Wealth
I just received an email showing all the building work going on in Dubai. The email had a satirical edge about what our petro-dollars are being spent on. It suggests we should buy more petrol to help support jobs and the building works in Dubai. The .pps file includes lot of great photography and digital versions of projected and current projects and statistics about jobs, costs and plans. If you go to http://www.dubai.com/ you can see some of the way Dubai sells their achievements to the world.
What it made me think about was what is wealth? It's a line of thought that has continued for me for along time. When I was younger I agreed with the alienated communist/socialist/anarchist activist idea that wealth is the enemy of society and community, that it could only exist at the cost of the workers. I still believe this is to some extent but I have a more complex view of it now and feel that it's a superficial view to think it is basically evil. I think wealth is different in different cultural and economic circumstances and can be positive. Power and wealth are innately a product of culture, its structures of status and trust in particular. Now I think we, and even the wealthy misunderstand what wealth is. The focus is on the results of the process of wealth rather than it's systemic creation. We are sucked in by the more simplistic individualism of post-enlightenment liberal Christian capitalism.
Wealth is a cultural system.
The first and obvious definition of wealth is that it is represented by what you have in the bank, or in/on the ground or other stuff you have. It is about ownership. If these were valid inflation would be a source of wealth rather than being destructive of it. If you owned wealth then market failure wouldn't be a problem for it. If it was about what is in the ground the richest places in the world would be Brazil, Central Africa, Siberia and Australia. Japan and Singapore would be poverty stricken. Yet Singapore and Japan are among the richest whilst apart from Australia all those places with wealth of the land are among the poorer countries (though I accept some are growing lately). The romantic definition is that you are wealthy if you have good health and plenty of friends, family, enjoyable experiences and learning. Another slightly more subtle definition is about power. That is, wealth is measured by the resources and people whose destiny is controlled and/or influenced by your decisions. These are easy to measure surfaces of wealth.
There is something that is at the centre of all these definitions of wealth. Wealth is trust. Rather wealth is an expression of the systems of trust. Money is nothing if there isn't trust. The current crisis in the financial system is a crisis of trust. The crisis of the 1930 Great Depression was a crisis of trust. The nature of these two crises is about the nature of the distrust. In the 1930's it touched everyday people through their banks and their jobs. This one, so far has effected the poorest strata of house borrowers and their banks but hasn't effected the majority of companies and the majority of jobs as happened in the Great Depression. When Argentina last decade, or Germany in the 1920's, or various parts of the world has hyper-inflation it is because money isn't trusted.
The wealth of a person and a culture/economy is about the level and the kind of cooperation people are inspired to participate in. Trust is central to the qualities of cooperation shared by participants. Whatever we might think about wealth it is ultimately about the cooperation of people. Cooperation can be forced, it can be seduced, it can be based on good information and bad, it can be fairly and honestly negotiated. It is the product of the systems of support for it. It is interactive and interdependent. It has emotional qualities because all human relationships have an emotional dimension but primarily because emotion is the primary way people are moved react and make decisions. How the resources, human and otherwise, of a culture/nation/economy are distributed, becoming focussed into wealth and how it functions and behaves are expressions of the way status works in different cultures.
All of the different ways of cooperating involve trust. To be forced, whether through overt threat of violence or through the threat of the withdrawal or blocking of a desired person, object or feeling, you have to trust the threat can be carried out for you to be moved by it. No point in threatening to hit someone if you're in another country and don't know anyone local who can hit the person being threatened. The fear has to be real. In seduction you have to trust the person can give you the desired object/s or feeling if you are going to carry out the instructions given. The possibility of fulfilment has to be real for you. Most work in western economies is base on a marriage of these two - threat of withdrawal of pay can be humiliating and embarrassing leading to pain, and if you carry out the instruction then you'll be paid and be able, over time, to fulfil your desires. Whether the information is good or bad for you to be moved by it you have to trust the sources of it. Of course fair honest negotiation has to be based on trust.
Economies are based on markets. Wealth is the product of success in the marketplace for status and inspiring cooperation. Markets are usually not the people living and working on the land, producing the products for sale. Markets are based on trust. First and foremost whether a person buys something is a vote of trust. If the product lets the buyer down by not living up to expectations not only will they not buy the product again they will tell everyone they know not to buy it.
An example of this is the movie industry. Most advertising and public relations for a movie happens with building intensity from months before to high pitch fever in the last three to four weeks before opening night. Then stops almost immediately that weekend. The reason is their aim is to get the first weekend full of movie-goers because they know it is word of mouth that decides if anyone goes to see the movie after the opening weekend. Trust is important in the definition and pay scales of stars. The reason an actor or director gets the big money for appearing in a movie is because their presence can be trusted to inspire millions of people all over the world who will not even need the marketing to spend their $10+. In fact an enormous number of people will go to a movie just because it stars a Brad Pitt, an Angelina Jollie, a Stallone or Swarzenegger, a Speilberg or even once upon a time a John Wayne even if the word is bad on it. So if they put in the standard marketing plan the presence of that particular actor or director might double the take of the movie even if it's not a good one. By the same token there are many many examples of the marketing failing because the movie failed to live up to expectations.
For wealth in or on the ground to be realised you need markets. Stratification of a society - class systems - can result when the source of wealth is objects or substances, like sheep, cattle, minerals and oil even manufactured goods which don't require the workers to have much in the way of expertise. If there aren't many people wanting to do the work and you don't have machinery then the work will not get done and the market will not trust you to supply it. People will live off the land in a subsistence way. If you have a lot of people the majority population become cheap to employ with them as cogs in a machine with the management class being the market for their physical labour but with all the power on their side. The sale-able transportable products become the focus of wealth because they are the point of exchange with the market. This is where the wealth of the Middle East has thus far proved to an outstanding failure both for the majority of their populations, and for local and internation politics. It is why the choices of Dubai become interesting. More in a moment.
By the same token if the source of wealth, the marketable products, are the skills of workers, material products that require skilled workers and high levels of cooperation between them or intellectual property then wealth takes different forms and is distributed differently, more evenly. For example the media moguls can only be the richest people in a country if the population is educated enough to read and wealthy enough afford televisions, radios and computers. The leaders, the wealthy, of a nation/economy have to acknowledge their trust of their worker citizens by allowing them more autonomy.
Those called wealthy in these cultural economic systems can't really be called materialist in the strict sense of the word. They can't concentrate their wealth into material objects like jewellery, gold, bits of land, houses etc personal servants as people did in the past and in the systems described above. When Bill Gates is said to be worth $50+ billion it is not in cash. It is the markets appraisal of worth of the entity Microsoft in a particular moment. Of course he can easily afford such material things. But his wealth is corporate, meaning it exists in the form of ownership of an group entity, a tribe, that is made of systems consisting of relationships between functions that are filled by people. He has a share of the ownership of a legal fiction whose brain is a board of directors, body is a group of shareholders and depending on how you think about either their hands or tools are the workers.
Now here is a significant question: Is Dubai spending its oil wealth is a way that will serve the long term good of its people, nation and they international political potential? What was in the email they seem to be spending it on tourist entertainments, on rich people's residences. It seems to me that Dubai, apart from having oil, is in a similar position to Singapore. In that its most and long term source of potential wealth is the same as it has been for thousands of years that is its position as a trading port at the mouth of the Red Sea. Its wealth like Singapore is in its people, their skills, creativity and cooperation. Tourism is one important market. And it is true that there are always materially wealthy people around the world who have money to spend but it is a low skill very culturally and economically stratifying industry. This choice of industry continues the class based system that has existed in that area for centuries or more. Tourism is subject to fashion trends and does require continual renewal which will mean plenty of ongoing building work. When the oil runs out and the country is left only with the assets it has built and paid for with it will they get a hundred or a thousand years of return from it? Or have they picked up the system and culture of the West married it to the pre-existing medieval class Arab system and made something that will exhaust itself in a short form.
I don't know what else they are spending their petro-wealth on but if their focus is only on what email said - tourism, show off pieces and expensive housing for the rich with workers from all over the world - without focusing on education, technical and other innovation, management skills and the development of its traditional strength as a trading hub it will be in trouble when the oil runs out. The mistake that the US and European governments have made is to take advantage of the oil resource in the Middle East. Over the last fifty years their use of the superficial power and wealth available from in the ground for its short term gains has resulted in Iran, Iraq, Egypt and the problems in Lebanon and in Israel. Of course it is complicated by the fall out of the end the Ottoman Empire. Islam is an inherently egalitarian democratic religion. It was the adoption of one of it principles by Western protestants and the spread of education through printing that led to widespread democracy in Western Europe and the USA, that is that your relationship with God was yours first and foremost meaning there is no need to for priestly intermediaries. The lack of education in the majority of the population of the Middle East and the economics of exploitation described above means that a society of violence and stratification with resources scattered rather multiplied by the lack of trust and cooperation within their cultures.
If this is to change then we in the West must change our understanding of wealth and how to create it, what it means to a culture and what its roles are and how it functions in an economy and culture. Our intervention through various international institutions need to be rethought. The focus must be on how trust can be developed through the cultural systems of the places we are seeking to help. And example recently is Somalia when a system of civic society was growing out of the natural cultural systems which must be Islamic in that country was attacked and destroyed simply because the USA was afraid of Islam motivated cultural systems. The result
More to come...
