Transforming our Economy At Last - Our World’s New Beginning

A speech delivered on March 17, 2011 in Carpenter’s Hall, Philadelphia
By Dr. David Martin, Executive Chairman of M•CAM Inc
Batten Fellow, University of Virginia

O Lord our Heavenly Father, high and mighty King of kings, and Lord of lords, who dost from thy throne behold all the dwellers on earth and reignest with power supreme and uncontrolled over all the Kingdoms, Empires and Governments; look down in mercy, we beseech Thee, on these our American States, who have fled to Thee from the rod of the oppressor and thrown themselves on Thy gracious protection, desiring to be henceforth dependent only on Thee. To Thee have they appealed for the righteousness of their cause; to Thee do they now look up for that countenance and support, which Thou alone canst give. Take them, therefore, Heavenly Father, under Thy nurturing care; give them wisdom in Council and valor in the field; defeat the malicious designs of our cruel adversaries; convince them of the unrighteousness of their Cause and if they persist in their sanguinary purposes, of own unerring justice, sounding in their hearts, constrain them to drop the weapons of war from their unnerved hands in the day of battle!

Be Thou present, O God of wisdom, and direct the councils of this honorable assembly; enable them to settle things on the best and surest foundation. That the scene of blood may be speedily closed; that order, harmony and peace may be effectually restored, and truth and justice, religion and piety, prevail and flourish amongst the people. Preserve the health of their bodies and vigor of their minds; shower down on them and the millions they here represent, such temporal blessings as Thou seest expedient for them in this world and crown them with everlasting glory in the world to come.


Reverend Jacob Duché
Rector of Christ Church of Philadelphia, Pennsylvania
September 7, 1774, 9 o’clock a.m.

Two hundred thirty seven years ago this invocation set in motion the First Continental Congress and set the world alight in a war against perceived tyranny and oppression. Two hundred thirty seven years later, we gather this evening in a world alight in a war against perceived tyranny and oppression. Kneeling under the illumination shining through the south window of this hall, resplendent in the light of morning, the Rector of Christ Church of Philadelphia could not have imagined that his prayer, so passionately constructed, would, in two centuries find itself more prophecy than supplication.

Just this past week, China re-emerged after 500 years as the world’s leading producer economy while, we the People for whom this prayer was spoken, find ourselves in a relentless struggle to “defeat the malicious designs of our cruel adversaries.” However in a tragic irony, this time maliciousness and unrighteousness are not directed to foreign powers but at our own countrymen. Having fled the rod of the oppressor, we have, in larger part, been seen as the oppressor. Rather than assembling in honor for the “best and surest foundation” we instead have scorned wisdom for the tyranny of intolerance.

Once again, now in the light of the waxing Lenten moon, I would like us to consider our precise condition so that we can find a path to a supplication more fitting a New Beginning. Tonight, I would welcome you to consider the animating values of ourselves, our businesses, our nation and our world and recognize that it is in this consideration in which we can reconcile ourselves to our callousness and find a path towards a More Perfect Union.

Earth Dwellers to Resource Conquerors
On the waning notes of the prayer which opened this Hall, Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations described the Earth as not our sanctuary and home but rather the compilation of commodities to exchange and consume. The Earth and its “resources” were objects of dominion and Labor – not human engagement and stewardship – serving as the determinant of value. In this view, and in its present manifestation, we find ourselves in persistent conflict to lay claim to perpetually lower “cost” resources and labor to leach profit from every source. In the late 1990s as we encouraged profit maximization by reducing domestic employment, did we profit or did we create an ecosystem where our own citizens have atrophied in their capacity to produce and contribute to a national wealth and identity? We prayed for nurturing care but decided that University of Chicago shareholder value maximization was supreme. Rather than seeing ourselves as stewards of an ecosystem, we sought piety through blood. Is it then, any wonder that the words “human trafficking” and “conflict metals” are as synonymous in our day as slavery and plunder were in 1774?

Sanguinary Purposes vs. Effectual Harmony
In the formation of the current Federal Reserve at the turn of the last century, we frequently recall the debate about States’ rights of currency. We remember William Jennings Bryan and J.P. Morgan variously advocating for agrarian interests in state currency and silver vs. gold and industrial credit, respectively. However, we spend little time considering the centrality of mortality in our Federal Reserve system. After all, it was the life insurers – like Aetna and Metropolitan Life – who provided life insurance premiums for the capital formation of our current monetary system (a practice persisted to this day). It was, after all, the cash compiled by insurers from 1905 to 1913 which provided the first “fixed income” capital to buy the first Federal Reserve debt. To this day, life insurance premiums and pensions require, as “safe investments” the very debt that animated the Fed’s founding. As founding members of Reserve Corporation and persistent members of its Board of Directors, what’s in your wallet is merely a debenture against your very mortality. And, given that most Americans die in debt, there’s no wonder why the dictum of near compulsory “death benefits” are structured to repay, in death what we failed to honor in life.

While we have layered equity markets, financial engineering, celebrated monetary hegemony on top of our modern, self-congratulatory assessment of our now threatened economic power, at what point in history did we actually stop and ask ourselves the considered question: “Does money based on actuarial management of Death serve as the best metric of performance or success?” Is a business the sum of returns to shareholders or is it an organizing endeavor which values the participants in a community; which builds value through employment; which spreads value through exchanges within and between communities; and, which engages value in practicing exemplary stewardship?

Expedient Blessings to Indebted Consumption
When the Reverend implored the Almighty for “expedient” blessings, is it conceivable that expediency and blessing are in existential tension? “Truth and justice, religion and piety prevailing and flourishing”? In this time, in fact our greatest perceived threat is coming from religion and piety prevailing and flourishing. The challenge for us is that, in our focus on our own interests, we failed to engage with our neighbors and, in the vacuum, other religions – built on strict adherence to the values of community and ideology over the individual and built on community values rather than isolated consumerism – flourished. While we can debate on the proximate causes for piety-animated extremism, there is no question that poverty is a fuel for radicalization and we were too busy swiping our credit cards using our houses as ATMs to recognize that we were contributing to the animation of our shared greatest fears.

Friends, we now live in the full measure of the prayer that opened this hall. Our manifold successes remain bound to tyranny and oppression. Our technological advances have been energized by resource exploitation which ravages countries and spreads the scourge of poverty-fueled reprisals to our shores.

Make me an instrument of peace;
where there is hatred, let me sow love;
when there is injury, pardon;
where there is doubt, faith;
where there is despair, hope;
where there is darkness, light;
and where there is sadness, joy.
Grant that I may not so much seek
to be consoled as to console;
to be understood, as to understand,
to be loved as to love;
for it is in giving that we receive,
it is in pardoning that we are pardoned.

In the Industrialization of the past century, we observed and were willing participants in an economic system which detached the value of business and human endeavors from the ecosystem, integral values, and a sense of perpetual stewardship not only for ourselves but for future generations. Rather than aligning capital and its flow to productivity, we sought extraction optimization and celebrated the same as the pinnacle of celebrity achievement.

We are more than the sum of this failing indebted currency metric.

What does the New Economy look like? How will we recognize it when it shows up? What can we do to align our efforts with its manifestation?

Productive Currency
Money is an artifact of value transfer – not the value itself. Since we stopped using metal coinage, this has been the case. Experiments in new currency – including Utah’s recent vote to reinstate gold and silver as legal tender – are emerging at community, State and international levels. Intrinsic to all of these is absolute commitment to reconnecting the exchange with productive engagement. Currency is a call option on future goods, services or interactions – not a draft against looming debt and mortality.

Collaborative Access
Humanity shares some basic traits – not the least of these is the shared impulse to be creative. Whether it’s the Inca pumping water up a mountain 800 years ago or the survivor of Hurricane Katrina in New Orleans, when water is where we don’t want it, we move it. From the farmer who goes from sharpened stick, to plow, to no-till agriculture to the metallurgist who goes from cast iron to single atomic thickness gas phase deposition of conductive materials, when we see our world, our impulse is to change it. This shared impulse must serve as the core for accessing active participation in the global exchange of value. Rather than seen as a commodity of labor, we will succeed when creative collaboration is a calling card equally valued regardless of race, creed or geography.

Transparent Accountability
Value is an inclusive experience which counts the all-in consequence of our activities. Coal isn’t free. It costs a forest, epochs of time, pressure, heat and space and our assumption that its value starts at its digging denies its replacement value. Metals don’t show up in ingots or bars but they start with a dynamic earth that quakes, heaves, and transforms phase and state. From materials to our final interaction with goods, services and experiences, accounting for ALL components of our experience is the only way we’ll manifest a viable economy for all. Poverty’s blight must be transformed from the absence of things to the willful disengagement from communities and networks. Wealth must take on the stewardship mantle where the best of us are the ones who remove the most barriers of access for the masses.

This is happening now.

So, in the waning hours of this evening, let us consider a new prayer for the New Economy.

Led by humanity’s Unquenchable Light,
We pledge…
… to live as stewards of our sanctuary Earth;
… to honor the inalienable value of the creativity intrinsic to all;
… to orient our actions to the removal of barriers of access and opportunity;
… to define our wealth by our character rather than our artifacts; and,
… to fully live in abundant grace in a spirit of tolerance and mercy;
So that we, dwellers of Earth, may be embraced in the illumination of everlasting glory.
Amen

Article III, Section 3 or Just AIG

Anytime I hear that any government bailed out entity is acting in “the best interest of taxpayers” I smell a rat! When I hear AIG (NYSE: AIG) say that it wants to buy back “assets” from Maiden Lane II, I find myself wishing that the framers of the U.S. Constitution had anticipated the government declaring war on its own currency when Article III, Section 3 was drafted. When I find out that the New York Federal Reserve is actually not sure that it wants to take AIG’s offer of $15.7 billion in cash (yes, U.S. Dollars – THAT cash) in exchange for toxic assets which nearly cratered the company and the country just two years ago I lament for the absence of any public media capacity to actually tell the country what’s really happening.

Let’s review for a moment. The U.S. Treasury – that vaunted entity that is responsible for the financial assets of the United States – owns about 92% of AIG. For the record, that’s a controlling interest and, we, the people, allegedly are being served by the management thereof. The New York Federal Reserve, the Managing Member of Maiden II, together with the collateral agent, The Bank of New York Mellon, are actually the “owners” and “managers” of Maiden Lane II. You will recall, recently the Federal Reserve (a corporation having NO public accountability and having no interest in the taxpayers’ interests) authorized the purchase of approximately $600 billion in U.S. Treasury securities. Now I know this will come as a shock but this purchase explicitly violated the rules of independence set forth in the AIG bailout – specifically violating provisions of independence required under the Fed’s custodial role. By accepting AIG’s purchase of the Maiden Lane II assets, the Fed would receive an estimated $1.5 billion profit for selling securities for $0.50 on the dollar.


But, you’d have to be a real loser to spend this much time actually READING the evidence of the cover-up to know any of this. However, in the interest of demonstrating just how much a geek I am, I decided that there was a bigger rat behind the ludicrous statement being made by U.S. Treasury-owned AIG. So I went down the rabbit hole of the CUSIPs (the Committee on Uniform Security Identification Procedures) which are the records of the assets actually toxic enough to qualify for bailout but now so desirable to own that the U.S. Treasury has decided that holding them is MORE ATTRACTIVE THAN HOLDING U.S. CURRENCY! While I won’t bore you with all of the assets, I wanted you to see exactly the “quality assets” which are better than the U.S. dollar according to the U.S. Treasury and the Federal Reserve Bank of New York.

Mortgage Obligations originated by…

Countrywide Home Loans Servicing LP's

IndyMac Bank, F.S.B. - Chapter 7 bankruptcy

Newport Management Corporation

Wells Fargo Bank, N.A.

Deutsche Bank National Trust Company


Yes, you’re reading this correctly. Assets of failed, bailed out, and civilly indicted (soon to include the prospect of criminal charges) banks are officially “better” investments than cash. And this determination is made by the organization responsible for maintaining the quality of U.S. cash! I wish you could make stuff like this up but reality is far more tragic than fiction could ever imagine.

Now, if you’re sitting there thinking to yourself, “Certainly someone somewhere out there knows what they’re doing,” I wish I could provide you some solace. However, in a painful experience this week with one of North America’s most respected news entities, I found out how anemic fiscal literacy is in our media and how horrific their attention span is to outright fraud. So, for the record, let’s simplify it and see if you can use your forwarding capacity on your browser to make sure others you know find out the simple truth.

In the public announcement made by the U.S. Treasury (owner of AIG), the Treasury has said that its own money is less valuable than toxic mortgage securities. The New York Fed, actually having to reflect on the sales offer – the same Fed that bailed out the Treasury for QE2 (the politically correct term for certifying counterfeit currency as the sale was NOT backed by an independent buyer thereby defying the “willing buyer” requirement for an independent transaction) – seems to agree that holding toxic mortgages is better than holding the dollar. And, every major financial media outlet, in their pathetic pandering to the propaganda that led us down the primrose path to Maiden Lane, regurgitates the LIE that this is good for the American taxpayer and the U.S. government. Ah, for the good old days of clear cut treason when people sought to destroy the country with tired trinkets like muskets and cutlasses. Now, treason is death by a thousand paper cuts of unread securities agreements written to blind the public in plain sight.

For years I pointed out that the 2008 collapse was not a “housing market” crisis but the fully forecast collapse of housing market financials when houses were used as ATMs and real estate became the basis for reckless consumer credit. Well, now we’ve got it. We really have the 2008 crisis that didn’t happen then. In this wholesale robbery from the public and in the broad light of fraud, the New York Fed, the Treasury, and their puppet AIG, are now solidly collapsing the dollar. I guess the Utah legislature is prescient in their decision to move towards a state-minted legal tender gold and silver standard. Because, what’s in your wallet is the ghost of a system built in 1913 which has now fully failed.

While most of the time, I end my blog posts with a “happy ending” I can assure you that this one doesn’t end happy. It ends with a warning. When we construct the next economic system, accountability and transparency not only will require an informed and educated population but it will require people like you, having read this, and having independently checked the accuracy of what I’ve reported, taking the next step and forwarding this to everyone you know who has a dollar or who has ever used a dollar so that, “no one saw it coming” can’t be said this time.

So go ahead, take a challenge from a Virginian who had the courage to actually call for Liberty and hit the "send" button. If a tea tax got in the craw of colonies - let's see if you know treasonous behavior when you see it and then, let's see if you do something about it!

Polarity of Insight – Staring at the Sun

When you grow up with a father who is an astronomer, you learn about optics long before others in your grade. As a little boy, I remember creating a pinhole camera in an attempt to see large sunspots or partial eclipses. I remember going to Rio Hondo Community College and using some of the telescopes to project images of the sun on white surfaces to resolve solar mysteries without blinding my beguiling eye. I also remember loving to start fires with magnifying glasses but that was not part of this story or part of my better childhood behavior so, enough about that! I remember driving across the desert and watching my brother Dan at a gift shop taking a pair of sunglasses and, while looking through them, turn them 90 degrees to see if they were polarized pronouncing to all of us younger siblings that this “polarization” was essential for some fantastical reason. From optics to audio, Dan could explain the importance of things with such a passion that you actually thought them to BE important. And so, at a National Park gift shop somewhere in the southwestern United States, I paid an extra couple dollars and got “better” vision. That I lost the glasses at the Grand Canyon is merely cause for you, the reader, to have great sympathy for me and then imagine what the loss of such value must have had on my psyche!

In collaboration with my M•CAM, Constellation, and other colleagues, I have revisited the notion of polarization realizing that this phenomenon is replete with natural philosophy and wisdom. Unwilling, however, to remain wed to conventional dimensions of polarization in which one filters perpendicular reflected light to reduce glare and sharpen edges, I would like to consider the values of the principles of polarization with infinite orthogonality.

In his most current work, my friend and colleague Richard David Hames explores the “civilizational worldview” in an epistemological criticism of unconscious sense-making assumptions. Using the context of global environmental changes, we work to see what ethnographic impulses can be deciphered when observing the SAME observed phenomenon by systematically shifting our observational vector. While we might, in the Occidental Lens, see crisis in climate change; in our Sinic Lens, we can see that the melting ice may be a godsend to those living systems that have been long starved for methane. By seeing things through different lenses, we find not only new perspectives on the same phenomenon but we… are you ready for this?.. might actually have sentient awareness of other facultative symbiots and see ourselves in-scale rather than in the glare of our own reflective Klieg egos.

Over the course of the past week, I have worked with a number of people to begin understanding the application and integration of Integral Accounting using the hexahedral optics (aka - a cube prism). Pulling a random article from a newspaper, I have asked people to annotate every word, phrase or concept in each of the six orthogonal dimensions of IA. An example is below. I am using a Reuters article entitled “US Corn Belt Braces for Major Flooding in Spring”.

In 2008 (Custom & Culture: time), rains (Commodity: water) pounded (Custom & Culture: evocative of destruction) the northern Midwest (Commodity: land; Custom & Culture: place) from early June into July (Custom & Culture: time) and caused (Knowledge: hydrology) tributaries into the vast Mississippi River watershed (Technology: natural water conveyance) to overflow (Commodity: abundant water), flooding (Custom & Culture: evocative of destruction; Well-being: loss of employment, land, shelter) some tens of millions of acres of cropland (Commodity: land).

Grain prices (Money: grain sales) soared (Custom & Culture: evocative of abundance) during the summer of 2008 (Custom & Culture: time) on fears of damage (Custom & Culture: social response; Knowledge: anticipation of consequence; Well-being: (-fear)) to the bellwether U.S. crops. Iowa farmers (Custom & Culture: class of labor) received nearly $1.1 billion in insurance payments (Money: insurance) in 2008.

Next, take the time to observe each artifact of integral value and shift your optics. When viewed on a global scale of a need for fresh water, are pounding rains destruction or essential to recharge fresh water? And if we take this view, are there pathways which we could imagine which would take the devastation into a new value by using technology, new social narratives, or alternative values on land-use? Are there people or places around the world where knowledge could be shared to turn a narrative from animations of fear, destruction and loss into opportunity? Did anyone win? Did anyone lose? Could any of those dynamics been altered?

By taking the time to apply the polarizing optics of value dimensions into something as simple as a CNBC article, one can also begin to resolve the fulcrum around which the narrative could change. In the story above, fear drove up prices. In the story above, farmers benefited from fear while insurers lost. In the story above, the consumer lost all the way around. Without considering the single dimension consequences in multiple, orthogonal perspectives, we animate a fatalistic, helpless worldview in which there are only winners and losers.

A challenge for the week: pick a story in your newspaper or favorite on-line media and look at it through the six dimensions of Integral Accounting. Then, tilt the image 66 degrees and look at every artifact through one other lens. Repeat at least two more times. See if you are inspired to ask, “Why didn’t someone see it this way?” See if you’re inspired to learn more about something you would have otherwise glanced over. See if you’re inspired to go through your day with a little less of your own reflected glare and a little more direct Light.

Pushing the Elephant in the Room

Addressing an international audience of some of the world’s most influential CEOs, Rose Mapendo recounted her life experience as the recipient of the greatest forms of cruelty dealt at the hands of brutal, violent men. Listening to her presentation beginning with the haunting languid melody of the song of hope and forgiveness, the same one she sang for months as she heard the screams of the dying and the living tortured with physical and sexual abuse, one could not help but be transported to the anguish-filled nightmare of East-Central Africa. At the end of her presentation, the chorus of responses from the audience was singular.

“What can we do?”

When a room full of global industry leaders hear Rose’s impassioned plea for justice and peace and respond with a “what can we do?” impulse, I wonder which part of the orgy of consumer enterprise blinds so many from the recognition that it was the institutions celebrated as idealized titans of industry that are those who maimed, killed, raped, and tortured the very ones whose voices echo in the notes of Rose’s song. Do we ignore the fact that between 1950 and 1989, the U.S. delivered in excess of $1.5 billion in military equipment to the region? Under the sterilized name of Foreign Military Assistance – a code name for our subsidizing of U.S. defense contractors’ sales around the world – much of the military hardware came with our own name stamped on the weapons and munitions. And we are not alone. Chinese and European firms, with full knowledge of their ultimate genocidal use, continue to authorize the weaponization of conflicts which serve to distract local communities while their mineral, gem, and energy wealth is stolen.

But, to honor the question Ms. Mapendo asked, “What is the source, not the symptom of our violence?” we must confront a topic that is NOT addressed in sterile gatherings of global business executives. How many of us know the contribution of our own unconsidered consumption which funded the terror meted out to millions? Did we ask ourselves whether the imbalanced concessions provided to Chevron / Congo Gulf provided the liquidity that turned fossil fuels into human extinctions? Did we concern ourselves with the pension funds and investment banks that financed the oil, diamond, and metals businesses whose disproportionate wealth extraction created feudal despotism that erupted into genocide? When did any of us – from London to Toronto to New York to Australia to Hong Kong – actually demand that publicly listed companies in whom we invested report MATERIAL events – including known human rights abuses to local communities and expediency payments (the politically correct term for bribes) to “security” provided by governments or militias?

As the abolitionists of the 18th and 19th century faced the dehumanizing pragmatism of the profitability of slavery, in our modern economy, why do we refuse to see that genocide and abuse of human dignity are NOT relics of the past but utilities that give us cheap electronics, energy and extravagant luxuries? In a region with an estimated $26 trillion in energy, metals, agriculture potential, and other materials, why can’t we find any capital market that has the courage to stand up and say that, on our watch, humanity will refuse to create the economic disparities that lead to rebels deciding that shooting husbands and preserving wives, mothers, and daughters for sexual abuse and torture is “a good use of precious commodities like bullets?” With bilateral investment agreements with the U.S., Belgium, Canada, Denmark, France, Germany, Israel, the Netherlands, Switzerland, and others, which citizen will stand up and be the voice that turns Rose’s painful lament into a chorus of humanity?

Let’s be clear. We continue to dishonor the plight of the death camp survivors in Rwanda, the Democratic Republic of Congo and the rest of the region when we refuse to face the fact that it is OUR inhumanity that fuels genocide. But for the cash supplied by Chevron, Congo Gulf Oil, Citibank, Telecel, Mobil, Group Damseaux, Tabacongo/Rothman, BAT, PLC, and others, violence wouldn’t be directed at the tribal conflict over the single digit percentages of revenues and profits extracted from the region. In countries where foreign investors must invest at least 70 percent of their capital in foreign currency – making local despotism and mercenary arming far more convenient for the agents of death – why can’t we see that our money supply robbed Rose of her husband, her home, and peaceful dreams? When scarcity is manufactured in the face of abundance, violence has ALWAYS been there. We cannot, for one moment, sit back in horror and anesthetize ourselves from the reality that we are the torturer.

When a Chinese gaming company buys a U.S. gaming company for several hundred million dollars, can we see in the fantasy war-game the actual violence that made the graphics processor optimized with metals from the anonymous dead? In a culture of business executives that applauds the miniaturization of genomics processors so that science can automate the synthesis of “life”, can we see that the components that run the computers and sequencers rely on the lives of real humans for whom clean drinking water is a luxury for less than 1 in 12 and where life expectancy is 47 years?

It is time to change the narrative. “Corporate Social Responsibility” is not enough. If we are going to be remembered for anything other than the scourges of immoral and unconsidered consumption, we must practice – and demand from all parties with whom we do business – an accountability that says that profits built on the dehumanization of others are no longer tolerated. And let’s be honest. The only reason why we don’t take the time to inform ourselves about the source of the metals in our iEverythings and mobileApp everything else is because we want to remain blind. In a world which could watch in rapt attention as Egypt collapsed and Libya consumed itself with blood, we don’t want to know that with knowledge comes responsibility. We call it a knowledge economy but we’ve actively chosen a path of ignorance. This must end.

Every stock exchange on the planet must institute a listing requirement requiring every listed company to comply with the Universal Declaration of Human Rights in all business practices.

Every securities oversight authority must have a public reporting mechanism to enable transparency provided by local communities directly impacted by the businesses conducted by public companies.

Every public company must be required, at its annual meeting, to have local representation from the workers or landowners of every place where business is conducted.

Every pension fund and investment manager must represent and warrant (at pain of financial and International Criminal Court censure) that it confirms that no funds are used for the use of force to effectuate or optimize the conduct of business.

Too radical?

Tragically, in our present trajectory, the mournful song of a woman in a death camp is likely to join the massive choir of those whose songs have been extinguished until a few of us start singing a “sweeter song”.

Rose named her story “Pushing the Elephant” in honor of the traditional African story that teaches that, to move an elephant, one must act with others because a lone actor cannot push the elephant. I would suggest that Rose’s challenge is infinitely more difficult given our denial of the existence of the elephant.

Trickle Down Morality

As I am wont to do, I left a conversation this week with an aspiring U.S. Foreign Service enthusiast puzzling over why, after millennia of seeing the futility of military ideological indoctrination, madness seemed more the rule than considered reason. In a country where, absent wartime procurement, we’d have a shrinking GDP for the 12th year running, I reflected on the roots of our incapacity to imagine an economy in which we genuinely built value on an aspiration for the reflected choice of liberty rather than the dogmatic zealotry of “freedom” at the end of a gun. Drenched in nostalgia for the heady days of the Reagan years – so banally celebrated on the centenary of his birth – and the glorious sponsorship of “Freedom Fighters” who in their modern incarnation, armed with our defense industry, have turned their weapons on us so as to be now referred to as “terrorists”, I mused at the intractable predictability of our impulse to support mayhem.

On a gloriously balmy day – more April than February – I probably would have let this topic pass but for a gnawing sense that a systemic, fatal error is lurking just under the surface of the Middle East and North Africa paroxysms. What struck me as alarming is the fact that I recognized the sequence of failures in governments corresponding with a very old, very forgotten, much abused law from the 1960s. To be precise, the collapsing countries of the past few weeks all seem to be the beneficiaries of the 1961 Foreign Assistance Act (Public Law 87-195). In fact, there is an ominous correlation between the nature of certain funding programs and the sequence of uprisings. This Act, which has been the proximate cover for overt and covert acts by the U.S. government for the past 50 years is worth the read if you want to see why we abandoned any hope of moral leadership on a global stage – unless you consider gunpoint to be a moral persuasion.

One only needs to read Section 620E of the Act to see precisely how far from a moral compass we’ve chosen to stray. Our assistance to Pakistan – including our arming of Afghans now killing coalition forces – was not only authorized under the animation of the Soviet occupation but, included providing Presidential authority to waive Arms Export Control Acts. My favorite section of the “Aid to Pakistan” program is the condition that, “lethal military equipment provided under this subparagraph shall be provided on a lease or loan basis only and shall be returned upon completion of the operation for which it was provided.” And who can forget the moral clarity of Section 620G which stipulates that the U.S. should withhold assistance to countries that participate or sponsor terror however, this can be waived, “if the President determines that furnishing such assistance is important to the national interests of the United States…”?

In the creation of the Foreign Assistance Act of 1961, the United States made a fatal error in judgment – neither the first nor the last. And the events of the past 6 weeks are showing the seismic risk of this error; the failure to apply Integral Accounting appraisal to a value exchange. You see, our thinking in the late 1950’s until well into recent history, was that we could exchange “aid” for politico-economic allegiance. If we fed, trained, armed, or defended a country, we reasoned, we would gain lasting stability and loyalty. While this type of bribery may work in postwar reconstruction in Japan, Europe, or at home (with our public works programs), it fails to adequately calculate the, “Commodity”, “Custom & Culture” and “Money” dimensions in Integral Accounting.

Since the first Mongol-Sino traders crossed Afghanistan to the ports in North Africa in the first century BCE, trading involved the exchange of tangible artifacts. What started in the East as silk or spices, could wind up in Alexandria or Tunisia as grain or gold. This transformation involved several principles that are present to this day in the cultural memes in the region and are immune from the hegemony of the Bretton Woods dollar. The trade routes of Asia, Persia, the Middle East and North Africa relied on a transitive commodity mandate as much then as now. Willingness to transport or trade was based on local needs or abundance as much as it was based on some remote “market demand”. If you needed food and had a bunch of gold, in the moment of the arrival of food, it had greater value than gold so you exchanged what was unusable yet reserved for what was usable and demanded. As a result, exchanges were seen in light of pragmatic expediency, not in terms of absolute supply and demand in invisible, distant markets.

In this ecosystem, value was a combination of the traded artifact with the reward of a “good deal”. Against this backdrop, it’s no wonder that when the Occidental moralists came calling with “aid” for which there’s no artifact exchange, mistrust is implicit. Clearly no one ever offers something for nothing. And in a world where the notion of artifact for ideology is the prima facie exchange, there is a certainty on the part of the recipient that a trap is being set. The Occidental policy failure was to mistake the counterparty who would accept our deal – the puppet autocrat who we’d promote into political supremacy – as an evidentiary party to the acquiescence of a country to our values and our proposed terms of engagement. We didn’t build alliances, we bribed malleable characters. And now, we’re watching as the façades fall.

While the covert abuses – from Reagan’s Nicaraguan Iran-Contra illegal activity to Bush-Cheney’s Bulf Oil and Greek Olympic “Security” financing of the weapons which are killing coalition forces – accelerate the failure of our misguided ideology, the overt, reported financing of moral exceptions to our stated values shows a level of hypocrisy which undermines any honor or credibility we might otherwise have. In the minds of an Asian or African observer, our willingness to place expediency as a paramount value when it comes to ideology amplifies the instability in countries around the world and erodes our ability to have any significant impact on transitions which are breaking out across the globe. In contrast, Chinese success in Nigeria, Afghanistan, Southeast Asia and even “liberated” Iraq, comes complete with good old-fashioned trading – not on ideology but on assets – the way it’s always been done. The Chinese are no more amenable to theocracies than their democratic, capitalist competitors. However, in commodity value exchanges, ideology is subservient to transactive interest.

Tunisia, Egypt, Israel, Haiti, Greece, Portugal, Russia, Jordan, Saudi Arabia, Taiwan, Bahrain, Burma, Cambodia, Cuba, Columbia, Peru, Afghanistan, Cyprus, Pakistan, Democratic Republic of Congo, Libya. If you made it on this list, you’re already in a fraternity where you may not want to be. You’ve been the recipient of a Cold War inspired doctrine which values frail ideological adherence over food, shelter and security. And if we, as conscious global citizens want to act before all the world is alight in unemployed, hungry anarchy, we would do well to figure out how to be part of a new narrative in these and related places around the world.

It is time for the U.S. to end the Foreign Assistance Act of 1961. Not because we shouldn’t actively assist those in grave need around the world. No, we should repeal the Act because it’s built on ideology long destroyed by termites and dry rot of our own fears and our collective neglect. In a world where the world’s fastest growing economy is communist (turned oddly market-capitalist), the end of the Act will be a wholesale loss of any last vestige of credibility. We’re not at war with communism – we’re in denial. We need to align our Foreign Assistance with those who are in need of genuine help so that they, and the world, can see a cascade of moral leadership in which those who genuinely care for humanity, the environment and the ecosystem of Earth champion wholeness rather than animus. Will this be an American enterprise or will it, at long last, be a global enterprise in which “isms” are placed into the realm of philosophical debates while we get about doing the work of being human? Let justice roll down.

Starting with the Universe

"The function of what I call design science is to solve problems by introducing into the environment new artifacts, the availability of which will induce their spontaneous employment by humans and thus, coincidentally, cause humans to abandon their previous problem-producing behaviors and devices. For example, when humans have a vital need to cross the roaring rapids of a river, as a design scientist I would design them a bridge, causing them, I am sure, to abandon spontaneously and forever the risking of their lives by trying to swim to the other shore."

- R. Buckminster Fuller, from Cosmography


Muhammad Hosni Sayyid Mubarak was not attuned to new artifacts. As a result, history will remember him not as the man that stood with Egypt’s peacemaker President Anwar El Sadat – close enough to be injured in the grenade blast that killed Sadat and propelled Mubarak to the Presidency in 1981 – nor the man who did much to bring Egypt onto the international scene as a vital source of power and stability. No, he will likely be remembered for the legacy of his perpetuation of the Emergency Law 162 (1958) which gave him sweeping powers so expansive that he believed himself to be above the law. And, on this week in 2011 he departed on the 32nd anniversary of Iran’s Shah’s exile in Cairo. He will be remembered as one of the first globally recognized powerful elite to fall to a new breed of social activism. While the U.S. would never allow a change of government like the one that we just witnessed in Egypt to take place in Washington D.C. without far greater human rights abuses and loss of life, I wonder if leaders across the globe took this week’s message to heart. The 363 year old Nation State is ending and a new social order is emerging.

And what took down Mubarak’s illusion of power – and will take down many more in the coming weeks, months and years – is the failure to honor the third tenet of Westphalia; namely, the covenant not to interfere with the sovereignty of states by any non-state actors or foreign interests. While it’s easy to point to the United States’ violent intervention as a clear affront to this revered principle, the more profound and consequential violation of the tenet is the prohibition on letters of marque, reprisal, and privateering. As I’ve written and spoken many times before, the transnational Corporation State, launched in the banking and corporate coup d'état which began in Europe in the early 19th century and whose cancer killed representational democracies across the globe by the early 20th century, thought that it could hide behind the façades of puppet heads of state in perpetuity. But when you build systems which remove the wealth of nations through agreements with despotic leaders for the benefit of foreign interests, the system will fail. The most ominous specter in the demise of Mubarak is sharpening his scythe for parasitic corporations who saw themselves beneficiaries of heads of state who did not care for their people.

Ironically, the wisdom in the Peace of Westphalia came from a multi-ethnic consciousness awakening that recognized that, left unaltered, petty religious and territorial conflicts animated by control of resources and trade, would lead to violent ends. Seventeenth century humanity was more awakened than most of their progeny today. And, at the core, one can discern the consideration of four dimensions of social consciousness that is required for such awakening. In an effort to simplify the concepts that I believe represent the environment into which alteration and new artifacts need to be inserted, we need to first understand our roles as Citizens, Leaders, Parents, and Provisioners



Citizens. We’ve long abandoned the recognition of the centrality of citizenship to all human endeavors involving any social structure. In our race toward the cult of the isolated identity, we failed to see that we only apprehend full identity in a context defined by the community in which we operate. Our awakening requires us to see that our liberty empowers us only when we are aligning our efforts and resources for their optimal use benefiting ourselves while insuring that others have suitable equivalent benefit and use.

Those who evidence mastery of this efficiency and inspire others by their mastery are ones worthy of the mantle of Leadership. I am deeply disappointed to see universities and business schools promote “Leadership”. The world doesn’t need leaders. Leaders emerge as being worthy of being followed – not by perceiving the direction the masses are facing and then racing to the illusive “front” of the milling masses and being the loudest voice in the room. Quality leadership empowers others to teach those characteristics that bring about a more harmonious system without pandering to self-interest or the interest of loyal sycophants.

Parents (both biologic and those acting as mentors) need to reclaim their role as both the nurturers of emerging citizens and as models of deliberate action emanating from a confident, powerful center. Rather than teaching lessons of scarcity and fear-based hording and consumption, parents need to convey the wisdom of suitable adequacy to manifest the individuated role of the provisioner.

Most radical in this understanding is the replacement of the role of the “individual” or the “consumer” popularized by our psychological or commercial memes with the omni-dimensional Provisioner. Beginning with you making sure that your own identity and well-being are sufficiently sated, you take on the capacity to understand your own productivity, consumption, and access to resources directly or through networks and then create the capacity to keep all of these in balance. Having done so for yourself, you can both steward that which you have while also engaging your capacity in the milieu of providing for those around you. Inward directed provisioning recognizes that the impulse to consume is replaced with the impulse to be adequately equipped. Outward directed provisioning recognizes that the need to be identified with what has been horded is replaced with the impulse to demonstrate the capacity to expand provisions for and to others. Identity, in this dynamic sense, fosters a perpetual reminder of one’s role as Citizen and thus the fortuitous cycle persists.

When this system is fully functioning, Presidents and CEOs won’t spend the majority of their energy reinforcing their grip on power by the suppression of others. History has demonstrated that this Tolerant Citizenship model fosters unprecedented prosperity and stability. And, to that end, let us engage in transformation by introducing new artifacts whose utility will necessitate their utility for safe transit to new behaviors – not in futile revolution.

From the Land of Pharaohs

Against the backdrop of CNN’s broadcasts of the protests in Cairo and throughout Egypt, I took a great deal of time to reflect on the events that served as catalysts for the new wave of self-determination evidenced across the Middle East and North Africa. For years, I’ve been lecturing, writing, and conducting business inspired by a central tenant that all value exchanges must, at their core, represent a bounded correlation to production. In the last several decades, under the guise of “financial innovation” the largest monetary asset transfer has occurred in which a select few have egregiously abused monetary systems for their benefit without considering the consequences of their amoral acts. The modern dead and the defiled reliquary artifacts in the Egyptian museum are but the latest casualties of this callous indifference to the global commons and its stewardship.

Egypt is no stranger to food-inspired social unrest. And, in point of fact, one of modern history’s oldest economic models was born at a time such as this. I decided to revisit the oldest known account of Egyptian unrest to see what wisdom could be discerned to inform events of today both in the region and in the broader macro economy.

In the Biblical account of the famine in Egypt (Genesis 47: 13-26), the following story is reported.

47:13 But there was no food in all the land because the famine was very severe; the land of Egypt and the land of Canaan wasted away because of the famine. 47:14 Joseph collected all the money that could be found in the land of Egypt and in the land of Canaan as payment for the grain they were buying. Then Joseph brought the money into Pharaoh’s palace. 47:15 When the money from the lands of Egypt and Canaan was used up, all the Egyptians came to Joseph and said, “Give us food! Why should we die before your very eyes because our money has run out?”

47:16 Then Joseph said, “If your money is gone, bring your livestock, and I will give you food in exchange for your livestock.” 47:17 So they brought their livestock to Joseph, and Joseph gave them food in exchange for their horses, the livestock of their flocks and herds, and their donkeys. He got them through that year by giving them food in exchange for livestock.

47:18 When that year was over, they came to him the next year and said to him, “We cannot hide from our lord that the money is used up and the livestock and the animals belong to our lord. Nothing remains before our lord except our bodies and our land. 47:19 Why should we die before your very eyes, both we and our land? Buy us and our land in exchange for food, and we, with our land, will become Pharaoh’s slaves. Give us seed that we may live and not die. Then the land will not become desolate.”

47:20 So Joseph bought all the land of Egypt for Pharaoh. Each of the Egyptians sold his field, for the famine was severe. So the land became Pharaoh’s. 47:21 Joseph made all the people slaves from one end of Egypt’s border to the other end of it. 47:22 But he did not purchase the land of the priests because the priests had an allotment from Pharaoh and they ate from their allotment that Pharaoh gave them. That is why they did not sell their land.

47:23 Joseph said to the people, “Since I have bought you and your land today for Pharaoh, here is seed for you. Cultivate the land. 47:24 When you gather in the crop, give one-fifth of it to Pharaoh, and the rest will be yours for seed for the fields and for you to eat, including those in your households and your little children.” 47:25 They replied, “You have saved our lives! You are showing us favor, and we will be Pharaoh’s slaves.”

47:26 So Joseph made it a statute, which is in effect to this day throughout the land of Egypt: One-fifth belongs to Pharaoh.

One cannot help but see in this narrative the harbinger of conditions which are being played out – merely by a new set of actors. Remember, that the context for this story was the storehouses that Joseph stewarded for seven years prior to the launch of the famine. In Genesis 41: 46-49 you read that an “immeasurable” amount of grain was collected during the seven year period preceding the food shortage – and this from excess abundance – not from forced scarcity. What is unspoken but implicit in this story is that the infrastructure and technology for food storage and security became one of the most significant public works projects in history. In a time when we don’t have food security for most of our population in any part of the world, ancient Egypt had abundance that afforded caloric resilience for 14 years!

When a food commodity price shock hits – like the famine of old – the first response was to collect all of the money. Remember, at the time, this meant that there was a “rush to metals” not unlike our present day. One can readily see how the Pharaoh had gold sufficient to line tombs when you realize that, in the first year of famine, nationalization of gold assets was the first step to a new economy. This is the first record of a national reserve bank impulse in human literature.

In the second year, Joseph provided grain in exchange for livestock. To understand the modern implications for this, one must revisit the ancient and modern understanding in much of the world that livestock was the primary indicator of heritable assets and wealth. In short, by taking all of the livestock, Joseph enacted an inheritance tax and created a state-owned pension monopoly. Sound familiar? This move is in ancient times what Social Security and entitlements are today. Further, this move represented a recognition that the units of wealth and status needed to be subordinated to a broader social good. At this point, I wonder how many of our religious right politicians take the time to realize that their Bible actually used nationalized socialism as a primary means of enacting “God’s plan”?

And then, the coup de grâce, the nationalization of private property. While the assumption of land and productive labor sounds harsh in modern times, this move is indistinguishable from the effective analog we have in the U.S. where all forms of enterprise and means of production have been usurped by the Federal Government under the guise of the Commerce Act. Once all artifacts of value and means of production were controlled, you have one of the most overlooked, yet vitally important concepts that can be deduced from this story – a flat tax. But, note the important differentiation between Joseph’s tax and what’s in place today. Tax was 20% of productivity – NOT a percentage of assets, efforts or wealth. And, while those with more communist leaning sympathies may loathe the carve-out for the priests – antiquities’ bureaucrats – note that they are NOT expected to be productive and are subsidized from the government’s share.

Upon close examination, I find this productivity-based national economic and revenue policy something dramatically missing in present day Egypt and in the rest of the industrialized world. Today, we don’t have the wisdom that allocates abundance for mass resilience; we don’t have leaders who understand the courage required to lead in time of crisis; and, we don’t have a sense of civil society and social responsibility that inspires the transcendence of the citizen over the self. Do we have a food price crisis in Egypt? Do we have a political crisis across the Middle East and North Africa? Is there a risk of contagion for violent populist uprisings around the world?

Absolutely and not really. What happened in Tunisia and Egypt is a symptom of a more fundamental problem. When the much heralded and lauded construct of “leadership” fails to stay rooted in citizenship and common accountability, volatility grows as a latent potential in any system. The more wealth transfer extremes lead to conspicuous, asymmetric consumption by the few in power at the perceived expense of the many, the greater the volatility. “Qu'ils mangent de la brioche” (“Let them eat cake”) was not a good idea in monarchist France and it’s not a good idea in Goldman-inspired modern economies. When markets preserve economic asymmetries in the face of known social inequities, there are no surprises when revolution breaks out.

So the wisdom awaiting re-emergence is the recognition that at this very moment, there are abundant excesses around the world which would meet the needs and ameliorate the fervor of the disenfranchised in Egypt. If we really want considered democratic reform, we should focus on insuring that change comes from satiated reflection, not from hungry desperation. Despotic leaders are half the problem; callous hoarders of wealth are the other. Until we address both, we will look primitive in the light of a Pharaoh and his visionary deputy.