Little Compass RoseCaribbean Compass   June 2009


The Caribbean Sailing Community in a World in Recession:
What Should We Do?
by Dick Stoute

The following speech was presented at the Compass Publishing Writers’ Brunch 2009 and appears in print by popular demand from our guests. Dick Stoute is a racing yachtsman who has served as president of the Barbados Yachting Association, secretary and Chief Measurer of the Caribbean Yachting Association (now the Caribbean Sailing Association), and president of the Barbados Chamber of Commerce and Industry. An engineer by profession, Dick recently retired and is now at Reading University studying philosophy.

Everyone knows that the world is in an economic recession, but everyone also knows that we will come out of it and, just as we expect things to be difficult for a while, we expect that the recovery will blossom forth with new opportunities. We can take comfort in knowing that the economic death we are currently experiencing has happened many times before and there has always been rebirth. But even as we batten down for the recession we need to prepare for the recovery. What can we expect? How can we position ourselves to participate in the recovery?

The downturn will be economically challenging for everyone and prudent financial management will be needed to get through it. This will be more easily achieved if the economic challenges do not lead to escalating crime. Should crime increase significantly this will likely compound the effects of the downturn, as it could drive visitors from our shores and trigger the type of social degradation that we have seen in some Caribbean countries. The Caribbean is particularly vulnerable to this social degradation, as it has inherited many social conflicts. These lie dormant during good times, but can erupt when economic quakes stir up long-buried fears and grievances. So even as you tighten your belt, be mindful of this effect and wherever possible direct your spending at engaging everyone in the community in earning a living.
But even as this economic downturn threatens hardship it can also bring benefits. The hectic pace of economic wellbeing leads to social separation — there is no time to talk, to build up friendships, to nurture the emotions that need deep, meaningful social contact, but which are ignored when times are good. Hard times provide this opportunity. There are many examples of hardships creating enduring bonds of friendship in a well-managed family or community, bonds that improve the quality of life even as “things get harder”. These relationships of friendship and trust that are built in hard times can bind our community together and create a solid foundation for the economic recovery when that comes along. For example, Goddard Enterprises in Barbados has a long-lasting relationship with the First Caribbean Bank. This relationship started when the then Canadian Imperial Bank of Commerce (now First Caribbean) gave Fred a loan when he was struggling to expand his small shop during difficult economic times. The trust between these organizations has been nurtured by prudent management over the years and both have gained significantly. We need to build these types of relationships in the Caribbean sailing community.

But how do we develop trust in a recession, when economic strains are naturally driving us in the opposite direction? This question requires a personal examination of ourselves to answer the question, who do you trust and why? You can be reasonably sure that other people are very similar to you and your reasons for trusting will be their reasons for trusting. As writers, we are in a good position to do this, as we are naturally students of human nature. A good understanding of human nature and with realistic expectations about the world are both necessary to get through this recession and prepare for the coming recovery. So I am now going to very briefly outline a model of human nature that I think will be very useful, and link this to the changes I expect that this recession will bring to the world community.

The Biblical story of Genesis issues a warning for humanity, which has been misinterpreted and ignored. It warns us not to “eat the fruit of the tree of knowledge of good and evil.” The Church has turned this into an enduring, unavoidable curse, and then proceeded to do exactly what Genesis warns us against: it judges people to be either good or evil. This judgmental attitude is widespread. It is an ancient, well-accepted way of thinking, but it has serious repercussions. It is very destructive and we need to understand how it operates so we can change the way we think. Because we believe that there are bad people, we put various social systems in place to restrain their behavior. This seems to work and we are lulled into believing that this is the only way to do things. As a result, laws and regulations proliferate. The obvious result is that more people are found to be breaking laws and the belief that “we are bad” is confirmed and proliferates.

As the society evolves, people respond to this and gradually a ‘game’ emerges which changes people’s behavior. Each person’s individual success depends on how well that person can play this game and, as with all games, to be successful you have to know the rules and use them for your own advantage. All the old guidelines about relationships and trust are tossed aside and the game of living becomes one in which everyone is out for him- or herself. This approach evolves slowly, from simple things like breaking the speed limit (it’s okay, if you don’t get caught) to a systematic approach that seeks to use whatever loopholes exist in the laws for your own benefit. This way of living becomes the norm, the ‘right’ thing to do, and law schools and business schools teach it as if it is the smart thing to do. This slow evolution pervades the whole community and gradually destroys relationships and the community as it goes. There is a clamor for more laws, more regulation and more policing of laws, and the society slowly stagnates as it becomes less and less efficient.

We can trace this evolution in sailing. First there are simple rules to avoid collisions at sea, but these are not adequate to deal with racing, so racing rules are adopted which are more complicated. Then the game evolves from simply avoiding collisions to using the rules to gain an advantage. This forces even more complicated rules, and skill at the protest hearing then becomes an integral part of the skills needed for the sport. The next step is match racing where rules become dominant and sailing skills perhaps secondary. These don’t quite do the trick, so we then start using ‘on the course judges’. All this adds significantly to the cost of administering a regatta. As resources are shifted into policing and regulation — things that increase stress — fewer resources are devoted to the things we enjoy. The same evolution has taken place in business and in finance, but while yacht racing is something we can walk away from, we cannot walk away from society and the stresses continue to build up.
Occasionally this system fails, as it has now done, and we have an opportunity to build a better one. What can we expect in the current redesign?
I expect that there will be a great effort to make things simpler. This has been the drive, for example in the sailing rules, and I expect that similar reasoning will prevail and our financial regulations will become simpler. Our current financial system attracted too much of the world’s talent and then used it to create an elaborate gambling casino. This took expensive resources away from the places that needed it. A redesigned system will, I think, release much of these resources to other areas of endeavor. This redesign will make finances simpler for the average person and produce a long period of low inflation and low interest rates that will be of great benefit to the world.
I expect that there will be a real effort to address the issue of poverty and lack of education. I don’t think this can be done with aid, because, apart from being expensive and economically inefficient, giving aid insults the people it is given to. It tells them that they are somehow less than equal, inferior, and unable to fend for themselves. Even as it relieves hunger, it provides a negative self-image and builds resentment. 

The solution has to be one that engages everyone in the process of generating economic value. It entails the working community finding ways to encourage everyone’s participation, especially those who find it difficult to carve out an economic niche.
Coming out of this financial crisis, I think we can expect a more equitable balance between the haves and have-nots. This will be driven by economics, rather than altruism. The borrowing spree that led to this financial crunch was a stopgap mechanism. This lending/borrowing allowed poorer people to consume more and so bridge the gap between low consumption and high production. Lending solved this problem by providing a means of boosting consumption. As we work our way through this crunch and the borrowing drops, consumption will collapse unless the lower-income consumers get more money to spend. It is obvious that, to get the world’s balance sheet to balance with less borrowing, the borrowers will have to earn more and the lenders earn less. I think our economists are smart enough to work out a way of achieving this without driving inflation too high, so I expect low-end incomes to increase while high-end incomes and interest rates reduce.
There are other benefits as well. From a purely economic perspective, add up the costs that are a direct result of income and education disparity: wars of all types, fighting terrorism, fighting illegal drug trading, policing the community, legal costs, imprisonment costs and private security costs. Include the cost of white-collar crime and the cost of redistributing wealth (the vast cost of tax collection and the cost of the tax-avoidance games). Include also the medical costs associated with high stress. Add all these up and then compare this total with the costs involved in reducing income disparity so that the incentives that drive antisocial behavior are substantially reduced and the stresses associated with this system are also reduced.

Although these costs cannot be accurately assessed, I think that we are getting to the stage where they are high enough to drive a radical change in economic thinking. Why not simply pay people more and let them decide how to spend the money, rather than having a large inefficient administration to achieve roughly the same goals? The question, “Do we want to live in a protected enclave and give up the world to violent forces, or do we want to make the world a good place to live for everyone?” will be addressed in unique ways. I believe that a community that finds a way of effectively dealing with income disparity will be much better off economically as well as socially and, as we improve our decision-making ability, this will become more apparent.
To achieve all this we need to improve our decision-making skills. But how do we, as a community, make good decisions? No one at present can tell us how to do this, but we are sure that being well informed and well educated helps. In addition, the role of emotions like fear and confidence are coming under the spotlight in regard to their role in decision-making.

Many people are now emphasizing the need for confidence. This is very interesting to me because, leading up to the millennium, I was researching the effects of fear on our communities, our governments and religions. That led me to write a book called The Fear Factor. Fear is the opposite of confidence. It seems that while we cannot create confidence directly, we can build it up slowly by understanding the very human “fight or flight,” response to fear. It may come as a surprise to many that violence and aggression are fear responses. The person that is carrying a gun is doing this because he is frightened. Anger is a product of fear, as are all the negative emotions: hate, prejudice, greed, etcetera. Fear undermines confidence and so understanding fear is key to building confidence.
There are several apparently contradictory social responses to fear. For example, “privacy” is a fear response. We want privacy to protect ourselves, because “the world is full of people who would try to take advantage of us”, but privacy also creates the environment that allows tricksters to flourish. Privacy is like darkness — it inhibits information flow. Darkness facilitates crime. Just as street crime is suppressed by streetlights, white-collar crime is suppressed by free information flow. In the Caribbean, restriction of information flow encourages a lot of antisocial activity. The metaphor that links information to light is very apt. When there is no light our imagination conjures up many threats, so we need light — we need to address the privacy issue at a social level and reduce our people’s fear of disclosure — so we can make progress against crime.

This recession provides an ideal environment and opportunity to focus on the skills needed to increase confidence. In the Caribbean, this is the key to reducing crime and violence. The light of understanding is essential for this to happen. Increased confidence also leads to increased investment, helps you make friends, and adds considerably to your quality of life. 
We need to be able to accept that it is fear that makes us want to be dominant. When we realize this, we will automatically want to distance ourselves from demonstrating that we are frightened by the way we behave, and this will put emphasis on an alternative mode of organization — networking. Networking builds confidence through equitable interaction and allows a plan to evolve from discussion rather than being imposed by some dominant faction. The world will be a better place if we can agree to work with each other for our mutual benefit and we now need to give the networking alternative a good shot. 
If we are lucky, we will emerge from this recession with a different attitude to business, one that places more emphasis on integrity and trust and less effort in antisocial directions. If the USA’s business community takes its leadership cues from its current President, we can expect that they will focus more on relationships and working out deals that benefit all the stakeholders. Should this happen, I think the Caribbean businesspeople will welcome it, as this is the way we prefer to operate. 

I expect that there will be significant effort devoted to making things simpler — especially in finance and business, and hopefully in government as well. The information revolution is poised to assist with this. The current hurdle is human emotion: fear of change, fear of being disadvantaged, fear of exposure. These are what we need to focus on now and overcome while we engage in the very competitive struggle to achieve simplicity and efficiency.
With this in mind I ask, what can we do as writers? How can we use our considerable influence to help this trend along? I think that history will deal harshly with writers who have taken the easy road and used their skill to simply escalate fear in the society. It takes little skill to point out what can go wrong, gloat over what has gone wrong, or be judgmental and point fingers. It is easy to evoke the fear response; little skill is needed to do this. The skill comes in providing readers with an alternative viewpoint, one that they may not have considered, one that illuminates issues from another perspective, or provides insights about human nature. As writers we must be wary of seeing issues in terms of right and wrong. Remember the Genesis warning about the consequences of “eating the fruit from the tree of knowledge of good and evil” and avoid being judgmental — it is very destructive.

We can get beyond the very superficial good and evil “reasons” that are so popular in the Caribbean and illustrate the simple formula that people are socially destructive when they are frightened and socially constructive when confident; encourage readers to understand how they can tell when someone is responding to a threat and encourage them to display confidence. We can help to provide that confidence by illuminating the issues we write about in a way that sensitizes our readers to the human issues lurking in the darkness behind the judgmental good/evil façade. This is a great opportunity for writers to probe in the darkness — find out and explain why people behave as they do while avoiding being judgmental and steering clear of the fruit of that mythical tree.
As writers our role is to seek understanding and explain what we learn while we entertain and inform. This will help our readers to become more confident, have a more open dialogue and feel freer to enjoy each other. We need to focus on building communities by illustrating what can be done and not destroying them by dwelling on the negative. The Caribbean is a great place. Its biggest challenge is income-imbalance resulting from lack of knowledge and lack of trust. We can help build the trust and help with the educational project. This is how we can help the yachting community gain strength during an economic recession and prepare it to take advantage of the recovery when it comes.

In closing I would like to thank Compass for inviting me to make this presentation and thank you for listening.


     

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