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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you: carol@geraniumfarm.org

Saturday, January 30, 2010

An Ethical Economy Is Based in Us

This past Wednesday through Friday, January 27-29, Trinity Church Wall Street conducted its 40th Annual "Trinity Institute", this edition titled "Building an Ethical Economy: Theology & the Marketplace". Speakers were the Most Reverend Rowan Williams, Archbishop of Canterbury, Kathryn Tanner, theology professor at the University of Chicago Divinity School, and Sir Partha Dasgupta, economics professor at Cambridge University.

Each session consisted of a lecture by one of the speakers, then a panel where all the speakers and an additional "discussant" discussed the lecture, along with questions from the audience. The "audience" was seated in the nave at Trinity and in 80 networked partner sites located in all 50 States, Panama and several other countries. Each session was followed by an hour-long meeting of small Theological Reflection groups, where eight or nine people from all over this country who had mostly never met each other before, got to hash out the lessons together and try to figure out how they could fit those lessons into their lives and work. At an opening Eucharist Wednesday night, the preacher was Bernard Ntahoturi, the Archbishop of the Anglican Church of Burundi, one of the world's poorer countries, with the Archbishop of Canterbury as the Celebrant. The Blessing at the conclusion of that service was offered – in unison – by the Archbishop of Canterbury, the Presiding Bishop of the Episcopal Church and the Bishop of New York. Heady stuff.

This article and at least one more to follow will give you my take on the presentations. The quickest way for you to get a sense of it for yourself is to visit Trinity's website, where videos of the plenary sessions are now available: http://www.trinitywallstreet.org/news/articles/todays-buzz-on-wall-street-an-ethical-economy . Also, a blog by Scott Gunn, a priest, and Catherine Mann, an economist, contains some great commentary. Here: http://www.trinitywallstreet.org/news/blogs/blogging-an-ethical-economy.

I had presumed that the conference would consist mainly in a lashing out at the capitalist system and free enterprise. This was not at all the case. These institutions were perhaps critiqued, but I think there's a growing recognition that the obvious alternative, government, may not necessarily do any better job; the recent financial crisis, after all, came about in part because regulators and government sponsored lending programs were themselves also irresponsible. And corrupt governments can contribute to poverty and pollution. More significantly, there are even more foundational considerations ["fundamental" could appear here, but it's overworked, and "foundational" gets more to the heart of the matter – or to the "base" of it, if you will]: how any of it works depends on the character of the people participating, that is, all of us.

Rowan Williams, who is an extraordinarily insightful and impressive speaker, began by pointing out that "economics" is, at root, "housekeeping". He described that in a house, or a home, the inhabitants all work together in common for the good of the household: "life is lived in common". So he wants us to consider the home we build together. This is a long-term activity in which we want to nurture the well-being of all the members of the household. In this setting, "every person is both needy and needed . . . we are helpless alone and gifted in community." Theology participates in this by providing a basis and a mandate for the examination of our character and our integrity. Our well-being depends, Williams says, on our capacity for bearing self-scrutiny and maintaining a discerning self-awareness. How do we do our best? What are we invested in – in a broad sense, not just financially.

Later, Dasgupta described "an economy" as whatever the relevant "unit of account" might be: household, yes, or community or nation or, increasingly, the whole globe. Wherever our exchanges take place. Dasgupta's main discourse, on the earth as the sum and substance of our "wealth", is a fascinating notion and will absorb a whole Ways of the World essay.

As you see through these brief references, the conversation never focused on business or profit. It never centered on income inequality or greed. It mentioned these topics, but it was our role and our relationships to them that were important, not the concepts themselves. The discussion emphasized community, but spoke so often of us as individuals that I hesitate to call it "communitarian". Nonetheless, as Kathryn Tanner, the theologian, explained, even as God desires our flourishing, we require relationships with others in order for us flourish. She believes religion can help market behavior and in particular, she believes Christianity can help market participants – that's us – look out beyond the short-term to something greater.

The Archbishop's closing summary explored four over-arching themes that he observed across the conference's various sessions: (1) a sense of "language", as he put it, or perhaps "terminology" that can have more than one kind of implication: for instance, "capitalism" enables you to do good when you don't intend to. And "competition" does not necessarily portray a "war of all against all". Indeed "self-competition" is quite a desirable property that fosters our own growth. He wants us to consider "what sort of persons we need to make the system work effectively". This refers to everyone, not just to financial specialists.

(2) Education. All the speakers at some point discussed the significance of education, especially early childhood. Williams asks "What does education initiate young people into?" That is, what values and culture do we pass on to them? He wants us to teach "enterprise" to children, presumably introducing ethical ways of conducting enterprise at a very young age. We must teach – and take for ourselves – a broader humanist approach that overrides strict "rationalism". [Interestingly, recent Nobel-Prize-winning economic research has dealt with exactly these kinds of issues: what is the value of early childhood education?]

(3) How do we define "self"? As in "self-interest". There was no debate about "self-interest" per se. But instead, we realize that our "self" is a bigger being than just us individually. Our self must also encompass our neighbors and any we have exchange with, a kind of "social self". In the context of our work here, the self is automatically invested in our neighbor now and also in the future. "The self of the future already exists in the present." What "we" do today will impact our children in later years – or even, as I think about it, our neighbors and our colleagues tomorrow.

(4) Finally, every speaker and every session came to "trust". This doesn't mean just "mutual belief", but a stronger "I believe that you share in my interest." The other person understands and participates in my interest. And, notably, vice versa. In this regard, part of the problem of today is that "there are great tracts of the world who believe that the wealthy have no interest in them." In reply to a follow-up question, Williams suggested that this is part of the schismatic problem that the Anglican Communion faces presently. He asks us to consider "Whose interests do I recognize?" and "Why should I be trusted?" In the end, he reminds us "We can trust God because God made us when God didn't need to."

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Sunday, January 24, 2010

More Links to Haiti

We hear today, January 24, that camps managed by the Episcopal Church in Haiti are hosting 23,000 people in some 21 locations. These efforts were highlighted in an article in last Thursday's Wall Street Journal and also a video interview with Msgr Duracin, our bishop there. Debbie, on the Hodgepodge page here on the Farm, gives us the link to the video. It's amazing to see that, somehow, despite the enormous physical damage to the church's facilities, the people and institution are able to continue such active relief work.

Notably, in today's communique from Episcopal Life Online, a letter from Bishop Duracin emphasizes that Episcopal Relief & Development continues to be the best conduit for financial assistance. And, financial assistance is the help they need most right now, he explains. The ER-D staff members there are coming in from the Dominican Republic.

Moreover, as we have come to understand so well about ER-D, it will not leave as relief efforts wind down. This same organization will also be there for the rebuilding. Surely this is an efficient approach, so that people's donations go farther in providing help rather than having to pay for the breaking down and reestablishment of administrations in a given disaster site. Here's the link to their website: http://www.er-d.org/.

We've continued to follow the Sisters of St. Margaret. As explained in our note of January 15, their three Sisters there are fine. Two of them and four "pre-postulants" are staying now in the home of friend of the Order's, while the eldest Sister, Marjorie Raphael, is at the Partners-in-Health medical facility in Cange, along with the bishop's wife, who was injured in the quake. Again, we recommend the material on their website, which includes commentary and numerous links to articles about the people and work of the church in these extraordinary days. http://www.ssmbos.com/. The Sisters have been in Haiti since at least 1945.

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Thursday, January 14, 2010

Haiti

Friday Noon, January 15:
We received an email from the Sisters of St. Margaret telling us that they finally were able to speak to their Sisters. They are all fine, gathered on a nearby football field with some of the residents of their senior housing facility. Praise God!
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There is a significant Episcopal Church presence in Haiti. Readers of Barbara Crafton's eMos, recipients of the daily emails from the Episcopal Church news service and folks on the mailing list of Episcopal Relief and Development will already be aware of our denomination's connections there. What we have learned so far is that all of our clergy and nuns there have survived, although the good Sisters of St. Margaret have not been heard from directly by their Mother House in Boston. All of the diocesan buildings, including those Sisters' convent, have, however, been destroyed.

Many have died. The Haitian maintenance director in my roommate's office building here in Brooklyn heard that two of his young family members there were last seen in a building that collapsed and in which no survivors were found. The Archbishop of the Roman Catholic Church in Port-au-Prince was known early on to have been killed. Earthquakes are obviously no respecters of position or privilege.

Possibly you are concerned about loved ones, or you know people who are. If you are looking for American citizens, you can contact the State Department, which has some information. Call their special number, 1-888-407-4747.

Many avenues are open for giving aid. We are amazed to learn that people text-messaged donations yesterday totaling more than $3 million. At least one cell-phone vendor was figuring out how to advance the money to places where it's needed. What we know best is Episcopal Relief & Development, http://www.er-d.org/. A box appeared on the homepage of their website early Wednesday morning, giving a direct click to donations for Haiti.

Finally, we are personally acquainted with a couple of the Sisters of St. Margaret. Go to their website. Reading the updates there is like praying right along with them. http://www.ssmbos.com/ See the pictures on the homepage of their members who are there, and then click on the menu item for Haiti to read. A very dedicated Sister is sharing with all of us . . . .

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Tuesday, January 12, 2010

Terrorism and Terrorists

In the wake of the Christmas Day attempt by a terrorist to blow up Northwest Airlines Flight 253, we immediately wanted to take a look at the whole issue of terrorism. What do we know? What have we learned about it since 9/11? It seems that academic writers in psychology and economics have learned a lot and that some of these ideas are very different than we expected. In a brief summary, we'll talk here about the terrorists themselves and where they come from. The other side of it, the national security issues faced by the U.S. and other target regions, makes a separate discussion for another time.

What is terrorism?
Here's the U.S. State Department's definition: "premeditated, politically motivated violence perpetrated against noncombatant targets by sub-national groups or clandestine agents, usually intended to influence an audience."[1]

What do terrorists want?
In the main, social science researchers argue, terrorists have two objectives: (a) inflicting economic harm on rich countries and (b) getting occupying powers to back out of prized territories.

(a) Terror groups are minority organizations who attack rich countries and try to inflict economic harm on them. In a 2004 appearance on al-Jazeera television, Osama Bin Laden was quite clear that al-Qaeda wants to "bleed" the U.S. into bankruptcy. Here are four other examples, identified by the professors who conducted the research:
1. In a tally of trans-national terrorist events, Krueger & Laitin show a concentration of targets among rich democracies.
2. In a widely cited study of Basque terrorism in Spain in the 1960s, Abadie & Gardeazabal show that the main harm was the damage done to the local economy.
3. In Israel from 2000-2003, GDP per capita is estimated to have been cut 10% as a result of terror attacks, according to econometric work by Eckstein & Tsiddon.
4. Describing another variation of "harm", Berrebi & Klor tabulated the hit to the stock market valuation of companies whose operations were targets. They calculate that the companies' capitalization was decreased by $401 million per firm per attack.[2]

Much of the harm the terrorists inflict comes from the psychological blow to confidence in the target economy that follows in the aftermath of a nasty attack. In a sense, the terrorists take their action because it's profitable. This is a reverse profitability, where they can spend a relatively modest amount of money compared with the magnitude of the hit the target economy takes. Note that "success" in the specific action is not necessary to achieve at least some of the economic objective; the mere attempt or threat inflicts costs and distress – and " influences an audience".

(b) Terrorists want to "liberate" "occupied territories". The most prominent example is the goal of Hamas and neighboring organizations to "liberate" the Israeli territory. Others include an Islamist organization in Pakistan called Jaish-e-Mohammed which "advocates the liberation and subsequent integration of Jammu and Kashmir from Indian control into Pakistan." Among the Kurdish people, the Kurdistan Workers' Party (PKK) desires the liberation of Kurdistan from areas presently part of Turkey, Iraq, Syria and Iran, whose governments are deemed "foreign occupiers" by the PKK. At present, far from the least important is an old group, ETA, the Basque separatists in Spain. They are of current concern since many believe they will stage some action during the next six months when Spain holds the Presidency of the EU. This list could go on at length.

Our basic source here is a book Social Science for Counterterrorism: Putting the Pieces Together, published just a year ago by the National Defense Research Institute of the RAND Corporation, where it was prepared specifically for the Secretary of Defense. Chapter 5 on "The Economics of Terrorism and Counterterrorism" by Claude Berrebi is a broad review of recent research in this burgeoning field.[3]

Two Major Perceptions Questioned
This resource and other material bring us two important points about terrorism that make it all the harder to get a grip on. First, as the list in the above paragraph indicates, far from all of the terrorist organizations are related to religion. The Kurdish group, for instance, has collectivist political and economic reform goals. Moreover, even among those that have religious ties, the role of religion and theology is ambivalent. I have been surprised to notice this and have learned that the role of religion is one of the biggest questions among scholars at present who are trying to fathom the motivations of terrorists and thereby fashion effective counterterrorism policy recommendations.

Second, the Christmas Day terrorist from Nigeria is a wealthy man with considerable education. In the main, this is the background for most terrorists: they are not poor and not uneducated, even though many of us have believed in this stereotype. Some TV analysts have mentioned this distinction in recent weeks, but some public officials continue to argue that the terrorists' extreme actions come out of poverty and frustration and that they are recruited out of some kind of innocent ignorance.

Religion
On the religion question, although it is still open to considerable ambiguity, the distinction is probably centered on the difference between religion and theology. For instance, in a quick read of some of the social science research, we saw no evidence that proselytizing for Islam was an objective. Destroying Israel, yes, but it's hard to separate the political and territorial issues from the religious ones. Further, it's not clear that the religion itself is inspirational. Economists and sociologists point out that religious organizations can evoke the deep devotion and commitment needed to perform terrorist acts, even and especially including suicide. But it's hard to find any sense that the theology was the driving force, over and above the social "glue" of the group. For example, in one study that included interviews with Palestinians who had not succeeded in such assignments, none of the would-be perpetrators said that they had been motivated by actual religiosity or promises of rewards in the afterlife. In another study, Marc Sageman, a consultant and psychiatrist, indicates in material published in 2006 that very few terrorists he has interviewed are religiously active: "The vast majority of the al-Qaida terrorists in the sample came from families with very moderate religious beliefs or a completely secular outlook. Indeed, 84 percent were radicalized in the West, rather than in their countries of origin. Most had come to the West to study, and at the time they had no intention of ever becoming terrorists." [4]

Income
Indeed, this finding about where and when radicalization occurs goes along with some of the study on the family background and income of individual terrorists. A significant number of them are radicalized when they go from their native countries to study in, for instance, Europe. According to psychologist Todd Helmus, these people gather together in the foreign country to socialize with their own people – that's not hard to understand – and in the case of Muslims, perhaps simply because they want to keep to the Halal dietary laws. Helmus argues that, while they are obviously not poor and uneducated, they are strangers in a strange land, feeling disorientation and alienation and sometimes discrimination.[5a] However, others surely may also go to Europe for schooling and not come away with some new radical worldview. So there is much complexity here that prevents much generalization. Other writers, especially Eli Berman and David Laitin, explain that many Muslim terrorists come from regions where, even if their families are not financially deprived, the government of their country may be dysfunctional and not providing basic services or feature significant corruption. [5b] Nigeria, despite its oil resources, may currently fit these criteria.

In more quantitative analysis of the relationship between terrorists and their economic status, economists have found that among terror incidents in the last 25 years or so, there is no measurable correlation between the number of terrorists who come from a specific country and its per capita income. So a nation's wealth doesn't impact any buildup of terrorist organizations there. What is correlated with the number of native terrorists are measures of political and/or civil rights. Notably, terrorism tends to emerge in countries where there is some amount of freedom, but which freedom may be limited or unpredictable. There has been little incidence of international terrorism from fully democratic countries or from countries where political power is held in an absolute dictatorship in which all dissent is successfully suppressed. It's countries in a kind of twilight or transition away from authoritarianism that seem most susceptible to spawning those groups.[6]

The definitive study on this issue was conducted by Alan Krueger, a professor at Princeton who currently serves as the Obama Administration's Assistant Secretary of the Treasury for Economic Policy. Until his work on terrorism was first circulated in 2002, that is, not long after 9/11, the conventional wisdom had remained – with exceptions among specialists who knew better – that terrorists were poor and unlearned. On the contrary, as Krueger's and numerous other studies now explain, the people who bring off these elaborate, undercover attacks have to be smart, dedicated and intensely trained. And these individuals have to be calm and cool-headed; they can hardly be psychotic or otherwise mentally ill, as had been thought before much of the recent study of these issues took place.[7]

Does this help? Do these guys sound something like the Weather Underground and other 1960s groups? Hear me think out loud here. Do their attitudes resemble this description from Wikipedia? "Anti-Establishment became a buzzword of the tumultuous 1960s. Young people raised in comparative luxury saw many wrongs perpetuated by society and began to question 'the Establishment.'" What do you think?

++++++++++++++++++++++++++
[1] From U.S. Department of State, "Patterns of Global Terrorism, 2000". April 30, 2001.
http://www.state.gov/s/ct/rls/crt/2000/2419.htm Accessed January 5, 2010. Cited by Alan Krueger and David Laitin, "Kto Kogo?: A Cross-country Study of the Origins and Targets of Terrorism", p. 6. See footnote [7] below.

[2] Paul Davis and Kim Cragin, Eds. Social Science for Counterterrorism: Putting the Pieces Together. Santa Monica, CA: The RAND Corporation. 2009. Available online here:
http://www.rand.org/pubs/monographs/2009/RAND_MG849.pdf. Hereafter referred to as Social Science for Counterterrorism.

[3] Claude Berrebi. "The Economics of Terrorism and Counterterrorism: What Matters and Is Rational-Choice Theory Helpful?" Chapter 5 of Social Science for Counterterrorism, pp. 151-208.

[4] Berrebi, op.cit., page 165.
[5a] Todd C. Helmus. "Why and How Some People Become Terrorists". Chapter 3 of Social Science for Counterterrorism, pp. 71-111.

[5b] Eli Berman and David Laitin. "Religion, Terrorism and Public Goods: Testing the Club Model." Cambridge, MA: National Bureau of Economic Research. Working Paper 13725, January 2008. Available at http://www.nber.org/papers/w13725.

[6] Alberto Abadie. "Poverty, Political Freedom, and the Roots of Terrorism". Harvard University, unpublished paper, October 2004.

[7] Alan Krueger and David Laitin. "Kto Kogo?: A Cross-Country Study of the Origins and Targets of Terrorism". Several versions, especially unpublished paper, January 18, 2007. Earlier from November 2003. Also published in Keefer and Loayza, eds., Terrorism, Economic Development, and Political Openness. New York, Cambridge University Press, 2008, pp. 148-173. See also Krueger's What Makes a Terrorist? Economics and the Roots of Terrorism. Princeton, NJ: Princeton University Press. 2007.

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