 2010, all 5 Gulf states are receiving tar balls on their shores.)

This blogger finds the BP Gulf Oil crisis (it has to be now called a crisis) a fascinating though tragic and sad consequence of a fallacious regulatory philosophy being taught/impplied in some business schools and a tenet of some eco-political thinking - that the best judge and monitorship of business activities are businesses themselves. This blogger's experience in a mid-career executive program at a leading business school was eye opening when he heard this proposed. And, admittedly as the cadence of this credo flowed smoothly across the lecture hall, "self-regulation" of business by business seemed to have an appeal

Corporate accountability, responsibility and “ethics” were presented to the blogger in a bottom line context that appeared to the blogger to be very different from human definitions and in many cases antagonistic to human interests and safety. That experience has stuck in this blogger's mind and has led the blogger to feel corporate America is far off-base in its perception of its social obligations to America and to the local communities where corporations operate. At the root of the matter, this blogger has come to several conclusions about the potential danger of attributing human qualities, and rights to corporations, in contradiction to the appparent current Supreme Court's perspective.

If one thinks about it for only a bit even, the lack of an ethics in the corporate world as humans understand ethics should not be a surprise - a corporation’s existence does not depend on the same essentials as required by humans, even though a corporation is a collection of humans. The corporation has its own set of existential priorities which are different from a human’s: a corporation does not breathe air, consume food, drink water, require houses, schools, etc. …in the normal sense. Corporations are uni-focused on the "bottom line", i.e. profitability, which is whether short or long term is the final measure and assurance of corporate success. Although, it can be argued, a corporation can certainly benefit from the infrastructures humans are motivated to create for themselves such as schools, shopping malls, roads, ports, and more.

Therefore, it is logical that cities, towns and governments tax corporations for using human infrastructures. And it should be logical that humans be constantly on guard against unthinking (rather, uni-focused)corporate damage to these essential human life-constructs, much like having a bear in your living room. Don't blame the bear, blame the person who foolishly believed the bear was deprived of watching the world series on the new flat screen tv.

Corporations do not have human ethical considerations. And this is very confusing to humans (including, this blogger believes, the US Supreme Court). For human safety and well being, this blogger believes corporations should be kept on a tight leash because corporate decision-making involves a different set of life-suppport factors as mentioned above. Thus in the case of oil-shale extraction, the close-focus of energy companies on potential over-use of precious water for steam extraction does not bear consideration from the corporation because once water is depleted, operations can be moved elsewhere, leaving a waterless (or polluted), bare region of gaping strip mines, or canals can be built(singled mindedly for minimum expense) to bring in water from, and hence deplete, other regions.

Likewise, and to the point, the analytical risk decision of Deepwater Horizon to save on drilling expenses by using less expensive (“cheaper” to us humans) safety shut-off equipment was a proper decision in a corpporate context which, if nothing negative had happend, would have meant additional corporate profits and substantial bonuses for human staff members in the decision and appproval chain. Besides, this decision was cemented by a successful corporate strategy concerning relations with Congress (campaign donations) that had resulted in a absurdly low liability cap of only $75 million, a little more than 1%% of BP's 2010 1st quarter profits of $5.6 Billion...and likely a very smaller fraction of BP pre-spill, reserve account. (Note: BP unfortunately but rightly, in the corporate strategy context, will not dip into its pre-spill reserve account but will penalize the dividend account so stock holders will suffer while the corporate body will not be affected. If BP staff are found to be negligent or acted flagrantly will there be stock holder law suits?)

The lesson learned from just these two examples and especially from the most recent oil spill in the Gulf region, is the following set of warnings:
- humans must not expect corporations to have/share human emotions, or needs.
- corporations have different needs than humans, or rather, corporations
do not breathe, eat, drink...as humans do.

- corporations need to be watched and regulated by independent (unbiased) parties on behalf of human safety.

- corporations should never be permitted to “self-regulate” (a ridiculous, non-term in the regulatory world).

The "ABC's" of institutional regulation posit that assured compliance with rules and guidleines to safe business activity is monitoring by independent agents. This is not a belief that business, or any other institution so monitored, has something inherently evil or untrustworthy about them, but only a requirement that goes hand in hand with the belief that regulation's first priority is "prevention" and NOT punishment.

Punishment focuses on the "after" something bad has happened. What is better than that the "Bad" never happened?! This is the rationale for giving priority to preventive regulatory laws guidelines and monitoring.

As an aside, business schools now have impetus to expand their curricula in the management sector by adding coursework on advanced regulatory techniques and decision-making. Techniques such as Morphological Analyses (Fritz Zwicky, Cal tech astrophysicist, 1967) will permit corporate executives to lay out (matrix sheet) and identify the key regulatory-risk factors that affect cost and liability.

But back to BP and Deepwater, regulatory-wise there was no failure of the regulatory system. Rather, human policy makers (Congress)insanely gave over their proper regulatory command and responsibilities to the regulated party, the corporate oil interests. It's just that Congress forgot, or never took the time to realize, or were easily convinced by corporate donations, that corporate needs and decison factors intrinsically compete with regulatory principles which basically exist to protect human safety. In this context there is no more misapplied concept than "self-regulation" which this blogger believes to be one of the most dangerous and fallacious tenets of some "conservative" and pro-business, business schools.

The real cost of of the BP Gulf oil "spill", or fiasco, will far outweigh the dollar value of cleanup because in the human world there are dollar costs and then there are intangible costs of traditions and lifestyle (loss of quality of life).

From a corporate viewpoint, it might not be even worthwhile to spend money attempting to stop and clean up the present damage as these efforts might have to go on forever.

The real question is whether, owing to by-the-book corporate decision-making based on cost-expense-profit considerations, a terrible and perhaps irreversible Pandora's Box has been opened on the Gulf environment and sea product industry. The Gulf region might come to be "sanitized, sterilized, uninhabitable, eliminated" ... for a long, long time.