Thinking Small-ish

I was recently critiqued for thinking "too big".  My activities apparently exist on a scale that is "too big" to understand.  This assessment was most intriguing as it came from a person specializing in leadership.  As I reflected on this assessment, I found myself entering a rather intriguing vortex of inquiry. 

It's become fashionable to speak in hyperbole in Occidental business and civil society circles.  We're the "most connected generation in human history"; "unprecedented in our capacity to collaborate"; participants in "unrivaled opportunities to collaborate and co-create"; and our linear self aggrandizement rolls on.  When we contribute to a collective effort, our tendency is to grossly exaggerate our contribution (and its associated entitled reward).  Our "global private wealth" is greater than it's ever been according to a recent study by McKinsey with more millionaires than ever before.  Models of the Nobel Prize winning "Commons" celebrate the "longest running commons of the sea" and the "Charter of the Forest" as evidence of near eternal scale monuments to our capacity to organize great societal artifacts.  Our accepted ontological egos seem to be quite happy embracing "too big" when it comes to applauding our apparent advancement.

Like the peacock for whom displays of plumage create the illusion of vitality and grandeur on what is in fact a rather scrawny bird, I would like to suggest that the use of linear projections of "most", "greatest", "first time in human history" assertions is a thinly veiled admission of the terror of being infinitesimally irrelevant and small in all likelihood.  Fueled by our intuitive recognition of diminution of consequence and purpose we seek to inflate our delusional status at considerable personal and social peril.

Let's examine this a bit more closely.  I recently encountered an argument asserting that Christians out perform all other faiths in establishing institutions of mutual aid and civil benefit.  Devoid of any basis for this assertion save the carefully selected empirical evidence of U.S. records of donations through charitable organizations - already a biased sample - the argument was presented to reinforce a particular predisposition of its proponent.  What I found interesting was the abject failure of the argument to include the faith / religion called "The State" or the faiths and religions which, because of their ubiquitous assimilation into culture don't count as faith or religion.  While I'll certainly grant that there are numerous church affiliated hospitals in the U.S. (obviously the only place the assertion needs confirmation in a world of 7 billion), I wondered how many ashrams in India have fed the hungry, treated the sick, and cared for the ailing in the thousands of years before a certain itinerant prophet wandered the hills of Galilee and was patronized by a sword wielding Emperor a few hundred years later.  I wondered how many roads (human connection for societal formation and trade), aqueducts (public health and food security), and schools were built by tyrants and democrats alike - all relying upon the surrogated belief in hierarchical structures and faith in government.  And while those who subscribe to the notion of charity are certainly entitled to their motivations - the idea that comparative charity is relevant is divisive and unnecessary.

We're not more connected because we have social media.  Was Thomas Jefferson more connected to the world with his capacity to travel to France, speak French, read Greek, Hebrew and Arabic, then any iPad wielding blogger today?  Father Sorin - the founder of the University of Notre Dame - was capable of transatlantic relationship-building unaided by "Like" buttons on social media.  The Yongle Empire of China's 14-15th century mandate to share "all known knowledge" in flotillas equipped with libraries were more careful than Google in aggregation and dissemination of knowledge.  The Komgi in East New Britain who can listen to the movement of life in the sea from a rock atop a high mountain have been "wired" to the Earth for 40,000 years.  They perfected a commons-based economy that was over 30,000 years old before the civilization that would millennia later concoct the Magna Carta and the Charter of the Forest even settled the isles.

I think that our consensus position is to think small because we know that we've been in retrograde for a long time.  Thinking small is reinforced by dogma and faith that goes as far as to denigrate wisdom (labeling its aspiration "original sin") and pronounces that the "wisdom of the world" cannot fathom the divine.  Thinking small is rewarded by powerful incumbencies that want to cow humanity into narrow chutes in the abattoirs of labor-rent consumption.  Incremental minutia is celebrated as "invention" while quantum inquiry is suppressed and marginalized. 

But here's the irony.  I find that all the people I meet who advocate for thinking and acting "small" actually are overwhelmed with how many constraints they need to keep in their awareness.  In fact, the smaller one thinks and acts, the more likely it is that hyper-acuity attends fear of position, failure, scarcity, and extinction.  Far from small, the "small" thinker and "small" actor is constantly bombarded with messages of limitations and is more busied and distracted than I've ever been.  When I want to solve a national or global challenge, I spend less cognitive effort than I observe in the intricacy attendant to a conversation on someone's cousin's chemotherapy or a cat with diabetes.  I think that "thinking small" is actually maddening in its regressive complexity.  I think that acting incrementally and small involves rejecting a myriad of bests and nows for the exasperation of serial tedium.  The analgesic for the mental pain: hyperbolic statements of being the best, most advanced, and superior!

Nonsense.  Our world needs people who are willing to take bold action at a relentless pace.  We need audacity to animate ourselves from our collective coma inflicted by the constant pounding of conformity.  The greatest challenge facing humanity at present is to have the courage to open the aperture of our awareness to see that the ever-present unfolding of reality always conscripts us to engage to our fullest potential and if we rise to the challenge, the rewards are incalculable!

Too Many Holes in ‘Balance’ Sheets

I’ve been asked many times to explain my rationale behind not following consensus practices of reporting corporate performance with ‘traditional’ accounting.  “Yeah, I get that you do unusual things but just show us the financials that we’re used to seeing,” I’m asked by people who have just determined that the businesses that I’ve created are among the most fascinating and innovative they’ve seen.  I used to be amused and now I’m just vexed by the illogic of such a request.  The field effect of what I’ve done around the world is visible.  The powerful technology I’ve architected and deployed is working and continually proven.  The countless ventures around the world that have launched, revitalized, or restructured using a unique methodology are bearing fruit.  Then I’m asked to explain this unprecedented effect using a metric that was never a component of its manifestation.

I am reminded of my frustration as a member of the radiology faculty at the University of Virginia when we were working with technologies enabling digital mammography and use of gamma emitters to detect early stage breast cancer in young women.  One of the FDA’s leading advisors from a famous northeastern medical school in the U.S. (also on the advisory payroll of one of the largest medical device companies making conventional mammography machines) convinced the agency to require newer, better, technology to be tested for equivalence against inferior conventional technology.  “Substantial equivalence” was required to take precise instruments and sub-optimally run them to prove that they were “as good as” an antiquated standard.  This industry-endorsed (and funded) malpractice and wilful illogic cost the lives of many young women who suffered from aggressive cancers invisible to inferior x-ray technology.  Threats to incumbent infrastructure could only be eradicated by proving that the measured out-performance was “not equivalent”.  People died.  Hospitals and doctors were essentially bribed into acquiescence.  And the band played on. 

Russia and China look like they’re about to execute a 30 year Russian natural gas supply agreement “worth $400 billion”.  This proposed deal makes sense – reportedly – for China as it solidifies another critical energy source for its growth objectives.  It fulfills Russia’s desire to find a cash-rich buyer alternative to the contentious European buyers who have been a constant complexity made worse by recent events in Ukraine.  But I find it fascinating that both China and Russia seem to be ignoring the fact that this $400 billion deal is not going to cost or be worth what is alleged at present.  Why?  For the simple reason that a thirty year anything will not be what is proposed.  Ukraine has been independent since 1991 – a short 23 years.  From the 1654 Treaty of Pereyaslav and the 1686 territorial dispensations in the “Eternal Peace” between Russia and Poland which was neither eternal nor peace to 1991, over 10 million Ukrainians died in wars and famines directly caused by their benefactor caretakers.  Not surprisingly, the cost of pumping natural gas from Russia to Europe across Ukraine did not factor in the nearly 350 years of pent up animosity resulting from abusers carrying many flags.  Is it reasonable to assume that 1.34 trillion cubic feet of gas will flow from Russia to China for the next 30 years without political or social upheaval?  Absolutely not.  Do we know the true cost of Ukrainian transshipment of gas?  No!  But we do know that it’s cost hundreds of lives, the frail global economic cooperation of the former G-8 (now G-7) and G-20 (now G-19?), and massive energy price ambiguity harming manufacturing and employment across the Eurozone.

What is the price of political risk?  What is the price of social upheaval?  Is it simply the collapse of purchasing power parity or gross domestic product?  No.  Can the much ballyhooed risk premium in commodities and utilities “price” the certain instabilities built in short term impulses with long term malignant consequences arising from neglect of knowable instabilities?  Absolutely not.  And can business and finance credibly offer extensions of current accounting models that adequately describe current realities and future opportunities and threats?  The fact that we’ve been globally incapable of emerging any economy post-2008 into a robust intervention-free actor is evidence that our metrics fail… Empirically! 

Therein lies the irony.  Using our consensus metrics, we can see that our metrics are insufficient.  Yet we still press on as though their use will somehow manifest their adequacy.  Central bank intervention has provided ‘cheap money’ to enrich the paper wealth of a few and push a greater proportion of the celebrated ‘middle class’ into retrograde.  The economically poor?  Forget about them.  Their ranks are growing and their voices are being strangled.  While high end retailers like Tiffany and LVMH grew at 9% in the first quarter of 2014, sales of the bottom 99% of homes in the U.S. fell by 7.4%.  Elitist retailers like Walmart saw sales fall by nearly 5% while discount retailers at the lowest price points grew over 7%.  The middle of the distribution is getting weaker while the tails are getting stronger.  In other words – the economy isn’t working for the economy. 

So back to my opening.  Why would I build a business that is predicated on, or assessed for performance on a system that does not work?  How much did it cost me to uncover the fact that Rio Tinto and its closely held corporation Bougainville Copper Ltd is seeking to defraud Papua New Guinea of over $50 million?  It cost: years of plane fares, days of interactions with citizens of Bougainville including ex-combatants that multi-lateral peace keepers refuse to engage, three years of direct opposition and discouragement from members of my own organization, courage of my family in the face of ostensible security threats, creative economic modeling and years of forensic accounting, joyful community engagements, a partnership with a great business partner, and countless other inputs.  And in over 30 years, did anyone with any budget do the same work?  Absolutely not.  How much did it cost to build a financial structure that could flow billions of dollars of capital to business by rationalizing their intangible assets in a fashion that banks could understand?  Was it millions of dollars of investments?  Was it tens of millions of dollars of revenue?  No!  Others tried the same and have come up discredited and empty.  It took bold initiatives in the public arena, ridicule and celebration for taking a contrarian stance against the propaganda of mainstream economists, the tireless effort of loyal members of a team who saw their professional colleagues taking lucrative shortcuts to personal enrichment at the expense of the mission, advanced computational analytics that are unrivaled in any industry – analytics that actually outmaneuver super-computers that cost taxpayers in excess of $300 million each year and bureaucracies on both sides of the Atlantic that cost industry over $4 billion each year.

In a few weeks, my quantitative equity fund will celebrate its first year anniversary of active trading.  Measuring corporate stewardship and quality of innovation alone, we have outperformed the large cap equity markets in a year where the same markets have reached their all-time peaks.  In short, we’ve beat the best at their own game.  And by a considerable margin.  Does that make our metrics right?  Absolutely not.  But what it does show is that the market is not measuring what drives it.  And this incomplete view directly harms wealthy and poor alike.  Public dollars are spent chasing ephemeral objectives rather than addressing legitimate social and infrastructure needs.  Countless illusions are created around businesses that will never bear fruit.  From crowd-sourcing to Goldman Sachs, the measurable ignorance premium is growing and we’re the worse for it.

It’s time to account for it ALL – the stuff that we use, the frameworks around which we organize our impulses, the wisdom that we integrate, the capital we use to empower our efforts, the tools we use to build and propagate our impulses, and the success or failure we celebrate or shun!  A more complete embrace of reality will have a quantifiable effect.  Let’s throw out the sheets that no longer service us and recalibrate our world.

Consecrated Hypocrisy

A Challenge to Pope Francis to Think and Act Differently

Catholics, Protestants, Jews, Muslims, Buddhists, Zoroasters, Hindus, Humanists, Animists and Atheists can probably agree on one thing at the moment:  His Holiness Pope Francis is rocking the boat more than has been done in a long time – possibly since a certain disciple credited to be the first pontiff was in a dinghy on the Sea of Galilee with his Master.  “Peace, Be Still,” is not uttering forth from his lips but is the fervent prayer of many of his politically correct, consensus surfing followers who have greatly benefited from ephemeral morality.  To his credit, his recent appearance in Israel has done nothing to earn him points in accommodative pandering.  And, according to press statements, President Mahmoud Abbas and President Shimon Peres have agreed to join him at the Vatican on June 6, 2014 to share in a Prayer for Peace. 

In his encyclical “Evangelii Gaudium” Pope Francis clearly articulated a clarion call for the world to take seriously the need to have economic justice on Earth.  Upsetting the modern day aristocracy (both the religious and secular) with what talk show host Michael Savage callously disparaged as “Karl Marx in a papal outfit,” (evidencing Mr. Savage’s ignorance of the writings of Karl Marx which bear no resemblance to the Pope’s missives), Pope Francis’ comments seem to be a voice of rational morality in a world of asymmetric predation.  On the other hand, advocates for donor-fueled ‘social justice’ campaigns have dared the Pope to turn the Vatican’s massive wealth reserves into a colossal entitlement benefactor.  And having seen the church’s massive land expropriations around the world – robbing countless communities of their prime agriculture, mineral and energy resources conveniently surreptitiously stewarded by mercenaries upon whom the church’s wealth has been built – I am sympathetic to the call to have this pope actually emancipate stolen holdings as evidence of his joyful gospel! 

But both Savage and Social Activist are reflexively responding to semantics while failing to contemplate where the Vatican should be encouraged to go.  In a world defined by expropriation, generations of exterminated options are inextricably our hideous legacy.  The “great American experiment” imagined by Alexis de Tocqueville in the 1830s cannot expunge the fact that its foundational labor was indentured and enslaved, its territorial expansion was based on theft and murder, and its hegemonic dominance at present is predicated on capital manipulation – not on democratic, free markets.  The Catholic Church in 2014 cannot find enough pontifical holy water to wash its hands of the complicity it has in the Crusades in which it sought to wrest control of land from the “infidel” only to find out that it was seen by the land’s occupants as infidels.  And like the disputed “Nazi” confiscation of artwork during the Second World War which fueled legitimate and illegitimate claims to reparations and repatriation, the idea that you give back to today some token of what was stolen in recent and ancient past is ludicrous.  The impulse for justice to be equated to recompense is simplistic and nonsensical as neither the beneficiary nor the competence of stewardship would render such impulses effective or salutatory.  So, to both reflexive arguments I offer a simple plea: cool your jets and think!

What could you do with the wealth of the Vatican – both in its reserve vaults buried throughout the world and in its vast land holdings – which would actually let some version of a ‘gospel’ be experienced?  Well, that’s a fascinating question and one that the good Father has not appropriately engaged.  Under a simple calculation, the liquid and reserve asset ‘collateral’ of the Catholic Church would support a bank – think of a credit union – with liquid credit origination capacity of over $180 billion.  Add physical land holdings and liquidity on revenue and you have a global bank which would exceed the scale and capacity of Industrial & Commercial Bank of China, HSBC Holdings, Credit Agricole, BNP Paribas, or Mitsubishi UFJ – the world’s top five banks by asset holdings.  And if the church was serious, it could replace all the development banks in the world with a capital offering that, at maturity, would repatriate collateral to countries from whom it stole lands in a structured transaction ripped from the very document upon which it purports to draw its authority – the principle of Jubilee.  Imagine a seven-year plan that, if executed by its own dogmatic architecture drawn from its own sacred text, would eradicate present day poverty by improving the lives of the economically “poor” by over 100%.  And it wouldn’t have to change ANY of its beliefs.

Now why is this path untaken by the Holy Father?  Why is he offering to host prayer breakfasts but unwilling to actually use his own biblical principles to address the injustice that he sees in others?  Well, for two reasons.  First, he’s running an institution that sees charity rather than stewardship as its best offering in the world.  By preserving a patriarchal system, he is blinded to the very principles that built Joseph into the greatest economist of all times in the seven years leading up to Egypt’s devastating seven year famine.  Second, he’s being advised by those who have a vested interest in preserving the vestiges of justice hiding under his vestments (sorry, I couldn’t resist a bit of “V”)!  If he’s serious about a gospel, he should read his own book.  His theology is great for boat rocking but he needs to listen to a voice that can calm the storm.  So far, that message is being lost in pandering and that’s a cardinal sin.

Tunnel Vision in Low Visibility

 When United Flight 1205 and US Airways Flight 432 “nearly collided” over the Pacific on April 25 of this year, air traffic control reportedly assigned both planes the same altitude.  An audible warning in the cockpit of the United flight alerted pilots to the potential midair collision and their rapid descent of approximately 600 ft in 60 seconds may have contributed to a few spilled drinks but the preservation of life of untold hundreds.  While the pilots deserve credit for their heads-up reaction, engineers at Boeing and the countless scientists who developed collision avoidance radar systems are even more to thank for averting the potential remote-controlled disaster.  The National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA) have a joint task force en route to Hawaii to get to the bottom of this near disaster that appears to be nearly covered up but for the activism of passengers who made noise about the incident.  I make this observation merely because the NTSB “Current Investigations” website as of the time the story broke does not include this “investigation” which they told media sources was “on-going”.

Let’s see, fellow humans, how is this going to go down?  Probably something like this.  A trained professional in a windowless room in Hawaii was tracking an out-going flight while bringing another flight in.  Small screens in front of the controller’s face were lit up with simple icons slowly blipping their way across the display.  This two dimensional representation of multidimensional data was designed by interface engineers that were encouraged to simplify complex data into ‘intuitive’ forms.  And, without deep consideration, two blips were heading towards each other while dozens of other blips were meandering about the screen.  “Maintain Flight Level 3-3-0,” was instinctive instruction spoken by the controller between multiple other instructions to other planes in the vicinity.  And, at the point the planes careened past each other, they were about 8.09 seconds and 800 ft away from vaporizing each other.  They didn’t.

I was flying across the same Pacific Ocean this week and got to see the puzzling reality of the frequent passing of planes in remarkably close proximity given the vastness of the firmament.  Keeping things simple, it seems, includes increasing the likelihood that we’ll crash.  But simplicity is to be favored?

Perplexing me all the way across the same ocean was the conversation that sent me on my way from Papua New Guinea this week.  Through a cunning manipulation of one number, KPMG aided Bougainville Copper Ltd - owned by Rio Tinto – in calculating investment returns due landowners for compensation due them since 1990.  Using an investment return rate (PNG Treasuries) that was never used in the PwC-audited performance reporting of Rio Tinto or Bougainville Copper Ltd, these companies have conspired to seduced cash-starved landowners into settling for less than 1/10 of the appropriate investment returns made by the companies themselves.  And by appropriate, I mean the actual, audited investment returns made by Rio Tinto on their own cash investment and their own publicly traded equity.  After all, in a country where one third of the population lives on less than an equivalent of $1.25 per day, getting a $275 / per capita pay day sounds like a lot!  But not collecting the actual, audited investment amount due (nearly 1% of the nation’s effective GDP) puts this conflict-torn land in line for another predictable collision with the same civil war and violence that’s visited its shores several times in the past 50 years.  And in response to this information, senior officials expressed concern that, “if the public found out about this, there’d be an uprising or civil unrest.”  You think?  Like the NTSB and FAA, the response to a simple oversight made in ignorance leads to an impulse to decrease visibility. 

It has occurred to me that the axiomatic “knowledge economy” taxonomy may have more sinister truth than hyperbole entwined in its warping.  We live in a time in which information asymmetry competes only with active disinformation as a means of disproportionately advancing the interests of the few at the expense of the many.  It’s not knowledge that we transact in the economy but rather our systems celebrate the predation on what’s not known as a means to advantage. 

The “free” nature of the internet leads millions to place their personal lives in the public view for the benefit of “social” networking.  Yet this ingenious seduction (even post-Snowden when revealed to be what some of us have always known and pointed out to a massive hypnotized audience) is a phenomenally cost-effective way for agencies of power to collect information that would never be released if its true aggregators were known.  It’s not the knowledge economy.  It’s an economy in which knowledge of what’s knowable or find-out-able is the easy path to wealth redistribution and appropriation. 

And to add insult to injury, well-meaning people who actually attempt to call attention to the self-evident collisions on the radar are told to simplify their message so that it can be consumed by the tedious masses.  So here it is.  Really simply.

Planes can collide and go missing when complex modes of transportation are reduced to blips on a screen.  They’re vehicles of mass-transportation with lots of people on board.  They need to be more carefully stewarded and the lives on board need to be valued enough to monitor their movements.

Defrauding the public using the guise of internationally-branded auditors and advisors and using slogans like, “development that meets the needs of today without compromising the ability of future generations to meet their own needs,” sews the seeds today for violence and revolt tomorrow.

Assuming that communication over “free” networks isn’t being observed by the people who are actually paying for the network is ludicrous.  And when they’ve gotten what they want, they’ll take it down.  So, building “sustainable communities” in virtual space is oxymoronic.  If you want to be in a persistent relationship, you need to be persistently relating in analog space.

We don’t need midair collisions, civil unrest and revolts, and privacy intrusions to prove the fallacy of simplifying that which is inherently complex.  And we don’t need to pick “the important” fact in isolation when the wisdom only occurs in multi-perspectival discernment.  A star does not aid in navigation.  Stars in relative position locate us with precision.  It’s time that we opened the aperture of our perspectives, challenge ourselves to deeply expand our awareness and sensitivity, and embrace the fact that knowledge may be born of our reconnecting with others who know what we don’t so that we too can avoid the collisions that are entirely knowable, known, and in certain instances, entirely engineered.  Embrace the complicated because therein is the essence of living!

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Generative Enterprise: Breathing Life Into Business

A Model For Human Endeavors

Humanity has engaged in the audacity of enterprise from its inception.  Far from passive acceptance of the natural ecosystem in which they find themselves, humans share an impulse to modify their living conditions for perceived security, efficiency, status, luxury and community.  Awareness is growing that some of these activities are actually harming our capacity to persist as a species.  Ecosystem degradation through reckless exploitation has cost us quality and capacity of life and, on the present trajectory, our viability is jeopardized through abuse, apathy and neglect.  In the face of this growing awareness, notions of “sustainability” and “resilience” have gained popularity in public and private sector endeavors.  Regrettably many of these concepts and their experimental deployments have failed to fundamentally challenge the dominant parasitic paradigms giving rise to very crisis they seek to ameliorate.  Reflexes ranging from “corporate social responsibility” to “biomimicry” to “blue economy” have been triggered by plastic failures and the anticipation thereof.  Source-derived models that draw on the only things in the universe we know to be persistently generative – magnetism, light, and plasma – are bypassed for complex, adaptive, accommodative systems.  In short, we’re assuming plastic destructive paradigms can be retrofitted with ethical elasticity thereby seeking a panacea rather than structural reformation.

At the emergence of socialization of the species, principles of reverence, fertility, and cyclicality were inextricably woven into our social narrative.  The interlocking tapestry of human life – the intersection of photosynthesis which stitches together that which oxidative metabolism harnesses for perpetual existence – is woven with such elegant simplicity that we don’t give it a passing thought.  However if we understand the symmetric mysteries of C₆H₂₂O₁₁ upon which all life is generated and upon which all animating abundance is experienced by our species we can understand the importance of a Generative Breathing Enterprise where Light and Magnetism serve as the architect of persistent, generative enterprise animated into action by the plasma arc of inspiration.

This is not a theoretical framework.  It is the indisputable observable reality and, as such, transcends model to mandate for developing the effortless dance of work and enterprise.  This is a call to emancipate dependency on surrogacy in favor of the accountable assimilation of the manifest abundance that exists around us as Commodity, Custom & Culture, Knowledge, Money, Technology, and Well-Being.  Most importantly, based on Generative Enterprise, some of the world’s most intractable challenges have literally evaporated into the mists of industrial haze when engaged with a simple breath.

Choosing Generative Enterprise requires discernment (the synthesis of sensory inputs and coordinated, multi-perspectival diffraction) and animated engagement.  Gone are excuses for inaction fueled by monochromatic scarcity.  They are replaced with immediate, progressive action at the moment of plasma arc where magnetism (Integral Accounting Value Units) and Light (emanation) are fully and completely engaged.  Gone are ephemeral seductions (business plans and funding pitches) and in their place are evidentiary invitations for collaborative engagement with communal abundance network proliferation.  Budgets give way to Accountable Provisioning.  Profit is consider as the possible observed evidence of unaccounted costs which then serves as a diagnosis for careful “all-in-cost” reflection. 

The model is quite simple and is outlined below.  Generative Enterprise replicates the dance around the fulcrum of sweet living – glucose.  Formed from the photosynthetic union of sunlight and expired carbon bathed in the waters of life springing from Source, glucose is the universal currency of abundance manifest.  Oxidative metabolism within the mitochondria serves as the framework for that which is engaged – the Generative Enterprise.  Using this model, we can precisely see the process of glycolosis (the engagement with commodity first impulses), the oxidation (the organization of energetic ecosystems) and phosphorylation (the movement of energy across a gradient).  The image below shows the precise interplay of Generative Enterprise recognizing that a precursor to this image is a genuine and comprehensive Integral Audit. 

From this basic framework of Generative Enterprise, we will examine each component of the process and work to translate our incumbent unsustainable impulses into persistent, gratitude denominated endeavors for a true humanity.

Honest Brokers Need Not Apply

In a world wracked with crises of confidence in the capital markets, I am puzzled by the dereliction of accountability in the realm of advocates, “independent” rating agencies, and advisors.  In his critical inquiry written in 2009, Université de Montréal’s Professor Stéphane Rousseau details the extensive contribution Credit Rating Agencies had in the conditions leading to the Global Financial Crisis of 2007-2008.  While rating agencies wilfully ignored evidence of credit quality erosion in favor of propping up phony investment grade ratings on financial products, they have borne no meaningful liability for the catastrophic effects of their neglect.  And while Rousseau and others comment on the massive financial harm done by this market failure, he provides little evidence to suggest that meaningful steps will be taken to address the massive conflicts of interest or user complicity in the environment that creates a dearth of comprehensive transparency.

Now it doesn’t take a degree in economics to figure out that issuer-pays models of credit rating have an inherent conflict.  If investors were truly free to opt in or out of purchasing “investment grade” products, for example, then competition for asset quality may be a countervailing force to hold rating efforts in check.  However, in a world where pensions, insurance companies, banks, and other asset managers are required to hold assets with certain ratings, the notion that there is a market force to hold originators or raters accountable is laughable.  Furthermore, with central banks and sovereigns complicit in issuing bonds that need to preserve the illusion of being “safe”, the ability for true qualitative rating to flourish is a phantasmal illusion.

But here’s the trouble with trying to solve the honest broker problem:  the public is passively or wilfully ignorant of basic financial literacy and thereby neither knows the questions to ask nor the ability to discern the veracity of the answers provided by ‘experts’. 

Let me offer a few examples. 

A country just announced that it is investing public funds into the development of a mining operation within its borders.  It is investing about $120 million into a project – not the publicly traded company allegedly running the project.  For its $120 million, it stands to receive (according to the optimistic interpretation of the agreement) 30% of the economics of the project (an unincorporated joint venture) – not equity in the publicly traded holding company.  During the same time the country was being encouraged to use public funds to invest in the JV, the company raised about ¼ of the amount in an issuance of commons shares for which one of its largest shareholders received a fee of C$2 million.  That’s right, a shareholder got paid to invest in common equity while the country from whom resources will be taken was told to pay for the privilege of getting a minority stake in the venture.  Now, the kicker is the following.  It would be reasonable to expect that a 30% stake of a venture sold for $120 million would mean that the venture must be worth about $400 million, right?  Wrong.  Contemporaneous with the country’s investment, the public markets priced the entire corporation at $224 million.  Oh, and another point.  When the public company bought the license to the project it claims to be worth around $400 million, it paid about $13 million in 2006.  Since then, it’s lost nearly $90 million with no reasonable revenue on the horizon.  Is the company’s auditor PricewaterhouseCoopers to blame for this perplexing market-defying transaction?  Probably not.  Is the country’s finance minister or asset manager to blame for getting terms far worse than the company’s own shareholders?  Probably not.  Is the company preying on market ignorance within the country?  Absolutely.  Would the country or the company’s auditor make different decisions if they were informed of all the facts?  Most certainly.

A high net worth investor has close to $1 billion.  For years, his assets have been the siren for “asset managers” and “private wealth managers”.  Using hundreds of pages of charts, graphs and disclaimers, investment professionals have desperately tried to convince him – for a fee – to allocate funds to partnerships that promise returns or market risk mitigation.  And, once allocated, performance has not matched the modeled returns.  Their explanations are reminiscent of cartoons depicting court advisors and astrologers who express their interpretations of omens and entrails with sufficient generalities to explain either accuracy or fallacy with equal confidence.  All the while, quantifiable risk and return, a measurable (and measured) phenomenon, is ignored in the clamor of professional opinions and explanations.  The illusion of brand credential costs this investor at least $10 million each quarter (for which he pays a few hundred thousand dollars) but is never explicitly recognized.  Is the investor’s staff culpable for this lost performance?  Probably not.  Should the principal be an expert in all global investment products?  Probably not.  Are the paid advisors preying on the product and performance ignorance of the investor?  Absolutely.  Would the investor and his staff make different decisions if they were fully informed of all the facts?  Most certainly.

In both of the examples above, the common denominator of predatory abuse is one party’s willingness to exploit a lack of knowledge while all those being abused are kept in the mists of uncertainty and ignorance.  In both of the examples above, the damaged parties have been informed of the wilful harm perpetrated on them and, in both examples, they have been incapable of responding due to the perception that, in the absence of their own competence or qualifications, it’s safer to go with a branded name than becoming fully informed and acting in enlightened self-interest. 

Which leads me to a rather important question.  Why is it that ‘victims’ of financial abuse are willing to expose themselves to predators even when fully informed of the harm they’ll face?  Whether its pension managers, resource-laden countries, or high net worth investors, the ‘honest broker’ is rejected in favor the consensus predator promoter.  Post-2008 no rating agency suffered Arthur Andersen’s post-Enron criminal fate.  Why?  Because their patrons still are benefiting from their dubious negligence.  Following decades of “resources curse” awareness heads of state and finance ministries still fall for the same illiquid ‘partnership’ deals that let public investors enrich themselves while countries are rife with poverty and corruption.  Why?  Because intimidation of power by corporate and capital elite is more powerful than the will of leaders to defend their citizens.  Despite persistent non-performance and sub-par performance, high net worth individuals continue to cede their stewardship to proven incompetence.  Why?  Because wealth, beyond manageable measure, debilitates those who confidently made it.  And in any of these eco-systems, where is the truth welcome?  Regrettably, nowhere. 

But in each of these cases, it is my contention that the problem actually arises from a deeper paradox.  Those who don’t welcome the truth may merely be evidencing a deep insecurity into the nature of why they’re sitting on such excessive opportunity.  The pension manager may be overwhelmed with the sense of responsibility to those whose funds are entrusted to him or her.  The head of state may be ill-equipped to steward the resources within a nation’s border.  The financially wealthy may doubt their entitlement to the excess that a market transaction placed in their hands.  In each of these instances, the rejection of transparency, truth and honesty may be a protection against the ultimate truth that cannot be confronted – that the steward suffers from a sense of inadequacy or confidence.  Therefore, one of the great opportunities facing those who value transparency and ethical, accountable markets, may be to care for and engage the steward, not the perceived asset, and in so doing, emancipate them from the burden of inordinate, unwelcome responsibility.  Maybe we need a bit less empirical honesty and a bit more compassionate collaboration with those to whom much has been entrusted.

Living Worth Dying For

 It is hard to exaggerate the magnitude of social unrest that's boiling over across the globe.  Accounts out of Syria detail unspeakable atrocities with hypnotizing frequency.  While politicians engage in name-calling, Ukraine's citizens see themselves and their societal fabric fraying reminiscent of the Balkans just a few years ago.  The hollow shell of peace in the Middle East was eviscerated with the cooperation between parties deemed to be "sponsors of terror" while drones rained down death at the hands of the "democratic" and "freedom-loving".  In this, another Spring of Discontent, it is fascinating to observe the ease with which we trade life for ideology - our acceptance of extermination made more palatable by our technologically advanced, sterile remoteness.  It seems that life in the digital age has somehow devalued.

Dogmatically held beliefs of all sorts have variously seduced humans into inhumanity for millennia.  We sit in what many would describe as a pinnacle of technological evolution despite the evidence that we're actually, on a larger scale, regressing into ethnocentric bigotry.  We celebrate our achievements of digital communications and virtual reality failing to observe that, from a certain perspective, we're regressing into animistic paganism where we pay obeisance to that which can be plugged in and has a keypad or touch screen forgoing actual human engagement and interaction.  If information cannot be found within the first two pages of a Google search, it doesn't exist.  "I tried to find him online but couldn't," I recently heard a person state.  As though the physical presence of a person - absent a virtual persona - is somehow less a person. 

In the May 2014 Vanity Fair, Editor Graydon Carter (one of my favorite writers) took on the story of Edward Snowden with a team of journalists.  In their story, "The Snowden Saga: A Shadowland of Secrets and Light", they detail the interplay between the former Dell and Booz Allen Hamilton employee, The Guardian (and other media outlets), and the governments who insist that their opaque intrusions are justified.  On more than one occasion, according to the reporting, Snowden and those around him, were faced with decisions that were cast as potentially jeopardizing their lives.  The cavalier nature of threatened assassination as a means of message control, whether real or perceived in this case, would suggest that the central organizing narrative is incapable of standing on its own.  If shown for all its costs and benefits, apparently "the system" is incapable of weathering accountability and scrutiny.  Somehow the "30 or 40" files that represent a catastrophic risk to "national security" are so vital that they threaten the very foundations of what is purported to be one of humanity's most celebrated experiments.  Spoiler alert: what they most likely threaten is the anonymity of corporations and individuals (who are most likely named in said files) who have become enriched at the expense of a public who would find their complicity unpalatable (for more information on this, read Hank Crumpton's memoirs The Art of Intelligence: Lessons from a Life in the CIA's Clandestine Service).

This week, I was fortunate to engage in dialogue with people as varied as an NBA superstar and a senior executive at the World Bank.  I marveled at how many of these amazing, accomplished people, at one point either at the zenith of their life or at least seeing it within reach, now sat on the bench watching a suboptimal life play out.  Far from run-of-the-mill monotony, these people influenced millions and yet, in the moment struggled to see how to make a difference at the same intensity that they brought to their 'game'.  In each conversation the dissonance between a world that was perceived to be possible and 'reality' was the source of resignation and looming futility.  And in a world of clandestine carnage - where life is thoughtlessly extinguished for opaque interests - I understand the expedient emotional fatigue that could lurk in the minds of those who are lucky enough to discern the madness.

But at the same time, I wonder if the reason why we're so dismissive of life is that few of us are actually living?  Seriously.  When we wake up in the morning, are we animated into relentless pursuit of purpose or do we begrudgingly stare into another monotonous day seeking to fulfill Maslow's pedantic isosceles aspiration?  If "making a living" or "surviving" enter into one's consciousness, is it possible that we wouldn't recognize the former if it bit us in the face and we're actually slowly killing our vitality in the latter?  Is the luxury of narcissistic drama a mark of 'civilization' or is it the evidence of devolution?

Life is an analog proposition.  It involves complexity that defies digital representation.  Our keystrokes and finger-swipes across conductive silicon are less artistic than the stylus pressed into soft clay that bore the cuneiform advocating tolerance and reverence for the explained and unexplained.  Our social organization - from regent patronage to limited liability corporations - has resulted in the hybridization of our species into far too many laborers and far too few enlivened, vital manifesters.  We're missing the mutations - the wild types - that actually move from prehensile tails alone to the fascinating utility of thumbs.  And when the wild types emerge, our consensus indoctrination tells us to warn them of their imminent extermination if they don't fall into line.  "Is it worth dying for?", is the ominous warning. 

My life is evidence of the fallacy of this question.  I've been warned that challenging corporate tax and accounting fraud, treasonous acts by elected officials, unsustainable monetary systems, colonial tyranny and suppression, all run the risk of jeopardizing "life".  However, I know that far from threatening my existence, they have enriched not only my life but the lives of countless others who see the value of their own 'mutations' from the mechanized consensus.  You see, truly living cannot cost you your life and pretending that it takes some sort of 'super-human' dispensation to 'transcend' fear and oppression is part of the tyranny of suppression.  I love being a person who is learning how to fully live.  And, when age, aggressor, or accident punctuates my life, I'll know that "worth living" was the only motivation I needed.