Saturday, March 19, 2011

When the Planet Shrugs.

and Japan shows that humanity’s vulnerability can also unleash its greatest strength.

Most of us felt it. A distinct emotional tug from within while witnessing the unfolding of a calamity in Japan. Some of us would have been affected more than others. Few would have been immune.

It’s called the mirror neuron. It’s some or other “thingy” in the brain that creates empathy and, as far as scientists can tell, we have the strongest mirror neurons of only a handful of earth’s species that possess them. It is what makes us human and, according to British medical and social Scientist, Robert Winston, it makes us natural born heroes. It is one of our instincts and the key ingredient to our greatest strength – compassion.

clip_image002The miracle of modern technology brought into our homes those awe inspiring scenes of repetitive destruction in Japan. Shock after shock, wave after wave as nature’s sledgehammer dealt ruinous blows to a reeling island. Buildings changed to rubble, possessions into debris…once proudly owned and giving affirmation and definition to the owner – a sense of being, of power, of significance. Because that’s what people do in their search for the good opinion of others. They create monuments and legacies of “stuff” and are defined by it rather than by their inner qualities of integrity, honesty, care and compassion.


Yet when, in a shrug of nature those monuments and legacies become nothing more than rubble and debris, the only thing that lasts are those inner attributes. They can never be taken away, only given away. It is the greatest of these – compassion – that comes to the rescue when we as a species are threatened. It is compassion that ultimately defines who and what we are. It is compassion that is our ultimate strength. It is compassion that drove U.S. President Barack Obama to remark: “...for all our differences in culture or language or religion, ultimately humanity is one."

I often marvel at the extent to which we have allowed the natural instinct of empathy and compassion to be buried by the motive of raw material self interest. We have cultivated self interest as an essential driver of a progressive economy…that prosperity has to be fuelled by an insatiable appetite for acquisition and consumption.

Not even the father of capitalism, Adam Smith argued that. At most he proposed that the concept of free enterprise best accommodated both the higher and lower selves. But as a humanist and moral teacher he would have baulked at championing the pursuit of immediate self gratification and self interest over a much higher social order. This is argued far more clearly in his earlier work: Theory of Moral Sentiments.”

Dwarfed by the human story in Japan, but still part of it, is the economic story. It may still take a while before a more accurate assessment of the economic consequences for the country and the world can be made. At least one outcome will be a global reassessment of nuclear energy. It also makes the economic assessment different from the previous Kobe quake. For Japan the triple blows of quakes, tsunamis and nuclear accidents will likely, according to Reuters, have a deeper impact than many initially thought. First estimates of the insured loss are at about $35bn but only about 15% of the Japanese are thought to be insured. In the medium to longer term some economists point to a growth recovery as the country rebuilds after clearing up.

But again I am struck by the neglect of all of the assessments I have read to take the human response into account. We are given one hint in the fact that Japan has been able to maintain in recent years a public debt of more than double its Gross Domestic product, the highest by far in the developed world. It is because nearly all of its debt is funded from Japan’s sizeable pool of household savings, large and stable institutional investors, and a strong home bias. How it will finance this latest catastrophe remains to be seen.

But how could we have forgotten that it was possible for Japan, one of the vanquished in World War II, and one of the most devastated by the war, to become one of the economic victors within 40 years? By the 80’s Japan was not only one of the world’s biggest economies, it was also the healthiest with huge positive trade balances and reserves, low inflation, continuing rapid growth and full employment.

Japan was hailed as a “miracle of capitalism”. That’s something of a misrepresentation. It had a free market labour driven economy as opposed to a free market profit driven economy. It was the exporter of such labour practices as participative management and techniques of establishing employee loyalty. It was the emphasis on labour that changed the lot of the Japanese worker from being lowly paid after the war to being amongst the highest paid workers in the world a few decades later. It was the Japanese human dynamic that accounts for its rise like a Phoenix from the ashes.

Japan, with Germany, reaped the benefits of being a nation with very low expectations and high aspirations after the war.

There were many other factors that contributed to the Japanese success. The labour driven approach shifted dramatically in the late 1980’s when Japan entered the circus of financial speculation and experienced a huge property bubble. That burst in the 1990’s, was compounded by the Kobe earthquake in 1995, and later developed into the Asian crisis. It was a bubble not unlike the one that burst in the West in 2008.

But the human core of what created the Japanese success story is most likely still there. I was struck that in none of the initial news coverage have we seen reports of looting. Victims line up in orderly queues at stores to get supplies as basic as water. Of course it is still early days and this may change as the situation worsens and people become more desperate. But there has been a very clear difference between Japan and New Orleans after Katrina, where the U.S. National guard quickly had to change their role from being helpers to policing a looting population within hours of the disaster.

It’s a key difference. The Japanese seem to have what can only be described as spontaneous restraint. That oxymoron is a powerful attribute worth emulating in all of our lives.

We certainly need it in South Africa.

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