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Chapter Seven of the “Building an Ownership Economy” presented by David Richins is titled “A Moral Code,” and its primary objective is creating a society that is free and prosperous. The presenter acknowledges that the economy is in a dire state due to the financial failures in several parts of the world. For instance, the presentation shows a frame depicting the Lehman Brothers, Greece financial crisis, and the inflation of the Chinese currency. Although the video does not directly discuss these issues, portraying them helps in reinforcing the idea that a change in the current status of the economy is necessary. David Richins asserts that some of the strategies for succeeding in life may soon become ineffective and irrelevant if people do not change how they approach economic problems.
Richins uses logos in his reasoning to support his views on the current economic status and the need for change in the society. For instance, the presenter points out that securing good grades and college degrees, working hard and saving money, and exploiting the compound interest powers may be inadequate for the future. Richins presents several strategies that can help in addressing the economic problems faced in contemporary societies, and these include; creating awareness, taking up responsibility, developing a moral code, and deriving the benefits.
Becoming Aware of the Situation
One of the factors that expose people to continued economic problems is the ignorance of the fact that economic systems and business operations change with time. Some of the economic difficulties affecting societies include wage erosion, environmental damage, economic instability, shrinking middle classes, inequality, and poverty among others. Most of these problems are systemic and occur over an extended period because people continue engaging in what Richins refers to as “normal” social and economic activities.
The activities include focusing on stock market investments, paying student loans, banking funds, seeking employment, living in the suburbs, paying mortgages, and financing 401(k) pension plans. Nonetheless, Richins argues that there is an urgent need for change in how people approach economic problems.
For instance, the collapse of the Lehman Brothers had devastating impacts on the American economy and international stock markets. The aggressive trade in real estate assets was a vital strategy to Lehman Brothers’ success in the previous years, but it increased the liquidity risks and eventually resulted in the collapse of the institution (Wiggins 5). The Lehman Brothers’ failure illustrates the problems that arise from not being aware of the changing economic systems and business environments.
Additionally, the inflation of the Chinese currency and Greece financial crisis threatened the stability of international economies and forced economists to reassess the current economic conditions. People have also realized that they are highly vulnerable to the financial sector instabilities, even in the foreign economies.
As Richins points out, the application of traditional approaches and wisdom in solving contemporary problems often fails, and this results in a sense of betrayal among individuals who struggle to “do everything right” (00:41). Richins asserts that noticing the macro-level problems is insufficient in addressing the economic harms and that the people affected by such issues must learn to connect the causative factors with the effects. Creating the connection is a vital part of solving the problem and helps in increasing the success rates of the derived solutions. Restricting one’s mentality to systemic issues that focus on widely held behaviors and convictions on activities that are regarded normal is detrimental to an individual’s financial stability and leads to self-destruction.
Thus, Richins suggests that people should not consider things to be “normal” because that is unsustainable. Instead, the presenter urges his audience to become aware of the economic changes to help in fixing the economy and improving the society. Richins points out that the separation of capital and labor is among the primary causes of the economic problems because it disconnected the financial and real worlds. Consequently, the disunity has made economic demands more important than the environment and working people are in the contemporary society.
Richins uses the logical appeal effectively in building his arguments on the need for economic change in the society by illustrating the risks associated with failing to do so. For instance, Richins notes that the traditional economic and social activities widely considered “normal” are inadequate and do not secure people from financial problems. Consequently, Richins shifts his focus to the entities that should bear the responsibility for such change.
Responsibility for Change
Change is unlikely to occur if people continue to assign the responsibility for introducing and implementing change to others. For instance, the video suggests that people expect the government, business leaders, economists, and the Federal Reserve to have the greatest responsibility in fixing the economy rather than individuals. Nonetheless, the knowledge for understanding economic systems is uniquely different, and people have varying experiences in the business activities that support economies (Shipley 75).
The economists and business leaders cannot solve the economic problems on their own because they tend to focus on market-approved methods and may overlook the applicability of their recommended solutions. Thus, the responsibility for initiating and implementing the economic changes lies with the individuals affected by the economic problems (Richins 01:03). This is vital in the successful implementation of the changes because the business and government leaders may not fully understand or appreciate the problems faced by the commoners. Acceptance is a crucial phase in change, and the presenter urges people to avoid wasting energy in attempts to fix or overthrow the current systems.
Richins encourages people to accept the current situation as it is and avoid engaging self-denial. Nevertheless, the presenter warns that acceptance should not be mistaken for complacency, and people must act. Richins points out that taking action implies that people should change the manner in which they choose to operate rather than mobilizing against the perceived economic oppressors (01:20). Creating social unrests in the community is detrimental to the successful implementation of economic changes.
Instead, it is necessary to empower local communities through information sharing and training to understand the complexities of economic systems because it enables individuals to make informed financial decisions. Building new economies to complement the existing ones occurs when the number of knowledgeable of people who know the new way of economic operations is adequate. As Phillips, Seifar, and Antczakargue, inclusiveness of all individuals in local economies is important because it offers several benefits to the local communities (56). For instance, the inclusiveness helps in creating stable employment opportunities and durable economies.
The presenter points out that the creation of wealth sustainability and sharing of wealth are the two primary challenges in economics. Consequently, there is a need to create a balance between decisions that improve social and environmental welfare with individual self-determination. People should avoid pursuing selfish financial interests that result in the destruction of environment and depletion of natural resources. Unfortunately, seeking optimum returns on investments is a major feature of capitalist economies and leads to damages to the environment.
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Richins suggests that expecting sustained altruism in protecting the environment and stabilizing economies is utopian and apparently impractical (01:50). For example, Klein argues that the billionaires who pledge prize money on new products or processes that protect the environment from damage do so to protect personal interests (232). She gives the example of “The Virgin Earth Challenge” that promises a $25 million prize for systems that extract one billion tons of atmospheric carbon dioxide. Klein notes that this is Richard Branson’s attempt to ensure that the Virgin Airlines continues to fly at full capacity, thus increasing his profit margins per year.
Consequently, a moral code that would allow people to adhere to sustainable economic and social practices is vital. Richins reasons that the moral code does not have to be a complicated set of guidelines. The presenter uses the example of the moral codes applied by children in their daily interactions, and he notes that the children often choose options that benefit their groups. People should be allowed to do what they wish as long as they adhere to the simple set of rules that promote stability in the society.
Nonetheless, Richins contends that the absence of personal moral codes is a major factor that causes economic problems. He compares the free market advocates and progressives who have conflicting approaches to solving such economic problems. However, he notes that creating and applying moral codes to help in developing the appropriate economic system is crucial.
Creating the Moral Code
Developing an applicable moral code requires some assessment on how people will use the code. Richins suggests that the moral code should be simple and easy to understand to encourage many people to adopt. Additionally, the moral code needs to be voluntary and flexible to allow people to use it as they wish and opt out when they are not satisfied with the code. The presenter considers the “buy local” movement a good example of a flexible and simple moral code that should be emulated. According to Richins, the “buy local” movement became local due to the presence of individuals who had similar values on the importance of supporting local economies (02:48).
Sharing such belief allowed the locals to operationalize it into “buy local” as their statement of principle. Consequently, many people could understand and appreciate the power of the simple motto “buy local” in their local economy.
Nonetheless, the locals required various tools to allow them to realize the statement of principle. Some of the important tools applied in the “local local” movement include local distribution channels, and this reduced the demand for supply services from external organizations. Richins notes that such local movements are very powerful in some areas, and this has enabled the local communities to create and distribute local currencies to eliminate external interference.
Richins gives the example of a pre-industrial farmer to elaborate his idea that individuals have the responsibility of improving the economic conditions and creating moral codes to achieve this goal. He notes that land was a vital commodity that everyone wanted to own due to the benefits and risks it offered. The farmers knew that they had to add value to their lands by planting crops and increasing the number of harvests each year.
The pre-industrial farmer became self-reliant by tending to his farm and managing it directly. Although the presenter acknowledges that the example of the pre-industrial farmer may sound irrelevant in modern contexts, he insists that it presents several important lessons that applicable to the contemporary economies that are capital intensive. Some of the vital lessons include the following:
- People must achieve to own productive capital.
- People must use capital to derive value.
- People must manage the capital directly and actively.
Richins suggests that people have the ability to overcome the economic problems faced in contemporary societies, but only if they accept that the economic systems have changed. He notes that becoming aware of this fact and taking up the responsibility for initiating and implementing the change is vital.
People require a moral code to control their behaviors and become successful financially. Some of the principles that help in achieving economic stability include owning productive capital, deriving value from the capital, and managing the capital directly and actively. Richins suggests that the violation of the three basic principles has caused the environmental and economic problems faced by contemporary societies.
The presenter argues that applying the principles helps individuals to alter how they conduct businesses, make investments, and challenge commonly held beliefs. People can derive the benefits of the three principles by learning and internalizing them. This enables individuals to become committed to acting on the principles and identifying others who are also interested in applying them. Richins insists that real change in the current economic conditions can only occur when people agree to join efforts and do things differently. Developing and practicing moral codes is a vital strategy in overcoming the economic problems.
Klein, Naomi. This Changes Everything: Capitalism vs. The Climate. New York: Simon and Schuster, 2014. Print.
Phillips, Rhonda, Seifar Bruce, and Antczak Ed. Sustainable Communities: Creating a Durable Local Economy, New York: Routledge, 2013. Print.
Richins, David. “Building an Ownership Economy: A Moral Code by David Richins.” Online video clip. YouTube. 2015. Web.
Shipley, Tom. Why Government Can Never Fix a Down Economy: And Why It Should Never Try. Denver, Colorado: Outskirts Press, 2012. Print.
Wiggins, Rosalind Z., Piontek Thomas, and Metrick Andrew. “The Lehman Brothers Bankruptcy A. Web.