Irving Wladawsky-Berger

Darwinism, Adam Smith and Global Management Models

The December 20 issue of The Economist has an excellent article "Why we are, as we are".  It touches on a fascinating theme: "As the 150th anniversary of the publication of 'On The Origin of Species' approaches, the moment has come to ask how Darwin’s insights can be used profitably by policymakers."

Inspired by the article, I started to reflect on how the lessons of Darwinism can be applied to help us understand the fundamental roots of the ongoing global financial crisis.  In addition, given my continuing faith in open markets and free trade, my thoughts also turned to my favorite economist - Adam Smith, - whose views I felt would also be quite relevant in helping us make sense of the situation.

Many have said that the underlying cause of the financial crisis is greed - that is, the pursuit of wealth, possessions and power beyond the need of the individual.  That is way too simplistic an answer.  To a greater or lesser extent, greed is part of the human condition, along with the other seven deadly sins and other vices.  Powerful evolutionary forces drive the quest for money and power, as The Economist article observes

"For a Darwinian, life is about two things: survival and reproduction.  Of the two, the second is the more significant.  To put it crudely, the only Darwinian point of survival is reproduction."

"Girls have always liked a rich man, of course.  Darwinians used to think this was due to his ability to provide materially for their children.  No doubt that is part of it.  But the thinking among evolutionary biologists these days is that what is mainly going on is a competition for genes, not goods.  High-status individuals are more likely to have genes that promote health and intelligence, and members of the opposite sex have been honed by evolution to respond accordingly.  A high-status man will get more opportunities to mate. A high-status woman can be more choosy about whom she mates with."

"Status, though, is always relative: it is linked to money because it drives the desire to make more of the stuff in order to outdo the competition.  This is the ultimate engine of economic growth.  Since status is a moving target, there is no such thing as enough money."

Do Words Matter?

About a week ago we learned that an Ecuadorian man died from injuries incurred in a beating in New York City in what authorities say may have been a hate crime. CNN reported that:

"Jose Sucuzhanay and his brother, Romel, had left a party on December 7 at St. Brigid's Roman Catholic Church when several men approached them in a car in the Bushwick section of Brooklyn, police said. The men allegedly began shouting anti-gay and anti-Latino vulgarities at the two men."

A month earlier, another Latin man, Marcelo Lucero was attacked by a group of seven high school students in Suffolk County and stabbed to death.  The Suffolk District Attorney said that "the seven students charged in the attack admitted they regularly beat Hispanics for fun.  He said one of the accused attackers, Anthony Hartford, 17, of Medford, told police 'I don't go out doing this very often, maybe once a week.'"

If such attacks against Hispanics are taking place in the New York area, among the most open-minded and diverse regions in the world, I can only begin to imagine what might be going on elsewhere in the US.  The picture that emerges is not very pretty:

"FBI statistics show an alarming increase in the number of hate crimes across the nation.  Latinos, the numbers say, have become the racists' target of choice in the last four years.  Since 2003, hate crimes against Hispanics have increased by a shocking 40%.  According to the FBI, almost 67% of crimes motivated by ethnic or national origin are committed against Latinos."

For several years now I have closely followed the immigration debates in the US.  I have seen, with considerable dismay, the negative, mean-spirited tone that powerful figures in politics and the media sometimes display when discussing immigration issues.  In particular, I have become increasingly alarmed at their mean-spirited, anti-immigrant words, especially aimed at poor Mexican immigrants.  Do these words matter?

Managing across Borders and Cultures

I was recently invited to join The Levin Institute as a Senior Fellow.  The Levin Institute is a new, independent institute within the State University of New York (SUNY).  It was established to train students, working professionals and organizations to live and work effectively in our emerging global environment.  Its mission is succinctly captured in its tag line: Managing across borders and cultures.

The Levin Institute is located in a newly renovated landmark townhouse on 55th Street between Park and Lexington, in the heart of New York City.  Its full name is The Neil D. Levin Graduate Institute of International Relations and Commerce.  It was founded by the State of New York to honor the memory of Neil David Levin, a former Executive Director of the Port Authority of New York and New Jersey who was killed during the September 11 terrorist attacks on the World Trade Center. 

The Levin Institute is led by Garrick Utley, a former broadcast journalist with extensive experience in international affairs, who reported from more than 75 countries for more than 40 years.  Mr. Utley’s Presidential message describes its missions thus:  

"We are a new 21st Century academic model and enterprise that addresses key aspects and issues of globalization. We do this through developing new learning models, research and public engagement.  We prepare individuals and institutions to learn, work and communicate across borders and cultures.  As a free standing, system wide institute within the State University of New York (SUNY) we meld management school curricula with those of schools of international relations.  The successful manager of the 21st Century will be defined by the ability to operate successfully across divisions of nationality, ethnicity, religion and languages as well as political, economic, legal and regulatory environments.

“Our research projects and studies include global talent (high end knowledge workers), China as an emerging, knowledge-driven economy and society, the growing influence of global corporations, global media and the impact of globalization on American society.  Through our conferences and events, and leading-edge information and audio visual technology, we work to give new meaning to the concept of distance learning. One of our web sites, www.globalization101.org, is a leading platform for information and learning tools."

Elitists and Populists

In a recent post, I wrote about the current meaning of political labels along the liberal - conservative spectrum, especially as they were used in the very long 2008 campaign for US president.  My personal conclusion was: "The terms ‘liberal’ and ‘conservative’ are alive and well when it comes to social issues, but they are increasingly irrelevant when applied to economic policy."

Another set of terms we heard a lot during the campaign were "elitist" and "populist."  Barack and Michelle Obama were cast in the role of chief elitists by a variety of political opponents and commentators.  The populist mantle was primarily worn by John Edwards and Mike Huckabee during the primaries, and even John McCain was cast as a populist toward the end of his presidential campaign.  But without a doubt, the role of populist-in-chief in the recently concluded campaign fell to the Republican vice-presidential candidate, Sarah Palin.

The frequent use of these terms caught my attention.  I started hearing that Barack and Michelle Obama lived in the "elite" Chicago neighborhood of Hyde Park, where their daughters attended the "elite" University of Chicago Laboratory Schools, and that Barack Obama taught constitutional law for twelve years at the "elite" U of C.

Wait a second.  I lived in Hyde Park for almost ten years, from the time I arrived in the US from Cuba in October of 1960 to the time I moved to the New York area to go work for IBM in June of 1970.  I attended the Lab Schools for my last two years of high school, and then went on to study at the University of Chicago for the next eight years.  I think of Hyde Park as a very diverse kind of community anchored by the university, home to many different kinds of people.

"Serious" Virtual Worlds Applications

Given my strong belief in the promise of virtual worlds applications, I follow closely their ups and downs in the maretkplace.  Virtual worlds continue to be most popular in video games, massively multiplayer online environments and other consumer oriented applications.  The number of applications in serious areas like education, business, government and health care remains small.  So it is particularly exciting when we see working examples of serious virtual worlds applications, because, more than the words any of us can write, they nicely illustrate their potential.  Let me highlight a couple of recent such applications. 

The IBM Academy of Technology comprises the most accomplished technical leaders from around the world who work across the spectrum of IBM's technical activities.  Established in 1989, its key mission is to identify and pursue technical issues affecting the future of the IT industry, especially those that are highly relevant to IBM's overall business and technical strategy.  There are currently about 350 Academy members.  In addition, there is an extensive global network of regional Academy Affiliate, whose membership includes the key technical leaders in each region.   

The IBM Academy is a self-governing entity that elects its own members and officers.  Its independence gives it very broad latitude in deciding what activities to pursue and what recommendations to make to IBM's senior management.  For many years I was a member of the Academy's Board of Governors, and its Chairman from October 2004 until my retirement in 2007.

Every Fall, the Academy hosts a three-day general meeting to help promote communications and a sense of community among its members, as well as to develop and debate new ideas.  Due to the deteriorating economic conditions caused by the global financial crisis all around us, the decision was made in early October to cancel the 2008 general meeting, scheduled to take place a few weeks later, and to replace it with some alternative virtual meeting that would require no travel.

As it turned out, since October of 2007, a small team of Academy members and other experts had been working to develop a virtual world platform for use in Academy meetings.  Besides its large annual general meeting, the Academy holds many smaller meetings throughout the year as part of its various studies.  Since participants in these studies come from all over the world, travel is always an issue, not just because of the expenses, but also the travel time and general wear and tear involved.