The Single Most Important Thing to Know About Financial Aid: It’s a Sham

 

In early March, a 17-year-old high school senior I’ll call Ethan got a text message from Ursinus College, a small, private liberal arts school located about 45 minutes outside of Philadelphia. It said, “Great news, [Ethan]! Ursinus College has awarded you additional money! Log into your portal to view your updated financial aid award.”

A few days later, Ethan got a letter from Ursinus repeating the same offer. “The Office of Student Financial Aid recently received additional information regarding your application for financial aid and, as a result, a change has been made to your original award,” it said. In December, Ursinus had offered Ethan a “Gateway Scholarship” of $35,000 to offset the college’s listed price of more than $72,000 for tuition, room, and board. Now it had added a “Grizzly Grant” (Ursinus’ mascot is a bear) of $3,500 to the mix.

It was puzzling. Ethan is not financially needy. One of his parents is a nonprofit executive and the other is a public school teacher in suburban Maryland. They own their home outright and earn well over $200,000 per year, putting them comfortably in the top 10 percent of household income nationwide. Ethan’s standardized test scores were good and grades were fine, but mostly not in the kind of rigorous Advance Placement–type classes that are mandatory for admission to selective universities.

All of this was in the application he sent to Ursinus last year, and he hadn’t talked to them since. What “additional information” were they talking about? Meanwhile, Ethan has a cousin who is also a high school senior. I’ll call her Ashley. Her overall academic profile was better than Ethan’s—higher grades and lots of AP courses, somewhat lower SATs. But her economic circumstances were not.

Ashley also lives in Maryland. Her mother, a single parent, dropped out of community college and works in the back office of a local restaurant chain. Her income is well below the median for someone with college-age children, and she has no real financial assets to fall back on.

Yet Ashley wasn’t getting unsolicited text messages offering her more financial aid. Penn State, a public land-grant university that allegedly has a mission to provide broad access to college, had recently sent her a financial aid letter. Like Michael Corleone in The Godfather Part II, their offer was this: nothing. Tuition, room, and board would be $49,200—almost $16,000 more than private Ursinus College wanted to charge her wealthier cousin. To pay, she was welcome to get a job, or take out loans.

Ethan and Ashley were learning a lesson about the way the business of higher education actually works in this country: College financial aid is largely an illusion. Government financial aid is real, if inadequate—federal Pell grants and state appropriations to reduce tuition at public universities definitely exist. But the financial aid purportedly provided by colleges themselves is mostly fiction.

The whole public-facing system of college admissions—in which admissions decisions are based on rigorous academic standards and financial aid is supposedly provided to those who are most academically and financially deserving—is an elaborate stage play meant to flatter privileged families and the reputations of colleges themselves. The real system, hidden behind the scenery, is much closer to the mechanics of pure capitalism, driven by an industry of for-profit consultants and relentlessly focused on the institutional bottom line.

That’s a huge problem for students and parents trying to make expensive, life-changing choices about higher education. Many families make bad decisions based on the misleading vocabulary colleges use around financial aid, leading to broken futures and, increasingly, unaffordable student loans. If you have children and are planning to help them go to college anytime soon, understand this: Much of what colleges are going to tell you about money isn’t true.

There are, to be sure, a few extremely wealthy institutions that really do provide financial aid. If you are among the small number of low-income students that Harvard chooses to admit after filling much of its class with legacies, athletes, and the children of wealth, status, and power, you won’t have to pay tuition. The Ivies and a handful of other elite schools have “need blind” admissions, which means they consider your application regardless of your financial circumstances, and offer generous aid to those who need it.

Parents can also find good, reasonably priced public options in some states, which allow them to avoid the shell games involving financial aid. Public universities in North Carolina remain very affordable, for instance. And some states also provide grants to students that are in fact based on their financial needs or academic achievements.

Tuition and fees for the State University of New York system are relatively low to begin with, roughly $8,000 to $10,000 for in-state students. But the state of New York also runs a state need-based scholarship program that, combined with a federal Pell grant, can be enough to cover tuition and part of room and board.

But if you live in a less generous part of the country and your kids are applying out-of-state, or they have their sights set on a private college without an Ivy League endowment, then you have wandered into a very different kind of market, one that has a lot more in common with airlines hawking seats or dealers selling cars than you might realize.

The language of admissions and financial aid suggests that colleges review every application with two questions in mind: “Does this applicant meet our academic standards? If so, how much scholarship aid, given their financial circumstances and academic merit, do they deserve?”

In reality, the large majority of undergraduates attend a college that accepts most or all applicants. And while the “sticker price” for tuition at some institutions exceeds $50,000, most colleges don’t have enough market power to charge anything close to that. For them, the real concerns are, “How likely is this applicant to enroll, if we accept them? And what’s the most amount of money they’d be willing to pay?”

To answer those questions, many colleges hire expensive consulting firms to help them manage a complex process of marketing, admissions, and pricing. The firms design social media campaigns and produce the flood of glossy brochures that pours through the U.S. postal system every year.

They take the wealth of detailed financial information that parents are required to disclose on the Free Application for Federal Student Aid, or FAFSA, and feed it into the same kinds of complex algorithms that airlines use to constantly change the price of seats in the months, weeks, and days before a flight.

They also use a probabilistic strategy for deciding whom to admit, based on a combination of how much they think parents are willing to pay and how likely students are to enroll. Because of online systems like the Common App, it’s easy for students to apply to many colleges. At less desired colleges—the safety schools and fourth choices—“yield” rates, meaning the percentage of admitted students who enroll, are often below 20 percent.

So they admit 3,000 students to fill a freshman class of 600 and hope that past statistical patterns hold. If too many students enroll, there’s no room in the dorms. Too few, and the college goes broke. The whole process is called “enrollment management.” To understand how important enrollment management is in the higher education industry, look to administrative hierarchy:

Ursinus College, for example, has a director of admissions who reports to a vice president and dean of enrollment management and marketing. When Washington College mailed Ethan three “VIP admission” tickets and an all-access lanyard with his name printed on it for an “Admitted Students Day Music Festival” in April, it was trying to increase its yield.

When one college after another sent Ethan a letter offering him tens of thousands of dollars in scholarship money, in most cases it probably had nothing to do with their evaluation of Ethan’s achievements. It was more likely because market research told them that students like the feeling of being awarded something, and the enrollment management algorithm suggested that full tuition minus $25,000 or $30,000 was a price his parents might be willing to pay.

The Ursinus College Office of Student Financial Services did not receive any additional information regarding Ethan’s application. That was a fib. An Ursinus spokesman confirmed for me that the extra award was based on his original application and “other financial considerations.”

It would not be surprising if those “other financial considerations” included a report from an enrollment management consultant—the firms Ruffalo Noel Levitz and EAB are two of the biggest—showing that acceptance and pricing projections as of early March were looking soft. When colleges find their enrollment numbers lagging, they act like a car dealer with too many of last year’s models on the lot, and put tuition on sale.

Like most colleges, Ursinus’ $72,000 list price is an imaginary number; on average, it charges students only about one-third of that. It is not providing Gateway Scholarships and Grizzly Grants from a pot of actual money. It’s just pretending to, because that’s what students and parents like to hear.

Colleges, unsurprisingly, are shy to discuss the consultants that shape the inner workings of their aid process, and will resort to linguistic contortions when asked about it. When I asked Ursinus whether it awarded its “Grizzly Grants” based on a report from an enrollment management consultant, a spokesman responded that it works “in partnership with a financial aid leveraging firm” and that “we monitor the progress of the first-year class on a routine basis throughout the enrollment cycle.”

A spokesman from Clark University, which tried to entice Ethan with a “$68,000 Robert Goddard Achievement Scholarship,” told me that the school “does not rely on an enrollment management consultant.” Instead, they said, it “occasionally” hires “outside analytical support” that does “not tell us how much aid to offer any student or group of students” but does “crunch large volumes of data in a timely manner that we then use to assess our progress toward our enrollment goals and estimate/project our total aid expenditure through that enrollment cycle.”

So, not an enrollment management consultant. Just, you know, a consultant that helps them manage enrollment. But while schools may not love talking about it, nothing about this system is a secret within higher education. For instance, after taking a job in the enrollment management industry, former Ursinus vice president for enrollment Richard DiFeliciantonio wrote an essay for Inside Higher Ed in which he explained that the “financial aid matrix” colleges rely on is essentially “the same pricing technique taught to M.B.A.s and commonly used by corporations for commercial products.”

He noted that the formula considers a student’s academic achievement mostly as a “proxy” for their willingness to pay for college (as opposed to a measure of merit). This is also why, despite her financial need and solid high school achievement, Ethan’s cousin Ashley was not being inundated with texts and letters offering her more money. As DiFeliciantonio wrote: “Wealthy families are more able and less willing to pay for college while the poorer families are more willing and less able.”

In other words, parents of means who themselves have finished college are often sophisticated consumers of higher education and are able to drive a hard bargain, whereas lower-income, less-educated parents feel an enormous obligation to help their children move farther up the socioeconomic ladder and blindly trust that colleges have their best financial interests at heart. So colleges obey the algorithm and offer more financial aid to the Ethans than to the Ashleys, one of many problems identified in a recent Brookings Institution report.

Ashley submitted financial aid forms with information about her family’s modest income because everyone and everything about the process told her college aid is based on how much money you need, or deserve. She had no idea that information could be used against her. In May, New York University offered her admission if she would agree to delay enrollment until spring 2023—when, maybe not coincidentally, her good-but-not-stellar academic record would not count in the rankings data NYU submits to U.S. News & World Report.

Their price? $79,070. Their aid offer? $0, take it or leave it, with 96 hours to respond. Federal statute limits how much the Department of Education can lend to undergraduates. Freshmen can only borrow $5,500. But there is no limit on how much the department can lend to parents through a program called Parent PLUS. Nor does the department check to see if parents have the means to pay PLUS loans back.

So NYU “offered” Ashley the opportunity to borrow $5,500 and take a $1,500 work-study job. Then it offered Ashley’s mother the chance to take out a $72,099 Parent PLUS loan—more than her gross annual salary, before taxes—for the first of four undergraduate years.

Fortunately for Ashley and her mother, they knew someone who offered sensible financial advice. They turned down NYU and its offer of gargantuan loans and chose a less expensive public university. But as the countless individual stories that compose the nation’s $1.7 trillion student loan crisis show, many families make different choices. They are drawn in by a combination of optimism, blind faith, and familial obligation, and end up with debts they cannot repay. Colleges know this will happen.

Colleges do this because they want and need money. The business of filling up a class has gotten more difficult as the number of new high school graduates continues to recede from the peak millennial years, with further declines expected starting in 2025. Small, private colleges are especially vulnerable, and some have gone bankrupt in recent years.

Understanding the true nature of the college market should reduce some kinds of student stress. If you’re a high school graduate in reasonable academic standing, there are scores of good colleges ready to admit you. The real market tuition price in the big middle of the higher education sector is probably about $25,000, not the $50,000 or $60,000 you might have heard. Applying to college there isn’t like being vetted to join an exclusive social club. Nobody is really judging your worthiness for financial aid. College is just another service with a price.

The words colleges use in the admissions process, embedded in the broader portrayal of higher education in popular culture, tell a different tale, leaving first-generation students with the least money and social capital most vulnerable to exploitation. Colleges are full of great educators who want to help you learn. But when it comes to money, you’re on your own.

By Kevin Carey

Source: College financial aid: It’s a sham that depends on what colleges think families will pay.

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What Is ESG’s Significance To Business Leaders?

No matter where you sit in a business, you’ll likely have heard of environmental, social, and governance (ESG). Your peers in finance, legal/compliance, and risk will have heard of it a lot. And we’ll all be hearing a lot more about it in the coming years. But ESG can mean a lot of different things, depending on who is saying it and the context in which they’re saying it, which leads to confusion.

What Is ESG?

Essentially, ESG denotes the qualitative and quantitative data that either:

  • describes a business’s environmental status, societal characteristics, and corporate governance (thus ‘E’ for environment, ‘S’ for social and ‘G’ for governance) or …
  • … reflects a business’s or sector’s or investment’s exposure to, and management of, environmental-, social-, or governance-related risks.

The data points can vary, but the World Economic Forum and Sustainability Accounting Standards Board provide common lists.

The Significance For Businesses

Interest in ESG started with arguments such as those of Harvard economist Michael Porter that businesses (and capitalism as a whole) benefit from thinking about value generation beyond the purely economic — that is, businesses should focus their value generation on all of their stakeholders (including communities, employees, and customers), not just shareholders or owners.

This broader interpretation of value would provide for longer-term competitiveness, profit, and business health, because it both drives down risk and makes the most of scarce resources. In fact, it was the investment community that coined the term, as they sought to widen their analysis to nonfinancial factors

This broader understanding of value generation has worked its way into the echelons of corporate management; even the cradle of Milton “profit is everything” Friedman, the University of Chicago Booth School of Business, teaches ESG.

ESG performance, the managerial decisions that drive it, and the data points that reflect it have become a form of proxy measurement on the quality of a business’s management, right alongside its financial data. Naturally, they have then become a matter of board attention, leaders’ attention, and operational discussions, with supporting functions, processes, and technologies across a company.

ESG now features much more prominently in just about every company’s key strategic discussions, especially at its highest levels. As the battle over Exxon last year and McDonald’s right now show, these decisions determine the futures of companies. And Elon Musk’s recent ESG post on Twitter, meant to disparage the term, reveals its importance even in companies that resist its influence.

Expect ESG to become more important, driven especially by climate change and scrutiny of capitalism’s social impact but also by companies’ efforts to seek competitive advantage and differentiation and investors’ desire to incorporate nonfinancial analysis for better returns.

ESG investing, despite the criticisms, is becoming increasingly popular and is most likely to be an investing approach used by millennials. Morgan Stanley Bank (NYSE: MS) recently conducted a survey that found that nearly 90% of millennial investors were interested in pursuing investments that more closely reflect the values they hold.

By 2018, approximately $12 trillion worth of investment assets were selected using a socially responsible investing strategy. As millennials begin to comprise a larger segment of the total pool of investors, you can expect ESG investing to expand right along with them.

The financial services industry’s responded to the growing demand for ESG investments by making moves such as offering ESG-focused exchange-traded funds (ETFs). Both of the two largest ETF providers – BlackRock and Vanguard – offer clients a choice of ESG-focused funds. BlackRock added six new ESG funds in 2020, and its equity investment team now includes a Head of Sustainable Investing. Brokerage firms now customarily offer stock analysis employing ESG investment strategies, and robo-advisors such as Wealthfront can be set to seek out socially responsible investments.

Although ESG metrics are not currently a required part of financial reports for publicly traded companies, a growing number of companies are proudly including them in their reported statements or a separately issued document. Increasingly there is consensus among many regulators that some form of standardized ESG disclosures will be required of publicly-traded companies on most major global stock exchanges.

Each of the three elements of ESG investing – environmental, social, and corporate governance – comprises a number of criteria that may be considered, either by socially responsible investors or by companies aiming to adopt a more ESG-friendly operational stance.

While many ESG criteria are rather subjective (such as evaluations of “diversity” or “inclusion”), moves are occurring on several fronts that are designed to provide more objective, credible ratings of a company’s performance in terms of ESG policies and actions.

In the past, a company’s standing in terms of ESG has often depended less on substantive practices and more on how good the company’s public relations department is. Businesses such as AccountAbility offer ESG consulting services for companies that want to implement broad ESG-friendly policies and practices.

Environmental criteria include a company’s use of renewable energy sources, its waste management program, how it handles potential problems of air or water pollution arising from its operations, deforestation issues (if applicable), and its attitude and actions around climate change issues.

Other possible environmental issues include raw material sourcing (e.g., does the company use fair trade suppliers and organic ingredients?) and whether a company follows biodiversity practices on land it owns or controls.

Social criteria cover a vast range of potential issues. There are many separate social aspects of ESG, but all of them are essentially about social relationships. One of the key relationships for a company, from the point of view of many socially responsible investors, is its relationship with its employees. Following is a brief rundown of just some of the issues that may be considered when examining how a company handles its social relationships:

  • Is employee pay fair, or perhaps even generous, compared to comparable jobs or similar positions throughout the industry? What type of retirement plans are employees offered? Does the company contribute to the employee retirement plans?
  • In addition to basic wages or salary, what benefits or perks are employees provided with? With ESG-concerned investors, it can make a big difference in the evaluation of your company if, for example, you do things such as providing a free, very lavish buffet lunch for all employees every Friday – or provide other types of benefits that aren’t common at all workplaces, such as an on-site fitness center.
  • Workplace policies regarding diversity, inclusion, and prevention of sexual harassment are also frequently considered.
  • Employee training and education programs; for example, does your company provide financial support for continuing or higher education and/or flexible working hours for employees pursuing further education; what opportunities exist for employees to be trained in new job skills at the company that will qualify them for higher-paying positions?
  • What level of employee engagement with management is there? How much input do employees have in determining operational procedures within their respective departments?
  • The level of employee turnover
  • What’s the company’s mission statement? Is it socially relevant and beneficial to society?
  • How well are customer relationships managed? Does the company engage with customers on social media? How responsive and efficient is the customer service department? Does the company have a negative history of consumer protection issues, such as product recalls?
  • Does the company take a public or political stance on human rights issues? Does it donate money to charitable causes?

Governance, in the context of ESG, is essentially about how a company is managed by those in the top floor executive offices. How well do executive management and the board of directors attend to the interests of the company’s various stakeholders – employees, suppliers, shareholders, and customers? Does the company give back to the community where it is located?

Financial and accounting transparency and full and honest financial reporting are often considered key elements of good corporate governance. Also important are board members acting in a genuine fiduciary relationship with stockholders and being careful to avoid conflicts of interest with that duty. Are the board members and company executives a diverse and inclusive group?

The issue of executive compensation is a primary focus of many ESG investors, who, for example, don’t tend to favor multi-million-dollar bonuses for executives while the company imposes a salary freeze in effect for all other employees. Is extra compensation for executives appropriately tied to increasing the long-term value, viability, and profitability of the business?

An example of how responsible corporate governance is put into practice can be seen in the policies of the company, Intuit (NASDAQ: INTU). One of the company’s corporate policies that is aimed at helping to ensure that company executives take on a strong vested interest in the company’s ongoing success, rather than just in earning some quarterly bonus, is a rule that requires the top-level chief executive officer to maintain stock ownership equivalent in value to ten times their annual salary.

In addition, executive bonuses depend on more than just revenue or income – factors such as employee, shareholder, and customer satisfaction are also part of the calculation.

Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help leaders across technology, marketing, customer

Source: What Is ESG’s Significance To Business Leaders?

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Capitalism Is killing The Planet Climate Crisis

Instead of focusing on ‘micro consumerist bollocks’ like ditching our plastic coffee cups, we must challenge the pursuit of wealth and level down, not up

There is a myth about human beings that withstands all evidence. It’s that we always put our survival first. This is true of other species. When confronted by an impending threat, such as winter, they invest great resources into avoiding or withstanding it: migrating or hibernating, for example. Humans are a different matter.

When faced with an impending or chronic threat, such as climate or ecological breakdown, we seem to go out of our way to compromise our survival. We convince ourselves that it’s not so serious, or even that it isn’t happening. We double down on destruction, swapping our ordinary cars for SUVs, jetting to Oblivia on a long-haul flight, burning it all up in a final frenzy. In the back of our minds, there’s a voice whispering, “If it were really so serious, someone would stop us.”

If we attend to these issues at all, we do so in ways that are petty, tokenistic, comically ill-matched to the scale of our predicament. It is impossible to discern, in our response to what we know, the primacy of our survival instinct. Here is what we know. We know that our lives are entirely dependent on complex natural systems: the atmosphere, ocean currents, the soil, the planet’s webs of life.

People who study complex systems have discovered that they behave in consistent ways. It doesn’t matter whether the system is a banking network, a nation state, a rainforest or an Antarctic ice shelf; its behaviour follows certain mathematical rules. In normal conditions, the system regulates itself, maintaining a state of equilibrium. It can absorb stress up to a certain point. But then it suddenly flips. It passes a tipping point, then falls into a new state of equilibrium, which is often impossible to reverse.

Human civilisation relies on current equilibrium states. But, all over the world, crucial systems appear to be approaching their tipping points. If one system crashes, it is likely to drag others down, triggering a cascade of chaos known as systemic environmental collapse. This is what happened during previous mass extinctions.

Here’s one of the many ways in which it could occur. A belt of savannah, known as the Cerrado, covers central Brazil. Its vegetation depends on dew forming, which depends in turn on deep-rooted trees drawing up groundwater, then releasing it into the air through their leaves. But over the past few years, vast tracts of the Cerrado have been cleared to plant crops – mostly soya to feed the world’s chickens and pigs. As the trees are felled, the air becomes drier. This means smaller plants die, ensuring that even less water is circulated.

In combination with global heating, some scientists warn, this vicious cycle could – soon and suddenly – flip the entire system into desert. The Cerrado is the source of some of South America’s great rivers, including those flowing north into the Amazon basin. As less water feeds the rivers, this could exacerbate the stress afflicting the rainforests. They are being hammered by a deadly combination of clearing, burning and heating, and are already threatened with possible systemic collapse.

The Cerrado and the rainforest both create “rivers in the sky” – streams of wet air – that distribute rainfall around the world and help to drive global circulation: the movement of air and ocean currents.

Global circulation is already looking vulnerable. For example, the Atlantic meridional overturning circulation (AMOC), which delivers heat from the tropics towards the poles, is being disrupted by the melting of Arctic ice, and has begun to weaken. Without it, the UK would have a climate similar to Siberia’s.

AMOC has two equilibrium states: on and off. It has been on for almost 12,000 years, following a devastating, thousand-year off state called the Younger Dryas (12,900 to 11,700 years ago), which caused a global spiral of environmental change. Everything we know and love depends on AMOC remaining in the on state.

Regardless of which complex system is being studied, there’s a way of telling whether it is approaching a tipping point. Its outputs begin to flicker. The closer to its critical threshold it comes, the wilder the fluctuations. What we’ve seen this year is a great global flickering, as Earth systems begin to break down. The heat domes over the western seaboard of North America; the massive fires there, in Siberia and around the Mediterranean; the lethal floods in Germany, Belgium, China, Sierra Leone – these are the signals that, in climatic morse code, spell “mayday”.

You might expect an intelligent species to respond to these signals swiftly and conclusively, by radically altering its relationship with the living world. But this is not how we function. Our great intelligence, our highly evolved consciousness that once took us so far, now works against us.

An analysis by the media sustainability group Albert found that “cake” was mentioned 10 times as often as “climate change” on UK TV programmes in 2020. “Scotch egg” received double the mentions of “biodiversity”. “Banana bread” beat “wind power” and “solar power” put together.

I recognise that the media are not society, and that television stations have an interest in promoting banana bread and circuses. We could argue about the extent to which the media are either reflecting or generating an appetite for cake over climate. But I suspect that, of all the ways in which we might measure our progress on preventing systemic environmental collapse, the cake-to-climate ratio is the decisive index.

The current ratio reflects a determined commitment to irrelevance in the face of global catastrophe. Tune in to almost any radio station, at any time, and you can hear the frenetic distraction at work. While around the world wildfires rage, floods sweep cars from the streets and crops shrivel, you will hear a debate about whether to sit down or stand up while pulling on your socks, or a discussion about charcuterie boards for dogs.

I’m not making up these examples: I stumbled across them while flicking between channels on days of climate disaster. If an asteroid were heading towards Earth, and we turned on the radio, we’d probably hear: “So the hot topic today is – what’s the funniest thing that’s ever happened to you while eating a kebab?” This is the way the world ends, not with a bang but with banter.

Faced with crises on an unprecedented scale, our heads are filled with insistent babble. The trivialisation of public life creates a loop: it becomes socially impossible to talk about anything else. I’m not suggesting that we should discuss only the impending catastrophe. I’m not against bants. What I’m against is nothing but bants.

It’s not just on the music and entertainment channels that this deadly flippancy prevails. Most political news is nothing but court gossip: who’s in, who’s out, who said what to whom. It studiously avoids what lies beneath: the dark money, the corruption, the shift of power away from the democratic sphere, the gathering environmental collapse that makes a nonsense of its obsessions.

I’m sure it’s not deliberate. I don’t think anyone, faced with the prospect of systemic environmental collapse, is telling themselves: “Quick, let’s change the subject to charcuterie boards for dogs.” It works at a deeper level than this. It’s a subconscious reflex that tells us more about ourselves than our conscious actions do. The chatter on the radio sounds like the distant signals from a dying star.

There are some species of caddisfly whose survival depends on breaking the surface film of the water in a river. The female pushes through it – no mean feat for such a small and delicate creature – then swims down the water column to lay her eggs on the riverbed. If she cannot puncture the surface, she cannot close the circle of life, and her progeny die with her.

This is also the human story. If we cannot pierce the glassy surface of distraction, and engage with what lies beneath, we will not secure the survival of our children or, perhaps, our species. But we seem unable or unwilling to break the surface film. I think of this strange state as our “surface tension”. It’s the tension between what we know about the crisis we face, and the frivolity with which we distance ourselves from it.

Surface tension dominates even when we claim to be addressing the destruction of our life-support systems. We focus on what I call micro-consumerist bollocks (MCB): tiny issues such as plastic straws and coffee cups, rather than the huge structural forces driving us towards catastrophe. We are obsessed with plastic bags. We believe we’re doing the world a favour by buying tote bags instead, though, on one estimate, the environmental impact of producing an organic cotton tote bag is equivalent to that of 20,000 plastic ones.

We are rightly horrified by the image of a seahorse with its tail wrapped around a cotton bud, but apparently unconcerned about the elimination of entire marine ecosystems by the fishing industry. We tut and shake our heads, and keep eating our way through the life of the sea.

A company called Soletair Power receives wide media coverage for its claim to be “fighting climate change” by catching the carbon dioxide exhaled by office workers. But its carbon-sucking unit – an environmentally costly tower of steel and electronics – extracts just 1kg of carbon dioxide every eight hours. Humanity produces, mostly by burning fossil fuels, roughly 32bn kg of CO2 in the same period.

I don’t believe our focus on microscopic solutions is accidental, even if it is unconscious. All of us are expert at using the good things we do to blot out the bad things. Rich people can persuade themselves they’ve gone green because they recycle, while forgetting that they have a second home (arguably the most extravagant of all their assaults on the living world, as another house has to be built to accommodate the family they’ve displaced).

And I suspect that, in some deep, unlit recess of the mind, we assure ourselves that if our solutions are so small, the problem can’t be so big. I’m not saying the small things don’t matter. I’m saying they should not matter to the exclusion of things that matter more. Every little counts. But not for very much. Our focus on MCB aligns with the corporate agenda. The deliberate effort to stop us seeing the bigger picture began in 1953 with a campaign called Keep America Beautiful.

It was founded by packaging manufacturers, motivated by the profits they could make by replacing reusable containers with disposable plastic. Above all, they wanted to sink state laws insisting that glass bottles were returned and reused. Keep America Beautiful shifted the blame for the tsunami of plastic trash the manufacturers caused on to “litter bugs”, a term it invented.

The “Love Where You Live” campaign, launched in the UK in 2011 by Keep Britain Tidy, Imperial Tobacco, McDonald’s and the sweet manufacturer Wrigley, seemed to me to play a similar role. It had the added bonus – as it featured strongly in classrooms – of granting Imperial Tobacco exposure to schoolchildren.

The corporate focus on litter, amplified by the media, distorts our view of all environmental issues. For example, a recent survey of public beliefs about river pollution found that “litter and plastic” was by far the biggest cause people named. In reality, the biggest source of water pollution is farming, followed by sewage. Litter is way down the list. It’s not that plastic is unimportant. The problem is that it’s almost the only story we know.

In 2004, the advertising company Ogilvy & Mather, working for the oil giant BP, took this blame-shifting a step further by inventing the personal carbon footprint. It was a useful innovation, but it also had the effect of diverting political pressure from the producers of fossil fuels to consumers. The oil companies didn’t stop there. The most extreme example I’ve seen was a 2019 speech by the chief executive of the oil company Shell, Ben van Beurden. He instructed us to “eat seasonally and recycle more”, and publicly berated his chauffeur for buying a punnet of strawberries in January.

The great political transition of the past 50 years, driven by corporate marketing, has been a shift from addressing our problems collectively to addressing them individually. In other words, it has turned us from citizens into consumers. It’s not hard to see why we have been herded down this path. As citizens, joining together to demand political change, we are powerful. As consumers, we are almost powerless.

In his book Life and Fate, Vasily Grossman notes that, when Stalin and Hitler were in power, “one of the most astonishing human traits that came to light at this time was obedience”. The instinct to obey, he observed, was stronger than the instinct to survive. Acting alone, seeing ourselves as consumers, fixating on MCB and mind-numbing trivia, even as systemic environmental collapse looms: these are forms of obedience.

We would rather face civilisational death than the social embarrassment caused by raising awkward subjects, and the political trouble involved in resisting powerful forces. The obedience reflex is our greatest flaw, the kink in the human brain that threatens our lives. What do we see if we break the surface tension? The first thing we encounter, looming out of the depths, should scare us almost out of our wits. It’s called growth. Economic growth is universally hailed as a good thing.

Governments measure their success on their ability to deliver it. But think for a moment about what it means. Say we achieve the modest aim, promoted by bodies like the IMF and the World Bank, of 3% global growth a year. This means that all the economic activity you see today – and most of the environmental impacts it causes – doubles in 24 years; in other words, by 2045. Then it doubles again by 2069. Then again by 2093.

It’s like the Gemino curse in Harry Potter and the Deathly Hallows, which multiplies the treasure in the Lestrange vault until it threatens to crush Harry and his friends to death. All the crises we seek to avert today become twice as hard to address as global economic activity doubles, then twice again, then twice again. Have we reached the bottom yet? By no means. The Gemino curse is just one outcome of a thing we scarcely dare mention. Just as it was once blasphemous to use the name of God, even the word appears, in polite society, to be taboo: capitalism.

Most people struggle to define the system that dominates our lives. But if you press them, they’re likely to mumble something about hard work and enterprise, buying and selling. This is how the beneficiaries of the system want it to be understood. In reality, the great fortunes amassed under capitalism are not obtained this way, but through looting, monopoly and rent grabbing, followed by inheritance.

One estimate suggests that, over the course of 200 years, the British extracted from India, at current prices, $45tn. They used this money to fund industrialisation at home and the colonisation of other nations, whose wealth was then looted in turn.

The looting takes place not just across geography, but also across time. The apparent health of our economies today depends on seizing natural wealth from future generations. This is what the oil companies, seeking to distract us with MCB and carbon footprints, are doing. Such theft from the future is the motor of economic growth. Capitalism, which sounds so reasonable when explained by a mainstream economist, is in ecological terms nothing but a pyramid scheme.

It scarcely matters how green you think you are. The main cause of your environmental impact isn’t your attitude. It isn’t your mode of consumption. It isn’t the choices you make. It’s your money. If you have surplus money, you spend it. While you might persuade yourself that you are a green mega-consumer, in reality you are just a mega-consumer. This is why the environmental impacts of the very rich, however right-on they may be, are massively greater than those of everyone else.

Preventing more than 1.5C of global heating means that our average emissions should be no greater than two tonnes of carbon dioxide per person per year. But the richest 1% of the world’s people produce an average of more than 70 tonnes. Bill Gates, according to one estimate, emits almost 7,500 tonnes of CO2, mostly from flying in his private jets. Roman Abramovich, the same figures suggest, produces almost 34,000 tonnes, largely by running his gigantic yacht.

The multiple homes that ultra-rich people own might be fitted with solar panels, their supercars might be electric, their private planes might run on biokerosene, but these tweaks make little difference to the overall impact of their consumption. In some cases, they increase it. The switch to biofuels favoured by Bill Gates is now among the greatest causes of habitat destruction, as forests are felled to produce wood pellets and liquid fuels, and soils are trashed to make biomethane.

But more important than the direct impacts of the ultra-wealthy is the political and cultural power with which they block effective change. Their cultural power relies on a hypnotising fairytale. Capitalism persuades us that we are all temporarily embarrassed millionaires. This is why we tolerate it. In reality, some people are extremely rich because others are extremely poor: massive wealth depends on exploitation. And if we did all become millionaires, we would cook the planet in no time at all. But the fairytale of universal wealth, one day, secures our obedience.

The difficult truth is that, to prevent climate and ecological catastrophe, we need to level down. We need to pursue what the Belgian philosopher Ingrid Robeyns calls limitarianism. Just as there is a poverty line below which no one should fall, there is a wealth line above which no one should rise. What we need are not carbon taxes, but wealth taxes. It shouldn’t surprise us that ExxonMobil favours a carbon tax. It’s a form of MCB. It addresses only one aspect of the many-headed environmental crisis, while transferring responsibility from the major culprits to everyone. It can be highly regressive, which means that the poor pay more than the rich.

But wealth taxes strike at the heart of the issue. They should be high enough to break the spiral of accumulation and redistribute the riches accumulated by a few. They could be used to put us on an entirely different track, one that I call “private sufficiency, public luxury”. While there is not enough ecological or even physical space on Earth for everyone to enjoy private luxury, there is enough to provide everyone with public luxury:

Magnificent parks, hospitals, swimming pools, art galleries, tennis courts and transport systems, playgrounds and community centres. We should each have our own small domains – private sufficiency – but when we want to spread our wings, we could do so without seizing resources from other people.

In consenting to the continued destruction of our life-support systems, we accommodate the desires of the ultra-rich and the powerful corporations they control. By remaining trapped in the surface film, absorbed in frivolity and MCB, we grant them a social licence to operate.

We will endure only if we cease to consent. The 19th-century democracy campaigners knew this, the suffragettes knew it, Gandhi knew it, Martin Luther King knew it. The environmental protesters who demand systemic change have also grasped this fundamental truth. In Fridays for Future, Green New Deal Rising, Extinction Rebellion and the other global uprisings against systemic environmental collapse, we see people, mostly young people, refusing to consent. What they understand is history’s most important lesson. Our survival depends on disobedience.

By

Source: Capitalism is killing the planet – it’s time to stop buying into our own destruction | Climate crisis | The Guardian

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The Complicated Reality of Doing What You Love

I didn’t love my old therapist, but she did give me one crucial piece of advice: Get a hobby. I was writing about food for work, so cooking didn’t really count as a hobby anymore — I’d already monetized that one — nor did reading, nor socializing, especially since all of my friends worked in my industry. I needed something in my life that existed apart from all that. I was stressed and, of course, also on my phone too much (and still am).

Maybe something you can do with your hands. The suggestion felt like an escape hatch: Maybe a hobby could free me from toil. Cooking had once been the thing I did to relax when I got home from work, the thing I was curious about, the thing that distracted my brain from its standard litany of complaints. Puttering in the kitchen had once been a release, but now it was part of my professional life. It needed a replacement. A few months later, I dutifully signed up for a ceramics class at a studio nearish my Brooklyn apartment.

This was March 2016. One of my roommates was an artist who had taken a class at that same studio, and I always envied the little pots she made. One of them was shaped like the face of a woman, with a ponytail for a handle. She gave it to me, and I put a small succulent in it that would soon die. I hoped that taking a class could make me more like her, or at the very least, happier — and if not that, well, maybe I’d make myself a bowl to put pasta in.

Learning to make ceramics on the wheel — this is what you picture when you think of that scene from Ghost — feels initially impossible, pointless, tantrum-inducing. In class, our teacher showed us how to take a blob of clay and slam it onto the machine’s surface, strong-arm it into symmetry as the wheel whirred around, dig a hole in its center with our fingers, make the hole wider, and then raise up the walls that would make it a vessel.

Doing it on my own was another thing entirely: a reminder of the unkind presence of physics, an asymmetrical lump thwapping around like an off-balance tornado, just some really ugly shit that would occasionally collapse in on itself.

This is par for the course. Most of us suck at first. The stuff you made in second-grade art class was objectively better. Clay shrinks when fired in a kiln, so the first mugs I made that weren’t ugly came out more like handled thimbles. Glazing each piece — decorating it with the often-colorful vitrified coating that makes it water-tight and food-safe, and glossy or matte — was its own messy challenge. My goal became not to make art or even craft, so much as to make things I didn’t hate.

Of course, failing at something new doesn’t feel good; it feels like banging your head against a wall in front of an invisible audience of your own making. Turning off the desire to excel once you leave work is often impossible, if not difficult.

That said, the pace of my failure was different at the studio. Making ceramics requires patience and is an exercise in delayed gratification (or dissatisfaction). There are so many ways to fuck something up, so many stages to the process, and entering that cycle of hope, expectation, and either failure and trying again or ecstatic satisfaction added a new dimension to the rhythms of my life. Entering that cycle of hope, expectation, and failure and trying again added a new dimension to the rhythms of my life

Through this mild and harmless struggle, I acquired a hobby. “How agitated I am when I am in the garden, and how happy I am to be so agitated,” Jamaica Kincaid writes in My Garden (Book). “Nothing works just the way I thought it would, nothing looks just the way I had imagined it, and when sometimes it does look like what I had imagined (and this, thank God, is rare) I am startled that my imagination is so ordinary.”

Powerlessness, for an amateur, can be its own draw. At the studio, I started as a lazy learner, but in a few months became obsessed, signing up for more classes when my session ended. My classes netted out to about $40 a week, plus materials and the cost of firing. I was spending maybe $200 a month, which required an increased vigilance in my other spending but also meant I had something to care about.

I had a place to go in my free time that was not my office, or my apartment, or a friend’s apartment, or a restaurant, or a bar. I had something to be curious about, and my goals were unrelated to exterior forces: a boss, a job, a market, a reader. Unlike with writing, my progress was quantifiable: Now I can make a vase this tall. Now I have made a planter. Now my handles are beautiful. Now I have made two things that more or less look like a pair.

I also relished having something to do that didn’t involve a screen and therefore felt far from the style of work to which I was most accustomed. Hands covered in clay cannot swipe very well. Hobbies have always been defined by their tenuous relationship to work: After industrialization bifurcated life into the realms of work and leisure, hobbies appeared as something “productive” for workers to do with their newly minted chunks of free time.

“Leisure came to represent freedom because it took place in time separate from work, and time in an industrial world could be used for either work or leisure,” writes Steven Gelber in his book Hobbies: Leisure and the Culture of Work in America. “For this reason, industrial capitalism sharpened the West’s ambivalent feelings about leisure.” Leisure does not exist without work and is therefore defined by it.

Even as hobbies gained popularity among the 19th-century middle class, they mimicked the capitalist attitudes of the workplaces from which they were meant to provide relief. “Since the hobby was done at home in free time, it was under the complete control of the hobbyist. It was, in other words, a re-embracing of preindustrial labor, a recreation of the world of the yeoman, artisan, and independent merchant,” Gelber writes. “Hobbies were a Trojan horse that brought the ideology of the factory and office into the parlor.”

The capitalist value of a “work ethic” has always been present in the world of the hobbyist. We love hobbies because they are something to do that isn’t work, something that we choose to do. But they still so often require toil; we are still proud of ourselves when we perform our hobbies efficiently, competently. Pursuit of mastery is implied, if not always present. For me, few things match the thrill of pulling something beautiful out of the kiln. It always feels like a surprise I have magically given myself.

Once I had made a few things that I didn’t hate — and because I have a smartphone and a need for validation — I began posting photos of my work on Instagram. I loved making mugs, loved their practicality and the way they fit into a home. A mug can look like anything. I had newfound opinions on what mine should look like, and that felt good.

By the winter, people were asking to buy them. I was freelancing at the time, and my studio cost about $200 a month, plus more for materials. If I could regularly sell a few mugs, I’d break even. The baseline price for these things, according to a brief survey of other potters, was around $40 — I started selling mine for $35 or $40, depending on size.

From the beginning I felt like I was doing everything wrong. Like maybe I should wait until I got a little better, or until I could make a nice shiny website, or until I had, I don’t know, SKUs. But it felt irresponsible to turn down a few people who would help cover my expenses and who wanted my work in their hands. Once you start making things, you have to put them somewhere. You begin to understand why people collect stamps.

Certain hobbies are difficult to monetize — say, bird-watching. Coin collecting, unless you sell it all. Gardening. Many things can only be monetized by becoming a teacher, or maybe now an influencer. Once demand appeared, selling felt like an inevitability. I wanted to keep making things but didn’t have space to keep it all; people love mugs; selling something feels like a pat on the head followed by a treat. (To be clear, the treat is money.)

People began commissioning mugs, and they’d tell me what color they wanted, send me a photo of something I’d made and ask for something similar. It was slapdash but it worked, and it covered my expenses. I was having fun and only mildly stressed by the process, always behind schedule. I look back now at some of the things that people paid for and feel a bit embarrassed, but I’m always wishing my work were a little uglier, so maybe I should be proud.

Once demand appeared, selling felt like an inevitability Somewhere along the line I made a website and started selling things more formally, claiming the revenue on my taxes, finding a person with a real camera to take photos of my work. I’d leave my day job at a magazine and go to the studio, often until 1 or 2 in the morning. It made me late for work, but I didn’t care; I ended up getting laid off with one foot out the door, and was given the gift of time — more daytime hours, at least — to spend at the studio. I had lost my hobby and gained a revenue stream.

My ceramic work, now, is caught up in the question of selling. Mugs sell, so I make more of them. I take a sick pleasure in the exhausting production line of throwing, trimming, attaching handles, smoothing everything down, painting, glazing, firing, staring at rows of cups lined up like synchronized swimmers, ready to jump. It’s the same sick pleasure I get in staying up until 2 am working on a jigsaw puzzle: maniacally focused on my goal at the expense of my posture. Untangling the question of what I want to make from what will sell feels like crawling out of a very deep well.

The swiftness with which modern craftspeople can and do monetize their hobbies is, of course, not a surprise. Traditional careers are crumbling, and side hustles are fetishized; Instagram has turned marketing into a basic skill we’re all expected to have. It’s easier to sell the crap you make in your spare time, and you’re more likely to need the money than you might have been a few decades ago, when you could have just foisted it all on your friends. This all risks turning hobbies into even more of an illusion, a mirage of leisure that quickly turns to obligation.

Some people, though, have fought the seduction of commerce and won. RC, an artist who makes work under the name marinatedclouds, began her first sculptural project with the express intention not to sell it. She was burned out from working a full-time job in graphic design, where in order for an idea to succeed, it needed to be marketable. “So many interesting concepts got dismissed because they couldn’t fit into a business context,” she remembers. “It became a situation where I started feeling really empty — I didn’t know how to have fun anymore.”

She had long toyed with the idea of creating a book about chicken and rice, with 35 different dishes from around the world. But she’d never gotten around to it; the work was too similar to her job as a graphic designer. So she decided to turn it into a sculptural project, quitting her job in April 2018 and giving herself the summer to focus on ceramic chicken and rice. Once she was done, she just kept making things.

Her work is influenced by early 2000s nostalgia and her Taiwanese American upbringing; her pieces look like something made by a child from a different dimension, playful and mind-blowing in one. Pencils are sliced like bananas; crayons threaten to crawl out of their box. She once made an entire aughts-era desktop computer.

Nurturing ideas was and is something I’m still extremely steadfast about,” RC says. “I want to pursue every idea, whether it lacks concept or not. Sometimes just making crayons is literally what I want. There’s no additional background to it, I just like the rainbow.” Refusing to sell her work — something she did for two years, despite enthusiastic interest from people on Instagram — allowed her to create the world of marinatedclouds without tainting it with outside influence. “For me, it’s just pursuing any and every idea that I have. That’s my form of self-expression.”

Quickly, her pieces began to pile up in her one-bedroom apartment. She was tripping over things. She got rid of her living room and turned it into a studio; she has no couch. But last winter, after a financially challenging 2020, she decided to sell some of her older pieces, both to make money and to clear space for new work. She learned that donuts sell really well. “That’s feedback that I didn’t actually need, but it does stay in the back of my head, and that’s something I do really want to avoid,” she says. She doesn’t want to cater to demand — only her own whims.Advertisement

This is, for many of us, the dream: unfettered commitment to externalizing our innards without concern for any gaze but our own. Reclaiming one’s time, you could say. But it requires nothing short of a battle. “Society puts so much pressure on success as in status or monetization,” RC says, “but success to me now is being true to myself.”

I can no longer call ceramics my hobby, and I doubt I ever will. I assume I will sell my work until people stop buying it, both out of necessity and because it does bring me joy to make a silly little thing that someone will incorporate into the tableau of their home. The struggle, for me, is between what I want to make and what I assume people will buy; the struggle of wishing I could log off forever but knowing that Instagram is the most direct marketing tool I have. The only solution I have come up with is to have a segment of my work I make just for myself, without concern for the market — or at least with an attempted lack of concern.

But making time for that also means carving out time, both for creation and inspiration, for the rest that is required for my brain to think thoughts. This is something I crave more than a new hobby; this is peace.

Marian Bull is an editor, writer, and potter living in Brooklyn.

Source: When you monetize your hobby, it looks a lot like a job

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LinkedIn Co-Founder Reid Hoffman on ‘Blitzscaling’ and Unintended Consequences

“You can’t anticipate everything. You can’t prep for everything,” said LinkedIn co-founder and former CEO Reid Hoffman during an interview Thursday at the 2021 Inc. 5000 Vision Conference. Entrepreneurship, he adds, is like “running really fast through the fog,” so the best thing you can do is equip yourself with learned wisdom from others who have been down the path before you.

Hoffman, who today is a partner at the venture capital firm Greylock, has had a hand in many fast-growth companies that have achieved enormous scale. In addition to LinkedIn, he was a top executive at PayPal, along with Peter Thiel, Elon Musk, and others who’ve gone on to become household names. And he’s been an investor in Facebook and Airbnb, among others.

Hoffman also is a three-time bestselling author whose newest book, Masters of Scale: Surprising Truths From the World’s Most Successful Entrepreneurs, which he co-wrote with June Cohen and Deron Triff, builds on the success of their podcast by the same name. Both the podcast and the book feature stories and lessons drawn from deep interviews with dozens of famous founders, along with tales from Hoffman’s own career. In short: Few people understand the art of scaling a business better than Hoffman.

In his conference appearance, Hoffman highlighted a few of the top takeaways from the new book and discussed the ethics of Silicon Valley-style blitzscaling at a moment when the type of tech giants he has helped create have come under increasing scrutiny.

Beware unintended consequences

One of the most memorable moments of Hoffman’s presentation came when he addressed the ethical complications that can come when scaling as quickly as possible brings unintended consequences. Especially as a growing organization moves “from single-threaded to multi-threaded,” Hoffman says, it can be hard as a leader to both maintain the speed to scale and keep on top of all the new threads–let alone anticipate all potential scenarios.

He recommends hiring “somebody whose responsibility is to say, ‘What could possibly go wrong? What would have the wrong impact with our customers or with society, and what are the things we could do now to prep against it?'” Nothing is fail-safe, he cautions, but the more you think ahead, the more nimbly you can respond when necessary–“because if things start going wrong at scale, that can be even more challenging.”

Let some fires burn

As Hoffman knows well, running a fast-growth company can feel like an exercise in constant crisis management. Rather than trying to put out every fire immediately, he advises, establish a triage system that allows you to, in his words, “let some fires burn.” An entrepreneur should ask herself a series of questions: “Which thing is most likely to kill us first, or limit our scale? Which thing, if we don’t start now, won’t be controllable later?”

The answers aren’t always obvious, he points out–some fires, though harder to control later, will be manageable because you’ll have more resources as you grow. “Generally speaking, you have a limited amount of resources to focus on some fires,” he says. “If you try to do them all at the same time, maybe you won’t get any of them sufficiently.”

It all comes back to mission

It’s not enough, Hoffman says, for your company to provide jobs or for people to love your product. “Those are important things, true, but sometimes your product might be questionable–like cigarettes.” So you should also ask, “Why is society better with your product in it?”–and invest in growing that direction.

That isn’t anti-business, he adds, it’s long-term brand building. It builds cohesion and clarifies decision-making in the company. It’s great for attracting talent. “It can be great capitalism. I think it’s really fundamental to great entrepreneurship and helps through the entire company,” he says.

By Tom Foster, Editor-at-large, Inc.@tomfoster2

Source: LinkedIn Co-Founder Reid Hoffman on ‘Blitzscaling’ and Unintended Consequences | Inc.com

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