Archimedean Theorem 1 – “Reality” Metrics

One cannot escape the cognitive reductionism which is a constant companion in our recent economic paroxysm. “No one saw it coming.” “We are adequately capitalized,” immediately preceding business failures and bankruptcy. Triple-A ratings on investments that had no market or value. Bank stress tests. Earnings growth by slashing future productive capacity. Equity market euphoria over missed earnings forecasts. Without question, we are collectively measuring the wrong stuff, or applying the wrong metrics, or applying the wrong metrics to the wrong stuff, or we just haven’t a clue. While we bask in the nuclear winter light of what I’ve been told is our post-post modernism (come-on, we can’t even come up with a decent name for today so we just revert to a very, very, very, very old technique we last used when counting words for our first written assignment in elementary school in which the number of words was the objective), we seem to not only have lost our way, we seem to have no clue where Polaris is or how to use a compass.

When Sir Isaac Newton inadvertently set in motion our present economic calamity, he did so by postulating that to every action this is an opposed and equal reaction. He never knew that central banks, bound by his “law” would find themselves compelled to engage in manifold folly by falsely misdiagnosing the action (the mortgage crisis rather than a destructive, dehumanized consumer debt cycle propped up by careless leverage policy which turned real estate into ATMs) leading to an insanity where recovery came from further indebting the taxpayer by bailing out AIG and providing year end bonuses for bankers who actually made their earnings on fee income derived from moving bail-out funds between themselves! We have a malignancy of ignorance and, courtesy of the market reporting media, we have the evangelists for the cult of impulsive greed chanting incantations at such a frenzy that if you wanted to find the truth…wow, I’m exhausted.

Let’s take a breath. Let me take you to one of the first places we lost our way. To find the roots of our current value bankruptcy, we need to understand that our current debt-based view of economic systems has inextricable roots in the 13th century – specifically the Fourth Lateran Council and the funding mechanisms put in place by Pope Innocent III for the financing of the fourth Crusade. In his Papal Bull (why does this animal keep showing up? – and yes, I know it’s not that kind of bull), he details the establishment of taxation of the public, preferential dispensations for the central bankers, and a removal of all rights from those outside the faith – not to mention his ultimate creativity of accelerating mortality for those who didn’t play by his rules. All of this to fund a war and provide liquidity for the State. Sound familiar?

Ironically, the reason why I link Newton and Pope Innocent III is critical. Both of them were absolutely confident in their definition of “truth” “values” and “laws”. Both of them were greatly motivated to impose reductionist simplicity on a world filled with heterogeneous thought. And both set in motion those who would become sycophant adherents who would conduct literal and figurative inquisitions which would stifle enlightened, creative thought and inquiry. And they did so by what appeared to be an innocuous act. Pope Innocent III gave us reality in the form of transubstantiation where the paradox of St. Augustine and Aristotle was resolved by fiat – it was the body and blood for Christ’s sake! And Newton gave us reality by confirming that only that which can be measured and observed is, in fact, real.

In our collective evolutionary regression, we obsess with “real”. We want to measure things, count things, compare who has more, who has bigger or better. Our obsession with metrics has paralyzed our creativity. It has dehumanized value and values. When my friend Tony offers to buy happiness from a company because they say it has no book value, no one is willing to part with it for any price. If we have less, than others with more should move to action. If we have more, we want to keep it from those who have less and want ours or find our morality in self-laudatory generosity and sharing. Pope Innocent III gave us debt-based currency. Newton gave us metric-delimited reality. And the present moment has given us a wonderful opportunity to realize that we have no clue what we’re measuring anymore.

What is the value of gold? As we swooned to see our golden calf (there’s that animal again) leap over the $1,000 an ounce moon, did any of us realize that the all in cost of movement of ore for processing last year’s production of gold required the equivalent of 14 billion human year’s worth of effort? That’s right, just to move the ore from mine to refinery, it would take 14 billion people working 24 hour days every day for a year just to move the ore. If you’re reading this, you clearly weren’t carrying ore. Neither were most of your neighbors. No, thanks to technology that pollutes the earth, water, and sky, we’ve become more efficient. But did we ever pay for the land from which we’re taking the gold? Did we actually set aside value to repair the environmental, social, and ecological damage of gold? If we did so, would gold really only cost $1,000 per ounce? Is its value what it costs? What it will cost the future? Is it worth what someone pays for a certificate saying that someone, somewhere has a bar with your name on it? What is its value? We have NO clue.

What is the value of earnings? When Intel and JPMorgan reported better-than-forecast results, their stock was rewarded with a vote of confidence, right? No! They lost 2% of their value. IBM topped expectations but investors rewarded it with a loss of value.

What is the value of prosperous engagement in the workforce? Unemployment continues to rise. The Federal Government demonstrated this week that it cannot even track its own expenditures when it attempted to report on the jobs saved or created with the Recovery Act. Silver lining? The Recovery Board is spending a reported $18 million on updating its website so the stimulus recipients’ self-reports of economic impact are more prone to accuracy.

What is the value of public support of innovation? I just spent the past two days with an inspirational leader from South Africa. During our conversation, I was disheartened to hear yet another instance when the innovative value of a country was measured by the number of patents filed by its researchers. We measure the innovative contribution to the world by how much we block others from using creativity? How tragic.

I am repeatedly asked questions about how much revenue my company makes. How many employees do I have? Why don’t I turn our technology towards making massive wealth and, after amassing a fortune, use it for good causes? And these questions come not only from crass capitalists but by perplexed social activists.

It is time to understand the elegance of the Archimedean Theorem I. Reality is that which catalyzes, harnesses, releases or perpetrates action or stasis in one or more projections thereby evidencing energy, dimension, field effect, and consequence. The understanding and assessment of Reality can be described only when Perspective delimiters are honestly disclosed with sufficient clarity so as to evidence understanding in the observers. The fulcrum we need to open a new, more integral view of value and its exchange will include a dynamic, kinetic understanding of Reality. And our social challenge is to move our ontology from metric to metaphor – from finitude to infinite orthogonality. One step closer to the next…

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