The quest for healthy aging and longevity

Credit: World Science Festival
NEVER SAY DIE

The human species has a natural shelf life due to aging – a debilitating condition that no one can escape. Our biological functions decay over time and the Grim Reaper eventually catches up with all of us. Despite the amazing advances in medicine and the resultant rise in life expectancy, you can’t keep Father Time at bay forever. Still, there are those who believe that humans can significantly extend their expiry date.

It is generally accepted that the apparent limit to human lifespan is about 120 years. The life extending treatments necessary to ward off the ailments that accompany old age and stop people living well beyond 120 years do not currently exist. So, at this stage, we are all doomed to age and die – assuming that some other fatal event does not take us out first.

That said, the good news for those who want to stay young and live longer is that scientists are working to recalibrate the human body clock. It’s already evident that people over 50 aren’t aging as fast or poorly as their parents, and anti-aging research is set to improve this trend. Over time, medical treatments to head off the slow march towards death will become increasingly common.

We know that the duration of human life is influenced by genetics, the environment and lifestyle. Yet the causes of aging are extremely complex and unclear. With the rise in longevity clinical trials, more answers – and questions – are emerging. Scientists are now asking whether our natural genetic makeup is limited to a maximum span of 120 years or whether this boundary can be breached.

The study of longevity is a developing science. Our genes harbor many secrets to a long and healthy life and researchers are trying to find the key within our genome to edit out bad stuff. Genes are akin to little packets of information found in each cell in our body. These packets contain critical instructions which tell our body how to grow and develop.

An online article by Nature Publishing Group explains that:

The action of a single gene can have huge effects on how long a creature lives. This may seem hard to believe because so many things go into determining lifespan, including a host of lifestyle factors and a long list of diseases. Nonetheless, remarkable effects on lifespan are seen when particular genes are deleted from an animal’s genetic sequence. Furthermore, research – particularly that involving microscopic roundworms – continues to provide scientists with tantalizing clues about the molecular pathways involved in aging.

Researchers at the University of Rochester have discovered that one of the keys to longevity resides in a gene called Sirtuin 6 or SIRT6. The Sirtuin family of genes and their proteins play a role in controlling aging by repairing damaged DNA, thereby preserving health and youthfulness. SIRT6 has also been identified as a critical regulator of telomere integrity.

Telomeres are an essential part of human cells that affect how our cells age. Telomeres are caps at the end of each strand of DNA which protect our chromosomes, just like the plastic coating (tips) on the ends of shoelaces. Without tips, shoelaces would become frayed and no longer able to do their job. In the same way, without telomeres, DNA strands become damaged resulting in the inability of cells to fully replicate.

The cells in your body are continually dividing and renewing. With each round of cell division, telomeres become shorter. Eventually, our telomeres become so short that the genes they protect could be damaged, so the cells stop dividing and self-destruct. This programmed cell death (called apoptosis) contributes to aging.

Apoptosis is “cell suicide” and scientists believe that reducing the rate of telomere shortening could slow the body’s cellular clock. Research shows that longer telomeres are associated with a longer lifespan while shorter telomeres are connected with the ailments of aging: heart disease, cancer and osteoporosis. If scientists can preserve or elongate telomeres, humanity will be one step closer to a genetic Fountain of Youth.

While most scientists are purely trying to extend life, some researchers are brazenly focussed on helping people dodge death altogether, by turning science fiction into science fact. To many, the quest for immortality seems nonsensical. Even so, Ray Kurzweil, Google’s Director of Engineering, preaches that “immortality is within our grasp”.

Google co-founder, Larry Page, has invested $1.5 billion of Google’s money into a R&D project called Calico, which aims to “cure death”. Calico is short for the California Life Company and the mission of this Google-backed biotech firm is to “harness advanced technologies to increase our understanding of the biology that controls lifespan”. For the masters of the universe at Google, death is the ultimate engineering problem to be solved. The company believes that it will eventually be successful at hacking the code of life.

Aging and death are existential certainties, which is why many consider Google’s anti-death project to be unbridled hubris. While the search for immortality is an epic goal, few believe that Google will solve “the problem” of death. A more likely outcome is that Calico will find ways to dramatically extend human life. That, in itself, raises a series of socio-economic questions regarding overpopulation, class divisions and the affordability of anti-aging technologies.

What seems forgotten by Calico’s backers in their conquest of death is that mortality has value, which is why immortality is not an easy sell. Research reveals that most people don’t like the idea of living forever. As outlined in a 2017 Smithsonian Magazine article:

… a large percentage of today’s population also subscribes to religious beliefs in which the afterlife is something to be welcomed. When the Pew Research Center asked Americans in 2013 whether they would use technologies that allowed them to live to 120 or beyond, 56 percent said no. Two-thirds of respondents believed that radically longer lifespans would strain natural resources, and that these treatments would only ever be available to the wealthy.

Google has resourced its science start-up with some serious intellectual firepower and these scientists and researchers are working behind-the-scenes to challenge the inevitability of death. The proponents of a “transhumanist” movement called the Church of Perpetual Life support Google’s initiative. They believe that technology could one day see our consciousness digitised into computers, turning us from biological humans into robots – the so-called singularity. (Some fear that this will see artificial intelligence morph into a modern-day Frankenstein’s monster!)

For Silicon Valley’s death-cheating initiative to be successful, it must find a way to defy the laws of thermodynamics so that an individual can live forever. The key to immortality is tied to the second law of thermodynamics which states that everything must decay. The cells in our bodies follow that rule and eventually deteriorate. That leads to entropy – the inescapable and irreversible process of disorder and eventual death.

Turnover is a basic characteristic of life. Ergo, the search for the elixir of everlasting life runs against the natural order of things as all living organisms ultimately die. Humans are not biologically immortal and no amount of R&D money can alter that fact. We will all eventually kick the bucket as immortality – the Holy Grail of biological sciences – is a fairy tale. Even if it were possible, I think that a never-ending life would be a fate worse than death.

The death of death has been grossly exaggerated.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why nationalism is a threat to globalisation

Credit: David Parkins
COUNTRIES FLEX THEIR MUSCLES

The postponed 2020 Olympic Games – which are now scheduled to kick off in Tokyo in July – will provide an international stage for countries to showcase their elite athletes. Spectators the world over will cheer for their nation’s sportsmen and women as they vie for Olympic gold. The fierce but friendly competition will fuel national pride and expose a positive side of nationalism – the celebration of the sporting success of those representing one’s homeland.

Beyond the Olympic arena, however, chest-thumping nationalistic patriotism has a dark side. It’s understandable that every country tries to instil a national consciousness among its own citizens. But when that patriotism morphs into a sense of superiority over other countries, it leads to a combative us-against-them mindset which is a poisonous ideology. In many parts of the world, patriotism has turned toxic.

Populist politicians have been selling nationalism as patriotism by promoting blind loyalty to one’s country to the detriment of global connectivity. Claiming to speak for “the people”, populists like Donald Trump have appealed to the anger and discontent of voters, tapping into their fears about jobs, race and immigration. In the West, many people feel left behind by technological change, growing inequality and the global economy.

Events over recent years show that there has been a nationalist backlash to globalisation. The UK’s decision to leave the European Union, Donald Trump’s win in the 2016 US presidential election and the growing momentum of right-wing parties in France, Austria and Germany all attest to this. In an increasing number of countries, the radical right – a group of extremist parties united by their hatred of immigrants – has surged in popularity.

These populist parties and their followers have been variously described as racist, xenophobic, anti-Islamic and anti-refugee. Parties of the far-right focus on tradition – real or imagined – and play on a nostalgia which yearns for simpler times. They want to turn back the clock to when national cultures were not influenced by immigration (and globalisation) and jobs were the preserve of native-born citizens.

This delusional hankering for the “good old days” was epitomised in Donald Trump’s right-wing rallying cry to “Make America Great Again”. Trump mistakenly believed that this greatness would be achieved by closing borders, curtailing trade and building a wall to keep out Mexicans. We should not forget that it was this kind of old-fashioned nationalism which helped fuel two world wars.

Following their defeat in World War I, the Germans felt humiliated and this enabled Hitler to exploit people’s feelings of resentment towards the ruling elite. Hitler also promised to make Germany great again. The parallels between how Trump and Hitler came to power are instructive. The rhetoric of both men was dangerously populists in nature. Not surprisingly, historians have been comparing Trumpism to fascism. One writer recently opined that:

It hardly takes a genius to see the similarities. Hitler promised to return Germany to her former glory by weeding out the traitorous politicians who had cost her the war. Trump promised to “Make America Great Again” by “draining the swamp”. Hitler blamed Germany’s problems on the Jews. Trump blamed Mexican “rapists and criminals”. Hitler’s supporters chanted slogans like “Im Felde Unbesiegt” (Undefeated on the Battlefield), Trump’s supporters had theirs too: “Build the wall”, “Lock Her Up”, and of course, his latest: “Stop the steal”.

As part of rebuilding the world after World War II, the Liberal International Order was created. Liberalism is an international (as distinct from national) worldview that opposes isolation and protectionism. The liberal vision looks for collective solutions to global problems by working co-operatively with the help of international institutions and alliances to make the world a better place. Nationalists, in contrast, want a more homogenous society and tighter controls by governments over territories and borders.

The mantra of nationalist politicians – “country first” – fuel calls to build fences and erect trade barriers. Yet since 1950, the burgeoning growth in international trade has helped make the world a more peaceful place. Free trade raises the cost of war by making nations more economically interdependent. The more people rely on trade with others, the greater the cost to all parties of a conflict.

One of the hallmarks of liberal internationalism is rule-based relations which are enshrined in institutions such as the United Nations. Under nationalism, however, we would see a more contested and fragmented system of economic blocs and regional rivalries. The desire to increase sovereign control invariably results in isolationist policies, particularly with regard to immigration.

In his final address to the UN General Assembly on 20 September, 2016 Barack Obama delivered a stinging rebuke to those who would build walls saying: “A nation ringed by walls would only imprison itself”. In the same speech, he defended liberal globalisation arguing that open markets, capitalism and democracy should remain the guiding forces of the international order.

… I believe that at this moment we all face a choice. We can choose to press forward with a better model of cooperation and integration. Or we can retreat into a world sharply divided, and ultimately in conflict, along age-old lines of nation and tribe and race and religion. I want to suggest to you today that we must go forward, and not backward. I believe that as imperfect as they are, the principles of open markets and accountable governance, of democracy and human rights and international law that we have forged remain the firmest foundation for human progress in this century.

It is paradoxical that the growing calls for a less open world would actually hurt the poor most of all. Since the end of World War II, free trade has lifted millions out of extreme poverty. It is irrefutable that globalisation has been good for the global poor. This point was also made by President Obama.

The integration of our global economy has made life better for billions of men, women and children. Over the last 25 years, the number of people living in extreme poverty has been cut from nearly 40 per cent of humanity to under 10 per cent. That’s unprecedented. And it’s not an abstraction. It means children have enough to eat; mothers don’t die in childbirth.

President Obama went on to say that “our international order has been so successful that we take it as a given that great powers no longer fight world wars; that the end of the Cold War lifted the shadow of nuclear Armageddon; that the battlefields of Europe have been replaced by peaceful union”.

Populist politicians are undermining liberal internationalism and this poses a threat to peace and prosperity. Less international co-operation will lead to increased distrust between nation-states and may even give rise to conflict. Nativism and its beggar-thy-neighbour policies is a backward and dangerous step for the world. In the words of the old adage, it really is a case of “united we stand, divided we fall”.

The rise of the new radical right reflects a deep social and economic malaise affecting an increasing number of nations. The past decades have ushered in an unprecedented level of socio-economic change and voters are expressing their dissatisfaction at the ballot box. Only time will tell how long this anger and resentment lasts. What is clear is that the rhetoric of the far-right has struck a chord with a critical mass of voters.

The world’s political landscape has been transformed by a nationalist movement which has gone global.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Don’t be fooled by self-appointed COVID authorities

Source: UNSW Centre for Integrated Systems for Epidemic Response
BEWARE OF ARMCHAIR EPIDEMIOLOGISTS

Throughout history, fake experts have suddenly appeared during times of crisis. They emerge from obscurity, stand on their various soapboxes and proliferate misinformation. Such falsehoods create a climate of fear, which is fuelled by those eager to put in their two cents worth.

Periods of great uncertainty always provide a fertile breeding ground for the spread of mistruths. The current COVID outbreak is no exception and has thrust previously obscure individuals into the pandemic limelight. People claiming to be health experts have popped up everywhere as talking heads in the media.

In response, the World Health Organisation (WHO) issued a statement in February warning that humanity is not just fighting a viral pandemic but also an “infodemic”. Like the virus, the infodemic has proven to be highly contagious and has been transmitted by mainstream and social media.

Public nervousness and the desperate search for cures has made it impossible to completely immunise a gullible public against fabricated stories. In the words of the WHO boss, we are “battling the trolls and conspiracy theorists that push misinformation and undermine the outbreak response”.

We should not heed the barrage of half-baked COVID health advice from Twitter, Facebook or deranged politicians like former President Trump. Yet millions have listened to their quack remedies and pseudo-scientific explanations. While some of these cures seem legitimate, most are patently wrong.

The WHO’s mythbusters site pours cold water on a raft of dodgy health tips that allegedly prevent or cure COVID-19. These include eating garlic, drinking bleach, snorting cocaine, rinsing the nose with saline, gargling with salt water and spraying alcohol or chlorine all over your body.

The Australian Government also has a mythbusting site and it debunks a number of COVID-19 myths including that hot temperatures kill the virus, 5G networks spread the virus, drinking water every 15 minutes prevents infection and hydroxychloroquine is an effective treatment.

Around the world, mass media coverage of the pandemic has contributed significantly to the COVID-19 infodemic. The mainstream media’s penchant for sensationalism has resulted in inaccurate news dissemination including the reporting of unscientific cures and unverified medicines. As noted in The Harvard Gazette:

At many major news outlets, reporters and editors with no medical or public health training were reassigned to cover the unfolding pandemic and are scrambling to get up to speed with complex scientific terminology, methodologies, and research, and then identify, as well as vet, a roster of credible sources.

The media’s failure to correctly identify qualified and trustworthy sources of information about COVID is a case of history repeating itself. From major incidences like terrorist attacks to routine events such as interest rate hikes, the media’s modus operandi is to call upon supposed “authorities” to act as instant experts and explain what has happened and why.

But these so-called pundits are often no more than self-proclaimed gurus. Indeed, they typically know little more than the rest of us. Even so, put them in front of a camera, and these publicity seekers can’t resist asserting their opinions on subjects in which they have little or no formal training or expertise.

The Y2K computer bug is a classic example. While technology legend, Bill Gates, saw the millennium bug as a “minor inconvenience”, less qualified IT commentators promulgated doomsday scenarios and were aided in their deception by the media which spun compelling but inaccurate stories.

A naïve public bought into the outrageous predictions about planes falling from the sky and missiles self-launching. Nonetheless, the bug did not bite and the New Year passed with nothing more than the expected hangover. Those who foretold of a global computer apocalypse caused unnecessary panic but were never brought to account.

Nothing had changed by the time of the Fukushima power plant disaster in 2011. Yet again, the media wheeled out instant experts who hyperventilated over the very modest amounts of radioactive fallout. While fears about radiation contamination were clearly overblown, they made for dramatic headlines which trumpeted the dangers of nuclear energy.

A report released five years after the disaster by the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) found that not one person had died because of the meltdown. Referencing the UNSCEAR Report, a Forbes magazine article stated:

No one will die from Fukushima radiation, there will be no increased cancer rates, the food supply is not contaminated, the ocean nearby is not contaminated, most of the people can move back into their homes, and most of the other nuclear plants in Japan can start up just fine.

Almost three years to the day after Fukushima, the world was gripped by the mysterious disappearance of a Malaysian Airlines Boeing 777. The aircraft vanished without a trace, bringing a gaggle of know-it-alls out of the woodwork. They went into overdrive speculating about what may have happened to the plane.

Many of their theories were not supported by a shred of solid evidence. Nonetheless, their views were given air time by media outlets. This helped networks maintain rolling coverage of the tragedy and filled the huge gap in reliable information about the plane’s fate.

Suggestions from armchair sleuths, aviation experts and conspiracy theorists were broadcast. Fringe theories flourished and ranged from the sinister (electronic warfare), to the far-fetched (remote island landing) to the insane (abducted by aliens).

Clearly, listening to near-experts is a fool’s errand which is why the media must do a better job of identifying opportunists who simply want 15 minutes of fame. Around the world, television, radio and print interviews have contributed to new-found notability for charlatans who were not properly vetted prior to being unleashed on an unsuspecting public.

The coronavirus has shown, once again, how easy it is for someone to claim to be a subject matter expert. And if the “expert” is deemed to be camera-ready, there is always the temptation by the media to forgo a credentials check. Even so, background checking should never be optional, even when working to a tight deadline.

Fact-checking the experience of an “expert” may seem like a tedious extra step to a journalist, a reporter or a broadcast producer – but it’s essential. The media is critical when politicians and CEOs – who also work to tight deadlines – get facts wrong. So, the same standards should apply equally to news outlets.

Please allow me to end with an observation. The media does a great job in holding others to account for their failings and shortcomings and is quick to throw stones. Despite that, the media reacts negatively to feedback about its own performance and is poor at self-examination and reflection.

“Journalists and media professionals automatically take up defensive positions when confronted with criticism,” notes Julie Reid, Associate Professor in the Department of Communication Science at the University of South Africa.

In an article published in The Conversation, A/Professor Reid acknowledges that, in many countries, political and government interference in the editorial independence of news outlets is still prevalent. This causes journalists and media professionals to feel that they are under attack. This, in turn, gives rise to a siege mentality which is reflected in the news media’s reluctance to embrace genuine critique or evidence-based scrutiny of its performance. She writes:

The rantings of a crooked politician who dismisses the news media’s reportage as fake news and calls for draconian media regulations to conceal his own corruption is one thing. The critique and criticisms of media analysts, but more especially of ordinary citizens, whose only request is that the news media works better for them, is an entirely different matter. And ought to be respected.

I’m an ordinary citizen who merely seeks better accuracy in news reporting. Like all citizens, I have the right to hold the media’s feet to the fire over its reporting of the pandemic. On all continents, mainstream media outlets have aided and abetted charlatans in spreading bogus COVID information and this has circumnavigated the planet in seconds.

Media professionals seeking advice on best practice in responsible journalism during a health crisis would benefit from reading an article by Catriona Bonfiglioli. Ms Bonfiglioli is a senior lecturer in media studies at the University of Technology, Sydney. In a 2020 piece she wrote for The Journalism Education and Research Association of Australia she stated that when journalists report on the coronavirus, it is important that their words:

… help people understand best prevention tips, minimise stigmatisation of people with COVID-19, reject fake health news, and resist the allure of “sexy” controversies and contrarians hitching a ride on the news wave by contradicting public health advice or calling for extreme measures.

Responsible journalism IS possible during times of crisis.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How the quiet many are drowned out by the outspoken few

Credit: Silent majority illustration by Greg Groesch/The Washington Times
MODERATE VOICES MUFFLED

It’s true – I’m a member of the “Silent Majority Party”. My fellow members and I never demonstrate, wave placards, stage sit-ins or stir-up trouble. We are a quiet bunch with no media spokesperson. Although many of us are discontent with what is happening in society, we keep our opinions out of the public arena and quietly get on with our lives.

In my particular case, I express my views on contemporary issues via this blog, but that’s where I draw the line. Like my fellow Silent Majority Party brethren, I leave the shouting, heckling and disruption to the vocal minority. Their manipulative antics invariably capture the attention of the media, which provides prime-time coverage of their opinions – no matter how radical.

Non-peaceful protests, rallies and marches tend to attract more media attention than peaceful demonstrations. “A little violence goes a long way,” proclaims US political journalism company, Politico, because “the press loves the sound of breaking glass, police-car sirens and tear-gas grenades”. Such activities certainly trump inaudible forms of protest like letter writing.

Political activists take to the streets over a diverse range of issues, grievances and concerns. In addition to protest activities, organised interest groups lobby politicians, mobilise grass-roots action and orchestrate media campaigns to get their message across. Swaying public opinion and influencing policy outcomes is the name of the game.

A US study claims that small groups which reach a critical mass of 25 per cent, can overturn established norms. Decades of work in sociology, physics, and other disciplines have supported this idea. As noted in a newspaper article:

Small groups of people can indeed flip firmly established social conventions, as long as they reach a certain critical mass. When that happens, what was once acceptable can quickly become unacceptable, and vice versa. Two decades ago, most Americans opposed gay marriage, bans on public smoking and the legalization of marijuana; now, these issues all enjoy majority support.

While I’m a passionate advocate for freedom of expression and would never stop anyone from exercising their democratic right to protest, the reality is that moderate voices are stifled by the clamour of minority interest groups and individuals. As most citizens do not shout from the rooftops or force their beliefs and politics on to their fellow citizens, they are largely invisible.

According to the NSW Bar Association, freedom of speech is not an unfettered right to do and say what we want. “It is a personal right which, in any civilised society, carries with it, the corresponding duty to consider the rights of others. Freedom of speech is therefore a qualified right, not an absolute right, in accordance with international human rights law,” wrote the association.

Research shows that being confident and loud is one way to win an argument – even if you are wrong. Shout louder than anyone else and people will assume you’re right. In the world of politics, bolshie behaviour has been seen as the way to get ahead. Donald Trump shouted louder and more outrageously than any other politician and this enabled him to dominate the news.

Nigel Farage – who led the former pro-Brexit UK Independence Party (UKIP) – is also a loud, rabble-rousing politician. His bombastic style convinced many Britons that breaking away from the European Union would be a good thing. He cleverly harnessed the power of voter discontent and exploited the populaces’ deepest fears about immigration.

Farage used xenophobic language to spruik a racist message, which had his misguided followers chanting “we want our country back”. The UK is now suffering post-Brexit regret over its disastrous decision to leave the EU. In the words of former UK PM, Gordon Brown, Farage “highjacked patriotism” by manufacturing distrust and disunity.

I’ve long observed that loud and aggressive people tend to get their way – they won’t take “no” for an answer. They’re the ones who will not accept that the doctor is booked until next week, but argue their way into the surgery that same day. They’re the ones who become irked at airline cabin baggage restrictions and hog the overhead bin after airline staff relent in the interests of on-time departure.

These “entitled” individuals believe that the rules don’t apply to them and that they deserve preferential treatment. Meanwhile, the rest of us graciously accept that the doctor can’t see us today and that we need to stay within baggage allowance limits. So, should we all stomp our feet every time we are upset when things don’t go our way? I think not.

We should not go through life being hijacked by our anger. To lose your temper and yell is not a constructive way to deal with a difficult situation – it’s also damaging to relationships. Being calm and quiet, on the other hand, is not a bad thing. The world is full of quiet achievers. The best performing staff aren’t necessarily the most vocal. Nor are the most valuable customers necessarily the loudest ones.

In the same way, quieter citizens are not necessarily apathetic. Rather, they dislike the politics of confrontation and prefer to cast an informed vote at each election. Politics based on “he-who-shouts-loudest” often comes unstuck where it matters most – in the privacy of the polling booth.

Democracy gives each of us an equal say because of the principle of one-person, one-vote. Each person who casts a vote is equal to every other voter – no matter how much noise an individual may make. I care deeply about our nation and am an avid follower of the political system. This enables me to cast an informed vote for the party with the policies that I believe will serve our nation best.

In fairness, I must acknowledge that the electoral process is far from perfect. We like to believe that voters evaluate the evidence put in front of them over the course of a campaign and then make an informed decision at the ballot box. This, however, is fantasy as research shows that the average voter is surprisingly unsophisticated. Most citizens don’t make their voting decisions based on policy questions. Voters are poorly informed and make irrational decisions.

On the plus side, Australia’s compulsory system saved us from Trumpism. As pointed out in an article in the Australian edition of The Guardian, Donald Trump was elected with only a quarter of eligible voters supporting him, and just 37 per cent of eligible Britons voted to leave the European Union. In 2015, (then) US president Barack Obama praised Australia’s system, saying it would be “transformative” if everyone voted in the United States.

Notwithstanding my personal preference to voice my concerns in the privacy of a polling booth rather than publicly on the street, I accept wholeheartedly that political activism is part and parcel of a free and open society. Let those who wish to demonstrate without violence, do so.

But let’s not criticise those who choose a less vocal way of expressing their views.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why it’s important to understand economics

Credit: tradeselecter.com
VALUING ECONOMIC LITERACY

Economics touches every part of our lives. We encounter it as workers, parents, citizens, savers, investors and borrowers. It’s at the centre of public debate on everything from education to immigration to the arts. Yet most of us struggle with basic economic concepts such as bond yields, trade deficits and GDP growth.

Turn on the TV or radio and you’ll be bombarded with economic data that screams for your attention. We are surrounded daily by talk of falling interest rates, rising oil prices, ballooning national debt and seesawing exchange rates. This statistical information helps explain the world in which we live.

Even so, most of us have not read an economics textbook, which is why the discipline remains shrouded in mystery. The technical language and mathematical models of economists are not well understood by the populace. Surveys confirm that most people have a poor grasp of economics.

This deficit in economic understanding hinders us in making informed judgments about the accuracy of economic statements that are made. Many people do not have the economic literacy necessary to critically analyse the economic headlines which dominate the 24/7 news cycle.

One of the primary activities of modern governments is to determine economic policies. The media play a central role in informing the public about these polices and explaining them in clear terms. Together, politicians and the media shape public beliefs and attitudes about economic matters.

Public perceptions about the economy have important political consequences. Governments are largely re-elected or rejected based on economic perceptions. Yet on many economic issues, the gap between public perceptions and economic reality is very wide.

This is not entirely the fault of voters who are constantly exposed to plausible-sounding economic misconceptions. These fallacies include many beliefs widely disseminated in the media and by politicians. As noted by American economist Thomas Sowell in the preface to his book, Economic Facts and Fallacies:

Some things are believed because they are demonstrably true. But many other things are believed simply because they have been asserted repeatedly – and repetition has been accepted as a substitute for evidence.

Fallacies abound in economics, affecting everything from domestic housing to international trade. Fallacies also have staying power – even in the face of irrefutable evidence against them. Economists could spend an inordinate amount of their time debunking the scores of economic fallacies.

In Fifty Economic Fallacies Exposed, Geoffrey Wood – Professor Emeritus of Economics – examines a range of popular economic misconceptions and explains how these mistaken beliefs misinform economic discussion. Among other things, he looks at the supposed dangers of international trade, the alleged ability of governments to control the economy and the purported benefits to consumers of regulation.

People embrace economic fallacies due to a phenomenon called the fallacy of composition. This fallacy infers that what is true for an individual is also true for a whole group. A classic non-economic example is that of a person who stands up at a concert so that he/she can see better. But if everyone stands, the view of many spectators will worsen. So, what is true for one individual in the crowd, is not true for the whole stadium.

Thinking about economic issues using the same flawed logic can also lead to incorrect conclusions. For example, our individual experience as a worker is a poor guide to the workings of an economy as a whole. Despite this, those who lose their jobs due to automation typically surmise that technology is a threat to all workers. However, this is an erroneous assumption as new technology does not result in higher overall unemployment.

The misconception that new technology destroys jobs is referred to as the Luddite fallacy. In the early 19th century, English textile workers and weavers protested against the changes ushered in by the Industrial Revolution. These “Luddites” smashed mechanised knitting machines as they believed the new labour-saving devices would steal their jobs.

Nonetheless, by the end of the 19th century, there were – according to economist and author James Bessen – four times as many factory weavers as there had been in 1830. Automation reduced labour costs for factory owners. This, in turn, enabled the price of garments to be lowered. This, in turn again, increased product demand leading to the need for more workers. 

Automation allows workers to deliver better, faster, and cheaper services and that’s good for growth and therefore good for the economy. What’s also undoubtedly good for the economy is immigration – but not according to the lump of labour fallacy.

This fallacy is premised on the mistaken belief that the amount of work available in an economy is fixed, so no one can get a job without taking one from someone else. Unsurprisingly, this fallacy is used to prosecute the entrenched myth that migrants steal jobs from native-born workers. It’s an understandable supposition, but it’s incorrect.

Immigrants who gain work also gain income to spend, creating new jobs. Immigration, therefore, increases the demand for labour and stimulates employment. Commenting on the positive impact that immigrant workers have on the US economy, The New York Times Magazine explained that imported workers:

… use the wages they earn to rent apartments, eat food, get haircuts, buy cell phones. That means there are more jobs building apartments, selling food, giving haircuts and dispatching the trucks that move those phones. Immigrants increase the size of the overall population, which means they increase the size of the economy. Logically, if immigrants were “stealing” jobs, so would every young person leaving school and entering the job market; countries should become poorer as they get larger. In reality, of course, the opposite happens.

It is axiomatic that the conventional wisdom which says that immigrants take jobs and lower wages is absolutely wrong. In reality, immigrants create jobs and make native workers more prosperous. As world renowned economist and Nobel Laureate, Paul Krugman, commented “… the (lump of labour) fallacy makes a comeback whenever the economy is sluggish”.

One final economic myth – which has been perpetuated for decades – is the household fallacy. A government is not a household and therefore does not need to manage its finances like a household. The household fallacy disguises this truth by falsely claiming that what is true for an individual household regarding debt is similarly true for a government.

The household analogy is simple: Governments need to live within their means (like households) by not spending more than they receive or risk going broke. In reality, governments do not always need to have a balanced budget. In fact, they can run prudent annual deficits indefinitely, as many countries do. Britain has maintained a national debt for more than 300 years. Going back to 1776, the US has been in continuous debt except for seven short periods.

Balancing the national budget sounds appealing and promising to get it back in the black resonates with many voters. Still, policymakers should avoid playing populist politics by trying to imitate family budgets. Fiscal austerity is commendable at a household level but can equate to economic irresponsibility at a sovereign level. As noted in a UK media article:

The familiar logic of the household analogy has become so embedded into public life that spending proposals that would help tackle some of our most pressing challenges – climate change, the housing crisis, unsustainable household debt – can barely make it out of the door. All too often, such proposals are stopped in their tracks by rival politicians and the media asking where the money is going to come from.

[Note: A fuller explanation of the benefits of government debt can be found in my recent post – Modern Monetary Theory.]

It can be seen that economics is replete with fallacies and has a bad reputation for its lack of precision and certainty. As economics is not a natural science – like physics, chemistry or biology – its propositions are rarely absolutely true or false. Broadly speaking, economics is the study of human behaviour as it relates to money and we humans are neither rational nor predictable.

Even so, it is incumbent on all of us to better educate ourselves in the workings of the economy. What currently passes for a conversation among the electorate about economic issues is often amateurish. So, learning about economics often starts by unlearning what you thought you knew.

We are ignorant of our own ignorance when it comes to economics.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why COVID vaccines are being distributed unevenly and unfairly

Credit: The People’s Vaccine Alliance
MOST NEEDY MISS OUT

Imagine this for a second. You’re at the beach and you notice two swimmers in difficulty. Each has encountered a beach hazard caused by the powerful surf. A rogue wave breaking along the shoreline has knocked a man off his feet and he is trying to regain his balance. At the same time, a rip current has dragged a woman out to sea and she is fighting a losing battle against the fast-moving tide.

You face a dilemma: The swimmers are 100 metres apart and you can’t rescue both at once. You quickly assess who has the greater need. While the man is disoriented, he has not suffered serious injury to his back or neck – he is unsteady, but standing. The woman, however, is clearly in grave danger of drowning – she is unable to stay afloat due to exhaustion and is slipping under the water.

The woman is far more vulnerable to the ravages of the sea, so you swim out through the breaking waves and rescue her. Bystanders commend you on saving her from certain death. As the male swimmer was able to stumble out of the water on his own, no lives were lost. Your judgment to use “likelihood of death” as a triage criterion was spot on. The swimmer most exposed to the elements was correctly identified and a fatality was averted.

Now imagine a different life-and-death scenario. This time, you are the boss of the World Health Organisation (WHO). You cast your eyes over the latest statistics on the number of COVID-19 deaths around the world. It’s clear that Brazil and Australia are navigating the virus differently. Brazil is in treacherous waters and has been unable to quell the pandemic waves. In contrast, Australia finds itself in calmer seas with little headwinds.

You face a dilemma: You don’t have sufficient doses of COVID vaccines to inoculate every citizen of both nations. You carefully assess which population is worse-off. Brazil has been unable to stem the tide of deaths and thousands more are expected to perish as a result of the pandemic. Australia, on the other hand, has done an outstanding job in containing the virus and has recorded an extremely low mortality rate from COVID-19.

As a leading epidemiologist, you know that vaccines should go first to the places where there is the greatest suffering. The primary measure of suffering is the number of premature deaths that a vaccine can prevent. As Brazil has far more reported COVID cases and deaths than Australia – in both absolute and per capita terms – it’s a no-brainer that Brazil’s needs are the greatest. Still, your decision to prioritise Brazil over Australia creates a storm of controversy.

As WHO Director-General, you know that each million doses of the vaccine will likely save the lives of hundreds of Brazilians. You also know that the same million doses given to Australians is probably not going to save more than one or two people. However, vaccines are not being distributed based on need but ability to pay. Countries with advanced economies have bigger cheque books, which has enabled them to push in front of countries with developing economies.

The unfairness of this is laid bare when we circle back to the lifesaving example. Australia can be likened to the male swimmer whose situation was non-life threatening whereas Brazil is akin to the female swimmer who was in serious peril. While none of the bystanders on the beach challenged your decision to rescue the swimmer needing the most help, you are being severely criticised for choosing the nation that needs the most help.

The hypocrisy of this double standard is even more pronounced when you learn further facts about the two swimmers. The male is from Australia and the female is from Brazil. You knew this before you plunged into the surf as you spoke briefly to the distressed families of both swimmers. However, knowing the nationality of each swimmer did not cause you to favour the Australian over the Brazilian – and quite rightly so!

Race and ethnicity should not be factored into the equation when rescuing swimmers or determining vaccine allocation. All lives matter and no life can be neglected. Yet, when it comes to COVID, we are witnessing the injustice of some humans being treated as less equal than others. The sad reality is that nearly 70 poor countries will only be able to vaccinate one in ten people against COVID-19 this year. The UN has labelled this distribution outcome as “wildly uneven and unfair”.

According to a press release issued by Oxfam International, rich countries are failing the vaccine equity test:

… wealthier nations have bought up enough doses to vaccinate their entire populations nearly three times over by the end of 2021 if those currently in clinical trials are all approved for use. Canada tops the chart with enough vaccines to vaccinate each Canadian five times. Updated data shows that rich nations representing just 14 per cent of the world’s population have bought up 53 per cent of all the most promising vaccines so far.

Anna Marriott, Oxfam’s health policy manager, adds: “No one should be blocked from getting a life-saving vaccine because of the country they live in or the amount of money in their pocket. But unless something changes dramatically, billions of people around the world will not receive a safe and effective vaccine for COVID-19 for years to come”.

The world has a moral obligation to help those in greatest need first. Given this, Australia, New Zealand and other nations which are not in immediate danger of “drowning” from COVID-19, should move towards the back of the vaccination queue. But this won’t happen as rich nations are focussed on national recovery, not global recovery as they are prioritising country over planet.

The WHO labels this behaviour as “vaccine nationalism” and blames it for the lack of solidarity against a common enemy. WHO Director General, Tedros Adhanom Ghebreyesus, has warned that the lopsided distribution of vaccines “harms everyone and protects no one”. Further, he believes that inoculating certain populations to the detriment of others is “medically self-defeating”.

The rising fever of inequality is fuelled by a chronic failure of national leaders to display true global leadership. The inward focus of most countries places the pursuit of domestic political goals above those beyond their borders. In fairness to national leaders, their decision to take a beggar-thy-neighbour stance is driven by citizens who expect their elected officials to look after them first and foremost. Many citizens want first dibs on COVID vaccine jabs.

Yet, it’s in Australia’s self-interest (and other rich nations too) to help ensure that every other country’s population is vaccinated. Until the fear of COVID-19 dissipates, trade and travel won’t return to normal. And health-wise, nobody is safe until everybody is safe. The strategy of every nation just looking out for itself is a path that most ethicists think is wrong.

The frenzied grab for vaccines is driven by the same selfish impulses that drove the hoarding of toilet paper. Coronavirus drives panic buying due to the fear of missing out and leads to the irrational stockpiling of vaccines, toilet paper and other essential items. Of course, no one wins when everyone adopts an “every-man-for-himself” attitude.

If we truly believe that life is sacred and worthy of our deepest reverence, we (as individuals and nations) would let poorer nations and those worst affected by COVID go first. Certainly, I would not have objected if the Australian government had delayed vaccinations until more needy nations had received their jabs first.

My view, of course, puts me in the minority as many Australians, as well as the federal opposition and some sections of the media, are critical that our rollout has not moved faster. Even though it shouldn’t be this way, Scott Morrison knows that his party’s fortunes depend upon giving the majority of Australians what they want – a jab in the arm and quickly!

Shame on us for letting the world’s most vulnerable people “drown” in a sea of COVID.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Is exploring and colonising Mars worth the investment?

Photo/illustration: NASA; Business Insider
JUSTIFYING THE COST OF INTERSTELLAR TRAVEL

The need to explore is at the heart of human existence. People have always explored the world around them as part of a primordial journey of discovery. Great explorers – like Marco Polo, Christopher Columbus and James Cook – led the spread of civilisation and helped humanity discover the unknown.

From the Stone Age to the Space Age, humans have pushed new frontiers to overcome what was once thought impossible. Human ventures have resulted in us navigating the seas, discovering new lands, conquering the skies and exploring the cosmos.

For eons, Earthlings have looked at the heavens and wondered about the celestial bodies in our solar system. Mars, the big red dot in the night sky, has long fascinated us. Indeed, no other planet has fired the human imagination as much as our neighbouring planet.

Throughout history, Mars has been embraced in myths (home of little green men), religions (named after the Roman god of war), literature (sci-fi tomes such as The War of the Worlds about extraterrestrial invaders) and cinema (Hollywood has released dozens of movies about Mars and Martians).

The lure of the Red Planet has also proved irresistible to NASA. America’s space agency wants to land a human crew on Mars in the 2030s – potentially as early as 2035. Between now and then, hundreds of billions of dollars will be spent in the countdown to put boots on the red Martian surface. But is it worth the stratospheric cost?

Astronauts are not budget travellers which is why spaceflights are so expensive. A manned mission to Mars is an extremely complex and long-timescale project which will burn through stacks of money – perhaps as much as half a trillion dollars.

No one in their right mind would consider this amount of money to be small change. Even so, it is – in the opinion of Mars exploration advocates – a sound and sensible investment. Opponents, of course, have a different view and see deep space exploration as an extravagance that we can ill afford.

The tension between those dreaming of a second home on a Red Planet and those prioritising the home we currently have on our Blue Planet is the most polarising issue in the Mars debate. The opportunity for Homo sapiens to shrug off their terrestrial bonds has divided us.

Many believe that the long-term benefits of space exploration are overshadowed by short-term earthly concerns. Those focussed on the “here and now” invoke the old catchcry that the money could be better spent elsewhere on more pressing issues such as the fight against world hunger.

Critics of interplanetary exploration also believe that the claimed scientific and social benefits of such pursuits are pie-in-the-sky. They would prefer to see their tax dollars deployed to yield immediate improvements in tangible areas such as national infrastructure and health care.

Personally, I am a strong proponent of humankind’s next giant leap to colonise another world. I accept that establishing a permanent human settlement on Mars is an eyebrow-raising idea. Yet it’s a dream that has captured the collective imagination of mankind more than any other.

Whether it’s private companies like SpaceX or government organisations such as NASA, the race to Mars is well and truly on. The shared space vision of many countries seems to be “Conquer Mars”. Only four entities – the US, Russia, India and the European Space Agency – have successfully entered the Martian orbit. However, membership of this elite club is set to expand.

Last July, America, China and the United Arab Emirates all launched unmanned spacecraft to Mars. The closeness of the three launches was no coincidence. Each was timed to take advantage of a one-month window in which Mars and Earth were in the nearest alignment on the same side of the Sun. This allowed for the shortest possible trip – a mere 55 million kilometres!

The space route to the Red Planet is becoming increasingly busy. A growing number of nations are blasting off to Mars with each looking to find their specific niche. While they have different objectives, Mars is shaping up as the next symbol of humanity’s enduring quest for exploration.

Many prominent scientists believe that establishing a colony on Mars is a worthwhile endeavour which will produce myriad long-term benefits for society. The three most often cited pay-offs are as follows.

  1. Ensure the future of humankind

Prior to his death, Professor Stephen Hawking made the bleak prediction that humanity must colonise another planet within 100 years or face possible extinction. “With climate change, overdue asteroid strikes, epidemics and population growth, our own planet is increasingly precarious,” warned Hawking.

Like Elon Musk, Hawking believed that we have no choice as a species but to become multi-planetary – starting with the colonisation of Mars. Musk views Mars as a “backup planet” should something apocalyptic destroy the Earth. Dinosaurs roamed the Earth for 165 million years until a colossal asteroid wiped them out – and the fear is that it could happen again.

If humans ever need to beat a retreat from Earth due to some doomsday event, we will need somewhere to go. Musk thinks that we may be ready to start shuttling people between Earth and Mars in the next decade or so. If all goes well, then perhaps 40 or 100 years later, Mars could be a self-sustaining colony of a million people.

  1. Search for signs of life on Mars

Understanding whether extraterrestrial life exists and/or existed elsewhere in the universe is a fundamental question of humankind. While Mars today is dry and barren, it wasn’t always a desolate wasteland. Water, which is critical to life, was stable on the surface of Mars for about a billion years. In the same way that life evolved on Earth, it is likely to have followed a similar path on Mars.

As noted in an article authored by political scientist, Darrell West, and published by The Brookings Institution, the question of the origins of life is central to science, religion, and philosophy. Humans have long assumed that life was unique to Earth and not present elsewhere in the solar system, let alone the universe. We have constructed elaborate religious and philosophical narratives around this assumption and built our identity along the notion that life exists exclusively on Earth.

If future space missions cast doubt on that assumption or outright disprove it by finding remnants of microbial life on other planets, it will be both invigorating and illusion-shattering. We humans will be forced to confront our own myths and consider alternative narratives about the universe and the place of Earth in the overall scheme of things.

  1. Develop new technologies

Many everyday conveniences we use in our daily lives stem from innovations in space technology. For example, the memory foam you lay on for a good night’s rest was initially developed to improve the comfort of astronauts on long space flights. Also, every photo you snap on your smartphone is possible due to small imaging sensors originally developed by NASA. Further, the water purification systems developed for the International Space Station are now used to help remote communities address water shortages.

Pushing the boundaries of human exploration invariably leads to discoveries in science and technology which deliver unintended benefits to humanity. The world already benefits greatly from space technology, especially with regard to satellites and global positioning systems which have revolutionised banking, navigation, and everyday communications.

Space technology orbits our daily lives without us even noticing, and the Mars missions will undoubtedly deliver further benefits. Successfully landing on and colonising Mars will require NASA and other space agencies to pioneer further innovations and the technology developed will ultimately find its way into our lives. For example, laser-based technology being develop for Mars landings will likely be used on Earth to make self-driving cars safer.

■      ■      ■

As a young boy, I watched in awe as Neil Armstrong walked on the Moon and I hope that in my lifetime I will also get to see humans walk on the Red Planet. Mars is a modern-day New World, and a human colony on this planet is the next great adventure. Let the countdown begin.

Three, two, one … we have lift off!

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

COVID vaccines offer drug makers chance to salvage reputation

Photo Illustration: Dado Ruvic/Reuters
VILLAINS OR SAVIOURS?

The development of COVID-19 vaccines is a public relations coup for the pharmaceutical industry. The arrival of vaccines has boosted public approval for drug companies. Thanks to the blanket press coverage of the global race to develop vaccines, “big pharma” brands like Pfizer, Moderna and AstraZeneca have become household names.

The long-beleaguered drug manufacturing sector has become the hero of the hour. COVID-19 has provided the sector with a once-in-a-lifetime opportunity to reset its abysmal reputation. Less than two years ago, there was no business sector in the US as disliked as the pharmaceutical industry, according to a 2019 Gallup Poll.

By providing the world with the ability to curb transmission of the virus, generations of ill will towards the industry seems to be melting away. Drug makers are currently basking in global plaudits – but will the adulation last? Will 2021 be a permanent reputational turning point or will past disreputable behaviour (such as price gouging and the US opioid crisis) be repeated?

One health expert has argued that we should not be under any illusion that profit, not altruism, motivated drug companies to develop COVID-19 vaccines. While no one knows precisely the extent to which these companies will profit from making vaccines, they are expected to collectively generate tens of billions of dollars in sales for the pharmaceutical industry.

Richer nations have gobbled up the majority of the global supply of vaccines, with poorer nations falling behind in the race for inoculations. This “me-first approach” is precisely the behaviour that the World Health Organisation feared and predicted. WHO Director-General, Tedros Adhanom Ghebreyesus, stated that “the world is on the brink of a catastrophic moral failure”.

In January, Dr Ghebreyesus criticised inequalities in the global coronavirus vaccine rollout, arguing that it was “not right” that younger adults in wealthy countries were getting vaccinated before older people or healthcare workers in poorer countries. He also hit out at the profiteering of drug companies, accusing vaccine makers of targeting locations where “profits are highest”.

Other experts have also expressed concern about vaccine nationalism and support Dr Ghebreyesus’ call for countries and manufacturers to spread doses more fairly around the world. Suerie Moon, co-director of the Global Health Centre in Geneva stated: “Richer countries will be able to vaccinate … their whole populations before vulnerable groups in many developing countries get covered”.

The WHO has urged countries and manufacturers to stop making bilateral deals. Such agreements have resulted in vaccine makers prioritising regulatory approvals in rich countries where the profits are the highest, rather than submitting their data to the WHO for approval. “No country is exceptional and should cut the queue and vaccinate all their population while some remain with no supply of the vaccine,” said Dr Ghebreyesus.

According to an opinion piece in the New York Times, drug companies will “make a killing” from the coronavirus. While other sectors of the business world have struggled to survive the mayhem from the pandemic, the pharmaceutical industry is set to profit handsomely. Sales of treatments and vaccines will pad bottom lines and this is expected to create a windfall for the industry.

But drug companies are not the only profiteers. A December 2020 article in the Los Angeles Times reported that executives at some pharmaceutical companies received huge paydays by selling shares around the time their companies announced positive news about coronavirus vaccines. This practice is common in the healthcare industry with executives using prearranged stock sale plans to unload shares on days when their companies release good news.

Pre-planned stock trades are not illegal and can be very lucrative. According to the Los Angeles Times article:

Pfizer Chief Executive Albert Bourla shed 60% of his holdings in the company Nov. 9, the same day his firm announced the results of trials that showed its vaccine was highly effective in preventing the disease caused by the coronavirus. The news caused the company’s stock to jump 15%. Bourla is one of seven Pfizer executives who collectively have earned $14 million from stock sales this year …. That amount is dwarfed by sales made by executives at Moderna, a Cambridge, Mass.-based firm that has never brought a product to market but has produced a vaccine reported to be nearly as effective as Pfizer’s. Executives there collectively made $287 million from stock sales this year …. Moderna’s CEO, Stéphane Bancel, has accounted for $81 million of the sales ….

The public has largely bankrolled the hunt for COVID-19 vaccines. Yet, even though taxpayers have footed the bill for much of the research and development, we have no say in how vaccines are priced and distributed. This is at the sole discretion of pharmaceutical companies which will use government granted legal monopolies – in the form of patents – to charge whatever price they wish.

Allowing drug makers to get rich from a global health emergency does not sit well with the average citizen. As we Aussies like to say, this arrangement fails the pub test. Patents should not come before patients. Picking up on this theme, Owen Jones, a columnist for The Guardian (UK), published an opinion piece, The Covid vaccine will benefit humanity – we should all own the patent, wherein he stated:

Pfizer and its German biotech partner, BioNTech, stand to make an astonishing £9.8bn (in 2021) from a coronavirus vaccine. Suggestions that pharmaceutical companies should not profit from the world’s most severe crisis since the second world war were dismissed in July (2020) as “radical” by Pfizer’s CEO …. But Pfizer’s claim to “have never taken any money from the US government or from anyone” does not stand up to scrutiny. … Essentially, pharmaceutical companies are global monopolies, which are given the right to charge whatever the market is willing to tolerate for the new medicines they produce.

Many believe that the current drug development model is broken as it does not deliver affordable drugs to the masses. This is exactly what happened when a treatment for HIV infection was developed over two decades ago. The drug was expensive at a whopping US$15,000 – per person per year – making it completely unaffordable to people in Africa. While AIDS sufferers in the West were able to afford the breakthrough treatment, millions needlessly died in Africa from the AIDS epidemic. The drug company blocked access to a low-cost generic AIDS medication to protect its investment.

Another fundamental flaw of the medicine patent scheme is that it motivates innovation only if potential patent-holders believe that they can make a substantive return on their investment. From a shareholder perspective, this is fair and understandable, but not always in the best interests of society. An example is the 2018 decision by pharmaceutical giant, Pfizer, to cease research on a treatment for dementia as it did not stack-up financially.

This dashed the hopes of millions suffering from Alzheimer’s and Parkinson’s and those at risk of developing one of these devastating diseases. The need to generate value for shareholders saw Pfizer re-allocate R&D funding to other areas. But this was cold comfort to patients and their families affected by neurological diseases.

Not surprisingly, there have been calls for future coronavirus vaccines to be treated as global public goods with equal access for all, without profit. We have a golden opportunity to reshape the biomedical research and development system in a way that prioritizes people over profits. The belief that monopolies and high prices are a “necessary evil” in financing the development of new medicines needs to be challenged.

The current medicine patent system is flawed and governments must do more of the heavy lifting regarding financing research into new drugs. This might be a bitter pill for drug companies to swallow, but a welcome tonic for the masses. With research costs paid upfront by governments, most drugs would be available for the same price as a bottle of generic aspirin.

I’ll leave the final word on this contentious topic to The Guardian’s Owen Jones: “Rather than being a PR triumph for big pharma, coronavirus should serve as a reminder of the disastrous consequences of leaving a life-saving industry in the hands of a profiteering monopoly.”

Perhaps it was unrealistic to expect a leopard to change its spots.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Will globalisation create a world without borders?

Photograph: Nasa/AFP/Getty Images
NATION-STATES UNDER SIEGE

The most famous photograph ever taken of our planet is called Earthrise. It was snapped by astronaut Bill Anders on Christmas Eve 1968 as the Apollo 8 spacecraft rounded the dark side of the Moon*. The now iconic image shows the world as a singular sphere, suspended in a desert of darkness. Earthrise changed how we see our blue-white planet and ushered in a collective awareness of the Earth as a whole, transcending borders and boundaries.

When the Earth is observed from space, you see one beautiful and fragile planet, not 195 sovereign nations. Nation-states are represented on maps by lines of demarcation which enclose and define territories. In reality, the Earth has no borders that divide the planet’s terrain. The physical world, of course, is interconnected. We are all part of Mother Earth – an indivisible, living community which is interrelated and interdependent.

All of us share the same natural resources – air, water, soil, minerals, plants and animals. Our three basic needs – food, clothing and shelter – largely come from these natural resources and their production is common to all cultures. Yet, we live in a world of “national tribes” who see themselves as different and disconnected from one another. But these tribes experience common issues that extend beyond artificial borders.

The challenges humanity faces – like climate change, global pandemics, natural catastrophes, international crime and rampant terrorism – are increasingly transnational in nature, which is why they cannot be addressed by any single government. As individual nation-states are too small to fix shared global problems, coordinated and collaborative action among governments, non-government organisations (NGOs) and international organisations is increasingly required.

Nation-states have also seen their power diminished by decades of global commerce. Capitalism has spread to the remotest parts of the world with transnational flows of goods, data and money. Borders no longer fulfil their historic roles as barriers to the movement of people, commodities and capital. Even so, the prediction that nation-states – as autonomous, independent entities – will collapse under the combined onslaught of monetary unions, global television and the Internet is hotly contested.

While many scholars have prophesied the decline and eventual demise of the nation-state, others fiercely contend that it does have a future and will not be superseded by a new world order. Three main schools of thought dominate the academic debate on globalisation theory – the hyperglobalist, the sceptical and the transformational. Drawing on the work of renowned political theorist – the late Professor David Held (et al.) – these perspectives can be described as follows:

  • Hyperglobalists argue that the world is heading towards a form of global governance which will increasingly see nation-states relegated to the role of decision-takers and not decision-makers due to the existence of international organisations such as the United Nations and the International Monetary Fund.
  • Sceptics strongly resist this view and believe that the intensification of international activities has reinforced and enhanced state powers in many domains and that national governments will continue to shape the nature of world politics with their borders remaining effective.
  • Transformationalists narrow the scholarly divide by presenting the middle ground that globalisation is creating new political, economic and social circumstances which are serving to transform state powers and the context in which states operate.

I’m a proponent of the transformationalist view. While I embrace the belief that nation-states will not vanish in the foreseeable future, I acknowledge that their powers are receding**. Globalisation has caused the erosion of the state’s authority and made it less important and central. So, I stand with transformationalists in believing that states will continue to dynamically evolve in response to changing socio-economic and technological trends.

These trends have already altered the political landscape with nation-states coexisting with a patchwork of non-state actors. We are moving towards a more distributed power structure as the world increasingly turns to experts outside of government to guide and shape state decision-making. This transfer of power is evident in the proliferation of international standards over recent years which most governments have simply incorporated in their national laws.

An example is the work of the International Accounting Standards Board. It sets transnational financial reporting rules which corporations around the world follow, making it a powerful de facto global regulator of accounting standards, even though it is a private-sector body.

Many believe that an even more powerful body is the Basel Committee on Banking Supervision. This Committee, which is headquartered at the Bank for International Settlements in Basel, Switzerland makes decisions which affect every man, woman and child on the planet. Yet few know of the existence of this unelected group of central bankers and banking supervisors.

The Basel Committee does not possess any formal supranational authority and its decisions do not have legal force. Yet its views hold great sway, enabling it to impose stringent rules and standards on the global financial system. The Economist magazine described central bankers as “more powerful than politicians, holding the destiny of the global economy in their hands”.

Beyond accounting and banking, non-state actors address every conceivable issue and operate in virtually every part of the globe. From buying bananas at the supermarket (the World Trade Organisation governs how bananas are traded) to obtaining medicines at the chemist (the World Health Organisation issues standards for prescription drugs), international laws impact our daily lives.

Imagine flying overseas to watch a major sporting event. The operation of the plane that transports you is regulated by the International Civil Aviation Authority. On arriving at your destination, you drive to your hotel by following standardised road signs developed by the UN Convention on Road Traffic. Following check-in, you phone home and this global connectivity is facilitated by a treaty on International Telecommunication Regulations.

You leave your hotel and use your credit card to buy a jumper and this transaction is governed by technical requirements issued by the Payment Card Industry Security Standards Council. With your jumper to keep you warm, you then watch an international sporting event where athletes are subject to mandatory drug testing by the World Anti-Doping Agency.

Globalisation has spawned the growth in organisations that regulate and control activity on a global scale. This has made non-state actors a worldwide phenomenon and there is no turning back the clock. These actors are essential to the smooth working of our globalised world. Nonetheless, nation-states still have an important role to play and will survive, albeit in a different form.

We often forget that nation-states (countries) are late comers to history. The fact is that we didn’t always have passports and borders – they are relatively new. Jamie Bartlett, one of the UK’s leading thinkers on politics, points this out in an essay he wrote for the digital magazine Aeon.

If you’d been born 1,500 years ago in southern Europe, you’d have been convinced that the Roman empire would last forever. It had, after all, been around for 1,000 years. And yet, following a period of economic and military decline, it fell apart. … To the people living under the mighty empire, these events must have been unthinkable ….

We are just as deluded that our model of living in ‘countries’ is inevitable and eternal. Yes, there are dictatorships and democracies, but the whole world is made up of nation-states. … Try to imagine a world without countries – you can’t. Our sense of who we are, our loyalties, our rights and obligations, are bound up in them.

It’s true that systems based around national sovereignty struggle to deal with complex companies, sophisticated technologies and social movements. It’s also true that economics and information have grown beyond the authority of national governments. Nonetheless, it is premature to write off nation-states as they still function under globalisation and will continue to exert significant influence over the daily life of their citizens.

The rumours of the death of the nation-state have been greatly exaggerated.

*Anders remarked that despite all the training for an exploration of the Moon, the astronauts ended up discovering Earth.
**Even though I would like to see nation-states superseded, they will stubbornly continue to exist.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

“Night Before Christmas” 2020 – year in review

Credit: Fashion Junkee
DEFINING MOMENTS IN UNPRECEDENTED YEAR

‘Tis the week before Christmas in a year we’d rather forget,
A series of natural disasters caused us to fret.
From bushfires to coronavirus, we faced profound disruption,
Grappling with uncertainty and epic social eruption.

Australians were not nestled, snug in their beds,
As fear and anguish filled their heads.
Calm continuity gave way to unfolding drama,
Crisis after crisis, we lost our karma.

The year began dramatically, with a summer of climate extremes,
Devastating fires and floods, shattered our dreams.
Apocalyptic images showed homes reduced to rubble,
The blanket media coverage burst our collective bubble.

Australia’s clean-up from nature’s fury, was abruptly interrupted,
Another calamity hit our shores, and our lives it disrupted.
The entire planet was halted by a deadly invisible foe,
COVID-19 took us by surprise, and brought devastation in tow.

Touching every corner of the globe, the outbreak ravaged humanity,
Yet many ignored health warnings, such behaviour was insanity.
The soaring number of fatalities proved social distancing does matter,
But defiant anti-lockdown protesters made such a clatter.

Even greater outrage followed, with the death of George Floyd,
Anti-racism protests erupted, another life destroyed.
An outpouring of pent-up anger, in the streets it prompted rage,
The hopes of Black Lives Matter, that we can turn another page.

Racial epidemic & health pandemic, the perfect storm for civil unrest,
Public outcries against injustices, basic liberties were suppressed.
Combustible social issues saw solidarity spread,
The world is in a battle for its soul, give us our daily bread.

Now, Putin! now, Orbán! now, Bolsonaro and Trump!
Authoritarian world leaders, you gave your citizens a thump.
You politicised the pandemic and failed to flatten the infection curve,
Thousands of your people died, an outcome they didn’t deserve.

You all brazenly used the health crisis to undermine democracy,
And failed a critical leadership test, exposing your mediocrity.
True leaders inspire and motivate, they are transparent and authentic,
But you all failed to deliver, your efforts were pathetic.

During a time of mass contagion, political strongmen were inhuman,
Yet effective leadership abounded, in countries headed by a woman.
From Angela Merkel to Jacinda Ardern, women led from the front,
Acting boldly and swiftly, the pandemic they did confront.

Citizens too were tested, with behaviour both naughty and nice,
When Santa asks how we acted, some will have to think twice.
Those who hoarded toilet paper should question their selfish ways,
While essential workers deserve our praise, they gave us better days.

Brighter times are also coming following the ousting of Donald Trump,
Four years of chaotic leadership, resulted in an electoral dump.
The president’s dark legacy, divisive and erratic behaviour,
Makes President-elect Biden, America’s political saviour.

But for now our thoughts turn to the season of goodwill,
And the excitement that comes from stockings to fill.
It won’t be long before Santa’s on his way,
If you listen carefully, you’ll soon hear his sleigh.

As I sign off for Christmas, I thank all readers of this blog,
I hope that my fortnightly posts have left you agog.
May the spirit of the season fill your home with cheer,
As I say “Merry Christmas to all and to all a good New Year.”

Before you go …
This is my final blog post for the year. I hope that I’ve kept you informed and entertained during 2020. I’m taking a short break from my blogging duties and will be back on-line on Sunday, 31 January 2021. Have a great New Year.

One last thing …
Please CLICK HERE to see how the award-winning photographers from Getty Images captured major world events in 2020.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting