Travel Report: October 2011

(All blogs published by the Institute are a personal opinion of the author and do not reflect the position of the Institute.) MontenegroIt’s small country. And it’s one of the most beautiful countries in Europe. On October 12, it started negotiations to join the European Union.I believe that is a mistake, and for the past two years I have been using all my powers of persuasion to convince the Montenegro government not to do it. They have no business joining that big, sick union––especially now, when the EU does not know itself where it is going and what it will be when it gets there.It is like marrying a schizophrenic woman. You have no idea whom you will wake up with each morning.Also, I argued, the cost is higher than the benefits.Montenegro is a small country, with a population of only 600,000. Let’s assume that one third of its citizens, or 200,000, are of working age. As the EU bureaucracy in Brussels requires a lot of people to be involved in following its regulations, a significant portion of the people of Montenegro instead of building the country, will end up writing or reading reports from Brussels.Those supporting entering the EU in Montenegro had another argument: by joining the Union they will become eligible for EU’s aid and various funds. I found this argument disquieting.Years ago, when I diagnosed the country of Greece for Constantine Mitsotakis, the Premier at the time, I tried to warn the Premier about the unintended consequences of such “aid.” People would get used to not having to worry about being productive, I said, since they knew they had a safety net, in the form of someone else’s largess. Pretty soon, they would become less motivated to be self depended. “Help” prolongs the need to be helped. It does not cure the debility.Is that what Montenegro wants?External financial economic aid, as different from investments, which need to have economic justification to be obtained, has cultural, economic, social, and thus political repercussions. If Montenegro were a desert whose people could not count on having enough to eat, much less getting a decent education, like the people in Africa, then aid is absolutely necessary. But Montenegro has plenty of assets: a beautiful coastline, breathtaking vistas. It can and should be a tourist Mecca. It can support itself.It should support itself.In fact, none of the Montenegro government’s reasoning for joining the EU made any sense to me. When that happens during a consultation––if my clients cannot give me a logical explanation for their behavior and strategy––I know it’s time to look for the “dead moose in the room.”“The dead moose in the room” is a metaphor for a situation in which everybody knows that something very undesirable is happening but no one addresses it. They pretend as if everything is fine although it is not; People walk around the dead moose, without discussing or debating how to remove it.Why don’t the people deal with the dead moose? Because, as they perceive the situation, there is cost to deal with removing the dead moose that they can not afford to pay or it might be even dangerous all together to remove the dead moose.Montenegro apparently has a dead moose.The country has corruption which most people feel helpless to fight it; the corrupt are simply too powerful and strong.So what is their solution? They want to bring in an even more powerful outsider to clean the house and get the moose out. The people of Montenegro believe that by following the rules the European Union imposes on those that want to join it, corruption will be cleared up.I believe they are misguided, and I said so in an interview, which was shown on Montenegro television.How long has Greece been a member of the European Union? Are they free of corruption? No. Well, why didn’t the European Union clean it up?I suggest it could not.No external organization can clean corruption. It has to come from within. The solution sometimes even requires benevolent dictatorship like in Singapore and Georgia. It requires benevolent dictators who have the right system of values, leaders that can politically afford to impose punishments for corruption, without worrying of being reelected. Cleaning corruption is not popular, although it is applauded.No external bureaucratic regulations will eradicate corruption, especially if those in power are the corrupt one.Also, adopting a strategy based on fear that the people themselves cannot solve the problem is not a good strategy. It does not solve the problem; it prolongs the problem. Fear breeds fear.Being against entering the EU is very unpopular. People perceive those that are against entering the EU as being in favor of corruption while those who support entering EU are the ones that want to fight corruption.Stay tuned as to how I am going to be received from now on in Montenegro.I am not popular with the government of Macedonia because of my public insistence that they need to change the name of the country so they can overcome the Greek veto to join EU, which in the case of Macedonia it is imperative for their survival.I am increasingly not popular in Israel because I find Zionism, as practiced, increasingly dysfunctional to the future of Judaism.Now Montenegro.Will see.United States I am not there, but I watch the news and I am most intrigued by the “Occupy Wall Street” phenomenon. This is a countrywide movement, on the verge of becoming a global phenomena––but against what? Clearly the demonstrators are upset with the bankers, with Wall Street making tons of money, while people are losing their jobs and homes. As one of the protesters said in one of the broadcast news report, “Something is wrong and we want it fixed.”But what is wrong? The movement is not very coherent on this question.Let me try to express once again what I believe is wrong.The profit motive is destructive. It served us well to build a vibrant economy. But, now it is dysfunctional. An economic system, where we have pushed our physical environment, air, water, earth, to the limit, more profits, generated by more production of what we already have in abundance, supported by a vast consumer economy, is becoming dysfunctional.Furthermore, to maximize profits, we export our work to countries where labor is cheaper. Then we are surprised and angry that there is unemployment in our own country.To maximize profits, we moved a lot of our technology abroad, to new emerging markets, to places like China. Now we are uncomfortable with the competition we are getting.To maximize profits, we sold packages of risky mortgage loans and left the taxpayers holding the bag.As I have said many times, profit should not be a deterministic goal to be maximized. Profits should be a constraint goal: no less than.Deterministic goals are those goals we want to maximize; constraint goals are those conditions we don’t want to violate. Dividends, for example, should be constraint goals, viewed more as payments on a bond—the minimum that has to be paid to investors to assure their continuing support.Ultimately, the deterministic goal should be serving clients and society. But that calls for a change in values. It is a major transformation, which our culture is not ready for yet. It will get there. I am sure of it. It will happen after we experience a string of even deeper, more disastrous crises. Unfortunately, society does not change its values until a string of unsolvable crises forces it to. TurkeyI love Turkey. It is the only country where people in the street turn to talk to me in the local language, assuming I am local, i.e., Turkish. Apparently my facial structure looks Turkish.I love the food. The music. The people. I feel at home in Turkey.But on this trip I got annoyed. (I really want to use the word p----d, but this is a serious blog.)Here is why: I read that the Turkish Parliament voted to allow the Turkish army to cross the border into northern Iraq, to bomb and defeat by force the Kurdish nationalist movement that has been making incursions into Turkey and killing Turkish soldiers.Wait. This is the same country that threatens to send its naval force to break the Israeli blockade of Gaza, which continually launches rockets into southern Israel, into schools, shopping centers, and homes. In the last two years more than 8,000 missiles have hit Israel, and they are moving closer and closer to Tel Aviv as their technology improves. Children in the targeted areas are afraid to go to school; their parents are afraid to walk to work.Now what country would allow that? What country would not at least blockade the attacker, to prevent more missiles from being brought in?For Turkey it is okay to defend itself, even by crossing into another country to kill and maim. But for Israel, even a blockade is excessive.Where does this double standard come from?From dirty politics. Turkey is vying to become the leader of the Muslim world, a counter-force to Iran. Attacking Israel is an easy way to draw attention and approval from the other Muslim nations.There could be another reason: the unspoken, undeclared reason that many Jews suspect: that it is not legitimate for the Jews to have a country of their own, or at least not at the expense of the Palestinians.Many Jews feel that the world does not care if Jews are killed. We have been murdered, burned alive, sold like slaves from one country to another for two thousand years. Now Israel has become the world’s scapegoat. So what else is new?And we take this condition as our fate. We do not fight it. We complain and we sulk. But we do not fight it. “There is no use of fighting it. They hate us anyway “ is a typical Israeli response.When Turkey threatened Israel with naval force, Israelis did not march to the Turkish embassy in Israel and burn the Turkish flag or throw rocks like other countries would do in a similar situation.Have you seen Israelis ever march in hate? When thousands of Israeli gather together to demonstrate it is almost always for peace.We do not march, scream obscenities, or raise our fists and threaten revenge, as Arab Muslims do all the time.We are quiet, almost as if we feel guilty. As if we do not deserve any better.Maybe we should go into the street and demonstrate. Burn some flags. Scream. Shout. Threaten the world with revenge if they do not let us live in peace.No worry. It will not happen. It is simply not the Jewish way.Because we are so quiet and the Muslims so noisy in their protests, the world might believe they are the damaged party and we, the Israeli, the damaging party.I believe Israel is ignoring world public opinion, at its own serious peril.Sincerely,Dr. Ichak Kalderon Adizes

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Dr. Ichak Adizes