Review by Capital Business Magazine: Western style capitalism is business as unusual in Asia

Jun 20, 2011

By Emmy Abdul Alim on Capital Business Magazine

We need a different way, says Chandran Nair. The author of Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving The Planet asserts that an alternative to Western consumption-fuelled capitalism is mandatory, for if left unchecked in its present trajectory human and economic development will encounter all sorts of havoc. Nair has been preoccupied by what would happen if Asia continues to develop along Western lines, in particular, he says, if countries across the region were to adopt consumption-driven capitalism as both their goal and means of reaching that goal. He is not one to mince words. “The biggest lie of all”, he writes in his book, “is that consumption-driven capitalism can deliver wealth to all. In Asia it can only deliver short-term wealth to a minority; in the long term, it can only deliver misery to all. This is the intellectual dishonesty at the heart of the model the West has peddled to Asia.”

Nair accepts that Western reaction to his book is one of initial discomfort and/or defensiveness. There is also an element of surprise, he adds, that someone from the Asian region, where there has generally been intellectual subservience, has posited some hard questions and suggested that the region reject the Western-led consumption model. But beyond the initial hesitance, Nair senses positive vibes in Europe at least, where, he says, there is great interest in learning more about his arguments. The jury is still out on the American response; Nair says that knee-jerk reaction of US mainstream media is to shun his book. He suspects his ideas are seen in more traditional quarters as “some sort of attack on the American economic model and way of life”. His purpose, he explains, is not to antagonise or make enemies of the western system, but to show realistically that the numbers do not and cannot add up at the rate consumerism is called upon to push forward economic development in Asia especially.

Throughout our hour-long phone interview Nair reminds me several times that he is not a “pot-smoking hippie” billowing visions through green-tinted lenses. His ideas have been shaped by extensive international business success. He founded Hong Kong-based Global Institute for Tomorrow (GIFT) in 2005, a think-tank focused on the relationship of Asian society and values with those of the rest of the world. Prior to GIFT Nair was chairman of Environmental Resources Management, an environmental, health and safety, risk, and social consulting company whose clients include many Fortune 500 companies as well as multilateral agencies like the World Bank. He is also co-founder and Chairman of Avantage Ventures, an investment and advisory firm that works to create a marketplace for social capital by addressing the information and funding gaps in the industry. Consumptionomics, his first book, is not a simplistic Capitalist versus Environmentalist, East versus West dialectic. The tome’s message writ large is – Business as usual will not do.

At the heart of the book are what Nair sees as the indelible links between policies and resources, and the stewardship of these resources towards their equitable and long-term continued existence. When resources are diminishing, policies must reflect necessary constraints and limits. Nair purports that because the root causes of economic and political problems are access to resources, “the ultimate policy framework must be to put resource policy at the centre of all policies, turning it away from the environmental debate.” He advocates for resource management at the hands of strong interventionist governments to safeguard resources for the collective good. This has offended many, especially in the West. Nair confesses that this is the heart of the debate he wants to provoke. For so long, he continues, it has almost been taboo to talk about any limitation of free markets, much less personal and individual rights. We cannot do or have everything and anything we want, he adamantly contends. He feels that Western liberal democracy has gone so far to one side that it almost believes it can do everything it wants. The Western solution, Nair strongly believes, is not a universal solution for the world’s ills. Asian countries must come up with their own workable solutions, drawing on their respective indigenous strengths and borrowing from abroad where there are benefits in doing so. Western liberal democracies, he declares controversially, are not suited to long-term interest and planning. Resource constraints demand a system that privileges the long-term.

So what does Nair’s version of a strong interventionist State look like, and why should businesses, and citizens whose individual rights are potentially on the line support his plea? Nair’s stand is that although Asian governments have gained greater economic output by freeing up markets, growth has come with severe environmental and resource degradation. Asian governments, he feels, have chosen economic pragmatism over adopting moral and ethical agendas. Without a strong ethical State, he says, the needs and interests of the majority will be usurped by the vested interests of business and the free market, and the powerful, who profit from short-term buccaneering. In Asia where the majority are the disenfranchised, a strong and ethical State is needed to step in to curb excesses and exploitations. What that State would look like is what citizenries need to decide for themselves, says Nair. His book, however, offers no substantive steps in what he would consider the right direction, only saying that intervention will doubtlessly take on different shapes. “Due to variations in culture, society and levels of wealth we can expect sizeable differences between these states. Some countries will be more rule driven, others more consensus oriented. Some will be democratic, while others may opt for continued strong rule by a single party.”

He stresses that he is neither advocating authoritarian states nor Communist ones. On that note he speaks candidly about China. In the Western context, he says, the Chinese are seen as “horrible Commies” who restrict people’s rights. He admits that the Chinese system has its problems, but that it has probably uplifted more people than anyone else in the history of humanity. Nair hopes to continue provoking more open discussions surrounding this very matter.

He discusses properly (re)pricing resources at some length, and does not discount outright bans. For example, he does not see a future in which we are not banning certain forms of consumption of seafood. If 500 million Chinese start eating fish once a week the oceans will be empty, he warns. If estimates are correct and China, India and other developing countries reach Western levels of car ownership, there could very well be 3 billion cars in the world by 2050, four times the current total. If China and India were to use as much energy per capita as the Americans, their total power consumption would be 14 times greater than that of the United States. How much more consumption can our planet accommodate, not to mention the potentially catastrophic levels of emissions?

Governments, not free markets, should set priorities and goals for the benefit of the collective good. The goal of business, he attests, is to secure short-term gains for their owners. It is in business’ interests to offload costs and risks onto others. And what better ‘other’ to offload risks on to than a future that is unable to voice its opposition or even reservation, he laments. Nair agrees that both Western and Asian businesses are culpable. The West peddles its brand of consumption-driven capitalism to the East, and Asia laps up the dream of wealth and ownership. However, Silicon Valley funded by American VCs cannot innovate to solve the world’s resource problems, he jibes. “This is where prominent business leaders and intellectuals from other cultures must speak up.”

The prerequisite for needed change, Nair presses on, is for Asia to stop looking to the West for inspiration. He admits that there is a lot to learn from the West, “But my God there is a lot for them to learn from the rest of the world”. The West is not ignoring the challenge, he is quick to add, but their preoccupations are very different from those of developing Asia. Consequently the debates of the economically wealthy principally focus for now on mitigating their impact on the environment rather than radically changing the way people live.

Professing to not be an expert in Arab affairs, Nair nevertheless perceives the Asian predicament reflected throughout the Middle East where as in Asia, the majority are disenfranchised, and fair access to resources is wanting. “If you look really deeply at what is going on in the Arab world today, it is about people saying – Our lives are not that good because we don’t have access to the basics. And instead of our governments spending tons of money buying aircrafts and cluster bombs from the Americans, they should be providing us with water, proper plumbing, proper homes, electricity, education, healthcare”.

He appeals to Asian and Islamic sensibilities, collective wisdoms, and deep-rooted beliefs. Modernity, capitalism and technological progress, he elucidates, must be mitigated with what traditions and religions teach us about living within limits, justice, and moderation. Instead what he sees on his frequent visits to certain countries are “castles built in the sand”, and replicas of European ski slopes. “You don’t see replicas of deserts in Western countries, do you?” We seem to have lost sight of the world we came from, sighs Nair. He observes that business people in Asia and the Middle East live their professional and personal lives in separate silos. One minute they’re business people and the next minute they leave everything behind to re-join their cultures and traditions. Asia and the Muslim world must reconnect to, and realign their traditional values and religious teachings with professional business practices. He calls for reclamation of Asian and Islamic narratives in the business sphere, which has thus far been dominated by the Western-led capitalist and financial model.

We finish the interview with Nair’s stark warning - continued growth will not create solutions to environmental challenges; if economics cannot come up with a better answer then we must put the tools of economics aside and stop allowing economics to set the agenda. There is no other way, it seems, than a very different way. Business as usual will just not do.

About The Author

Emmy is currently contributing to the weekly The Islamic Globe, with John Foster as Managing Editor. Emmy has been covering Islamic Finance news coming out of Malaysia and also contributed to the UK-based Islamic Banking and Finance magazine. Prior to all this, Emmy was Radio Producer/Presenter and writer for when based in Cairo in 2009.

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