Symbiosis

sym·bi·o·sis (sĭm'bē-ō'sĭs, -bī-)

n. pl. sym·bi·o·ses (-sēz)

1. Biology A close, prolonged association between two or more different organisms of different species that may, but does not necessarily, benefit each member.

2. A relationship of mutual benefit or dependence.

("symbiosis." The American Heritage® Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. 22 Sep. 2007. .)

Look at the person on your left. Look at the person on your right. Think of the person you love the most. Now think of the person you hate the most. Now try to think of someone you haven't thought of in years. Now think of me. Everyone one of those people have something in common with the others: we need each other.

Today's Word Of The Day is symbiosis. In the context of this blog, it means that every living human is affected in some way by every other living human being. There are many directions I could go with this, but I am trying to stick to the economic as I build an argument for Corporate Social Responsibility.

I first learned the word symbiosis in an Ecology class. We all first learned the basic principles in a 1st grade science class. Think of a pond. You have lilly pads, insects, big fish, little fish, and various micro-biotic life forms. If you affect one of these groups, the others are affected as well. For instance, if you kill off all the big fish, then the little fish that were once eaten by big fish begin to rapidly reproduce. They eat more insects, which hurts the lilly pads, which hurts the pond scum, which changes the PH balance of the pond, which starts to kill off the little fish. Therefore, even though the big fish may have nothing to do with the pond scum or lilly pads, each is still affected indirectly by the other.

The same principle applies to society. I need you, whomever you are. You also need me. There are many ways we can affect each other, but let's stick to business and economics. If I do not pay my taxes, then there is that much less money paid into the system that has to be made up somewhere else. Conversely, if I have a windfall this year and pay twice as much taxes as I did last year, then there is that much more money in the system that does not need to be collected elsewhere.

If you do not pay your debt and have it written off in bankruptcy, you should realize that money does not disappear. Just like energy cannot be destroyed, neither can money. Your written off debt will result in higher prices for me. Or, perhaps, my company will lay me off to cover their compounded losses. Or perhaps my 401k will take a hit because of written off debt diluting coroporate earnings.

It is popular in our culture to say "follow the money" when we expect it will lead to the source of a conspiracy or scandal. Money is the mascot of economics, so we can follow money to trace the symbiotic nature of our economy. We will start with $20 in your pocket.

You take your $20 and buy a widget. The retail chain from which you buy your widget is located in my city. A penny from your purchase is sent to my city in the form of a sales tax. This penny lessens the burden on my city to match revenue with expenditures; in other words, it lessens the likelihood that they have to raise my property taxes. If you spend enough money over time, it may mean that I get a street re-paved. Thank you.

My spouse may happen to work at that retail store. Part of your $20 paid her salary. It may have even influenced her bonus. Thank you.

That retail store has to purchase their product from somewhere, and they chose the Acme Manufacturing Company. My mutual fund owns shares in Acme, Acme's earnings drive up the stock price, which drives up the value of my mutual fund and overall 401k. Thank you.

Since my 401k is doing well, I take a loan out of it and buy a car. The salesperson whom I purchase from is your cousin, and he owes you $20. He was having a bad month and planned on avoiding you until I walked into the showroom. I hadn't planned on buying a car, but my wife got her bonus and the city repaved the road and my 401k was doing well, so I decided, "Why not?" Therefore, you got your $20 back from your cousin because you spent $20 on a widget.

No, that isn't ridiculous. Money travels all over the place, all the time, and does much more than we realize. Sometimes, what appears bad to me turns out to be good. Sometimes what is bad for me is what is good for you. At some point, we need to realize that we are all linked economically, for better or worse.

Economics is a system of many parts, including each individual, each company, and each governing institution. The tiniest action at the lowest level has an affect the whole, especially because it affects other tiny actions, which affect other tiny actions. This can be demonstrated mathematically in a principle called The Butterfly Effect, but is much more easily demonstrated in the movie of the same name, or in the movie It's a Wonderful Life.

Giving Money Away

A bleeding heart liberal, a serious Christian, or other charitably minded person would look at this principle and think of how we should try to affect the system to benefit the poor, weak, handicapped or incapacitated, unlucky, and other people who are not prospering in the system. I feel these feelings. I often wonder how we can help those who are currently not helping themselves effectively, for whatever reason. Some people concluded that personal involvement and donations are necessary. Others think that the government should take more money from wealthy people and corporations in the form of taxes and give it in various forms and social programs to the poor. Some people seem to think that talking load and writing angrily will solve the problem.

If we continue to consider symbiosis, then we will realize that we cannot just give poor people money from any source. We need to get something of value in return for that money, whether the source is charity or taxes. We need poor people to contribute to the system, not just take from it. In a motor, every part needs to contribute in the same direction at the same speed. If one part works slower (due to dirt or lack of oil) or if a part quits working completely, then the whole motor is slower and requires more energy to work.

Another way of looking at it: Imagine that you and I are on a bicycle built for two. If we both pedal in unison, we have an enjoyable ride. If I stop pedaling, you will have to pedal harder to keep us going. If you pedal backwards and I pedal forwards, we will crash the bike. We need to contribute as equally as possible to have an efficient bicycle ride.

Therefore, giving money to people who have little or none without receiving something from them in return makes for an inefficient system. It would be better if our charitable contribution or tax money resulted in a contribution to the system. This has been the case with many charities and faith-based programs. I benefited personally from Alcoholics Anonymous, and I think it has led me to become a stronger contributor to the system. This has most often not been the case with government programs due to bureaucracy, politics, and corruption; not just in America, but in other countries and the United Nations. That has led me to lean to the right, and distrust the use of government to combat charity.

Poor Help Themselves?

What if we went to the political extreme on the right and just ignore the poor--let them fend for themselves like the rest of us? Well, that would cause a few poor people to get off their ass, get a job, and quit whining. The other 99% would find that impossible for various reasons. Maybe they are too old, or they have a mental handicap, or a physical handicap, or just a long life of abuse and neglect. Whatever the situation, our charities today are not equipped, scoped, or funded to take all of the people who are a drain and turn them into contributors.

There are some who would just write them off. Social Darwinists, students of Nietzsche, and other cold-hearted bastards would say let nature run its course and we can prune the vine. There is a problem with this as well. The people who are unable or unwilling to help themselves as contributors to the economy may be willing and able to commit the crimes that will supply their needs. Why do you think crime rises as property value descends?

For those who did not turn to crime, they would grow sick and eventually die. Where should they die? That is an important consideration. Do we ship them off somewhere to die as a group, or do we step over them as they die on our sidewalk? Seriously, people do not just fade away like Yoda and Obi-Wan Kenobi. They take up space, they leave behind a decomposable structure, and they make a mark on their way out--it make take them months or years to finally die. We need to either prevent their passing or be prepared for an epic mess.

Also, there are spiritual dimensions to symbiosis. If we begin to allow people to starve and freeze, it affects our collective soul. Look at Germany in the 1930's. They started with persecuting wealthy Jews and nationalizing their property, but they ended up killing millions of people based on ethnicity, sexual orientation, and mental handicaps. What would have come next if we hadn't stopped them? Wiping out all left-handed people? Wiping out people who have trouble with math? What is the likelihood that you would end up on the list at some point?

What is more, when your respect for human life dwindles what else does that affect? Your love of art, beauty, the innocence of children, or what? There is an opportunity cost associated with every decision; if we decided to let go of our respect for human life and dignity, I shudder to think of what else we would be giving up.

Can we agree that we, as participants in the economic system and a human society, should make sure that we all benefit as much as possible, and that no one should be left behind? We need not agree on the means at this point, but we should agree on the principle. Now that we have the principle, it is all over but the shouting: We agree to help people economically, can we agree on the need to do so efficiently? Of course, let us do so efficiently; otherwise we will waste our effort, miss our mark, and eventually destroy the benefits of the system. So what is the most efficient method?

Some people liked the combination of Marx, Trotsky, and Lenin, with the end result being that the workers of the world rise up, take the wealth from the rich, and distribute it equally. We are still waiting for that to happen. The Russians rose up in October of 1917 and took from the Czar and nobility; they forgot to give equally to everyone. Apparently, as Orwell eloquently put it in Animal Farm, "Some are more equal than others." It is not likely that a government can avoid the corruption and bureaucracy that drains money and oppresses common people.

It has been attempted since, but we are still waiting for it to be properly implemented. One eyewitness to the October 1917 revolution, Ayn Rand, wrote a brilliant novel that demonstrates what happens when you take from the successful and give to "the people". Like I pointed out in my last post, without the incentives of Capitalism, you lose the benefits that we enjoy from the people seeking incentives.

For instance, there are people working feverishly to cure cancer right now because they know the result will be fortune and fame for them. Without the fortune and fame, how hard would they work? An answer to that can be found at your local fast-food "restaurant": without incentives, the employees do not work very hard--just enough to keep from getting fired. Do not expect that your food will taste good, that you will see a smile, or that the bathroom has been cleaned in this decade.

If we tax the rich and give to the poor, what is the result? Bunker mentality. If you attack the wealth of people, they will seek to protect it. This means they will spend less, take less risks, and be less generous. Therefore, there will be considerable less money in the system to trickle down to everyone else. Now, rather than the inefficiency existing at the bottom with charity, it exists at the top with preservation of wealth.

It is popular and acceptable to hate Bill Gates. However, without Mr. Gates our life would be very different. By developing and selling a version of the BASIC programming language for the 8080 Intel processor, he inspired and empowered many other people in their development of computers, including Steve Wozniak, the inventor of the Apple. Without Bill Gates, there may not have been a Wozniak. Without Wozniak, there would not have been a Steve Jobs. Without Woz and Jobs, what would you view this blog on? Linux? Not hardly; Linux is a direct response to Windows. And most people would never have been able to afford or learn to use Unix. Since then, Mr. Gates has inspired and empowered millions more ideas and people. There is no way to calculate the wealth and quality of life that Mr. Gates has helped us achieve, but we can be sure it is tremendous.

And Mr. Gates needed us. He needed someone to write software, someone to run the machines that packaged the software, and someone to sweep the floors. Each one of those employees was needed. He needed people to buy the software. He needed other programmers at other companies writing games, productivity packages, and other applications. He needed telecommunications companies to lay more fiber, which made computers more useful, which made his software more useful. He needed Intel and Western Digital to develop more resources and expand the capabilities of computer hardware so that his software could do more. He needed people to mine silicon, pump oil, and produce electricity. He needed instructors to learn and then teach others about his software. He needed people like me to fix computers when they break and customize systems for individuals and companies.

Economics is a tale of symbiosis, large and small. Companies need governments, and vice versa. People need corporations, and vice versa. small companies benefit form large companies, vendors and suppliers affect each other, and it all comes down to one person. Any person. Any little action will set off other actions, some which are imperceptible at first.

The basis of historical and current Capitalism does not make any provisions for individuals or organizations who are unable to compete. They are simply chewed up and spit out. Sometimes that is a good thing when it comes to companies. That is always a bad thing when it removes a human being from the game board. What we need to do is to adjust Capitalism somehow so that it encourages Econmic Synergy, an efficient state where everyone is contributing and benefiting in some way.

I argue that Economic Synergy is in every government's, corporation's, and individual's best interest. I also argue that Corporate Social Responsibility is the best and most efficient means to achieve Economic Synergy.