Emergence of the Fusion Economy - The 10-Years-Hence speech from 2007!

This speech was delivered at the University of Notre Dame February 9, 2007 as part of the Mendoza College of Business Ten Years Hence speaker series.  Later that year, the lecture was ranked by MBA Channel as one of the top 10 best MBA videos in 2007. 

Emergence of the Fusion Economy
Dr. David E. Martin, CEO, M·CAM Inc.
Fellow, Batten Institute, Darden Graduate School of Business Administration, University of Virginia

Abstract: From the birth of modern treasury-based economies in the 15th century until today, global power and wealth have been centered around, and measured by, manipulation of supply and demand. Seeds and land generate traded crops. Extracted minerals are refined into weapons, tools, machines, and infrastructure. Complex materials using proprietary formulae generate technology. Knowledge guilds create data and information to share with selected networks. However, the systems and metrics developed over the past half millennium have strained – many, to the breaking point. Global financial and knowledge fulcrum are being transported by economies and cultures that have been excluded from the seats of power at the world’s table since the “Age of Enlightenment”. Beginning with a modern-day parable of a Jesuit-trained Egyptian Muslim, Dr. Martin will explore the applications of the new levers upon which the world finds itself being moved and discuss the implications of Archimedes’ paradigm in the Next Ten Years.

Standing here before you today and embarking on an exploration into the paroxysm upon whose precipice we now stand, there is delightful convergence in knowing that today’s lecture is being given at a Catholic University – the University of Notre Dame – which owes its founding charter to a Methodist State Senator in 1844. In great ecumenical symmetry, my first interactions with Notre Dame came during the lauded tenure of past President Theodore Hesburgh whose speeches and writings inspired me, by lineage a Mennonite, while I was a student at a neighboring institution, Goshen College, just down the road in Elkhart County. At the outset, I will invoke his all too infamous, yet so temporally relevant admonition in 1969 calling for the repudiation of those who would substitute “force for rational persuasion.” Nearly 40 years later, these words continue to motivate me as their content – irrespective the debate on the context in which they were expressed – serve as a clarion call for the emergence of greater understanding and informed public discourse.

We will begin our journey in Dubai. On the first day of my first trip to the Emirates, I had the pleasure of making the acquaintance of Moustapha Sarhank, a Jesuit trained Muslim from Cairo. He knew that I was an opportunistic American businessman exploiting a social network for my own gain. I knew he was a mercenary deal maker who had access to the untapped wealth of the region. Within the first five minutes of our interactions at his suite in the Intercontinental Hotel I knew that he could never understand motivation beyond self-serving materialism. He knew that I was contentious, arrogant, and condescending.

Neither of us knew the other at all. And then, in a moment of hostility, one of us mentioned the words “honor” and “integrity”. Thankfully, neither one of us knows who redeemed the train-wreck of our first interaction. Setting aside the stated purpose of our meeting, we began talking about faith, family, and a vision for the future and, in less time than it took for us to find animosity, we found a brotherhood sealed that Fall when he invited me to celebrate the Fast of Ramadan – permanently binding our fraternity. Many of the insights that I share with you today are not mine alone but those that have emerged from the conversations we’ve shared and, to that end, I share this podium with my friend and brother, Moustapha. And while much of my message can be misheard as a prophecy of doom, I challenge each of you to sit long and talk much over these observations so that you can find the optimism that perpetuates my life.

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.

Those who would be optimists may retreat to the final high ground which insures our global supremacy – our economy. After all, we have the most recognized currency on the planet, we have the most liquidity in our markets and, since 2001, we poured that liquidity, in record amounts, into financial products that the rest of the world doesn’t always fully appreciate or, in some cases, in which they are precluded from participation. It’s important to note that the growth of hedge funds, derivatives markets, and related financial instruments has out-paced all other investment structures and products. In 1987, the International Swaps and Derivatives Association reported less than $1 trillion in interest rate and cross-currency swaps. By 2006, that number has grown to over $250 trillion including credit default swaps and equity derivatives.

This number, while staggering, should be clearly understood by the average consumer as acceptable as, according to Allen Greenspan in May of 2003 he provided the following reassurance stating that, “derivatives market participants seem keenly aware of the counterparty credit risks associated with derivatives and take various measures to mitigate those risks.” Isn’t it reassuring to know that the largest financial instrument class in the world exists under the rigor and discipline implied in the preceding comment? Isn’t it ironic that the world’s cumulative GDP in 2004 was estimated by the World Bank to be 1/6 of that number at a meager $40.2 trillion?

Well, folks, while we were walking through this wonderful illusion, 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.

I would propose that the disintegration of 2007 actually has its roots in the Napoleonic conquests – a notable component of which we celebrate in bicentennial this year. Our present situation has haunting similarity to conditions that existed in Europe when, in 1807, Napoleon promulgated the Swamp Decree. To fund his burgeoning ambition for hegemony, Napoleon needed to fund far-flung military campaigns and so he innovated a taxation system that birthed the modern intangible asset economy – in short, he created a national economy built not on tangible productivity but rather on what could, in theory, be made productive by municipal fiat. Explicitly, the Swamp Decree took the C.E. 800 Holy Roman Empire property valuation paradigm in which property was valued and taxed based on its alleged productivity and improved upon it by imputing the value land would have if it was drained. In short, the value wasn’t there but, by extrapolation, if the State determined that it could be valuable, it was deemed so.

This creative – some would argue, rather sinister – approach to valuation was the birth of the modern economic optionality. More importantly, transactional imputed value was not the exchange of value between a willing buyer and seller but was superseded by the whim of the realm for the calculation of taxation whereby the State could fund its affairs and excesses.

Eight short years later, another dynastic emergence vaulted onto the then-known-world stage. The Rothschild family, in 1815, took control of the Bank of England in what amounted to one of the all time most creative derivatives deals surrounding interests in the East India Trading Company and some fascinating timed trading following the Battle of Waterloo. Having amassed control of much of Europe’s financial power by the 1830’s, notable members of the family were said to have boasted that they cared not what puppet monarch sits upon the throne of England as he who controls the money controls England and they controlled the Central Bank. The dissociation of the sovereign from the monetary authority, unthinkable before, created a vacuum filled on both sides of the Atlantic by a few very influential families who, in some instances, hold sway to this day. Despite the convulsions of two World Wars in the following century, linkages between the monetary authority and the mercantile industrial complex were such that, while nation-state fortunes rose and fell, the financial players rode out the storms with relative ease.

At the end of World War II, we found ourselves setting the stage for this present penultimate act.
Again, we are a nation at war. As enemies have evolved from territorially defined states, to ideologies, to the modern euphemism of “terror”, we know that vast armies of those who feel marginalized, compromised, or disenfranchised now operate in cells ranging from Idaho and Oklahoma City to London, to Beirut, to Bali. All christen their causes invoking a divine impetus. However it is important to note that Chaucer’s adage that “Idle hands are the Devil’s workshop” enjoys a corollary – perceptions of disempowerment foster ideological (and religious) extremism. While I would not simplify present geopolitics into a sound-bite, I would argue that the strain of perceptions of global economic imbalance may very well be the catalyst that finally collapses the foundation. With the President’s call this week for increased funding for the war with a concomitant reduction in domestic spending priorities, it is clear that the economic forecast for GDP growth over the next 5 years will rely on Americans who have less financial resilience than at any time in the past 70 years and on companies increasingly unable to adapt to the global transformations in economic powers save those directly supporting the military infrastructure. We are at a tipping point.

So then what?

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.

x

Celebrate Monotonous Goodness - From Amanda Gore

An amazing blog written by my dear friend Amanda Gore - worth the read!

https://amandagore.com/2020-the-year-of-monotonous-goodness/

Tensegrity: How do we divide equity?

The following is excerpted from a letter I have sent to some business partners.  I thought some of you might find it helpful.

Dear Colleagues,

When we met several months ago, I did my best to introduce what I refer to as the “Breathing Enterprise” business model.  As the name implies, this process seeks to insure that our efforts carefully consider each element of a healthy and organic process that is aligned with how life quite literally happens.  Informed by the way the living cell unlocks the power of sunlight from glucose, the Breathing Enterprise model is both prescriptive and diagnostic.  We can use it as a template and it serves equally as a means to diagnose how an effort is not running as it could.  And before we get caught up in dividing the baby, let’s make sure we’re super clear on what we have locked in and what we have ignored.

Let’s start with the key elements.  Within the model, there are 6 domains of value which require equivalent attention and stewardship.  These have to do with the Alchemy of how we transform effort to value; how we make Apparent our organization of effort into a reproducible product or service; and, our Essence – what we know and how we are known.

Any successful venture will recognize that holding these 6 dimensions in tension and balance (Buckminster Fuller’s notion of ‘tensegrity’) is the only way to build an organization that requires no external intervention as all the energy required is based on the structural integrity itself.

The mistake that is made by many (dare I say, most) organizations is to prioritize technology and money and leave the other things to be relegated to ‘solvable with money’.  This – by definition – is unsustainable.  When we place equivalent value on each of the 6 dimensions, we learn that we also see the need to reward, incentivize and compensate in equivalent ways.  A ‘preferred’ return in one dimension without preference in others means that enterprise failure is most assured.  When a “financial” investor is preferred over the personnel team or the branding manager – the institution suffers a fatal cultural (and ultimately, existential) harm.

So, before we start divvying up “equity” (a horrible abuse of a poorly understood term), let’s make sure that we allocate equivalence across the domains of value so as to insure appropriate and suitable value recognition to all participants.  And yes, for those of you who are doing the math, if an investor wants more than 16.7% of a business (one-sixth of the enterprise), he or she better be accountable to deliver on the other dimensions of value.  If it’s for money alone – run, don’t walk away.

x

2020 Vision of Truth

On this last day of 2019, I found myself sitting on the tarmac at Chicago O’Hare long after my scheduled departure time.  Nearly an hour earlier, I had watched a frazzled gate agent recite the clearly false information about delayed crew – a lie only evidenced when, having boarded the plane, I saw the same crew that had been there all along.  Then came the de-icing delay clearly falsifiable as I had already watched the plane being de-iced from the comfort of gate F-20.  Sitting motionless at the gate nearly 30 minutes later, the pilot apologized for the fact the we couldn’t push back because a de-icing form confirming that de-icing had taken place was missing and without it, he couldn’t get ramp clearance to push back.  And then another 30 minutes of silence before we started moving.  For this nearly 2-hour delay of United flight 4852, I mused about the fact that several people had been comfortable reciting false statements to rationalize what in fact was a cascade of human error.  And as I sat on the plane, I pondered the fact that for the next 90 minutes, my life was entrusted to people who had no apparent objection to lying.

This is an odd way of beginning my annual Litany of Saints post for 2019.  But this year has been marked with major league dishonesty.  Some of it we’ve all seen play out on the nightly news with caricatures of officials clearly dismissing observable reality with false statements.  Others have been profligate abuses of business agreements I’ve made throughout the year in which written and contracted expectations have been dishonored with predictable regularity.  Most deeply painful have been personal experiences in which assurances of love and relationship have been shown to be weaponized and manipulated.  In short, I find that the well of gratitude that has marked many years of my life has been deeply impacted by a drought.  And, as is always the case, I seek to examine this experience and see what I can learn.

My life was greatly enriched by Nic Wales who demonstrated that, regardless of the challenges I faced throughout the year, his capacity to persistently ‘show up’ as the genuine friend and colleague was as certain as the sunrise.  During many of my most challenging times, his first-to-the-line spirit often rallied both my spirits and those with whom he interacted.

My year culminated with an exceptionally deep appreciation for my son Zachary who, in spite of several struggles throughout the year, declared his intention to pursue his life’s passion resulting in his move to California to begin his next pursuit as a golf coach.  And, speaking of setting lofty intentions, my daughter Sienna concluded that her academic and athletic goals included being exceptional and, as a Freshman at Monticello High School – her first American school year – was a member of the varsity cheerleading squad (winning District titles) and has been achieving near perfect marks in her classes.

I observed my friend, colleague, and source of inspiration – Amanda Gore – strive to achieve new levels of elegance and excellence in her dynamic public speaking career and marveled at the discipline evidenced in her relentless commitment to integrate perspectives she learned no matter how uncomfortable that transformation may be.

And above all, I witnessed Kim Martin incarnate her stated desire to break patterns of thinking and behavior that had restricted her living giving life to a much more dynamic and vibrant person than the woman I met nearly 5 years ago.

These – and others – earned my respect not for what they said they would do, be, or manifest, but rather for the fact that they actually did their truth.

Which leads me to my point this year.  I’m afraid that truth – like many other constructs – is a cognitive fallacy.  Let me explain.  We are all sensitive beings (in an apathetic sense).  By this I mean that as we transit life, we are aware of our lived experience informed by our surroundings, our interactions, and our synthesis of stimuli.  The irony in my use of ‘apathy’ is that while we sense and perceive – that which we sense and perceive is selective to our conditioning, recollection, and implicit values.  In other words, the exact same experience does not and cannot be replicated with identity in another.  So, while we seem to obsess about “truth” as a theoretical abstraction, the truth is, it never exists.  And by never I actually mean that.  That’s because by the time reality is processed, it is selectively curated to form meaning, understanding, or judgment.  With the passage of time, that selectivity is further narrowed to fit a narrative or worldview.  By the time we’re conveying it, thinking about it, or judging it, IT no longer is the lived experience.

I frequently comment about the monotonous goodness of most of our lives and I often get quizzical looks.  Think about it.  Most next moments are both unimpressive and basically good.  While you’ve been reading this, your heart has beaten several hundred times and, you didn’t do anything to conspire to make that happen.  If you are reading this sentence, your optical nerve has already processed 5,140 characters and you didn’t care about most of them.  While you were reading this, your computer didn’t blow up, your house didn’t burn down, you were not tortured, and you basically had it alright.  What we remember, too often, is the punctuations in the monotony, and far too often, what focuses our obsession is that which is misfortune or challenging.  But most of most of our lives is good.

What does this have to do with “truth”?  Thanks for asking.  By ignoring the monotonous goodness of life and narrating our lives through the punctuated drama of either ecstasy or suffering, we actually lie to ourselves.  We’re so obsessed with being interesting (both for good or ill) that we curate a storyline that ignores most of our lives.  When President Trump says that he “doesn’t recall” prostitutes, bribes, or Russian blackmail, he may be telling his version of his own selective recall.  Evidence, schmevidence!  We can make all the observations we want but if the selective curation of a narrative is absolute, then everything that doesn’t fit ceases to exist.  Evangelical Christians swear they’re pro-life but applaud missile strikes on the infidel du jour.  Capitalists want persistent economic growth but seek to maintain exclusionary rights and privileges to prevent others from growing.  You name it, hypocrisy is rampant only when you don’t share a common definition of truth.

Which leads me to my year end gratitude.  I am grateful this year for all those in my life who have turned truth into a verb.  Being genuine.  Being authentic.  Living coherently with their values.  People who don’t need to ‘tell the truth’ because their too busy living it.  To those I’ve named and to the many who are reading this and knowing of our interactions that were characterized with these hallmarks of integrity, I honor you this year.  Thank you and here’s to living true in 2020!

x

The Knowledge Economy and a Cross of Gold

2001 Bluffton College Presidential Leadership Lecture

October 2, 2001

“I come to speak to you in defense of a cause as holy as the cause of liberty – the cause of humanity.”

- William Jennings Bryan, 9 July 1896

Winds of change fanned flames of controversy the year in 1899.  Across the country, upheaval caused by geopolitical and economic power realignment left Americans searching for a standard, a basis upon which they could denominate their existence.  With the industrial machine drowning out the sound of the plow and scythe, a revolution was brewing – one that would change the landscape of the globe for a century.  

Productivity, industrial might, and cash now measured wealth, once denominated by property ownership.  The idle holders of idle capital vilified by William Jennings Bryan at the Democratic National Convention in 1896 were the educated industrialist elites who, according to him, turned a deaf ear to the working masses.  While all acknowledged the need to establish a currency standard, fierce battle lines were drawn on the 11^th meridian of the Periodic Table of Elements with impressive skirmishes in the “A” section.

In the face of this tumultuous time, another debate was growing equally rancorous.  As the 20th century dawned a movement was afoot to establish the infrastructure to consolidate the movement of wealth throughout the nascent continental country.  Financial panic, alleged by many to have been instigated by proponents of a central bank, provided a stimulus to create the Federal Reserve Bank by 1913.  The centralization of the mode of wealth and knowledge transfer, be it tangible or intangible, has long been known to be the path to dominance.  After watching the Duke of Wellington defeat Napoleon at Waterloo, Baron Nathan Rothschild was quoted as saying, “I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain's money supply controls the British Empire, and I control the British money supply.”  While observing that, “whoever controls the volume of money in any country is the absolute master of all industry and commerce,” President Garfield provided the inspiration for today’s presentation in his words spoken in 1880.  “I am an advocate for paper money, but that paper money must represent what it professes on its face.  I do not wish to hold in my hands the printed lies of the government.”

Today, we will explore the realities of a crisis of humanity more polarizing than the debate of gold or banking.  We will probe the enigma of the knowledge economy that has no standard – a wealth without denomination.  We will address the challenge presented by President Garfield 120 years ago and resolve to valiantly seek to address the problems we encounter.  What is knowledge, how is it’s quality assessed, and who controls its distribution?  Informed by the debates of yesterday, we will seek solutions for the challenges we face today. 

Let me begin by making the following observations.  At the turn of this century, the International Leadership Forum estimated that the adult global literacy rate was 73%.  That means that the written word was meaningless to over 1.3 billion adults.  With many countries boasting rates of 95%, many had rates under 50%.  An UNESCO report estimates that approximately 250 million children between the ages of 5 and 14 are working and going to school.  Fifty percent of this group works full-time.  When one considers the numbers of people trained beyond nominal literacy, the numbers are more poignant.  Less than 40% of the world’s population, over the course of their lifetime, can enter tertiary educational institutions.[1]  Sixty three percent of the world’s literate population lives in economically “developed” countries with African, Central and Southeast Asian countries disproportionately illiterate.  These statistics should, in themselves, hold considerable weight.[2]  However, this is not a lecture on education of the masses.  No, today, I’m concerned with a far more complex topic that, while impacted by the numbers above, is far more unnerving.

We find ourselves at a point in history where considerable acclaim is cast upon those who have achieved greatness in the pursuit of corporate goals.  Forbes and Fortune herald one after the other multi-millionaire whose fame is built on success in entrepreneurial imperialism of one sort or another.  During the last four years of the past decade, more millionaires and billionaires (in economic adjusted terms) were created than in the cumulative running of all of human history.  Are we really that much smarter and that much more productive than all civilizations that preceded us?  Are our institutions of higher learning producing genius with every diploma?  Do we live in Garrison Keillor’s mythical town where, “every student is above average?”  Or is it possible that we have built a tower of Babel?

Let us examine three elements of the knowledge economy.

First let us ask the question posed by Mr. Bryan.  In the knowledge economy, we must ask ourselves the unsettling question of basis.  In antiquity, wealth was denominated by raw materials.  Those who had the most land, the most gold – in short, the most tangible property – were the wealthiest.  In the evolution of economies, these basic elements were replaced by the metrics of the industrial age.  In industrial economies, productivity, distribution, and market share served as the more abstract surrogates for the wealth of ages gone by.  Now, in the knowledge economy, we find ourselves confronted by an economic reality without basis.  Prior to the dot bomb, we were told that value was measured in “eye-balls” and “stickiness”.  Billions of dollars flowed into the creation of a virtual presence that conveyed virtual information virtually anywhere.  Pause; let us consider what virtual means.  Our faithful Webster tells us that virtual refers to a hypothetical particle whose existence is inferred; being in essence though not formally recognized.  In other words – NOT.  When value is ascribed to virtual reality, how is it denominated?  More importantly, how is one to know whether it is real or imagined?  As the educator and the educated, how can we learn to discern reality from that which is not? 

Revisiting President Garfield’s conundrum – we need to know that face value is based on value or it’s a lie.  Is “knowledge” the presence or absence of literacy, the letters of degree conferred on an individual, the prestige of institution or commercial affiliation, nationality, race, creed?  Or, is knowledge something more than these? 

I would suggest the sine qua non of knowledge economy is the need for a gold standard.  Copyright law of the United States established that facts have neither owner nor value.  The organization and presentation of facts in various expressions have value.  Our society is filled with data; our challenge is to transform that into usable information leading to wise deployment creating value.  Yes, here’s where I appeal to the student populous movement – educational assessment should not be based on the recitation of facts established by U.S. law as valueless – now here comes the part where I shamelessly pander to the faculty – but in the useful synthesis and application of the same.  Knowledge built on rout memorization is valueless, knowledge built on application and problem solving has value.

Second, we explore the problem of ownership.  There was a time when ownership was rather unambiguous.  Possession was 9/10ths of the law.  Land, buildings, shipping lines and trade names were clearly defined by title.  In the knowledge economy, we are confronted with the timeless problem of counterfeit.  When he realized that conventional warfare was not swinging in his favor, Hitler, in an effort to decimate the United States and Great Britain economies began the process of printing counterfeit dollars and pounds.  The French tried the same technique in Vietnam and the U.S. introduced 20 Peso notes in Cuba for the infamous Bay of Pigs invasion.  Why is it that from Duke Sforz of Venice in 1470, to Napoleon, to Hitler, to Kennedy counterfeiting has been an integral part of war?  Because savvy tacticians know that economic chaos is one of the world’s most effective weapons.  Introducing counterfeit undermines all economic systems as confidence is lost in the representation of legal tender.

So too, in the knowledge economy, counterfeits are an untold tactical weapon.  In a recent study made of United States patents, our company found that over 35% of all current patents are intellectual forgeries.  This means that the patent claims rights already secured by another party or already existent in the public domain.  One cannot help being overwhelmed in Malaysia with copies of Microsoft Office being sold for $2 in the shopping malls of Jabor Bahru.  Passing off as proprietary that which is not is an unmitigated disaster looming over our current economic system.  For the knowledge economy to have any viability, forgery detection must be implemented. 

Last Spring, the University of Virginia gained national attention when one of its faculty implemented a computer system to determine whether term papers submitted by students were plagiarized or authentic.  In certain sections, as many as 25% of the papers were copied, in part or in whole from other sources – often the papers of classmates.  Is it any wonder that we go on in life to copy the works of others in business, education, and other walks of life when, in high school and college, we get away with intellectual theft?  I think not.  However, I believe that educators and students alike must realize that these patterned behaviors establish foundations that lead to ruin.

Many have proposed that with the ubiquitous nature of the internet, we are becoming a boundary-less world.  Traditional geopolitical barriers are eroding.  People are interacting with one another irrespective of time zone, language, tradition, or status.  In real time, I collaborate with business partners overlooking Tiananmen Square, Big Ben and Tierra del Fuego.  However, in these times of heady multinationalism, we must consider the often-overlooked dependency that is being created in this unrestricted world wide web.  Knowledge must be transferred and shared for it to achieve its greatest impact.  However, as we see the expansion of telecommunications-facilitated trade, we see an equally expanding malignancy of inadvertent isolationism.  Geiger & Diller closes its doors while we shop on-line.  Balmer’s purchases are now made at Talbots.com.  All the while, we lose the priceless, informal interactions with our neighbors telling us of places, people and events that once were intrinsic to the broadening of our minds and perspectives.  We miss the touch of the hand, the warmth of a smile and the sharing of a friend’s tear – in our wealth, we gain poverty of soul and mind.   In the midst of this efficiency, what has the knowledge economy lost?  Is the local ISP the Rothschild of the knowledge economy?

We have sacrificed human interaction.  In our global economic conquests, we have lost the innovative impact of observation.  Rather than go to places, we visit them virtually (remember, that means we DON’T).  I would like to suggest that one of the greatest threats of the knowledge economy is that we will actually see a reduction in global understanding.  We will see, hear and trade with only those who are wired into the web.  Rather than learning from the wisdom of the cultures that have passed before us, we will see only that which the content providers deem appropriate and, in so doing, we will see a contraction, not an expansion of knowledge.  In short, we will choke the inventory of innovation and inquiry in the morass of irrelevancy.  We must resist the centralization of information and knowledge.  Efforts must be made to learn from the richness of indigenous knowledge that may never find its way to a web browser.  We must develop multiple venues and vehicles for the exchange of knowledge so that the trade routes are not the monopolistic empire of the few.

So today, we must heed the warnings of history and listen to the voices of the past so that we build a legacy of renaissance, not repression.  We need to encourage one another to add value, not volume, to the knowledge of the ages.  We must commit ourselves to respect and value the uniqueness of the intellectual property of each member of the human race and decry piracy of the same.  And finally, we must vigorously resist the temptation of sloth and in its place actively participate with the global community.  We must resolve to move forward the democratization of knowledge and be relentless in our efforts to bear the standard of substance in the face of maelstrom of virtual value.

Let now ring true the statement made by Mr. Bryan on that hot July day in 1896, “The humblest citizen in all the land, when clad in the armor of a righteous cause, is stronger than all the hosts of error.”

---

[1] http://unescostat.unesco.org

[2] http://unesdoc.unesco.org

STRONGER Patents Act 2019 - An Even Bigger Fraud

On August 22, 2019, Ambassador John Kenneth (“Ken”) Blackwell wrote an article entitled Congress Must Stop The Erosion Of Patent Rights.  Making reference to the proposed STRONGER Patents Act of 2019 sponsored by Steve Stivers (R-OH), Bill Foster (D-IL), Tom Cotton (R-AR) and Chris Coons (D-DE), he argued that ‘inventors’ should enjoy more unquestioned ‘rights’ and that the Patent Trial Appeals Board (PTAB) should be “reined in” as they were invalidating “over 75% of patents issued by the USPTO.”  Ambassador Blackwell is on the wrong side of history…again.  You might remember this masonic Ohioan from his infamous role as Secretary of State of Ohio during the controversial election of George H. W. Bush when he said of a court ruling against his bigotry that he would rather go to jail that follow the court’s order.  He must have forgotten that Masonic (he’s a Mason) values include honor and integrity.  But then again, he’s a Fellow of The Family Research Council – an organization that has never let honor or integrity stand in its way.

You probably don’t care about patents.  I doubt you have given them a moment’s thought today.  But you should.  You are currently paying a tax to a broken innovation propaganda machine to the tune of an estimated 12.6% in many of the products and services you purchase.  And its fair to say that over ½ of that tax is flowing to companies and individuals who have defrauded the patent offices and, by extension, you.  So, put bluntly, you’re being robbed.  And the worst part of it is the U.S. Government and its global counterparts are not only complicit – they KNOW that it’s happening and choose to do nothing.

Whether it’s the PTAB, the Court of Appeals for the Federal Circuit, or ‘second-set-of-eyes’ patent examination – the facts are tragic.  With just a second opinion, close to 70% of the patents that are granted by the world’s patent offices are deemed invalid.  Imagine what would happen if 60-70% of the dollars in your wallet or in your bank account were counterfeit.  How long would you put up with that?

Ambassador Blackwell, Representative Stivers and Foster and Senators Cotton and Coons are dead wrong.  But its not just the STRONGER Patent Act of 2019 that’s the problem.  It’s the issue I addressed in last week’s blog post regarding propaganda.  Since 1981 when Japan eclipsed the United States in legitimate patent filing, the U.S. Government’s official response was to liberalize the criteria for getting patents.  This resulted an order of magnitude increase in patent activity.  Did we get smarter?  No!  We got better at stealing, lying, and plagiarizing.  And while it’s popular to blame the Chinese for ‘stealing’ innovation, where were the politicians when Siemens’ and GE executives stated that they took innovation from universities because “universities don’t have the legal war chest to fight them,” in 1997 at RSNA?  Where were the politicians and industry associations when the (dis)Honorable Gerald J.Mossinghoff – former Assistant Secretary of Commerce and Commissioner of the USPTO – told an audience in Washington D.C. that if, “you bring me someone else’s patent and a check for $50,000, I can get you the same patent”?  Where was Congress when UPSTO Commissioner Q. Todd Dickinson comfortably stated that his job was not to ensure patent quality but rather to “get his customers their patents.”

We’ve gone nearly 40 years making the fraudulent patent the foundation of our “knowledge economy” illusion.  Foolishly, naïve countries like Singapore, Australia, the United Kingdom and the European Union have decided that it’s better to play ball than to hold up quality standards.  Not surprisingly, the weight of the World Bank, the OECD, and every national initiative to build “knowledge economy” businesses have suffocated nascent innovation under the bloated ‘entrepreneur’ enablement interventions rather than building vibrant economies flourishing with transformative ideas.  Tragically, with the exception of the Kingdom of Denmark – yes, the one that won’t sell Greenland to Donald Trump – no other country has been willing to call the bluff underpinning the Propaganda Economy’s leading currency – the fraudulent and plagiarized patent.  And now a Conservative Republican is chiding Congress to defend the system his generation contaminated beyond repair.

It used to be that I was simply a locust eating, sackcloth-wearing prophet when I testified in Congress at the Patent Quality Hearings in the early 2000s.  But times have changed.  By measuring the quality that the Ambassador, Congressmen, and Senators patently ignore, M·CAM has succeeded in out performing the equity markets with our indexes and funds since 2013.  And while academicians, economists, and legal apologists all seek to count patents in their Monopoly game while ignoring the multiply confirmed counterfeit majority of these artifacts of manipulation – not invention – our indexes and our funds show the value of separating the truth from the fiction.  And regrettably, if STRONGER Patents gets passed, our performance will likely improve.

You don’t care.  When you pay too much for food, medicine, smartphones, appliances, cars, voice-recognition customer service, building materials, seeds and so many other things, you don’t know that this theft is truly OUR PROBLEM.  And the ignorance born of our confusion in believing that we’re increasing ‘knowledge’ while in reality being constrained by curated propaganda paralyzes us in the face of the tyranny of messages like those spouted by Ambassador Blackwell.  Do you care?  Share this and last week’s blog post in as many circles as you can.  See if someone somewhere offers a counter-message to the Ambassador’s before Congress takes us back to the Dark Ages.

x

Dateline 1945 – The “Knowledge” Economy Propaganda Machine

 One hundred years ago, Everett Dean Martin was appointed to serve as chairman of the National Board of Review of Motion Pictures in an effort to advance the emerging movie entertainment genre.  Having spent nearly a decade of his life as the First Congregational Church in Lombard, Illinois, he became a national evangelist for the psychological paradox he saw unfolding with the proliferation of technology outpacing education of citizens sufficient to keep them fully informed of how to consume media and messages.  Having seen how the technology of late 19^th and early 20^th century religion had been effectively co-opted by business, politics, and civil society, he campaigned against those who appealed to self-serving and “ignoble” instincts to shape public behavior, belief, actions and thought.  In the wake of the demagoguery that inflamed the horrors of World War I, he knew that, “the crowd is a state of mind,” and the capacity for masses to fixate on delusional ideology gave near omnipotence to the “enemies of humanity”.  In his 1920 essay The Mob Mind vs. Civil Liberty, Martin anticipated the “pandemonium of propaganda” that was inevitable when technology afforded greater access to ideology than to expansive and liberal education.  It is with some irony that the motion picture board to which he was appointed would one day help fulfill his greatest fears.

“Certain crowd-movements in America today give marked evidence of this unconscious motivation. Notice how both the radical and reactionary elements behave when, as is frequently the case with both, the crowd-spirit comes over them. Certain radicals, who are fascinated with the idea of the Russian Revolution, are still proclaiming sentiments of human brotherhood, peace, and freedom, while unconsciously they are doing just what their enemies accuse them of-playing with the welcome ideas of violence, class war, and proletarian dictatorship. And conservative crowds, while ostensibly defending American traditions and ideals against destructive foreign influence, are with their own hands daily desecrating many of the finest things which America has given to the world in its struggle of more than a century for freedom and justice. Members of each crowd, while blissfully unaware of the incompatibility of their own motives and professions, have no illusions about those of the counter-crowd. Each crowd sees in the professions of its antagonist convincing proof of the insincerity and hypocrisy of the other side. To the student of social philosophy both are right and both wrong. All propaganda is lies, and every crowd is a deceiver, but its first and worst deception is that of itself.”

This critique, written one hundred years ago today could be republished in 2019 with no editing and be seen as the epitaph to the century past.

Martin died in 1941.  He didn’t live to see the immediate fulfillment of his worst fears.  The V-2 rocket, the U-boat, signal intelligence and encryption, broadcast propaganda all unleashed the inhumane fury that he sought do desperately to warn humanity against.  When in response to the industrial consequence of largely German propaganda-fueled innovation the Allies realized that they had been bested, a more malignant propaganda economy was born.  Unable to compete with superior ideas and innovations for the most part (save the notable atomic initiative), the industries of Allied economies in the 1940s were dictated by espionage-acquired intercepts and salvaged technologies – not by the ingenuity of their engineers and scientists.  From 1945 – 1959, Operation Paperclip (the collection of German engineers and scientists through overt and covert operations) did more to fuel the second half of the twentieth century than any other single action.  While telling the story of technological supremacy to reinforce the “winning” narrative dear to the US psyche, the nation was duped into believing that Americans were dictating the industrial technology agenda rather than scaling and appropriating the intellect of others.  We weren’t defining what America needed.  Rather, we were reflexively responding to evidence of the supremacy of “others”.  Remember, the modern computer was not born of U.S. or British science.  British, US, and Australian intelligence were driven to produce countermeasures to the superior technology that Japanese and German cypher engineers and mathematicians invented.

I spent the past few days in Boston and Silicon Valley.  The frequency with which I was accosted with the term made popular by Peter Drucker fifty years ago in his book The Age of Discontinuity – the “Knowledge Economy” – was deafening.  At one point, I snapped.

“We don’t live in a Knowledge Economy,” I said.  “We have been living in the Propaganda Economy.”

The words barely escaped my lips before I realized that this observation has been what I’ve spent the past three decades of my life attempting to overcome.  Reflecting on the dire prophecies of Everett Martin, recounting the socioeconomic adoration of Peter Drucker, I realized that since the end of the Second World War, we’ve abdicated “knowledge” for reflexive and compulsive enterprises which serve not the benefit of humanity in the main but rather seek to satiate the unconsidered consumption of incremental industrial output.  We are told what to fear (and desire) – morbidity, mortality, economic and egoic existential ‘threats’.  Then we’re told what and how to consume antidotes for manufactured “needs”.  We’re deluded into “choosing” among indecipherable “alternatives” (Apple vs. Android; Prescription vs. Wholistic; Industrial vs. Organic; Green vs. Polluting) while being ignorant to the ever-narrowing aperture delimiting unconstrained innovation.  We have over 10 million patents on less than 50,000 products.  We have the proliferation of “information” curated by advertiser-fueled “technologies” without considering the inherent influence or bias that shapes the sanctioning of messages.  And against this backdrop, we hear the cacophony of hypnotic academicians, advisors, politicians, pundits, and industrialists celebrating “knowledge”.

I recently lectured in Palo Alto.  The room was filled with the venture funded experts at the “cutting edge” of technology.  For three hours I described the consequence of incremental vs. fundamental innovation.  In simple biologic, physiologic and chemical terms, I described how they could integrate known, established, science to make disruptive impacts in their respective areas of work.  While I spoke, several individuals frantically sought to ‘google’ the concepts, terms, and research I was referencing commenting on how none of them were ‘trained’ to think in the wide-ranging scope of my talk.  From photosynthesis to membrane oligomerization; from Particle Swarm mathematics to lossless encryption; from genetics to social psychology…the range was extensive…and entirely necessary and effective.

“I think we need to rethink how we think,” was the comment articulated by one of the participants in the end.  “Nobody is thinking like this.”

“I hope you don’t think like me,” I responded.  “I just hope you think.”

Walter Powell wrote that, “the key component of the knowledge economy is a greater reliance on intellectual capabilities than on physical inputs or natural resources,” in The Annual Review of Sociology in 2004.  In 1969, Drucker polarized labor into those who work with their hands or the heads.  And herein lies the fallacy upon which the propaganda is built.  For “knowledge” to enable an economy, it cannot be the curation of the observations and recitations of others.  Rather it must be the synthesis of cognitive acuity, analog practice, and a fundamental curiosity born not of consumer expedience but rather from qualitative examination of conscious existence.  In other words, if the ‘problem’ is what you’re ‘solving’ than you’re contributing to a Propaganda Economy.  Because in a genuine Knowledge Economy, we’re arranging matter and energy to optimize existence – not “solving problems” born of myopic perspective shaped by myths, mantras, and media. 

Returning to Everett Martin one more time – his genuine admonition to work towards adult education which would outpace (and hold in check) technological development is one that bears consideration.  The notion that by our second decade we have acquired all the “education” we need to function in society supports the crowd thinking against which he unsuccessfully warned.  It’s time that we enter into continuous education.  And start it by turning off your computer, your iPhone, or your electronic device and read something written before 1945.  See if you could learn a thing or two from knowledge before it was so economically hijacked!

x