“Politics is local, and the politics of inequality is doubly so,” says Nancy Birdsall, founding president of the Center for Global Development. And in a fascinatingly relevant lecture excerpted in the Boston Review, Nancy tells us exactly why we need to reexamine the way we think about economic inequality.

According to Nancy, inequality can be productive or unproductive, and we need to distinguish between these two types of inequalities:

While inequality may be constructive in the rich countries—in the classic sense of motivating individuals to work hard, innovate, and take productive risks—in developing countries it is likely to be destructive. That is especially true in Latin America, where conventional measures of income inequality are high. It also may well apply in other parts of the developing world, where our conventional indicators are not so high but there are plentiful signs of other forms of inequality: injustice, indignity, and lack of equal opportunity….

Inequality is constructive when it creates positive incentives at the micro level. Such inequality reflects differences in individuals’ responses to equal opportunities and is consistent with efficient allocation of resources in an economy. In contrast, destructive inequality reflects privileges for the already rich and blocks potential for productive contributions of the less rich.

Nancy goes on to point out that “Globalization is not leveling the global playing field for everyone,” and argues that “in the case of the poorest countries, we need to explore whether the common assumption always holds: that the pressures of the global economy will enable them to benefit by exploiting the technologies others have developed.”

Global financial markets have not only brought instability and reduced growth to the emerging market economies; they have affected their capacity to develop and sustain the institutions and programs that would protect their poor. One culprit has probably been the premature opening of capital markets. In some emerging market economies, premature opening of the capital market—before adequate banking supervision and financial regulation were in place—brought pressures for increased inequality along with volatility, for at least two reasons.

Nancy says that when the market works, “global markets reward productive assets.” However, when the market fails, “in the global economy, failures hurt the weak most.” Furthermore, “Global rules and regimes tend to favor already rich countries and people.”

Nancy ends her essay with a number of recommendations to address these issues. She concludes that:

We have a potentially powerful instrument to increase wealth and welfare: the global economy. But to support that economy we have an inadequate and fragile global polity. A major challenge of the 21st century will be to strengthen and reform the institutions, rules, and customs by which nations and peoples complement the global market with collective management of the problems, including persistent and unjust inequality, which markets alone will not resolve.

Read the long excerpt on Boston Review, or the full lecture on Center for Global Development’s site. (via 3quarksdaily)

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A super-informative article in the New York Times on why the Farm Bill needs massive revisions.

The article, written by Dan Barber, chef and co-owner of Blue Hill at Stone Barns, has many California-specific details:

the real cost of milk is hidden in places like California, with its heavily subsidized irrigation system; if Western dairy farmers had to pay the real cost of the irrigation-dependent alfalfa fed to cows, New England’s milk prices would be more competitive. And if those cows ate a variety of grasses as they were meant to, instead of just alfalfa, “Got Milk?” would be more “Got Rich, Delicious and Affordable Milk?”

Dan effectively quashes the arguments of those who call organic farming passe, ineffective:

Some people argue that the desire to promote smaller, family-run local farms is gratuitously effete and nostalgic. That’s just nonsense. It’s the agriculture industry’s mind-set — high on capital, chemistry and machines — that is actually old-fashioned. Just as the Industrial Revolution of factories with heavy machinery and billowing black smoke is yesterday’s news, so too are our unsustainable farming operations.

So what to do? Dan points out some specific changes that need to be incorporated into the farm bill, which are well worth reading!

One thing I’m still wondering. So what can we readers of the NYT and general citizenry do to make those changes happen? Who are the legislators who might support pushing the necessary changes into the new Farm Bill? Who are the ones against, who should be named and shamed?

I guess I’m saying I’d like others who’re more informed than I am about the farm bill to speak up about what they think need to be done — and what practical, real-life steps we can take towards that goal. The USDA has a whole section of its site dedicated to “Farm Bill Forums,” but most of the info on it is transcripts and analyses, not action-oriented steps. Anyone have suggestions for this kind of action-oriented work being done around the Farm Bill?

Update, 1/23/07: Tom at Grist’s gonna devote lotsa time to the Farm Bill! For those who read my rather stressed post about the difficulty of finding solutions for this farm bill problem, Tom’s like, awesome. This first post, however, simply establishes that farm subsides aren’t necessarily a bad idea considering all the farming variables. Tune in to future posts for more deets.

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Why don’t businesses tap into the Wisdom of Crowds — “the collective knowledge of employees and customers on all key organizational and new product development decisions”?

Sez Dave Pollard of How to Save the World:

The real reason Wisdom of Crowds hasn’t caught on in business?

(1) Management isn’t really interested in the opinions of employees and customers – they think they have all the answers and that their judgement is better than the ‘crowd’s’, and

(2) If it were to be found (as I believe it would) that the crowd makes better decisions than management, what need is there for management? With most executives obscenely overpaid for what they contribute (and, to be fair, over-blamed when things go wrong), nothing could be more terrifying than a cheaper, better replacement for the entire upper hierarchy of organizations.

Fascinating, and quite convincing. And somehow, Dave manages to go from this interesting topic to the theory of gift certificates to the importance of local shopping, all in the same post.

I’m not sure who intro’d me to How to Save the World, but thank you. And thanks, Dave. Your blog’s one I always slow down to read.

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Corporate Social Responsibility sounds good, but does it make a difference? As it is now, not much, sez Keith Slack, senior policy advisor of Oxfam America, in Policy Innovations.

Luckily, Keith doesn’t stop there; in that nice Oxfam fashion, he gives us some ideas how to make CSR work.

What’s wrong with CSR? The prob is that often, corporations don’t do shit, except very vaguely “engage in dialogue.” Then corporations will just continue its biz as usual — and get green creds for “listening” and “caring.”

This is the problem Keith points too — It’s much too easy for corporations to greenwash their image by participating in CSR initiatives that don’t require that they actually change business practices.

So — How to solve this. Keith’s sez we need to identify what corporations are most interested in — namely, profitability — and what corporations need to achieve profitability — namely, access to capital and access to markets. Then, we need to link access to capital and markets with good corporate practices.

How? To address the access to capital, “the focus should fall on the private banks that finance transnational corporations.”

Respect for human rights and environmental standards could be made a legally-binding part of the loan agreements between the banks and the corporations. In other words, capital will be cut off from a project if serious human rights or environmental violations are found to have occurred.

But would banks do this? Keith concedes that this plan requires a big bank or two, with great foresight, taking leadership on this issue. While there’s reason to hope that this may happen, I don’t really see a way for the average consumer like me to push major banks to think ahead.

But Keith’s second idea — affecting access to markets — sounds more definite, and more like something I could actually take part in making happen:

Large institutions, such as public utilities, universities, pension funds, and corporations that consume significant volumes of materials or are brand-sensitive could adopt legally binding contracts that discontinue materials or stock purchases from corporations that operate irresponsibly. In this way, such institutions could force corporations to compete with each other to provide the most responsibly produced products.

As you know, many universities in particular have changed their buying practices in response to student activism. Coke’s been kicked out of some campuses, and Nestle’s been kicked out of many. Many universities have had to change where they get their apparel made, due to student protests against sweatshops. Starbucks and Peets — both of whom don’t care much about fair trade — have made fair trade coffee part of their product line for universities, in order not to lose marketshare to more responsible coffee companies.

And you don’t have to be part of a university to get involved; the same sort of thing can happen with local government and workplace purchasing decisions. The key, however, seems to be to try and influence these larger institutions to then influence corporations, instead of just relying solely on one’s own individual purchasing power.

What institution around you are you, or do you plan to be, influencing? Pick one, and let’s get to it.

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[image from Mother Jones]

You’ve heard ’bout how the big corps are going green. Walmart and bp’re working really hard to make this list; Starbucks has been working to stay on it since forever.

You hear that big corps care ’bout cleaning up the environment. Now, Bill McKibben gives you (in Mother Jones) a convincing reason why not to believe that line: “Any sign that corporations might be willing to take on the job is greeted with an enthusiasm that borders on delusion.”

And Bill provides some good data to prove his point. Take bp, for ex. After making a grand pro-enviro speech back in 1997, the former British Petroleum’s “gone beyond petroleum to the tune of about one-sixth of 1 percent of sales” in 2004.

Consider also that the bp Alaska pipeline that was shut down last summer first raised eyebrows back in 1992, that bp’s top US exec co-chaired Bush’s reelection campaign in Alaska, and that “investigators are trying to figure out if BP gamed gasoline prices on the New York Mercantile Exchange.”

And on Walmart, sez Bill:

It makes scant difference whether Wal-Mart starts stocking organic food or not, because the real problem is the imperative to ship products all over the world, sell them in vast, downtown-destroying complexes, and push prices so low that neither workers nor responsible suppliers can prosper.

Bill then goes on to recommend that, instead of looking to biz to change its own rules to do the right thing, work to change the laws to force business to play its part in doing good.

Thanks to fair trade coffee news, via which I found the article. That blog sez it won’t even buy fair trade coffee from Nestle, Walmart, or Starbucks:

Why support small coffee farmers by buying fair trade coffee from Wal-Mart when the company now has over 870 stores in Mexico, causing untold damage to local small businesses?

What would the Wal-Mart flyer say…”Buy here – Support a small coffee farmer and close a local business”?

Find your local fair trade cafes here, and your local fair trade roaster here. And check out their overall commitment before becoming a regular. Here’s my 6-step guide to becoming a green coffee drinker on Treehugger :)

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