Absolutely Corrupt… Almost

When Robert E. Lee surrendered to Ulysses S. Grant at the Appomattox Court House on the morning of April 9, 1865, Grant declared that the Union had been preserved.  An ocean away, a notable Catholic John Emerich Edward Dalberg-Acton, 1^st Baron of Acton lamented, “I mourn for the stake which was lost at Richmond more deeply than I rejoice over that which was saved at Waterloo.”  His abiding sympathy for the cause of decentralized government – a cause he saw embodied in the campaigns of Lee as battles for “liberty, progress and civilization” – was but a fraction of his broader liberalist perspective.

Many of us almost know of the maxim attributed to Lord Acton:

“Power tends to corrupt, and absolute power corrupts absolutely.”

Few of us are aware of the corollary that was part of the same thought:

“Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority.  There is no worse heresy than that the office sanctifies the holder of it.”

Few of us understand the emanating impulse for his misquoted adage.  Far fewer contemplate the profound insight he maintained during the latter half of the 19^th century – insight that has been lost to the dust of time for the most part.

Lord Acton’s quote came from a letter to Bishop Mandell Creighton written on April 5, 1887 in which he was vigorously arguing against the canon of Papal Infallibility.  But in this same letter, he addressed the association between the power usurped by Kings and Popes and the rest of the prevailing systems associated with the promulgation of power – including economics (you knew I was going to get there somehow).  Conspicuously missing from our recollection of Lord Acton’s philosophical musings are his equally poignant but less anarchist observations like:

“If we may debase the currency for the sake of genius, or success, or rank, or reputation, we may debase it for the sake of a man’s influence, of his religion, of his party, of the good cause which prospers by his credit and suffers by his disgrace.  Then History ceases to be a science, an arbiter of controversy, a guide of the Wanderer, the upholder of that moral standard which the powers of earth and religion itself tend constantly to depress.”

Now, for the sake of common usage, let’s remind ourselves that the definition of power is:

Power = Work / Time and Average Power = DWork / DTime.

This formula, in isolation can neither corrupt nor be corrupted.  When applied and misapplied to human contrivances, Lord Acton’s caution is prudent.  Why?  Because when human systems are aligned for the purpose of commandeering “work” and when capricious delimitations of temporal realities are imposed, the purveyor of “authority” (the definition of “work” and “time”) is the agency through which the debasing of the system is effectuated. 

Consider the following.  Conventional economists since the middle of the 18^th century live in a Rent Labor paradigm.  Economies are said to be functioning when employment is maintained and when wages are sufficient to support a mercantile industrialist paradigm.  They are said to be in dysfunction when employment is insufficient to fuel consumption.  But does ‘employment’ equate to ‘work’?  Absolutely not.  The fact that we don’t observe this linguistic compromise does not make it unimportant.  Long before Lord Acton, social systems – notably religion and government (in his observations indistinguishable since the time of Constantine) – dissociated the “work” in the power formula from productivity.  It’s not an accident that countless heretics went variously to the pyre and their watery drownings for questioning whether “faith” or “works” were central to Christian dogma.  In a world defined by illiterate labor and conniving, self-enriching literate elite, the more people focus on the occupation of time as opposed to the substance of productive work, the more the illusion of power can be maintained.  In fact, modern government and religion would collapse entirely if we actually realized that modern power relies not on physics but on belief where:

Illusory Power = DTime Spent Thinking You’re Doing Something / DTime.

Before we carelessly react with a call for anarchy, neither Lord Acton nor I find that to be the logical conclusion of a system clearly hijacked for the benefit of the few at the collective cost of the many.  Such a response is ill-considered.  Lord Acton’s observation that most great men were bad men must be examined more closely.  In his litany of bad actors is great wisdom.  The “great men” to which his observations were made were entirely from the Christian Occident.  The “general wickedness” of “men in authority” was correct but failed to consider the fact that these corrupt characters in their full bloom came from a fertile field of surrogated masses – masses who saw the Church and State as their benefactors.  It turns out that if predators see prey turning their necks towards the fang, they tend to bite.  If, however, we interrupt this impulse to look to authority for succor but rather collaborate with authority to support general accountability, we may actually rebalance the power equation to its incorruptible state.

But what does this mean?  Well, practically it means that we have to bear responsibility for things that we have pawned off on others.  It means that we need to care for those who need support; we need to rally to productive pursuits; we need to set aside our predilection to philosophize and instead engage in real work towards real future benefit.  In so doing, we address the integrity of the numerator and reduce the capriciousness of the denominator.  This means that we’ll work for the love of its results – not for the rents we collect – and in so doing, become Great Men and Women Incorruptible.

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One Stroke (in Time) of the Lutine Bell

The French frigate La Lutine was six years in His Majesty’s Service following its surrender at Toulon in 1793.  Passing the Dutch coast in 1799, she sank and with her about 1 million pounds worth of gold and silver and her bell.  Long after her economic loss was borne by the Lloyd’s underwriters, her treasure was located and, much of it salvaged.  Most cherished of the salvaged wreck was the ship’s bell.  This bell – along with thousands of bells – once served the important role of insuring that everyone knew that something important had happened at the same time.  As church bells summoned the faithful to assemble, so the Lutine Bell summoned risk takers to account when a loss at sea was confirmed.  If the Lutine Bell rang once insurers knew that an insured loss had occurred as a ship’s overdue status had been confirmed as a sinking.  Ringing twice, the bell provided good news that an overdue ship was just late and had in fact delivered its cargo.

Edward Lloyd, the coffee and maritime gossip house proprietor on Tower Street in London was known more for his quality of shipping intelligence than his coffee.  From a reward for a missing chestnut mare believed to be taken by a man with “black curled hair” with “Pockholes in his face” published in the London Gazette 326 years ago this month to the more important news of shipping movements and calamities, Edward knew that he could sell more coffee if his place was seen as the most reliable source of news of the day.  As the bloody 18^th century opened, the speculation on shipping losses became big business.  With the seas boiling with perils – pirates, battles, faulty maps, storms, shoals – the frothy wagering on the fear of loss became one of London’s most celebrated markets.  In less than half a century, underwriting activities at Lloyd’s had become so exotic and speculative that the London Chronicle described the fever pitch of “illicit gambling” at Lloyd’s as “the melancholy proof of the degeneracy of the times.”  Those who understood the significance of disciplined, intelligence-based underwriting abandoned the debauched coffee shop and set up a new operation (complete with coffee) at Pope’s Head Alley in 1769 – just in time for the Atlantic to explode with cannon and cutlass.

There is something particularly fascinating in the colorful history of the birth of modern insurance.  Edward Lloyd knew the value of reliable information and used it to sell coffee to speculators.  John Julius Angerstein, the rate setting moral icon of Lloyd’s in the 1770s, knew that getting a jump on everyone else’s access to information was even more important.  Like the infamous Napoleonic wartime knowledge advantage that gave the Rothschilds their control of the banking system, Angerstein’s intelligence gathering collaboration with the British Navy cemented the unrivaled dominance of Lloyd’s in the market.  It’s not surprising that the 1820s competition to Lloyd’s came from Nathan Rothschild!  And while the tolling of the Lutine Bell was an essential form of leveling information asymmetry – everyone knew the conclusive facts at once – the most successful underwriters actually realized that timing of knowledge was more important than the knowledge itself. 

And here is the subtle fascination I have with this seemingly pointless, obvious fact.  Insurers, like today’s high frequency, low latency quantitative traders, exist solely based on an anomaly within our ‘civilized’ societies – a willingness to reflexively pay for the illusion of time.  When it comes to monetary-associated events, our behaviors are more similar to a reflex then a cognitive process. 

Now let me diverge for a moment for those of you who did not sit through Dr. Bruce Craig’s neural physiology lectures.  Peripheral nerves in the skin and soft tissue do a great job of triggering digital (on / off) responses.  While they are constantly stimulated, they do not trigger a response until there is sufficient stimulus at which point they have an “all-or-none” consequence.  When they fire, the neurons rush information to the spinal cord which immediately and dramatically links sense to muscle stimulation which again acts in an “all-or-none” fashion.  When you touch a hot stove, for example, your recoil is not carefully considered.  Rather it is instantaneous and reckless.  Your brain finds out about your reflex as a completed event and has no time to override the muscle response.  Considered, organized cognitive motion, in contrast, synthesizes numerous inputs – vision, distance, wind, sound, balance, capacity – and then formulates a recruitment of activation which can anticipate outcomes and then orient efforts to manifest them.

We know that events perceived to be adversity will happen throughout life.  We’ve been advised that speculators (known as insurers) should be paid a “premium” (ironic in its common derivation to the concept of a reward for a game of chance) for taking an ‘unknown’ tomorrow’s risk today.  And we know that, in most instances, when ‘bad’ things happen, these entities actually pay what they’re contracted to perform.  Societies’ willingness to transfer money to surrogates of accountability has become a ubiquitous feature of our current system.  And these surrogates actually respond – like spinal reflexes – in a timely fashion (most of the time).  But this too, is interesting. 

The Lutine Bell’s single strike meant that it was time to pay for a loss.  Everyone who had been paid to take the risk was now called to account – immediately.  Famously, Cuthbert Heath, a famous property and casualty underwriter from Lloyd’s who insured properties in San Francisco at the time of the 1906 earthquake paid not only those who had earthquake damage but paid, “all policyholders in full, irrespective of the terms of their policies.”  And herein lies a more interesting temporal nature of how the system ‘works’ for the surrogates.  By creating a near instantaneous settlement – like the spinal reflex – the societal ‘brain’ is informed of the completed event (loss and recovery) rather than taking the time to consider premiums paid to claims made.  And this time function is as, or more, important to the reinforcement of the denomination of risk than the timing of information referenced above.

An insurer and a quantitative trader are like highly refined spinal reflexes in our monetary system.  Their intelligence gathering has to involve a long-arc synthesis of observations that anyone could make but few do.  They need to be sensitive in the periphery and be masters of subtleties in large volumes of information deemed too tedious to occupy the average person’s attention.  Then, they need to modulate their behavior to evidence immediate capacity to perform – pay a claim or execute a trade – drawing as little attention to the proportionate scale of inflows and outflows as possible.  If these two dynamics are managed well, profits are amassed.  And with complex computational models which have mapped humanity’s behavioral reflexes with hyper-evolutionary efficiency, those who have sensed the most over the longest observational period will always have the coffee-house advantage. 

What I find ironic is the absence of a counter-narrative.  The model of Lloyd’s has profitably traded on temporal human reflexes surrounding loss for over three centuries.  The core principles which make insurance and quantitative speculation work have evidenced greater continual profitability than any other venture without significant government intervention or support.  In other words, We The People have predictably behaved around fear of property and life loss more consistently than we’ve done much of anything else.  So what would a system look like if it was built around presumption of resilient access to abundance?  What if our starting position was that we’ll be fine no matter what?  What type of transactions would be structured and traded around the ability to participate in the productivity to come?  I’m not talking about speculative futures which themselves were a form of insurance against future price uncertainty; I’m talking about real shared alignment against known, model-able, persistent enough.  What would accounting look like if we didn’t see a binary world of ‘gains’ and ‘losses’ but rather we saw a world of interdependent sufficiency in which wealth was informed by our ability to access resilient capacity rather than surrogate future ‘uncertainty’?  The answer is that it looks a lot different, and last night, in a coffee-shop in London, that future was born.  Ring the bell twice!  We're heading into turn two!

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Trading Slaves

Two hundred and seven years ago this week, William Wilberforce saw over two decades of impassioned zeal pay off.  With the patronage of The Right Honorable William Wyndham Grenville, PC in the House of Lords and The Right Honorable Charles James Fox, PC in the House of Commons, the Slave Act of 1807 was on its way to passage in the British Parliament.  While this moral victory was on the horizon in London, for the next 50 years over 1,600 slave ships were interdicted by the Royal Navy and over 150,000 African slaves were released.  Why?  Because a moral legal victory does not morality make.  And while many view slavery through the blurry bespectacled lens of nostalgic history books or the occasional condescending Hollywood film, two hundred and seven years later, we’re no less prone to enslave – we’ve just changed the manacles.  Rather than ships plying the seas, we’ve come up with the quite cunning enslavement of humanity in situ (Latin for “in place” or “in position””). 

Now before we go too far, let’s recall that slavery then as now, is a complex matter.  Driven by a consumer who wants to receive goods or services for less than their fair value, producers are seduced into examining how to ‘cut’ costs.  And, benefiting from the anonymity afforded by distance, whether you’re Apple Computer or WalMart you can look the other way when it comes to the labor conditions of people who you never think will have a voice or represent a market.  And if you think this is hyperbole, in the United States today the Securities and Exchange Commission requires companies to publicly disclose their use of “conflict minerals” from the Democratic Republic of Congo.  Remember that Apple and Intel were celebrated in 2011 for their announcement that they would “cease use of conflict minerals” directly acknowledging that they had done so in the past!  But, from the passage of §1502 of the Dodd Frank Wall Street Reform and Consumer Protection Act in July 2010, it is not until May 2014 that companies will actually have to comply with the rule!  Why?  Because We The People prefer the illusion of morality over genuine, authentic, conscious humanity.

Now, take some Dramamine® because the seas of this post are going to get a little choppy.  We’re about to circumnavigate the globe at warp speed and if you’re not strapped in with your seat belt low and tight across your lap, the unexpected loss of cabin pressure will trigger the oxygen mask above your seat but you’ll be too loopy to put it on!

The Parliament of Mongolia has been working for over four years to come to terms with a massive indebtedness that they acquired for the privilege of having their copper and gold wealth extracted from the Gobi Desert.  You see, in a transaction that was advised by a U.S. investment bank who had conflicted ownership interest but carefully circumvented legal liability by having their Asian subsidiary do the “advising”, Mongolia was allowed to take a 34% equity stake in Oyu Tolgoi – the massive copper mine acquired by Robert Friedland’s Ivanhoe Mines Ltd in 2000.  What the Mongolian government did not pay attention to was the financing charge that their equity stake would cost while the mine was not in production.  With mounting liabilities exceeding $1.7 billion at interest rates as high as 12%, the last several years have seen Mongolia slip further into debt while the public has traded on the debtor’s prison business model Friedland sold the former government.  Rio Tinto and its shareholders (and Friedland) are rolling in equity value while the indenture of Mongolia mounts.  At no point did the Mongolian people or their government realize that their “equity stake” was a carefully disguised money machine in which the international shareholders (including, for all you “ethical investors” PAX World Fund) would actually make more money financing the expropriation of Mongolian minerals than on the copper sales themselves!  In the most insidious and cunning fashion, the debtors prison – the colonial dynamic that fueled slavery – is now being presided over by the slaves themselves!

An isolated case?  Absolutely not. 

Japan’s Itochu, Japan Oil, Gas and Metals National Corporation (JOGMEC) and the JGC Corporation have teamed up with Robert Friedland on his Platreef Project about 275 kilometers from Johannesburg, South Africa.  This nickel, copper, platinum, palladium, gold, rhodium metals bonanza is thought to extend for over 30 kilometers and be another one of Robert’s storied “discoveries”.  And, as he did in Mongolia, several months ago he told the South African government that he’d allocate 26% of the project to a private company in South Africa – BBBEE SPV – and generously offered to finance the equity out of – you guessed it – Ivanplats (his company).  Like any banker, you can imagine who holds the lien on the equity until the citizens can pay off their debt!  Oh, that’s right, the banker!  The best part about the filing in South Africa is Robert’s commitment to insure that this equity stake benefits local communities, women, children, and employees!  He’s becoming so politically correct in these later years.  Ivanplats also opeates the Kamoa Project in, you guessed it, the Democratic Republic of Congo where he financed a 5% ‘non-dilutable’ interest for the government in a local company in which no other equity owner would ever be contemplated.

Robert Friedland is not the bad-guy in this story at all.  This former drug-convicted felon in the U.S. who now lives under the generous sanctuary of Singapore (ironically where his U.S. conviction could have earned him the death penalty), is evidence of a system that promotes faux values while demanding mercenaries to do the dirty work.  His sojourns with Steve Jobs in India and Oregon (I wonder where Apple got their comfort with conflict metals?) exposed him to multiple aspects of cultures – both those he valued in homage to his Hanuman inspiration and those for which he held contempt like the gullibility of corruptible governments.  And the fact that he continues to persist with the same model from the Gobi Desert to the Bushveld of South Africa is evidence that neither citizens nor politicians take the time to let simple diligence get in the way of their individual predation instincts on the citizens they govern.  While I have no idea whether his penchant for ‘discovery’ of gold, platinum, and copper would continue if he didn’t have a complicit system that follows his iron cudgel from the Milky Way (a cultural metaphor if you know the cosmology of China), I do know that it’s the ecosystem that sustains him, not the man, that needs to wake up.  As long as we value metals, we will value the divination proclivities of prospectors like Robert.  Unless we provide an alternative system of incentives, we’ll keep the enslavement going.

Which leads me to a glimmer of hope.  On Wednesday, Papua New Guinea Prime Minister The Honorable Peter O’Neill formally apologized to the people of Bougainville – the location of one of the world’s most storied and bloody copper and metals mines.  Stating that he was putting in process a mechanism to repeal the tyrannical, extra-constitutional Bougainville Copper Act of 1967 (a democratic action currently opposed by Rio Tinto) he punctuated the abusive practice of legislative corruption that persists in Mongolia, South Africa, the DRC, and numerous places around the globe.  Who knows?  Maybe a vision for a new humanity – one that sees minerals and their custodians as a service for the stewardship of humanity – may emerge from one of the oldest cultures on Earth!  Here’s to the emancipation of Bougainville and with it, the end of enslavement!  That would be Amazing Grace!

If you’d like to stand with me in this call for human liberty, share this post with 207 of your friends in honor of the anniversary we celebrate this week.  Maybe we can get Hanuman to give Robert a new dream!

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You Can Learn a Lot From a Mummy

Imagine that you find a book written by an itinerant priest 500 years ago.  Most of the pages are missing and the ones that remain are written in a barely legible script.  You’re lucky enough to find a few references to the book in two other writers’ works and, in the majority, the bits seem to line up.  From there you painstakingly spend over a decade transliterating what you’re reading into the metaphors of the present moment ensuring that all of your work does not offend the sensibilities of the present day reader.  And, just for good measure, you take a single edict from a single king and use that as the definitive lexicon to insure you haven’t mistaken any cultural meaning.

O.K., here goes.  The following text (approximately the same length as the text on the Rosetta Stone from which we confirm much of our “knowledge” of 5,000 years of Egyptian culture) is precisely the antiquarian representation to which my example applies.  This is an English translation of the Latin text of the concluding sentence from the declaration of the Fifth Lateran Council exactly 500 years ago this month.

As we ponder how heavy is the burden and how damaging the loss to the vicars of Christ on earth that counterfeit elections would be, and how great the hurt they could bring to the christian religion, especially in these very difficult times when the whole christian religion is being disturbed in a variety of ways, we wish to set obstacles to the tricks and traps of Satan and to human presumption and ambition, so far as it is permitted to us, so that the aforesaid letter shall be better observed the more clearly it is established that it has been approved and renewed by the mature and healthy discussion of the said sacred council, by which it has been decreed and ordained, though it does not need any other approval for its permanence and validity. For a more ample safeguard, and to remove all excuse for guile and malice on the part of evil thinkers and those striving to overthrow so sound a constitution, with a view to the letter being observed with greater determination and being more difficult to remove, to the extent that it is defended by the approval of so many of the fathers, we therefore, with the approval of this Lateran council and with the authority and fullness of power stated above, confirm and renew the said letter together with every statute, regulation, decree, definition, penalty, restraint, and all the other and individual clauses contained in it; we order it to be maintained and observed without change or breach and to preserve the authority of an unchanging firmness; and we decree and declare that cardinals, mediators, spokesmen, envoys and others listed in the said letter are and shall be bound to the observance of the said letter and of each and every point expressed in it, under pain of the censures and penalties and other things contained in it, in accordance with its meaning and form; notwithstanding apostolic constitutions and ordinances, as well as all those things which we wished not to prevent in the said letter, and other things of any kind to the contrary.

For those of you who are not computational linguistics aficionados, you might miss the fact that the reference above has approximately 45 nouns and proper nouns from which you would need to confirm all meaning – knowable and known – about every subject in world culture to confirm that your aforementioned transliteration was correct.  From the text above, we could safely say that the hooded priests who affixed their seals to the Fifth Lateran Council decree were pretty sure that they were actively fighting the “tricks and traps of Satan” (a.k.a. people who didn’t agree with them) and they wanted to be certain that everyone knew that they were in power.  We wouldn’t know anything about fishing, Mediterranean shipping traffic, weather, housing, municipal infrastructure, or the communities who lived in Rome 1,500 years ago.

Yet when it comes to our cumulative knowledge of a lineage of cultures that persisted along the Nile River for over 5,000 years, our references are equally opaque.  However, when viewed across the arc of a temporal illusion, we’re convinced that we “know” a lot about Egyptian cosmology.  So, as we unearthed another Egyptian pharaoh this week near Abydos – King Senebkay – CNN declared that the “Pharaoh’s tomb sheds light on the shadowy Egyptian dynasty.”  Really?  What we really know is that we’re finding evidence that what Napoleonic and English aristocrats and academicians told us we know is inadequate and that our illusion of “knowing” is an illusion.

The text to which I referred in the opening of this post is the writing ascribed to Manetho (although we don’t know if he actually existed or was the compilation of several writers in the 3^rd century BCE).  In work attributed to him, all of the “gods” and “deities” are direct analogies to the Greek pantheon; all of the time references are Hebrew (including Adam and Noah’s flood) and all the explanations are Hellenistic.  The quote from the compiled works of Manetho below demonstrates the pathologic cultural bias of the one fragment of information upon which we built our entire understanding.

“So long at Manetho followed the ancient records, he did not stray from the truth; but when he turned to unauthorized legends, he either combined them in an improbable form or else gave credence to certain prejudiced informants.” (c. 280 BCE.  Manetho.  Tr. W.G. Waddell 1940.  pg. 147).

By now, a few of you may be wondering how many other ‘sacred’ texts and stories are equally subject to cultural redefinition and manipulation.  Rest assured, if you hazard a peak into some of the earlier catholic Councils, you’ll become increasingly uncomfortable!

Now what does all of this have to do with InvertedAlchemy and the economy?  Well, it turns out, quite a bit.  Karl Popper’s Poverty of Historicism is a remarkable commentary on the social implications of inferring “known” from filtered “past” narratives.  His work nearly 60 years ago attempted to alert society to the dangers of selective and propaganda-filled narratives.  A philosophical product of a world in conflict, Popper had the decency to remind us that if we tell ourselves linear stories, we will harm our capacity for genuine understanding and critique.  This will lead to dogmatically held, error-laden postures that fracture and contribute to conflict on multiple levels. 

We’re presently in the throes of a dangerous mutation where the social opiate of “sustainability” is permeating structurally unsound systems creating the illusion of transformation all the while preying on the gullibility of the masses.  What used to be the realm of social activists and hippies – the idea that it’s a bad idea for us to consume all available resources on the planet and toss them into landfills so that we can fulfill our gluttonous race to exhaustion where we are the punctuation at extinction – is now in vogue across markets – including the recent orgy of inactivity and illusion in Davos.  The reason why NGOs and social activists are as ineffectual as their predatory capitalist chameleons is their abject failure to examine alternative narratives of our past to see if the assumptions framing our current views are adequate to describe our present condition.  They’re not!

And, by the way, trying to understand life by untangling the knotted chromosome and stretching it into the monofilament of DNA; explaining matter by forcing it through the Cuisinart of the periodic table; and understanding physics by calculating newton meters in geometric limits; all fail to capture the actual experience of life which animates through persistent respiratory tides dancing to the gravitational harmonic rhythm of the cosmos.  The Greeks were smart enough to know the difference between essential “Knowing” (gnosis), perception of forms or appearance (eidos), and consensus opinions or prevailing illusions (doxa).  This week’s “discovery” in Abydos reminds us that we’re burying our heads in the sand… and we don’t know it!

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Linnunrata, Vikings and Tigers

I love the Finnish myth of the creation of the world which starts with an exploding egg.  What I love even more is the cosmology that was developed around the stellar path of the Milky Way – the Linnunrata.  At the edges of the earth, according to the legend, was the warm home of the birds to which they would fly along the path of the band of stars that stretched across the heavens only to return with the summer to nest in the forests of Finland.  The warm south was an idyllic place where birds, souls and fantasies all flew during the long, cold winters.

HSBC just published their updated forecast for where the world’s economies will grow and shrink by 2050 and, to say that the Finnish and Norse birds have flown the coop is the understatement.  Denmark, Norway, Sweden, and Finland all are forecast to free-fall from the upper echelons by enormous scale and with them much of the rest of Europe.  These ranking drops in excess of 20 places on the world stage happen in the face of ascendancies by countries like India (forecast to be the third largest economy behind China and the U.S.) which is slated to rise 5 ranks, Mexico rising to 8^th (+5), Turkey rising to 12^th (+6), and Philippines to 16^th (+27), Malaysia to 21 (+17) and Pakistan to 30 (+14).  In fact, the largest gainers are South Central Asian and South American while the biggest drops are all European. 

This report struck me as fascinating in part because of the massive geopolitical ramifications that these transitions portend but more so because to the absence of creativity reflected in the metrics.  Apparently, we are to assume that in the next 36 years, we’re still going to be measuring and counting things the way we did at the end of the Cold War.  The birds in Finnish mythology, go to the south in the winter and find their way home following the stars of the Milky Way bringing with them the humanity and warmth that they experienced in the south at the edge of the world.  While HSBC sees the rising Tigers and MINT countries (Mexico, Indonesia, Nigeria, and Turkey) is the age of Odin at its end?

In 2007, I gave a speech entitled 10 Years Hence in which I was asked by the Mendoza School at the University of Notre Dame to discuss what the world of 2017 would look like.  I’ve excerpted it below to stimulate a conversation that may light a path to envision a world not of rising or falling ranks but of a More Perfect Union.

We live in an era defined by Ignorance Arbitrage.  By this, I mean that all of our implicit social constructs rely on the selective “knowledge consensus” among authorized network members.  We explicitly communicate within archetypes constrained by presuppositions of awareness that may, or may not, be encoded for others to understand in part or in whole.   As long as equilibrium, or the appearance thereof, is preserved, we’re comfortable.  However, when the preponderance of evidence no longer sustains our contrived realism, we despair over our impending obsolescence.

Let’s review our modern credo of manifest destiny. 

We begin with a resolute recitation of Doctrine of Conquest.  Following World War II, a victor’s conundrum emerged.  You will recall that in 1945, the Soviet Union was our military ally together with Britain, France, Australia, Belgium, Brazil, Canada, China, Denmark, Greece, Netherlands, New Zealand, Norway, Poland, South Africa, and Yugoslavia.  You will also recall that our enemies included Germany, Italy, Japan, Hungary, Romania, and Bulgaria.  Four short years later, we were in the Cold War.  From 1949 to 1989 the global economy was shaped by the dichotomies of the specter of Communism vs. the supremacy of Capitalism in a neat East vs. West model.  It is worth noting that Socialism was largely ignored (albeit frequently invoked as Communism’s evil cousin) despite its important contributions in Europe, India, and other “lesser developed countries”.  The West embraced materialism at every level to overtly display social and economic supremacy and constantly contrasted it to the despondency of those living under the iron fist of “the others”.  When the Soviets, in 1957, successfully launched the highly relevant technology – a satellite – the United States’ response was to put a man on the moon!  We, the country founded on conquest, reclaimed supremacy by conquest of a large dusty rock as though we didn’t have enough dusty rocks on earth.  While I would not suggest that our Space Race didn’t have unintended benefits, it’s comical that modern communication rides on the back of the “losers” of the Cold War.  In short, to confirm our myth of our own divine right, we engaged in a conquest of an inert object.  To the victor goes the re-writing of history.

From Conquest, our Catechism teaches the Doctrine of Colonization.  In the 1980’s, the steel of our cars and guns and the copper of our electronics conveniences provided little solace when Japan out invented the United States in a number of critical technologies – challenging a doctrine of intellectual supremacy that was significantly built on the backs of the German engineers relocated to the United States after the end of World War II.  After all, the MacArthurian utopia was supposed to cooperate with our global economic policy but something had gone terribly wrong.  Japan learned from the excesses of the industrial West during the 1970’s and started beating us at every turn.  You will recall our response in the 1980’s was:

• Slashing domestic industrial manufacturing to “build competitiveness” thereby un-employing 2.8 million Americans;
• Doubling of Foreign Direct Investment into the U.S. nearly making up for the job cuts in American businesses by employing Americans in foreign owned enterprises;
• Pumping billions of dollars into state-sponsored research kicked off by the Stevenson-Wydler Technology Innovation Act of 1980 in which the following doctrine was elucidated.  “It is the continuing responsibility of the Federal Government to ensure the full use of the results of the Nation's Federal investment in research and development. To this end the Federal Government shall strive where appropriate to transfer federally owned or originated technology to State and local governments and to the private sector… including plans for securing intellectual property rights in laboratory innovations with commercial promise and plans for managing such innovations so as to benefit the competitiveness of United States industry.”
• Malcolm Baldrige, U.S. Secretary of Commerce, architected the “Trade War” doctrine as a matter of national economic response to Japan – a policy strikingly similar to that deployed today against the Chinese;
• The Capitalist Victor of the Cold War minted the oxymoronic phrase “unfair competition” to level against any country that happened to outperform U.S. economic execution.

Colonization, under the moniker of “Free Trade”, means that U.S. and European policy reserves the right to define “Free” and “Fair” and the litmus test to apply to measure the relative pH of the system is how the behavior of others impacts U.S. and European industry.

When fully bloomed, we achieve the transcendence of the Doctrine of Eminent Domain.  In this final incarnate step, we see the emergence of the unholy trinity of creator, purveyor, and manipulator.  If we say that we create all things that are innovative and valuable, and we convince others that they want and must have the things we create and allege to be innovative and valuable, and finally, if we actively insist that only that which we say is valuable can achieve value, we have achieved bliss.  When white collar jobs followed the blue collar exodus to India, Vietnam, Korea, Singapore, China, and Thailand, the American people were reassured by policy makers and the media that all was fine because, after all, all the innovations come from America.  The assumption followed, therefore, that as long as we created all that is new and valuable, the rest of the world would “need” us.  However, this assessment never fully calculated the fact that, since 1987, the majority of foreign students being educated in the programs created under the 1980 – 1983 national research competitiveness programs came from Taiwan, China, India, and South Korea.  By 1994, the U.S. Department of Education reported that over 50% of all doctoral degrees awarded in computer science and engineering were awarded to foreign students.  A subtly in that report (published in 1996) was the observation that while Taiwanese and Indian students were more biased towards computer science and engineering, students from the People’s Republic of China were more focused on the natural sciences.  One early indicator of pending transformation can be drawn from this statistic – namely that the PRC has millions of basic scientists from whom the next new “new thing” is likely to emerge as their training has not merely prepared them to out-engineer and optimize but to understand the basics of discovery.  Just because we educated masters and doctoral students doesn’t mean that they all returned to their home countries with a permanent sense of loyalty to their academic progenitors.  The assumption that eminent domain applies to the landscape of the mind, while a wistful aspiration, has not held true in the past and will not hold this time.  The Stevenson-Wydler Act inadvertently has educated and enabled the GDP growth of others while we preside over a flat or decreasing GDP on our shores.  Since we’ve educated the world, we should be cooperating with it rather than vilifying those whose intellects we’ve shared.

A series of clearly identifiable factors began to warm the seas into what promises to be the economic El Niño that bodes for a transformational 10 years hence. 

• In 2006, one third of all international IPO’s were from China with proceeds growth of 87% in a single year.
• The total proceeds from global IPO’s has not yet returned to 1998 levels though the average deal size has grown by almost 20%.  The companies that are raising money are hardly at the innovative edge of future technology and business models – credit cards, airplanes, real estate, hotels, and car rental to be precise - concerning the top 5 grossing deals in 2006.  It is troublesome to be reminded that one of the common reasons for the slowdown in IPO deals is the requirement for compliance under Sarbanes Oxley – an unwanted burden of accountability and oversight which leads me to my observations about the future.
• The “strength” of the U.S. economy is measured with metrics which systematically under report:  unemployment and under-employment; the consumer contribution to the economy that is increasingly representing new debt (much of which has been supported by hyper-inflation in perceived real estate value); national entitlement programs including Social Security, Medicare, Medicaid, together with the grossly overlooked actual financial position of the FDIC, Fannie Mae and Freddie Mac and their attendant solvency risks which are nowhere to be found in Federal fiscal transparency; and, the actual contribution and double counting of Federal underwriting of government spending on both consumable products and services as well as the perpetual abuse of the in-process research and experimentation tax credit which is supposed to finance our future GDP.
• Industrial stalwarts such as General Motors, General Electric’s plastics division, pharmaceutical giants, and consumer electronics increasingly see global competition catching and surpassing them with little or no option than to option off their futures.
• James Wilsdon’s critique of the British investment in science, and the underlying presumption that this is linked to what I refer to as Gross Innovative Output in the November 3, 2006 Financial Times, in which he illuminated an industrialist paradigm at the public policy level which has become unmoored.  The notion that investing in laboratories, academia, and industrial research and experimentation will somehow positively correlate to the next new thing may have worked in a more industrial society.  However, in a world where proprietary value – that which protects goods or services from commoditization and minimal profitability – is increasingly based on knowledge franchises, this public policy and financial prioritization is outmoded. 
• According to the FDIC, the total of past due and nonaccrual assets in 2006 were predominantly (82%) in real estate-secured and consumer credit (51% and 31%, respectively).  A closer look reveals that a potential double exposure exists driving the remarkable increase in these statistics from 2004 to 2006 of over 20%.  Leading the increase in non-performing obligations were debts for the 1-4 family residential real estate sector and the credit card debt non-performing sector which are tracking each other very closely supporting the concern that the seven consecutive quarters of negative savings in the U.S. is impacting not only wealth accretion but is also beginning to adversely impact long-term credit rating foundations. 
• One of the largest financial innovations of 2005 and 2006 was the creation of the sukuk – an Islamic finance product originated in the Gulf States and subscribed from Indonesia to Germany.  This novel finance vehicle, in two year’s time, raised close to 10% of the global total financing proceeds compared to all funds raised through IPO’s in the traditional markets.  While the rest of the world was learning about, and investing in Shari’ a-compliant investments, U.S. policymakers were protesting port security provided by one of our allies who floated a sukuk offering.

In short, our love affair with our domestic ever-expanding consumption without transparency and accountability has resulted in a financial and social bankruptcy the import of which has not been lost on the rest of the world.

The Silk Road is coming back.  For over two thousand years, stretching from the Eastern Mediterranean to the Sea of Japan, southward through the Indian Ocean, the Silk Road was the nexus for the emergence of knowledge transfer and international trade networks which rival, in diversity and value, modern conventions.  While the U.S. and Western Europe prosecute military campaigns in Iraq and Afghanistan, the Silk Road is emerging as a literal and figurative power reminiscent of its earlier glory.  It was after all, on this network, that one of the most compelling technology transfers was facilitated.  Between C.E. 300 and 1168, Chinese and Muslims developed and applied the core technology for potassium nitrate, arguably one of the most explosive technologies that has shaped two millennia of human endeavors. 

To set the context, it is helpful to picture the Silk Road Economic Block in the following way.  Starting in Alexandria, Egypt and terminating in Beijing, China, draw your latitude line angling from N30° to N40°.  Then look south of that line to the Equator.  This region holds close to ½ of the world’s population; is home to most of the world’s religious and cultural progenitors; enjoys unprecedented GDP growth forecast to represent over 20% of the world’s GDP in the next ten years; and, is actively building cross-border economic cooperation at the corporate and national level.  The strength of the Silk Road Economic Block poses a number of compelling arguments for a global shift in power within 10 years hence.

First, the U.S. dollar.  In 2006, 47% of the U.S. Treasury securities were held by foreign interests while the U.S. Monetary Authority retained 17.8%.  The Federal Reserve estimates that two thirds of U.S. currency is held outside the country amounting to over $700 billion.  While the U.S. dollar represents 47% of the world’s official foreign exchange reserves, it is helpful to consider that with that exposure comes certain risks.  In June 2005, the Bank for International Settlements warned that countries would need to act “together” to deal with the burgeoning U.S. trade deficit and went so far as to suggest that the U.S. should consider cutting expenditures and raising taxes.  Failure to address this issue could lead, they suggested, to disorderly decline of the dollar and trigger significant global market perturbations.  As we all know, the appetite for this medicine has not yet created the impetus for change. 

As we see our country slip in its influence on the foreign policy front, we cannot ignore a maelstrom of our own creation.  While we’ve leveraged our nation in our pursuit of energy consumption, insatiable material acquisition, and protection of our way of living, we’ve actually mortgaged our economic fulcrum in shaping global policy.  When China elects to build energy alliances with Iran, paid for in U.S. dollars and financed on U.S. Treasuries, precisely what leverage have we retained.  Given the fact that U.S. consumption has provided vast wealth to those in the Middle East and Asia who now are cast as “emerging threats” to our national security and “sponsors” of terror, what incentive have we provided to engage in constructive dialogue?

Increasingly, innovations of global consequence are emerging from the Silk Road Economic Block.  In Singapore, Malaysia and China, biofuel technology is being funded and deployed.  In China, near-zero emission transportation and municipal systems are being developed.  In Iran, low-fire glass ceramics are being developed to safely dispose of highly radioactive nuclear waste.  In India and Iran, transgenic tomato plants are being developed to produce vaccines for biological warfare agents.  In Singapore, a global surprise anticipation center is being built to fundamentally change national and international policy from reactionary to proactive and anticipatory.  In Saudi Arabia, Kuwait, and the United Arab Emirates, novel energy and water municipal systems are years, if not decades, more advanced than the municipal systems in much of the U.S. and Europe.  Islamic financial products – based on fundamental ethical requirements for transparency and risk-sharing – are attracting capital market participation for funds that have never been liquid in the global economy.  National treasuries are adopting policies for foreign direct investment within the Block realizing that economic gain is inextricably linked to domestic and regional security.  In short, the region is emerging the “Fusion Economy”. 

Why Fusion?  First, because it accurately describes at the physical sciences level the imperative driving the emerging reality.  In the fusion reaction, the application of an external nuclear force overcomes the naked repulsive electrostatic force that keeps nuclei repelled.  When one nucleon is added to a nucleus, it attracts others and, by doing so, adds mass while emitting energy.  What’s coming?  The Fusion Economy.

Highly divergent, one could argue polar, forces exist in the cultures of the Silk Road Economic Block.  Nowhere are the divides between wealth and poverty; progress vs. preservation; theism and modernism more brightly illuminated.  Nowhere is there a more concentrated aggregation of wealth denominated in U.S. dollars.  Nowhere are markets so entirely dependent on the consumption of energy, goods, and services demanded by, but out-sourced from, the West.  However, in spite of these conditions, a single catalyzing event (triggered by war on an economic or corporeal level) could serve to unite those who appear so woefully segregated.  Who would have imagined that Chinese restaurants would become commonplace in Tehran?  Who could imagine that China could evolve an intellectual property regime that would actually begin successfully invalidating presumptive monopolies that other nations feared to challenge?  Could it be possible that ½ the world could create a self-sustaining resiliency that would be denominated on a non-U.S. treasury / currency platform?  Could a new paradigm integrating compulsory, ethical innovation licensing be paid for in “virtual value units” that entitle the bearer to water or energy rather than a call option on a Central Bank?  Is it possible that we’ve actually placed in motion sufficient antipathy to forge Atheist, Buddhist, Hindu, Muslim alliances that embrace more common values than the Anglo-Saxon values we seek to purvey? 

Ten years hence, Chinese won’t be buying IBM computer businesses – they will be engineering nanotechnology autonomous appliances.  While we debate how to deal with global warming in the U.S., New Delhi and Cairo may very well fund emission free public transport.  While our aging population finds itself under increasing financial burden to pay for medicine, Abu Dhabi Organics may be feeding the Gulf States medicament plants engineered at that National Research Center for Genetics and Bioengineering.  And, yes, my dear friends in the Kashmir may finally have the traditional herb compound that grows back my hair.

Today, we can choose the path that allows us to participate with those for whom we’ve had exclusionary practices for years.  We can begin to unwind the pejorative archetypes defining those like us as developed and those unlike us as aspirants.   We can participate in the financial accountability of ethical investing.  We can enter into dialogue with those we’re sure seek to do us harm.  Can we sit and objectively listen to former President Khatami quote the great Persian poet Sa’di’s words, “With devotion I will take that poison as the cure has been created by the Almighty,” and understand that this riddle contains not only the key to understanding those we find so foreign but a gentle echo of the admonition from the very Bank for International Settlements with whom no Silk Road voice conferred?  We have before us the paradox left by our Greek progenitors – to choose an Odyessian or Orphean destiny for the sirens are singing.  I choose the sweeter sound.

Freely Poisoning the Elk River

I was walking in the pouring rain this morning.  The temperature was hovering just around freezing.  The largest lake – once a vital water supply for the city of Charlottesville – was still covered with ice save an area of about 100 square meters that had been kept in motion by the Canadian geese that winter in our giant backyard.  The geese were foraging on the muddy banks moving in and out of the mist that shrouded the cedar trees.  My breath lingered in front of my face just long enough to remind me of the warmth that I was expelling against the cold enveloping me.  All was quiet and still.  Water everywhere. 

One hundred seventy miles away at a bearing of 277 over 300,000 people were awash in a very different experience with water.  Courtesy of a $400,000 grant from the Federal Government’s “stimulus” program provided by the U.S. Army Corps of Engineers in the spring of 2009, Dennis Farrell’s plans to vacate his toxic chemical processing and storage facility were thwarted and his much needed river dredging took place.  The Elk River and filled with so much sand, silt and mud that it had “affected barge service from his business.”  Together with Martin Marietta and Arrow Concrete, Freedom Industries needed the Elk to run deep so they could be “economically fit to run the facility”.  Reading the Friday May 8, 2009 article by Jake Stump, a reporter for the Daily Mail Capitol Reporter, I wondered how many West Virginian’s would be pleased to know that the estimated $26 million in profit that Freedom Industries reportedly made back then was more important to company owners than insuring against the leak that has rendered the State Capitol a Federal Disaster Area where all you can do with the water is flush toilets.  If the U.S. Army Corps of Engineers hadn’t dredged the river, it would have “cut the heart out of this company,” Farrell was quoted as saying.  A few short years later, Freedom Industries, profitable heart still pumping had an aneurysm that has put the body in jeopardy.

The water contamination in Charleston West Virginia is a disaster to be sure.  Having hundreds of thousands of people unable to drink, wash, or prepare food is an unspeakable tragedy.  But the reporting and the public discourse around the estimated 5,000 gallons of uncontained methylcyclohexane methanol (MCHM) seems to be neglecting the fact to which we’re all supposed to remain oblivious.  This event is a crisis of the Commons and we’re missing the story.

MCHM is known to be hazardous to humans.  According to the National Library of Medicine, low dose exposure can irritate the eyes and skin while larger dose exposure can cause damage to the heart, lungs, liver, kidneys and may result in death.  Medical journals from the early 1980s reported on environmental exposure leading to serious morbidity and mortality concerns.  At the incorporation of Freedom Industries in 1986, we knew that MCHM was toxic and harmful to humans.  Yet We The People thought that it was good economics to place this plant on a river that serves as a watershed and drinking source for hundreds of thousands of people.  Why? Because barge transport (the reported secret to Freedom Industries’ economic success) on a public waterway (the Commons) was profitably expedient. 

And while every news network squawks on about citizens drinking bottled water and being unable to bathe, wash dishes or go out to eat at the now shuttered restaurants, none of the coverage actually takes on the fundamental issue.  We The People paid $400,000 for the right to have this disaster.  We The People will now have the right to pay for the clean-up and the massive loss of revenue to West Virginia’s businesses.  And, reflexively, We The People will turn to the Department of Homeland Security, the National Guard, FEMA and charities to address the immediate human suffering all the while neglecting the hundreds of Freedom Industries clones across the country and around the world where the utility of nature is being used for unconsidered profit while the same utility becomes the agency of our collective poisoning. 

When I was a kid, I remember sitting in the winter rain at our house at 357 South San Antonio, Upland California about this time of year.  Migrating Cedar Waxwings would leave their breeding grounds in northern Canada and fly south to balmy southern California where a raucous flock of them would visit our house.  Perched on the powerlines running down the street, the birds would gather in the morning for a Bacchanalian festival of epic proportions.  You see, in front of our house we had a pyracantha bush which, in the winter, would be covered in bright red and orange pomes.  Each year, these berry-looking clusters would ferment and, by the time of the birds’ arrival, they would be entirely laden with alcohol.  Predictably, the early flights of the birds would be from the lines to the bush and then back to the lines.  As the morning wore on, landing on the lines got ever more tenuous and by midday, many of the birds were too drunk to fly.  Invariably, some of these little fowl would wind up dropping out of the sky and landing in the path of cars zipping up and down San Antonio Blvd and end their tiny existence – all for what seemed like such a great idea. 

I reflected on these birds when I noticed on the Freedom Industries website their red white and blue emblazoned bald eagle – land of the free, home of the brave, patriotic façade – and the far less visible, subtle chemical compound on the upper left of the site – H3COH.  My childhood birdies were killed with ethanol – C2H6O – but let’s not stand on chemical ceremony.  When you feed an eagle methanol, you get a toxically drunk eagle just like when Cedar Waxwings eat lethal doses of ethanol.  And if the flock of cackling, drunk birds (in my metaphor, the horde of media converging on Charleston) don’t snap out of it, we’ll migrate to another one of these entirely avoidable tragedies again – maybe next year, maybe tomorrow – who knows?

At a speech I gave recently, I ranted endlessly about the use of the word “free”.  In the instance of my presentation, I was highlighting the fact that the concept of “free” is a social illusion that really masks the deep pathology of callous ignorance and indifference.  The illusion of “free” invites its evil corollary “for the taking” and leads to a conscious neglect of considering the entirety of a system.  The Elk River wasn’t “free” to “use”.  And now that We The People have contaminated it, we’re given an opportunity to reflect on the fact that the water we take from it is not “free” either.  If we actually saw the Elk River as an invaluable treasure, we wouldn’t foul it with chemical plants and barges.  If we saw water as the undisputed arbiter of life and death, we’d be less willing to see others destroy it.  But we don’t!  And, on this rainy, chilly January weekend, we’re paying for “free”.

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Beyond the Barricade in Tahrir Square

 Driving north up Al Kasr Al Aini towards the barricade on the south side of Tahrir Square we quickly realized the great fortune of selecting the right-hand lanes of traffic as the left stood motionless behind the snarled Sunday evening traffic.  To make matters worse, the piercing blue and red strobe lights of emergency vehicles indicated that those on the left would likely remain in stasis for quite some time. 

“Alhamdulillah,” my companion commented as we sped past the less fortunate commuters just meters away recognizing that the difference between arriving at dinner on time or hours late was providently decided by a traffic impulse a mile earlier.

This morning, I glanced at the news on my way to my early morning workout.  Blackberry had filed a patent infringement lawsuit against Typo Products.  Blackberry geniuses Jason Griffin, John Holmes, Mihal Lazaridis, Herb Little, and Harry Major had convinced U.S. Patent examiner Monsour Said to grant them a patent on “a handheld messaging device for wireless e-mail that is optimally configured to facilitate thumb-typing with thumbs, comprising a keyboard having a plurality of keys representing the letters of the alphabet said keyboard integral to the hand held messaging device….”  Apparently neither the Blackberry engineers nor the patent examiner were familiar with the theorem from 1913 set forth by French mathematician Emile Borel who examined the probability of the infinite number of monkeys on the infinite number of keyboards reproducing works of Shakespeare’s Hamlet.  Undoubtedly, said French monkeys on said keyboards would have used “thumb-typing with thumbs” in 1913 making Blackberry’s infringe-able invention in 1998 highly anticipated and not inventive.   As if 100 year old French monkeys aren’t reason enough to dismiss this frivolity distracting the venue of insanity also known as the Northern District of California Court, the “revolutionary” product (their characterization) created by Typo Products representing the “culmination of years of development and research” (their characterization) that allows iPhone users to use a keyboard affixed atop the flat screen is a retrofit snapped over the iPhone casing and therefore fails Blackberry’s first claim of being “integral” to the device. 

As I’ve done for decades, I had the opportunity to sit down - this time in Egypt - with aspiring entrepreneurs – a term originally used to described the manager of a theatrical production or a circus (do I sense a French theme in this post?).  This group was working to eradicate from Egypt the horrific legacy of war in the form of vast tracts of land filled with landmines and, compliant with the misguided advice of business consultants who favor more monkey than mathematician, sought to reassure me that their ‘invention’ was ‘patented’.  These patents, they argued, were part of the value proposition of their endeavor.  Having begun my day with Canadian monkey business, I was disheartened to see passionate young Egyptian men ‘pitching’ an illusion that had distracted them from the legitimate and laudable endeavor upon which they had embarked. 

Listening to these gentlemen detail the gruesome scourge of lost lives and limbs throughout Egypt courtesy of Norwegian Nils Waltersen Aasen’s invention of the modern anti-personnel landmine on the eve of World War I, I was struck by the ironies of the day.  Nearly 100 years ago, Aasen was made an honorary colonel in the French army and was awarded the status of Chevalier in the Legion d’honneur for his anonymous armaments.  This inventor of “the automatic soldier” set in motion a century of death that my Egyptian friends sought to destroy with a ‘patented’ automatic mine detector.  Both of them promoted their efforts as ‘inventions’.  Both sought speculative investors to fund their novelties.  Separated by a century, neither fully contemplated the trajectory of their endeavors – ignoring the ample lessons from history and oblivious to the sustainability of their efforts in the future.

Far more dangerous to humanity than buried landmines is the proliferation of distracted intentions.  There’s no question that the gentlemen I met today are zealous about ridding Egypt and the rest of the world of hidden agents of death and destruction.  There’s no question that they’ve undertaken considerable time and effort to develop technical solutions that can go a long way in addressing a problem that plagues millions of acres and kills or maims thousands each year.  And with 155 signatory countries to the Ottawa Treaty who agree that they will not use, develop, manufacture, stock-pile or traffic and trade landmines, their effort is certain to appeal to the morality of a vast majority of humanity.  So why is it that these young men so willing to serve humanity believe that their effort is served by laying cognitive ‘landmines’ in the illusory landscape of innovation?  What evidence could anyone point to that supports the hypothesis that patenting the method to rid the world of landmines actually serves humanity more effectively than collaborating with humanity to achieve the same outcome?  The answer.  None.

As I’ve stated before, one of the most prolific deterrents to the success of human enterprise is the reflex to force every impulse into a consensus structure or form.  We pretend to celebrate creativity in technical adaptation and engineering, for example, but we find anathema equivalent creativity in business models or the provisioning of the same.  Figure out the angulation of keys on a typewriter modeled after the 1868 U.S. Patent 79,265 awarded to QWERTY inventors Sholes, Glidden and Soule so that opposable thumb primates can tweet to one another while driving and you’re celebrated as worthy of infringement defense.  Suggest that you consider a business approach other than the broken VC model of the failed U.S. and European inefficient capital roulette wheel and you’re crazy.  Why?  Because with conformity comes control.  And with control comes the ease of reinforcing incumbencies.  And with incumbencies comes the maintenance of the status quo – a status quo that has, for 100 years, accepted the fact that people who don’t matter in places that don’t matter randomly trigger forgotten landmines.  And, like the axiomatic silent tree that falls in the earless forest, the landmine that is never detected by the invention that never gets funded that kills the farmer that never was considered is something that the status quo never hears because it doesn’t make a sound in the Silicon Valleys of the Knowledge Economy.