Why Can’t the Poor Ever get Ahead?

Poverty is a topic that resounds consistently throughout the world. It is an unvarying problem that every country is effected by. Poverty is defined as “the state or condition of having little or no money, goods, or means of support; condition of being poor….”

We often associate poverty with third world countries and other countries where poverty is so flagrantly present. But yet, most of us seem to overlook poverty and its causes in more advanced and well developed countries. Take the United States of America for example. It is the single most powerful country in the world however; it had a poverty rate that exceeded 13% last year, a staggering number of approximately 39.8 million Americans.

There are many economical, sociological, and political reasons why poverty is so prevalent in countries such as the United States; but perhaps one of the less obvious reasons is the idea of capitalism. The United States focuses heavily on enforcing capitalism and as a result, a lot of Americans tend to adopt a “dog-eat-dog” mentality. They have a propensity to focus on getting ahead in life without regards for those they have to step on in order to excel. This mentality is very prevalent in corporate America as well.

In one of my previous blogs I discussed the unfortunate situation the citizens of Blue Star Mobile Home Park in California are currently going through. I shared how Kort and Scott Development firm bought the Blue Star Mobile Home Park and without sufficient notice, jacked up the price of land rent. This in turn made it very difficult for the citizens of Blue Star to continue their residency. Many of the residents are elderly and have no means to obtain other adequate living quarters.

But what does this have to do with poverty?

With a fixed income, medical expenses and burdened with the inability to work, most of the Blue Star residents and others of the like are forced out of their mobile homes and into poverty.
Just like many other major corporations and firms in the United Sates, Kort and Scott Development firm neglected to act moralistically and as a result, caused many innocent people to lose their most prized investments and sink into poverty.

When capitalism is put into the perspective of those who are negatively affected by it, the concept of capitalism doesn’t seem as ideal. For Kort and Scott, capitalism worked out in their favor. For the citizens of Blue Star however capitalism was the cause of their anguish.

To decrease capitalisms’ negative effect on poverty, perhaps the government should intervene. By implementing regulations and limitations on capitalism, the government could virtually protect many Americans from being forced into poverty. This could in turn stimulate the economy thus making way for a more efficient government.

Although capitalism is one of the many causes of poverty, it is a contributing factor that is often overlooked. However one decides to address the issue of poverty in the United States, it is important for them to understand capitalistic thinking and be aware of its contribution to the poverty rate.

The True Problem with Major Development Firms!!

In my previous post, “Does Major Development Firms = Heartless, Money Hungry Monopolists?” I explained how major development firms have displaced many residents from their homes by jacking up rent prices for the land at outrageous rates. I illustrated this by explaining the crisis that many residents of Blue Star Mobile Home Park in California are currently going through. Many of these residents are being forced into poverty because they simply can no longer afford the unreasonable prices Kort and Scott Development firm have raised their rents to.

The major problem with development firms such as Kort and Scott is not one of legality. It is very much a moral issue in that these development firms neglect to take into account the negative externalities their business causes for others.

These businesses tend to conduct business with an ethical egoism approach. They fail to consider deontology and are only concerned with promoting their own interests (maximal profit). Unfortunately, this kind of approach tends to result in negative externalities for society.

In the case of Kort and Scott, the externalities in which they have caused has a more direct and apparent effect. They are single handedly responsible for causing many residents of Blue Star to become homeless.

Another less apparent externality the development firm is contributing to is the poverty rate.

By making it impossible for Blue Star residents to afford rent, many of these residents are forced to leave their mobile homes with little to no money and nowhere else to live. Because of this, many of these residents are forced into poverty without the resources and skills needed to recover. A great percentage of these residents are elderly and cannot obtain a job that provides enough income to get them out of poverty once sunken in (i.e. raising the poverty rate).

For these reasons, it is important for large corporations and businesses to not only make sure they are abiding by legal regulations, but it is also important for them to consider issues of morality and market weaknesses. To ultimately stimulate the economy, large corporations and businesses must take a more ethical approach when attempting to obtain maximum profits. They must make a conscious effort to minimize externalities.

A company that is financially successful while minimizing its negative externalities helps to stimulate the economy more than one who completely disregards negative externalities all together.

Externalities – Why should I care about them?

The dictionary defines externality as “an external effect, often unforeseen or unintended, accompanying a process or activity.”

But what does this mean to me?

Actually, we deal with externalities on a daily basis with things such as second hand smoke, stepping in someone else’s gum left on the sidewalk or getting a flat tire from broken glass left in the street.

But externalities don’t necessarily have to have a negative connotation. Anytime an individual acts in a way that has more of a positive effect on others rather than themselves deems as a positive externality. An example of a positive externality can be something as simple as finding a dollar on the street that someone dropped.

Externalities are unavoidable for the simple fact that most people are completely oblivious to the affects their actions or lack of action have on others. One surefire way to reduce externalities is to internalize them. In other words, people are less likely to act in adverse ways if they are directly affected by the consequences (or externalities) of such actions.

The same goes for businesses.

Externality is a word often associated with businesses and their production processes. Many businesses operate in ways that may be cost efficient for them, but they often neglect to take into account the negative affects their practices may have on others. For these reasons, externality often has a negative implication surrounding it in terms of business.

Many major corporations like Chevron, Exxon Mobil, Fast food chains such as McDonald’s and KFC, and health care providers are often at the forefront of scrutiny for causing negative externalities. From damaging the ozone layer with air and water pollution to causing serious help problems in humans, these businesses have caught negative criticisms from a lot of different entities.

To help reduce these externalities, the government does things such as set emissions or pollution taxes and have cap and trade pollution quotas to discourage wasteful practices. Doing this makes it costly for businesses to pollute and cheaper to be less wasteful.

Fortunately, with internalized consequences such as the ones listed above, we are continuing to see a decrease in adverse production processes and an increase in corporate social responsibility.

Does Major Development Firms = Heartless, Money-Hungry Monopolists?

Imagine yourself as a senior citizen who has worked your whole life and is currently living in your most prized investment, your mobile home. You are on a fixed income and your three major expenses are utilities, medication and rent for the land in which your mobile home is placed. Imagine that your rent currently costs $300 a month and you budget your money accordingly.

Now imagine that a major development firm has taken over your mobile home park and has raised your rent 30% (another $90) with only a ninety day notice. Imagine this mark up continuing throughout the course of one year with a total markup of 120%.

If you could fathom this happening, you can see the current distress many citizens in California and other major states such as Florida, Illinois, and Nevada are currently going through.
Many residents of the Blue Star mobile home park in California have become homeless due to the vast increases in their rent by the Kort and Scott development firm. The outrageous rent increases issued at unreasonable rates have caused these mobile home owners to sacrifice buying food and medication in order to not become delinquent on their rent payments. Due to the fact that moving their mobile homes to another location can cost anywhere from $25,000 to $30,000, many of these mobile home owners are at the mercy of major development firms such as Kort and Scott.

With only an hour to review and sign the twenty page lease agreement that Kort and Scott development firm has typed up, citizens of the Blue Star mobile home park find themselves stuck in agreement with not easily decoded clauses and stipulations that address the development firm’s rights to manipulate rent prices. Keep in mind that most of these mobile home owners are senior citizens and do not have very many other options, even if they did not fully agree to the terms and clauses.

Some people might say that this issue is not that major. They might say that these are one of the unfortunate externalities of capitalism. They may agree that development firms such as Kort and Scott are just doing “good business”.

But is corporate social responsibility not a part of doing “good business”?

Any big corporation has the ability to make money by any means necessary, but the real challenge is to do so in an ethical manner. Unfortunately many major development firms have failed to rise to the challenge. By raising these rents at a staggering rate, these development firms are contributing to the rise in the poverty rate; which in turn negatively affects the economy as a whole.

It is a known fact that Kort and Scott and other development firms would not have much of a business if there weren’t any mobile home owners to occupy rent space. So why bite the hand that feeds your company?

Can Fast Fashion Remain in Fashion?

Among the many environmental issues that have been raised for the first time over the last couple of decades, the sustainability (or in-sustainability) of fashion is a hot one. With the recent popularity of "fast fashion" - couture designers creating lines for stores such as Target and H&M, thereby offering fashion to the masses at low prices, increasing the turnover of styles - the debate is raging in the industry over whether this trend will stick, or like many other things in fashion, fade quickly, and the consequences of the trend.

Many argue that the advent of fast fashion has "saved" the fashion industry. In America, where less than 10% of the population is knowledgeable about couture designers, it has meant a whole new way of getting name recognition to the masses. For many young designers, such as Proenza Schouler who debuted their line for Target last winter, it is an opportunity to jump-start their career and finance their business. Additionally, the affordability of designer fashion has democratized the industry, making it accessible to more than the fashion-obsessed and the very rich.

However, arguments against the plebeian production of fashion have certainly mounted. For one, there is a significant amount of waste involved in all this consumption - the fashion industry is second only to agriculture in water usage. Over 8,000 chemicals are used to turn raw materials into fashion. In 2006, people were buying a third more clothing then they were in 2002. The increased demand has put momentous pressure on the suppliers, and often gets taken out unfairly on the workers. The new "value" fashion industry has doubled in size over the last 5 years; the growth is simply enormous while the implications of these rapid changes to the trade are largely being ignored.

I think there are several market weaknesses rearing their head. Externalities span from environmental waste to pressure on workers to work harder, faster, longer and without pay increase. Additionally, there is an information asymmetry in that most consumers don't have a clue where their clothing comes from or the effect their consumption has on these different stakeholders. There is also a culture factor present in that it is hard to change people; people will always be upwards aspiring. They want to touch some of the luxury they long for and if that means buying a Jimmy Choo H&M clutch for $45, then so be it. I have also heard it argued that there is a moral depravity issue at hand with fashion, as in why are we even buying clothing when one can go to a thrift shop and buy something that already exists because fashion doesn't matter. I disagree. Fashion most certainly does matter, it is a form of currency in a way in our competitive culture; who in their right mind is going to hire you for a serious job if you come to the interview dressed in an 80's power suit with shoulder pads, or an ill-fitting suit? I think fashion matters a great deal, and that people who immerse themselves into following it shouldn't be punished.

Some solutions have been offered to the fast food mentality of fast fashion. Organizations have sprung up to address the issue, notably the Ethical Fashion Forum in the UK and FutureFashion sponsored by Earth Pledge in the US. These non-profits seek to sign on designers to commit to using more sustainable means of production; so far, FutureFashion has had great success (counting among their "designers" Donatella Versace, Diane Von Furstenburg, Burberry, Thakoon, Yves Saint Laurent and many more) and presented their own runway show at New York Fashion Week in 2008 with sustainable looks sponsored a variety of designers. These organizations seek to encourage use of natural fabrics, recycled material and high quality products, as well as create fair guidelines for garment workers. They also lobby designers to refrain from partaking in designing lines for companies such as H&M.

The success and publicity that a return to high quality pieces with longevity and use organic materials has garnered in the industry is promising, though by no means a total solution. One problem is that studies have shown that only 1% of the US population would buy a more expensive "green clothing" article over a regular clothing article. The sad truth is that Americans don't care enough to sacrifice their cheap quick clothes. A smart solution would be for the clothing industry to install some regulations on itself before the government does. These regulations could dictate the chemicals that are allowed and those off limits, ethical sources for fabric, production plants who treat their employees fairly and some kind of an incentive for using recycled or organic materials. I think that once consumers expand their green awareness - as they are everyday - eventually the fashion industry will come under fire as well. Before that though, I think executives need to look at their business model and find ways to cut back the number of lines or looks they release each season. The rate they are operating - too much, too fast, too cheap - simply will not hold up.

Manufactured Housing Park Debate, Continued...

My goal in this post is to follow up on the consequences of raising rent in mobile home parks, which I explained in my previous post. The basic stakeholders that need to be considered in this situation are the renters, the park owners and the city or community in which the park is located. The noise from the differing opinions in the issue is growing rapidly. With more and more park owners raising rent, and more tenants getting squeezed out of the park, cities and counties are being forced to mediate. The interesting trend that has come to light though, is communities supporting the mobile home owners, in spite of some significant legal victories by the park owners.

Essentially, there is an asymmetry of wants here. Park owners want rapid return on their investments. Renters want reasonable rent prices that they can handle on a fixed income, and some sort of guarantee that the prices won't suddenly raise to heights they can't afford. The community wants low-income housing to be available for their residents who need it - this prevents them being added to welfare for the city. The way things stand now, a compromise is nearly impossible to foresee - something has to give.

In areas (California and Texas especially) where rent control laws have been passed, park owners are consistently suing the city, alleging that the ordinances are illegal. They have won some of these cases, and lost others. Astronomical amounts of money and time have been spent on these suits, both by the park owners and the cities and counties. They tie up the legal system and force funds away from projects that could benefit the whole community. These unproductive suits will continue until some kind of uniform national precedence is set.

Some "compromise bills" that have resulted from disputes between the stakeholders have made progress. They include: requiring approval from a special city commission when park owners want to increase rent beyond a certain percentage every year, allocating a relocation fund for residents who are forced out of the parks due to financial reasons and being transparent in their business practices. In areas where these laws have passed, the renters and land owners have benefitted mutually. Park owners don't have to spend money and time in litigation and renters can have some assurance that if rent gets out of control, they have an out.

However, other - more predatory - park owners have largely ignored these examples. They crow about the high returns they can get on their investment due to the lack of legislation on the matter. However, while it might be the case that they can raise rents consistently and outrageously, after a certain period of time they run into trouble. Their tenants can't afford the rent and can't afford to move. They default on their payments. They can't sell the home because no one wants to live in the park. The park falls below capacity. They stop seeing those great returns. They decide they want to sell the park, but first they have to pay for the remaining tenants to be relocated. This can cost up to several hundred thousand dollars for all the park residents. They have to lobby to get the zoning permit changed on the land. They then have to find a buyer. At the end of the process, have they really gained anything?

I think the best example today of a functioning relationship between owners, renters and the community is that of the compromise bill I mentioned earlier. It's not ideal; residents are still being squeezed and are subject to rent increases - albeit lower increases than before - and owners are still grumbling about the legality of it all. I think it's high time the federal government speaks out about the issue and sets some guidelines.

Astronomical Rent Increases in Mobile Home Parks Forcing Homeowners Out

In many mobile home parks nationwide - particularly in California, Texas, Florida, Illinois and Arizona - rapid rent increases by landowners have hit residents who are typically on fixed incomes. There are no federal laws to protect these renters who often have no choice but to vacate their manufactured homes, or sell at fire-sale prices due to the fact that no one wants to live in a park where rent is unfeasible.

Most people living in manufactured homes own the home itself, but must pay rent for the land where it sits. The reason for this is states require mobile homes to be restricted to mobile home parks for aesthetic reasons more often than not. Another issue residents face is the misunderstood notion that mobile homes are just that - mobile. More often than not, they are on foundations and today, tend to be double-wide or even triple-wide sizes. This means that in order for them to be moved, they must be dissembled, placed on to separate oversized trucks and then given permits to be moved, a process that can cost up to $30,000.

Mobile home park owners argue that in order for them to profit from the land, these rent increases are necessary. However, in many cases they are looking for a very short-term return on their investment and are unwilling to wait the 15 or so years it can take.

For renters, the issue is that of being backed into a corner by the escalating rent. Nationally, residents of manufactured homes tend to be of retirement age, although in some states such as Texas younger families are moving into this more affordable housing option. With low and fixed incomes the norm, rent increases mean that the tenants have to budget their funds differently, allotting less money for food or medicines in order to pay the rent increases. However, when the landowners increase rent every 90 days, as they legally can, eventually homeowners are forced to default or sell their homes because they can no longer incur the costs, leaving them with few options. At this point, their homes can sell for as little as $2,000 because no one wants to reside in a park with such high rent.

Residents of these parks have been banning together to try to stave off the rent hikes, with little success. Constitutionally, they often have no backing. Additionally, filing lawsuits means money and many times, up to 8 years of litigation, with continual rent increases in that time period. As with older tenants, they often die before the suit comes to any decision, and class action lawsuits aren't an option.

I think this is a serious issue that hasn't received much attention - mobile homeowners aren't given the same protection as apartment renters or homeowners. In today's economy, more families and older people are facing financial hardships, and mobile homes are an option for affordable housing...but when you factor in these escalating rent costs, that option often disappears. Additionally, for the landowners, how do they expect to fill the parks and make any kind of returns at all unless they are able to attract renters? If they decide they'd rather sell the land, they still have to pay penalties in most states to help offset the cost of relocation for tenants, and those penalties can be an enormous sum. I think there needs to be a little give and take here; a Rawlsian look at the situation could benefit everyone.

Some states, such as Arizona have passed law to protect/help these manufactured homeowners. They require the park owner to cover the costs of moving for tenants who are forced out due to rapid rent increases. In Texas, the Southwest Consumers' Union has published several reports about the state of the 1.2 million Texans who live in mobile homes. They have found that rent increases in some parks are illegal and in others, are simply unethical. The Consumers' Union is encouraging rent control laws be put in place. In several counties in California, these very rent control laws are being taken to court by landowners and the cities are defending their mobile home residents. I think this shows strong support of their community and is an encouraging advance.

Overall, the current situation cannot benefit either side. The landowners are being thrown into costly litigation and are losing return on their investment by driving away renters. The homeowners' lives are being turned upside by the unreasonable increase. I think a couple of things need to take place. Firstly, landowners need to listen to their tenants and realize at what point rent is too high. They should also create a fund to help offset costs for residents who are forced to move because they can't afford rent. Secondly, I think more cities and states need to get behind their community and enact rent control laws to cover the residents of manufactured homes that are similar to laws applying to apartment renters. Only then, I think, can you begin to see the fairness that would be mutually beneficial.

Market Failures of a Music Festival

This past weekend in Columbia, Missouri the Second Annual Bluebird Music Festival took place at over 12 music venues and 7 art galleries in the downtown area. Over 60 bands from the Midwest traveled here for the festival which is sponsored by several different Columbia businesses and radio stations.

The event's organizers weren't able to quote actual numbers, but it was generally agreed upon that attendance was down from last year. Though the event head's blamed the lower turnout on the cold weather this past weekend and venues that differed from those offered last year, I believe the real reason for low numbers of attendees was a simple information asymmetry: the public knew little, if anything, about the festival.

I think the festival has an incredible amount of potential in Columbia. The weekend brought acts that varied from acoustic folk music, good old fashioned rock'n'roll, techno and indie rock. Columbia is a community that loves its arts and music. The audience is out there, they just failed to inform them in a successful manner.

Instead of analyzing who their target audience was and how it was best to reach them, the Bluebird Festival went the easy way out by spending their limited budget on radio and television spots (can be viewed on the festival's site: http://whatisbluebird.com/What_is_Bluebird/Home/Home.html). However, I think it is pretty obvious that college-aged kids and recent grads in their 20's DON'T listen to the radio. We listen to iPods, iPhones, satellite radio and iTunes. We DON'T watch TV in the traditional sense. We DVR our favorite shows, watch them on Hulu, do a quick google search to find episodes streaming for free or simply watch things on YouTube. The message wasn't received by the desired potential attendees.

I understand that their budget was limited, but I feel if the festival organizers had simply examined their surroundings a little more closely, they would've stumbled upon the obvious: the festival takes place in a town most well known for the University of Missouri, which is most well noted (beyond sports) for their Journalism School. Within that school, there is a Strategic Communication Journalism major which combines PR and advertising. Within that program, there are over 300 students who would throw themselves at the opportunity to have an internship with the festival to place on their resume. They would do this work for free. They would do it with great enthusiasm to show off their knowledge and ideas. How this didn't occur to the organizers - all local Columbia musicians and artists - is beyond me.

Instead of eating their budget with TV and radio spots that were seldom seen nor heard by the target audience, Bluebird could have explored a variety of options. A blog could have been added to their website with interviews with the forthcoming bands posted in the months leading up to the festival and updated information on the venues and art galleries. Posters, flyers and stickers could have been printed and posted on campus and in the downtown area (okay, so they did a little bit of poster/flyer distribution this year, but not until the days leading up to the festival) to raise awareness. Facebook advertisements could have been purchased at very minimal cost and been extremely targeted to Columbia networks only. The list could go on and on with potential for reaching and drawing a wider audience.

I think the Bluebird Festival really blew it this year, to be completely honest. However, there is always next year and, I think, true potential for the event. The Bluebird Festival has proven for the second year their ability to attract incredible bands, exude that warm Midwestern vibe and create a supportive and passionate community for music and the arts in Columbia. All they are missing is an informed strategy on reaching their target audience and increasing attendance.

Dove...Real Beauty or Real Profits?

In 2004, Dove launched their "Real Beauty" campaign. Print media and a television commercial featured "real" women in their underwear, ostensibly to promote the values of natural/normal beauty versus stick thin supermodels. Media reaction to this campaign was overwhelming and immediate and garnered them attention that has been valued at tens of millions of dollars.

Mostly, the public was won over with the message of self-confidence and "real beauty". However, common criticism came in the form of male chauvinists (my favorite comment came from a columnist at the Chicago Sun-Times who said of the billboards featuring large women in their underwear, "the only time I want to see a thigh that big is lightly breaded and in a bucket," which is pretty hysterical no matter your personal views), professionals in the health field lamenting acceptance of obesity and the cynical crowd attacking Dove for advocating natural beauty while selling cosmetic products.

So can you reconcile the message with the messenger? It is inarguable that the stereotypical woman you see in advertisements in beautiful, young and thin and that this probably has some significant affect on young girls. However, as many bloggers, journalists, competitors and advertising professionals have pointed out: Dove is a cosmetics company. The initial introduction of the "Campaign for Real Beauty" was timed to coincide with the release of Dove's newest product: a skin firming cream for cellulite. Honestly. This is a brazen manipulation of product and consumer reaction. Make the average American woman (5'4" and a size 12) have these feelings of "I can be curvy AND beautiful. Thank you Dove for that message and self-esteem boost," then... casually offer them the option of feeling even better about themselves by trying a new cream to rid them of cellulite. Excellent use of marketing, but is it ethical?

You have to be a true cynic to appreciate what is happening here. Dove is a brand owned by Unilever who, coincidentally, also owns the brand Axe body spray and deodorant for men. Axe ads, as any breathing American could probably attest to, use beautiful sexy women and sexually provocative innuendoes to market their products. Contradiction? Here's another: Dove is classified as a cosmetics company. The very industry their ads prey upon and attack. True, Dove is perceived more as a "soap and lotion" company then a cosmetics one, but it is part of the industry none the less. At its core, Unilever is a giant corporation, looking out for itself before young girls I would think. And if they find a way to do both (say, raise awareness and good feelings towards their products while simultaneously raising their profit margin), then hey, more power to them.

On a different note, I've noticed an interesting opinion being echoed in comments on blogs and articles about Dove's campaign. There is a backlash against showing larger - some truly overweight - women as "normal" and "beautiful" during an ongoing obesity epidemic in our nation. The comments seem to primarily come from physicians, not just "fatists". I believe they make an unanticipated but highly valid point. Should Dove be promoting these values? One doctor raged against the new accepted stereotype of a female in our culture being overweight or obese, claiming it would be better if the stereotype in media leaned more toward thin women - at least that way young girls wouldn't get the impression that being fat is okay. Where this view fits in with the larger argument, I'm not sure since it seems to be a minority group raising this issue.

When it comes down to it, Dove has done something remarkable. Thanks to a large survey conducted in 2001 on worldwide perceptions of beauty and the geniuses at Oglivy & Mather, they were able to create an ad campaign that got ridiculous amounts of attention, generated discussion internationally on the issue of women and beauty, and created an enormous amount of warm feelings toward their brand. I guess in this example, we can think of Dove as consequentalists: the reasons why they produced the campaign don't matter so much, what matters is that the consequences have been phenomenal for their business.

Ethics in Education

Last Sunday's NYtimes Magazine was the annual 'School Issue'. One of the major articles described an alternative public school in Washington D.C. where inner-city kids in grades 6 -12 not only attend school but live in dormitories Sunday through Thursday night. Students at the SEED School must balance their academic week lives - full of strict rules and a ban on Facebook, TV and MySpace - with their weekend lives back in their urban poor neighborhoods. Students at SEED post remarkable graduation rates and far higher test scores than their D.C. public school counterparts. These students are chosen via yearly lottery, provided their parents have gone through the required paperwork and evaluations.

Critics claim the high costs associated with the school ($35, 000 per student) and the means by which they select students is unfair. The argument is that SEED manages to "skim the cream of the inner-city youth," by selecting only from the pool of students whose parents are functional and educated enough to be able to properly fill out the paperwork. Additionally, some believe that large sum of money per student would be better spent helping to improve ALL D.C. schools across the board, and ideally, to improve the neighborhoods and homes themselves so that students wouldn't have to escape to a boarding school environment in the first place.

So...ethical? If you were to look at Jonathan Haidt's theory of moral "flower pots," it would be easy to see where people would line up politically on this issue. Liberals, viewing ethics strictly from a fairness and caring perspective would, I believe, heavily endorse the school and its vision (President Obama has called it a "true success story"). To them, SEED is protecting these kids from the dangers of their neighborhoods and trying to educate them to a level whereby they could be equal other students who have the privilege of good schools, stable homes and communal support. Conservatives, however, see 5 different areas of ethics that they believe in equally according to Haidt. Not only do they take fairness and care into consideration, they also focus on respect for tradition, purity and loyalty to your group. In that case, the school's completely nontraditional mission would be a turnoff. Perhaps some would argue that sending children away from their family in order to teach them is also against tradition as well as breaking up the pureness of the family.

I think the school has an interesting concept. SEED now has a school in Baltimore and has plans to open in other cities. So far, the statistics have backed up the founders expectations and more and more parents are entering their children in the lottery every year. Maybe Ayn Rand would take the argument that the school is stealing the best and brightest and turn it on its head, saying that these kids are the "superpeople" and they have earned this right and will succeed. Whether it is the greatest good for the greatest number is debatable... the money could be going towards more kids. At the same time, these students that graduate and go on to do well in college could return to their neighborhoods and use their knowledge and experiences to help future kids. Regardless of where your ethics fall, I think the SEED School is worth keeping an eye on to see if the program catches on nationally.

Social Contagion Theory and Collective Behavior

The feature story of the Sunday, September 13th NY Times Magazine addressed the recent phenomenon of social contagion and was titled, "Are Your Friends Making You Fat?". The enticing title led to an overlong - but interesting - story outlining the discussion of "contagious behaviors" today. Social scientists, Nicholas Christakis and James Fowler, have spent years analyzing mounds of data and have come to the conclusion that not only are your behaviors influenced by your friends and family, but they're also affected by your best friend's brother's friend, and your coworkers niece.

The concept of behavior being contagious has been around since the 1930's, but it's regaining popularity and finally being backed up by studies and data. The NYtimes article focused on weight gain or loss, smoking and happiness. However, collective behavior has proven pervasive in the recent economic downtown. The explosion of the real estate bubble was largely caused by the herd effect - everyone is just gushing about the importance of "investing in real estate" and the profits you are guaranteed and... how could you not want to be a part of it all? As Felix Salmon of Wired Magazine points out in his article, "Recipe for Disaster: The Formula that Killed Wall Street," the inclination to follow what those around you are doing is so strong that wildly intelligent people that we trusted our money to disregarded statistics and numbers and rationality. The reliance of Wall Street on David Li's formula for correlation contributed significantly to the market crash in 2007.

So what is collective behavior and how does it work? We see our neighbors, friends, family doing something and we're influenced to do the same. I think a great example is smoking (it's much easier to understand than market behaviors). A group of friends has always smoked together; maybe the most rebellious one in the group started when she was 16 and the others soon followed. They all smoke together for years and years. Then one of them decides to quit, then another is influenced by that first one, then another. Pretty soon, only the original girl is still smoking. She feels uncomfortable being the only one lighting up, having to step outside during group dinners because they now sit in the 'non-smoking' section of restaurants. Pretty soon, she too will quit.

This example can be multiplied over and over and over and proven in endless instances. We're seeing it now in our economy. Scientists now have numbers and research to back up this seemingly obvious pattern. However, the problem may now be determining how to break it. After all, how do we pull out of this economic recession when we are all spending less and saving more; when shoppers feel like they have to hide their purchases because no one else is spending. That is the true challenge today.

A Story about Wal-Mart... uh-oh

When I was growing up, my family would spend the summers at the Lake of the Ozarks. My grandparents had a great lake house there, and it was all fun and swimming and boating. We're from St. Louis, so typically the drive would be around 2 and a half hours to reach the Lake.

Now, at this time, the Lake was nothing like it is now. Now, you can go to Target, Starbucks, Panera Bread Company, Paul's Market, HyVee, etc. for all your grocery and household product needs. All that development has really only come along in the last 3 to 5 years though. Before that, there was really only a Wal-Mart Supercenter (one of the first Supercenters, I believe), your local convience store gas station and a terribly shady Carl's (where it was discovered they were putting new expiration stickers on top of the old ones on the meat, "extending" its shelf life). Back then, the Lake was not even close to looking like it does now: you could still ski on the Main Channel and EVERYONE shopped at Wal-Mart because you had no choice.

When thinking of spending summers as a kid at the Lake, I cannot help but think of the ordeal of loading the car. My family is staunchly opposed to Wal-Mart. My dad is a pretty staunch Republican, but then he shocks you by being a recycling freak and a Wal-Mart hater. He is a business owner himself and employs about 60 Union electricians, believes Union is the only way to go and is a big supporter of local and family-operated businesses. Because of this beef we had with Wal-Mart, we refused to shop there, even when it was the only option around. So that meant that my mom would do this enormous grocery trip at our Schnuck's or Dierburg's the day before we left for the Lake, and we would then have to somehow fit all these coolers full of meat and produce and dairy into my dad's Expedition. Even though that's a big car, add 4 kids and all the baggage that goes along with that and it makes for a ride from hell.

The point of this story is that, Wal-Mart is a remarkably polarizing company. People love it or hate it, but they definitely have an opinion either way. Some people hate it so much they go to great lengths (2 to 3 coolers, to be exact) to avoid it at all costs. Some people love it so much they'd shop there everyday if they could; I overheard a girl say she'd love to live there, actually. Personally, I can spare the few bucks they would save me per trip and go elsewhere with my business. I don't think the money saved is worth what they had to do to get those low prices to you. But that's just me.

Patagonia and Corporate Social Responsibility

Patagonia, a privately owned outdoor apparel and equipment company based out of Ventura, CA, receives a great deal of media attention and praise for their policy of "corporate sustainability". In May of 2007, they were featured on the cover of Fortune magazine and lauded as "the coolest company on the planet," for their commitment to "Build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis" (part of their mission statement found on the company's website).

Patagonia applies this attitude at pretty much every step of the way. For example, they train their "quality insurance staff" to review the factories where the clothing is produced with a "contractor relationship assessment" and also hire a third party auditing company to do the same. This is to ensure that all the cogs linked back to the company promote the same values Patagonia does. In 1996 they switched over to organic cotton and every cotton garment they've made since then has been from organic fabric. Patagonia has implemented a recycling program for old clothes, where customers can bring back old coats or other apparel items to have its fibers recycled into new products. Employees at Patagonia's HQ in Ventura get the day off when the surf is high. They subsidize child-care for their employees. They only employ factories where turnover rate of staff is low. Patagonia pledges either 1% of annual sales, or 10% of pre-tax profits (whichever amount is greater) to environmental causes yearly. They allow their employees time off and grant money to study the environment. And on and on, you see the direction this is going.

Patagonia is something of an anomaly in the debate over corporate responsibility. What would Milton Friedman say about this tree hugging company? It's interesting, Patagonia is a privately owned company so it is difficult to get yearly concrete sales figures. It would seem though, that the draw of Patagonia is largely in their attitude towards the environment. Who buys their products? Mainly, outdoorsy people who have a great love and appreciation for the planet. They are rock climbers, hikers, runners, they camp, they fish, they cross-country ski. Their philosophy about the relationship between people and the planet is basically in line with Patagonia's. Why else would they spend $33 on a pair of heavy duty mountain climbing socks?

So what would Friedman say? Being privately owned, they don't have stockholders to be conscious of. Additionally, it would seem that their profits and publicity are directly linked to their environmental awareness. At what point to the lines between corporate social responsibility and the pursuit of profits blur and become one and the same? Would Patagonia be Patagonia without social responsibility? I would argue not. The brand is built on its foundation of sustainability and corporate responsibility - that there is a larger picture out there that we are all a part of, and to be oblivious to that idea is to mark your brand as antiquated.

I think Edward Freeman and and Yvon Chouinard, Patagonia's founder, would go out for drinks and spend hours patting each other on the back for their convictions. Freeman's support of corporate social responsibility to all the stakeholders in a company is practiced to perfection by Patagonia. They don't draw the line of consciousness at their employees or products, they extend it to the planet at large, the factories that produce the clothing, to the very fabric they use. Patagonia sees the big picture - all the stakeholders - and embraces it.

If the recent trend in green marketing and corporate sustainability is any indication, social awareness is here to stay. Patagonia is a shining example for those companies attempting to update their mission statements and show the consumer that they are aware of their footprint on the planet. It will be interesting to see if Patagonia's profits will increase with increased consumer awareness of the environment or if other companies will become savvy of the trend and out-green the original green company.