Sunday, January 26, 2014

How humanity is creating its own misery and how to stop creating more misery

Humanity (through government, public and private sectors) is making wrong developmental choices on behalf of living beings by only using financial value-add as a measure to compare between alterative ends. Such choices theoretically ought to get made based on the maximum longer term financial and non-financial value-add to the maximum number of living beings(through long term impact on living beings, their surroundings and their relationships).

Unfortunately these decisions get made more on the basis of short term tangible impact of the choice on the (sometimes sub-group of) local people, their relationships and their surroundings.

The foolish criteria of "cost of financial capital", which is used to guide investment decision making is hopelessly inadequate due to its miserable short termism and subvertibility. This measure focused only hides the selfishness in the intangible (non-financial at decision time, but strategic and financially relevant in the long term) impacts of investment decisions on living beings. In a highly interconnected world, where every individuals actions impact outcomes for all others, what is the sense in letting individuals, firms and government make choices based on whether they can fund the action cheaply with respect to the benefits they get (irrespective of the impact on other individuals, firms and governments and more importantly the environment and universe)? As humanity we need better mechanisms...

The capitalism of Adam Smith, which posits that self-interest constitutes a method of social organisation, around the current means of investment for production and the subsequent distribution of the needs of humanity is a bit flawed. Till all humans correctly understand their enlightened self-interest, Adam Smith's capitalism is vulnerable to subservsion by empire-building ignorant humans and groups of humans, who do not understand how their ignorance causes their own misery and that of the rest of humanity.

Potential solution

Trusting unenlightened humans or groups of human, without adequate education and training and sensitivity with the best interests of humanity is dangerous. Putting too much trust in systems and procedures to guard against the risk is not the solution.

There is a need to raise the purity of intentions, skill of implementing intentions and knowledge of how actions compare in purity and skill at all points of time.

There is need for more meritorious people at the top who get there through sequences of meritorious deeds, who actually think through the long term costs-benefits for maximum good and happiness of maximum people. And their allocative actions (i.e. choices of projects) can ensure allocation of right work and compensation to people who work on these projects, while keeping the longer term interests of these project staff too in mind
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