The Hames Report

The Next Renaissance

To me, "Personal Democracy" is an oxymoron. Democracy may be a lot of things, but the last thing it should be is "personal." I understand "personal responsibility," such as a family having a recycling bin in which they put their glass and metal every week. But even then, a single recycling bin for a whole building or block would be more efficient and appropriate.

Democracy is not personal, because if it's about anything, it's not about the individual. Democracy is about others. It's about transcending the self and acting collectively. Democracy is people, participating together to make the world a better place.

One of the essays in this conference's proceedings - the book "Rebooting Democracy" - remarks snarkily, "It's the network, stupid." That may go over well with all of us digital folks, but it's not true. It's not the network at all; it's the people. The network is the tool - the new medium that might help us get over the bias of our broadcasting technologies. All those technologies that keep us focused on ourselves as individuals, and away from our reality as a collective.

This focus on the individual, and its false equation with democracy, began back in the Renaissance. The Renaissance brought us wonderful innovations, such as perspective painting, scientific observation, and the printing press. But each of these innovations defined and celebrated individuality. Perspective painting celebrates the perspective of an individual on a scene. Scientific method showed how the real observations of an individual promote rational thought. The printing press gave individuals the opportunity to read, alone, and cogitate. Individuals formed perspectives, made observations, and formed opinions.

The individual we think of today was actually born in the Renaissance. The Vesuvian Man, Da Vinci's great drawing of a man in a perfect square and circle - independent and self-sufficient. This is the Renaissance ideal.

It was the birth of this thinking, individuated person that led to the ethos underlying the Enlightenment. Once we understood ourselves as individuals, we understood ourselves as having rights. The Rights of Man. A right to property. The right to personal freedom.

The Enlightenment - for all its greatness - was still oh, so personal in its conception. The reader alone in his study, contemplating how his vote matters. One man, one vote. We fight revolutions for our individual rights as we understood them. There were mass actions, but these were masses of individuals, fighting for their personal freedoms.

Ironically, with each leap towards individuality there was a corresponding increase in the power of central authorities. Remember, the Renaissance also brought us centralized currencies, chartered corporations, and nation states. As individuals become concerned with their personal plights, their former power as a collective moves to central authorities. Local currencies, investments, and civic institutions dissolve as self-interest increases. The authority associated with them moves to the center and away from all those voting people.

The media of the Renaissance - the printing press - is likewise terrific at myth-making. At branding. Its stories are told to individuals, either through books, or through broadcast media directed at each and every one of us. Its appeals are to self and self-interest.

Consider any commercial for blue jeans. Its target audience is not a confident person who already has a girlfriend. The commercial communicates, "wear these jeans, and you'll get to have sex." Who is the target for that message? An isolated, alienated person who does not have sex. The messaging targets the individual. If it's a mass medium, it targets many many individuals.

Movements, like myths and brands, depend on this quality of top-down, Renaissance-style media. They are not genuinely collective at all, in that there's no promotion of interaction between the people in them. Instead, all the individuals relate to the hero, ideal, or mythology at the top. Movements are abstract - they have to be. They hover above the group, directing all attention towards themselves.

As I listen to people talk here - well-meaning progressives, no doubt - I can't help but hear the romantic, almost desperate desire to become part of a movement. To become part of something famous, like the Obama campaign. Maybe even get a good K-street job out of the connections we make here. It's a fantasy perpetrated by the TV show West Wing. A myth that we want to be part of. But like any myth, it is a fantasy, and one almost entirely prefigured by Renaissance individualism.

The next renaissance (if there is one) - the phenomenon we're talking about or at least around here is not about the individual at all, but about the networked group. The possibility for collective action. The technologies we're using - the biases of these media - cede central authority to decentralized groups. Instead of moving power to the center, they tend to move power to the edges. Instead of creating value from the center, like a centrally issued currency, the network creates value from the periphery.

This means the way to participate is not simply to subscribe to an abstract, already-written myth, but to do real things. To take small actions in real ways. The glory is not in the belief system or the movement, but in the doing. It's not about getting someone elected, it's about removing the obstacles to real people doing what they need to to get the job done. That's the opportunity of the networked, open source era: to drop out of the myths and actually do.

Sadly, we tend to miss the great opportunities offered us by major shifts in media.

The first great renaissance in media, the invention of the alphabet, offered a tremendous leap for participatory democracy. Only priests could read and write hieroglyphs. The invention of the alphabet opened the possibility for people to read or even possibly write, themselves. In Torah myth, Moses goes off with his father-in-law to write the laws by which an enslaved people could now live. Instead of simply accepting legislation and government as a pre-existing condition - the God Pharaoh - people would develop and write down the law as they wanted it. Even the Torah is written in the form of a contract, and God creates the world with a word.

Access to language was to change a world of blind, enslaved rule followers into a civilization of literate people. (This is what is meant when God tells Abraham "you will be a nation of priests." It means they are to be a nation of people who transcend heiro-glyphs or "priestly-writing" to become literate.)

But this isn't what happened. People didn't read Torah—they listened as their leaders read it to them. Hearing was a step up from simply following, but the promise of the new medium had not been seized.

Likewise, the invention of the printing press did not lead to a civilization of writers - it developed a culture of readers. Gentlemen sat reading books, while the printing presses were accessed by those with the money or power to use them. The people remained one step behind the technology. Broadcast radio and television are really just an extension of the printing press: expensive, one-to-many media that promote the mass distribution of the stories and ideas of a small elite.

Computers and networks finally offer us the ability to write. And we do write with them. Everyone is a blogger, now. Citizen bloggers and YouTubers who believe we have now embraced a new "personal" democracy. Personal, because we can sit safely at home with our laptops and type our way to freedom.

But writing is not the capability being offered us by these tools at all. The capability is programming - which almost none of us really know how to do. We simply use the programs that have been made for us, and enter our blog text in the appropriate box on the screen. Nothing against the strides made by citizen bloggers and journalists, but big deal. Let them eat blog.

At the very least on a metaphorical level, the opportunity here is not to write about politics or, more likely, comment on what someone else has said about politics. The opportunity, however, is to rewrite the very rules by which democracy is implemented. The opportunity of a renaissance in programming is to reconfigure the process through which democracy occurs.

If Obama is indeed elected - the first truly Internet-enabled candidate - we should take him at his word. He does not offer himself as the agent of change, but as an advocate of the change that could be enacted by people. It is not for government to create solar power, for example, but to get out of the way of all those people who are ready to implement solar power, themselves. Responding to the willingness of people to act, he can remove regulations developed on behalf of the oil industry to restrict its proliferation.

In an era when people have the ability to reprogram their reality, the job of leaders is to help facilitate this activity by tweaking legislation, or by supporting their efforts through better incentives or access to the necessary tools and capital. Change does not come from the top - but from the periphery. Not from a leader or a myth inspiring individuals to consent to it, but from people working to manifest it together.

Open Source Democracy - which I wrote about a decade ago - is not simply a way to get candidates elected to office. It is a collective reprogramming of the social software, a disengagement from the myths through which we abdicate responsibility, and a reclamation of our role as citizens who participate in the creation of the society in which we want to live.

This is not personal democracy at all, but a collective and participatory democracy where we finally accept our roles as the fully literate and engaged adlts who can make this happen.

The Next Renaissance was Douglas Rushkoff's keynote address at the Personal Democracy Forum that took place June 23-24 in New York City, at Frederick P. Rose Hall. Douglas is an author, lecturer, and social theorist and The Next Renaissance is reprinted here with his permission. His books include Cyberia: Life in the Trenches of Hyperspace, Media Virus! and Coercion: Why We Listen to What "They" Say.

 

 

Greek Mythology

A strategic foresight practitioner like myself cannot help but be mesmerized by the extent of disruption being caused today by the breakdown of the competitive, machine-like, model of human enterprise - especially when, even in its death throes, it still traps us in paralytic fear of alternative, more humane, possibilities.

The endgame of the industrial paradigm, typified by linear thinking, exhausted systems and wasteful practices, is rapidly giving way to a networked society. Here abundance will have ousted scarcity, distributed knowledge (shared in peer-to-peer networks and used collaboratively) will have liberated innovation far more effectively than the clumsy legal frameworks of the past, and a new literacy, networked intelligence, will have helped us surmount most of the limitations inherent within the old model.

Yet many of us, including elected leaders and their King Canute-like courts, vainly cling to a myth: namely that the industrial model of “free market” capitalism, braced by certain democratic principles, is the definitive peak of human achievement. In other words that better options are impossible to imagine and that we must therefore do everything in our power to prevent a collapse of the old order. Of course this is to deny the inevitability of evolution as well as the rules of nature.

Although I am no financial expert we can find a good example of predictable collapse in the way economic theory, typically favouring either “free” market principles or centralised government control, is applied. Regardless of the politics, what remain constant in today’s world are:

• a monetary scheme founded on compounded debt
• an economic orthodoxy increasingly driven by selfishness that limits the nature of value (and the value of nature) to mere utility while ignoring some costs as being relatively unimportant
• a global reserve fixed on a single currency thereby biasing the system in favour of that currency
• a limited range of fiscal responses nations are able to adopt in order to out-compete each other while maintaining social cohesion (through security, employment, education & welfare for example)
• a banking system overtly manipulating regulatory mechanisms to generate wealth for a surprisingly small number of individuals and corporations.

This is just one example of why systems that are supposed to support humanity are failing us. It is clearly unsustainable. Any structure with such intrinsic constraints is ultimately going to fail. We are witness to that inevitabilty right now in Greece. As the grand experiment we call the European Union staggers from one crisis to another, with past mistakes rationalised rather than resolved, the Greek economy is being allowed to fall into even more of a chaotic mess. Greece will run out of money in six weeks. So what is actually going on?

In early 2010, we discovered that successive Greek governments had been consistently and calculatingly misreporting the country's official economic statistics so as to keep within the EU's guidelines. Subterfuge had enabled Greek governments to spend well beyond their means, while hiding the actual deficit from Brussels. In May of that year the deficit was estimated to be 13.6 per cent for the year, which was one of the highest in the world relative to GDP. Total public debt was forecast to hit 120 per cent of GDP during 2010, again one of the highest rates in the world.

Now, after two bailouts (totalling €240 billion) Greece is indebted to other nations, mostly France, Germany and the UK, to the tune of €0.45 trillion. This is small in comparison to some European economies, and direct damage of it defaulting on its debts could probably be absorbed by the eurozone. However, the fear is that an Athenian default could trigger a financial catastrophe for other, larger economies, such as Italy. The ripples will be felt around the world.

Actually a default (accompanied by Greece's exit from the EU) is probably just a matter of time. There are good reasons for this, not least of which is Greece’s history in such matters. Whatever happens, the current debt (as well as some of the irresponsible commentary accompanying it) is causing a deep cultural malaise in Greek society and overwhelming the ability of other systems to cope. Unemployment figures are stuck at 21.7 per cent, including an incredible 50 per cent of all young people. Over the past two years public service salaries have plunged by 40 per cent and suicides have risen by 22 per cent. In Athens alone there are over 13,000 homeless people. The health system is in turmoil since there is no cash to pay pharmacies for prescriptions. Corruption is rife, the bureaucracy is bloated, competitiveness is poor and evasion of tax is estimated at 47 per cent. If all of that wasn’t crippling enough the country now faces increasing political turmoil and parliamentary dysfunctionality afer an inconclusive general election in which both mainstream pro-Europe parties saw a dramatic colllapse in support. It is highly likely fresh elections will have to be called.

As always there is an upside to be considered. After the most recent bailout the European Commission, European Central Bank and International Monetary Fund all insisted Greece find ways to make its economy more competitive - principally by cutting the cost of doing business in the country. That is undoubtedly a sensible call as it should attract overseas investment and international visitors. Since the early 1990s until fairly recently the nation’s growth has been higher than the EU average. In terms of economic complexity the nation is strong with a diverse range of embedded productive knowledge. Nor can the Greek work ethic be criticised: the labor force, which totals approximately 5 million, works the second highest number of hours per year on average among OECD countries.

If the drachma was still a valid currency this situation might not have arisen. Or at least, if it did, it would be within Greece’s jurisdiction to introduce measures to deal with the problem. Over the past century the Greek economy has often owed more than it produces. But now Greece is being intimidated by its European partners to repay loans faster than it can possibly manage and with no amnesty being offered.

At this point austerity measures, it is claimed, are vital. Austerity (the cutting of public spending to the bone) is the new global economic medicine prescribed for dealing with sovereign debt. Proclaimed with frenzied zeal by almost all the world’s leading financial institutions, austerity is being demanded of Greece by its eurozone partners, as if it were the panacea to everything. This is quite a dangerous strategy – not least because the chances of Greece defaulting are already quite high and more pain might simply push the country over the edge.

The logic of austerity is being driven by the custodians of the old industrial system - in whose opinion productive efficiency matters far more than social wellbeing or commonsense. Austerity means people suffer because many essential public services are reduced, or eliminated altogether. This undermines self-reliance and unravels the fabric of society still further. Economic shock therapy of this kind does not work because it destroys cultural cohesion. We have seen that before in pre-revolutionary Chile and in Cuba - where it was the US weapon of choice – as well as in Thatcher’s Britain and Reagan’s US - where it was a doctrine of faith. Yet we still blindly insist that it must work in Europe for there are no other “economically rational” solutions.

And here my economic naivety comes to the fore as I cannot for the life of me see the rationality in such partial, linear solutions. Of course economic austerity makes sense in theory, especially in terms of trimming what has become a bloated and inefficient public sector. But to rely just on austerity measures to save Greece is to wilfully ignore morale, motivation and empathy within the community – the very things that breathe vitality and meaning into innovation and entrepreneurship.

Greece actually has all the resources needed to be a thriving and prosperous nation. Unfortunately ordinary men and women in Greece are not sufficiently connected and their politicians, bullied by France and Germany, are mere slaves to their European partners. So while trimming the fat from government spending is wise, enduring solutions are going to come from elsewhere. But where should we be looking?

Once more an appreciation of context is important. As the world transitions to a more openly transparent, networked world, and systemic failures caused by the industrial paradigm continue to crop up, almost on a daily basis, the acquisition of new literacies becomes a critical factor in society’s renewal. Paradoxically the disruptive conditions enveloping Greece are now inviting an incomparable opportunity to seize the future by creating and adopting new literacies, and new values, that are already re-casting the basic patterns of human production and consumption.

Because a renewal strategy of such a wide-ranging nature will need to be multidimensional, strategically relevant and systemically viable, it will require imagination, foresight, courage and a commitment to the extraordinary cultural ethos for invention that Greece bequeathed the Western world ages ago – qualities that appear to have gone missing from today’s political leadership scene.

But if this leadership were to emerge, phoenix-like from the current disorder, what might a viable strategy for the future of Greece actually comprise? If the design challenge is to create the greatest benefit for the greatest numbers of people then the following points would at least need to be seriously considered:

1. People have lost faith in brand politics and celebrity politicians – particularly the three major families that have dominated politics in Greece for decades. Here is an opportunity to instigate far–reaching reforms to the system of political governance by adopting diversity and inclusion within an overtly egalitarian society. Greece, once the cradle of democracy could actually reconceive what demos means in an age of online interconnectedness. Greater participation from citizens, even in the form of new political coalitions and governance models, might also do a great deal to stamp out the nepotism and corruption that still haunts political life in Greece.

2. Governments cannot create wealth. But they are responsible for generating the conditions wherein wealth can be generated and shared. As we transition from the failed mode of fossil-fuelled industrial economism to a cleaner, more sustainable world of global business ecosystems, enabled by digital and bio-technologies and featuring community collaboration, open-source design and peer-to-peer relationships, new purpose and new wealth will be created by people being given encouragement to trade and use their talents and natural resources more effectively. Four things are evident in this context. Greece must:    

• invest in a reliable and speedy online infrastructure that allows all citizens to connect at any time and for any reason – or risk innovation being smothered
• increase economic complexity by supporting knowledge economy ventures and cleantech startups as well as providing targeted support for traditional industries such as tourism, merchant shipping, agriculture and fisheries
• encourage companies to grow around community - acquiring new knowledge and capabilities for the way goods and services are made, shared and consumed
• optimise an abundance of assets that are being ignored in the current context – assets such as sunshine, ancient sites, beautiful islands, good food and wine, etc.

3. There is no denying the Greek bureacracy has become bloated, costly and inefficient. But it needs to be trimmed slowly (through natural attrition and the suspension of obsolete programs, for example) in order to avoid an even bigger crisis. Unfortunately, institutions that sell credit are generally impatient. Not giving Greece the time it needs to repay and rebuild could result in an upsurge of corruption that quickly spins out of control – as occurred in Russia when Mikhail Gorbachev was denied adequate time to develop a post-soviet economy by the World Bank and IMF.

4. As adaptiveness to contextual volatilility becomes essential for investors, entrepreneurs, corporate strategists and government policy makers alike, we need to use new information and communications technologies, including the new social media, to speed up the learning metabolism within society. As proven by Stafford Beer in pre-revolutionary Chile, but mostly forgotten today, equality and responsiveness to shifting realities can be transformed through instituting an "electronic nervous system" that links voters, workplaces and agencies in a single interactive national communications network. Such an investment would serve Greece well at this juncture as well as providing a prototype for Europe as a whole.

5. Liberating the untapped wealth of the people while avoiding unnecessary hardship must be part of any strategy going forward. That probably required Brussels and other creditors to give Greece some slack, including allowing extra time for the debt to be repaid. If Europe declines then Greece should simply default and find new trading partners. As my colleague Ivor Kellock recently reminded me - there are always people willing to do deals….

 

The (Other) World Game

1. A Single Worldview

Over the past few years I have given considerable thought to the notion of the civilizational worldview as a shared construct. I believe this paradigm insinuates its way into our beliefs and attitudes towards each other and towards the Earth on which we rely for energy, sustenance and inspiration.

The grand visions and moral imperatives of this source model trace the most improbable story of the human project on planet Earth. An exultant story of astonishing adventures, passionate social movements and political revolutions. A romantic story of virtuosic creativity. A story that has fashioned great works of art, assembled complex urban environments, spawned incredible technologies, and produced massive wealth.

These accomplishments are all the more remarkable in that they have arisen via discoveries made within relatively bounded domains of knowledge and have been primarily driven by our curiosity and willingness to investigate discrete disciplines - initially theology, later philosophy and the humanities and, most recently, science. Such is human ingenuity and persistence.

If, or when, it occurs to us at all, we assume this civilizational worldview to be a constant element – the bedrock underlying everything we do and the means by which we can express our most fundamental nature. It is the life-condition we discern, experience each day of our life, and in which we are immersed from birth. It matters little whether we were raised in the parched deserts of Sudan, the chic urban landscape of Chicago, the dense rainforsts of Borneo, or the overcrowded slums of Mumbai. Regardless of where and how we live, what we earn, the particular skills we have acquired, or our social status, the civilizational worldview is as natural to us (and as mystifying) as the air we breathe.

This same civilizational worldview has fortified our world-system for at least the past 2,000 years. Along the way it has been nourished by a stream of varying sentiments about human purpose and capability, tested in a cauldron of competing ideologies, and shaped by common moral impulses. All these have progressively wrought our worldview into a deeply congruent and ingrained credo defining what we faithfully believe to be an indisputable truth describing humanity. Rising above any specific value set connating good or bad and right or wrong; transcending philosophy, history and geography; this credo implies eight tenets:

1. A ruling power “elite” serviced by a compliant underclass of “serfs”[1]
2. Wealth and power acquired by the elite at the serfs’ expense and protected via state political, military or policing mechanisms
3. An all-encompassing ethereal or superstitious dogma (where the elite may be depicted as representatives of a deity or divine beings) typically used to manufacture consent
4. An industrial war machine viewed as a crucial component of the economy and held up as validating the inherently combative nature of humans
5. Most aspects of production and consumption controlled by the elite - through ownership, language, access to services and skills, etc.
6. Games, entertainment and mass media used as a social distraction in ways that help maintain compliance within the social order
7. Economies (nomos or rules) accorded a higher status than ecologies (logos or purpose) - thus nature is logically exploited as a human right
8. An irresistible narrative within society based upon competition, labour, scarcity and difference.

This set of eight tenets does not imply a universally applicable monist integrity. On the contrary our worldview is something of a chameleon, changing its tone, color and intensity over time according to its changing surroundings and cultural maturity. But the critical thing to note is that the civilizational worldview was instituted, shaped and given legitimacy by us. As a social construction it can be rejected, remodeled or transcended - if that is what we want.

Until now it is explicitly what we have not wanted - nor even anticipated as being necessary. I cannot find evidence of any serious or persistent critique that comes close to challenging the veracity of this worldview. Indeed across the sweep of history, in every culture, architects of the bloodiest upheavals and entrepreneurs behind the most compassionate enterprises alike, have all assumed the validity of the civilizational credo. So it is fair to presume either that the civilizational worldview is the preferred epistemological framework for Homo sapiens, or that we have not yet been motivated to discover surrogates. Not to be searching for viable alternatives must surely mean either:

• that the current civilizational worldview has served our needs well - and
• those benefitting from this worldview (in other words those who have most to lose - the elite) want it to endure, or
• the thought of renewal or reinvention is simply too confronting, or
• an embodied sense of “worldview” as an implicit social construction is way beyond our collective consciousness to such an extent that reasons for alternatives are outside our capability to know.

Personally I deem a combination of the first and second of these possibilities to be most likely. There can be no doubting the civilisational worldview has brought great affluence, health and well-being to many millions. The reservation I have is whether it can do the same for the burgeoning billions of the world’s inhabitants who are starving, have no security, shelter, income or education, and are victims of injustice and discrimination.

The elite in all contemporary societies (i.e. essentially those who control the flow of money, resources and ideas - including elected and self-appointed leaders, the priesthood, public intellectuals, high wealth industrialists, bankers, politicians and their advisers, royalty, business corporations and industry lobbyists) put most of their efforts and resources into preserving and reinforcing the existing order because they have a vested interest in keeping things the way they are. Nor is embracing the existing state of affairs and safeguarding venerable institutions necessarily a bad thing. Indeed it can be stabilising and comforting – something most of us yearn for at some stage. But occasionally, betrayed by hubris and distracted by the very means that have been constructed to maintain consent, the old-guard fail to heed the all-too-obvious signs of impending disaster.

Arrogant leadership, inadequate or flawed information, and decisions driven by vanity rather than wisdom have instigated almost every contemporary tragedy - from the sinking of the Titanic to the explosion of the space shuttle Challenger and even the collapse of Enron and Lehman Brothers. Now it seems, with climate change, we may be heading into a situation that threatens humanity itself. Yet we continue to ignore warning signs, convinced of our invulnerability and oblivious to the damage already being wreaked by our “lock-in” to the civilizational worldview.

The elite are unlikely to change their ways until they feel pain, which is unlikely as wealth can quarantine us from the worst of adversities. In practical terms we know that if climate change turns out to be as disruptive to our way of life as scientists now predict, it is the poor, the disadvantaged and those who remain trapped by circumstances, who will suffer most. The elite can still sleep easily in their beds.  

2. A Cultural Cornucopia

A more profound facet of the worldview, and one that is more immediately recognisable, is the countless mindsets applied by people in differing cultures to help them interpret the worldview. Although the terms worldview and mindset are often used interchangeably, they are actually distinct. In my context a cultural mindset is a set of ingrained assumptions that reinforces social identity and purpose within a community. As powerful inducements for continuing to accept prior behaviours, choices and technologies, cultural mindsets invariably reflect and accentuate one or more features of the prevalent worldview.

But whereas the worldview is a single phenomenon, the shared backdrop to our collective experience, an abundance of cultural mindsets are extant. Continuously breathing life and relevance into the worldview, they are the social filters we acquire, transmit from one generation to the next, and overtly employ to sculpt the civilizational worldview to local conditions, such that it retains intrinsic meaning for us.

Each cultural mindset is exceptional in its semiotic palette. For example, each aspires to perceive knowledge accurately - yet translates truth and beauty and goodness in dissimilar ways. Each has its own sense of place, sophisticated ways of knowing, implicit biocultural associations, language, ethics and customs. And each affords unique answers to that most fundamental of questions: What does it mean to be human and to be living together on this planet?

In the distant past there seem to have been significant differences between one cultural mindset and another. But when the urge to discover and explore new lands accelerated during the 15^th century, and new colonial settlements started to blend with native mindsets, entirely novel hybrids formed. The fusion created through the collision of the Indic, Sinic and Occidental cultural mindsets, for example, shaped a fertile interface for trade and commerce along the Silk Road.

Unfortunately that is all changing. One of the repeatedly ignored downsides to globalization is the pall of homogeneity that erodes heritable knowledge and distinctive cultural attributes. Take the indigenous cultural mindset of native Australians, for example. At the time of white settlement there were at least 270 discrete Aboriginal languages and possibly 600 or more dialects. Half have been lost and only 18 are spoken today by around 500 individuals. This represents a huge loss of knowledge, much of it irreplaceable.

Sadly this trend is also reflected in our consumption patterns. Our addiction to luxury goods, for example, means global brands are to be seen in shopping malls in every large city and international airport with tedious inevitability. Meanwhile distinctive local trades, crafts, customs and markets are an endangered species – increasingly known only to a small and contracting clientele and a few scholarly anthropologists.

Even the purest and most precious of cultural mindsets are surrendering to this overwhelming assault as an incessant stream of corporate advertising infects our minds with the banal, the trivial and the frivolous. Large multinationals now dominate the food chain, the industrial war machine, global finance, the energy industry and the political agenda. They are happy with the status quo and see little reason to amend their ways.

The fact that we do not generally take these granular cultural predilections into account is one of the most glaring reasons for transcultural misinterpretation and international follies. It is also giving rise to a global monoculture in which western industrialised capitalism (the Occidental mindset in its most vibrant and compelling modern form) is given precedence over all other expressions of what it means to be alive and human. This particular cultural mindset overwhelmingly views reality as a logically explicable system of physical artifacts, calibrations and observable phenomena. It is a mindset dominated by scientific rationalism, in spite of the philosophical outcry cautioning us that such a viewpoint only illumines a path to perdition. Indeed the German writer Goethe claims in Urfaustus that putting one’s faith in Newtonian principles is tantamount to selling one’s soul to the devil.

In comparison, the Indic mindset sets far greater store on iterative cycles of internal reflection and spiritual transcendence, the prominence accorded to the relationship of the individual soul to the manifestation of external phenomena amounting almost to an ecological metaphysic. The Sinic mindset is different again, cherishing balance in all things – the feminine yin and the masculine yang preserving a delicate equilibrium between extremes.

As intimated there are other mindsets in existence that were once considerably more important in locally circumscribed situations than they are today in a global context. The ancient Amerindian, African Ubuntu and various Indigenous mindsets, for example, hold far less sway in today’s world, largely because they signify values, relationships and ideals that do not sit comfortably with our addiction to material wealth and scientific progress. These islands of humanity serve as critically disregarded laboratories where gender, social order, symbiosis and persistent narrative can inform many of our inquiries. For that very reason we should be paying more attention to them, specifically in terms of how we might develop a greater consciousness of evolving to a less exploitative worldview where communities can live in harmony with each other and nature. But that, I suspect will take a radical metanoia on the part of society at large.

Finally, to make things even more complicated, there are subtle inflections of multiple mindsets - as in the recent amalgam of contemporary mindsets across Asia, resulting in part from globalization as well as the intended and unintended remnants of imperialism.

Thus a multitude of different interpretations and understandings can materialize from societies operating from within differing cultural mindsets – to the extent that extreme behavioural divergence between them is often evident even though the civilizational worldview itself remains a shared and immutable phenomenon.

So, depending upon our cultural upbringing and mode of social initiation into the modern world-system, we will inevitably perceive, translate and respond to any crisis within the civilizational worldview through a distorting filter and with an intensity that differs from one society to the next, reflecting deeply implanted cultural attributes.

Because of this we also have a tendency to apply differently nuanced operating models and technologies (including the language used to express priorities and principles) to policy, governance, organizational and management issues that may give the impression of contradictory interests and needs. This impression is part illusion and part fact. A reality check can be undertaken by comparing such apparently conflicting interests with how our moral impulses play out in each case. These checks invariably surface basic needs and expectations that are universally applicable to the entire human family - irrespective of other incidental local factors.

The loss of each cultural mindset, as well as the congealing of the remainder under the intensity of Western orthodoxies, is leading to a monoculture and must be resisted at all costs. The ideal of a global monoculture, that is implicit in the cult of progress and technological positivism, impoverishes our humanity. As the great poet Octavio Paz said: Every view of the world that becomes extinct, every culture that disappears, diminishes a possibility of life. That there are now far fewer extant cultural mindsets should concern us, particularly as biocultural diversity, considered by many scientists to be essential for the survival of our species, cannot be replaced.

3. Rebooting Civilization

So within the current world game we have two structurally-embedded elements that are discrete and yet intimately interwoven:

• A prevailing civilizational worldview, dominated by conventions that fly in the face of what 99 per cent of the population deems acceptable today and exemplified by an old industrialised capitalist paradigm that is failing us on a number of levels
• A diminishing number of richly diverse cultural mindsets that, while potentially containing genetic material for metamorphosis of the worldview, are simply discounted as being of less consequence to present endeavours and future outcomes.

Only comparatively recently has there been any rigorous critical appraisal of the civilizational worldview – something nigh impossible from within its defensive walls. But there are now plenty of examples of seemingly irresolvable problems caused or aggravated by this worldview that leads us to question how much longer its entropic nature can persist before totally unraveling. This is not whimsy, as some might wish, but a grave epistemological issue.

The human project is in a state of disruptive transition. Indeed I believe we are rapidly reaching a developmental crisis point that necessitates a total rethink of how we interpret and value progress. Given the major crises facing humanity, particularly the storm of intersecting environmental, economic, food, water and energy meltdowns, we must rapidly come to terms with the old proposition that there are indeed fixed limits to growth. Naturally much depends upon how much pain we are prepared to take before the adoption of a new paradigm becomes the preferred option. And whilst we cannot go back and reinvent the past, the future paradigm remain very much ours to configure.

Furthermore the socio-economic volatility and community awakening we are currently witnessing offers an exceptional opportunity for us to shift to a higher plane of consciousness in facilitating a different ethos underlying relationships we have with each other and our environment. We just need to be able to see the promise of an “appreciative” society with greater clarity and conviction.

Ironically, transformation of the civilizational worldview can help us by opening our minds to alternative possibilities. Enshrined within the rigid chrysalis of the present worldview is a source of hope – the imaginal cells of a worldview crafted to be intentionally viable, resilient, and based upon the fundamental premise of provisioning for humanity as a whole rather than continued pandering to a wealthy minority.

That is what we can achieve if, initially, we are able to envisage an appreciative worldview as a recasting of the eight tenets underpinning the old civilizational paradigm – a doppelganger with a decidedly different moral credo. Namely:

1. Open source governance – primarily as the interaction of the commons (at a global and many local levels) with elected regional representatives
2. Wealth (as in access to food, health, employment, learning, happiness, wellbeing and security) distributed without favour and protected by appropriate officials, effective monitoring councils and the justice system
3. An all-encompassing humanitarian mechanism for ensuring that cultural diversity is protected and fostered
4. The elimination of conflict through the dismantling of the industrial war machine and its relationship to "disaster" capitalism, (as famously articulated by the "shock doctrine" economist Milton Friedman) alongside the promotion of cooperative structures and multicultural enterprises
5. Most aspects of production and consumption controlled by the commons with open access to ownership, language, services and skills
6. Games, entertainment and the mass media used as a social distraction and openly acknowledged as just that
7. Economies (nomos) are lodged within ecologies (logos) - thus nature is protected for future generations and ecocide is a crime
8. A diversity of cultural mindsets and compelling narratives within a society unified through cooperation, empathy, intelligence and abundance.

But what of role should our cultural mindsets play? An understanding of context becomes particularly critical when so many of the ideas and institutions defining civilization seem to be in a state of collapse. This is the case today. It is the ideal time to be learning from other cultural traditions as an alternative to blind insistence on the superior nature of the Occidental mindset.

Possibly the most profound transition in history, one that has taken literally hundreds of years so far and is still far from completion, was the move away from pious notions of an infallible ‘maker’ or supreme being, to the concept of scientific materialism. Here it is the physical world that really matters. This shift required discarding deeply imprinted fears and fallacies. Unsurprisingly it led to the modern obsession with material goods and the acquisition of personal wealth. But evolution cannot just stop there…

We must now move beyond even our current phase of understanding. Among the most vital of contemporary principles is the rejection of the idea of the world as a machine and the adoption of the world as a living, interconnected, ecosystem. The transition towards a new society instilled with such a basic ontological shift appears most likely to lead to a new holistic consciousness that integrates both science and spirit. Yet the practical realities of governing a global population of seven billion or more people still lag far behind conceptions.

In the past, our inability or unwillingness to engage with really big issues (e.g. endemic poverty, environmental degradation or the alienation of young people) in any meaningful or constructive manner has been hampered by the fact that we have not allowed for diversity. We have been seeking a universal panacea. It is unlikely to appear and, if it does, will not be of much use.

Our inclination to delegate important decisions to others, for example (whether to dictators, monarchs, professional managers or elected representatives) was deemed pragmatic. Our unwillingness to understand our experience through an “others” perspective allowed us to live unconsidered lives. This epitomized a disquieting social apathy – a deeply ingrained passivity that has been extremely difficult to overcome. What is more it often allowed corruption, misconduct and oppression to thrive, to which we then turned a blind eye for fear of attracting still further repression. Many communities still suffer from that indifference today.

With the advent of today’s sophisticated communications systems and online social media, however, there can be no excuse. People are able to speak out and air their concerns, wielding power in ways that were previously out of the question. Governments and dictators fall at the hands of people power. Today, the voice of every citizen can be heard. Individuals can contribute to a global community of mind (a collective intelligence for change) should they wish to do so. Indeed some commentators argue the case that it is increasingly impossible to remain quarantined from such participation, given the potency and insidious nature of new social media. Furthermore, new social networks help create the collective consciousness we so urgently need to reboot civilization.

As far as I am concerned some of the more important questions we should be pondering are not even on the agenda. While the greatest threats to humanity and to our environment seem to be that nothing is done, that the wrong things are done too quickly, or that too little is done too late, I believe the greater threat to our social wellbeing is that we act without wisdom.

The most urgent issues for humanity no longer focus on discrete events and their immediate impact but on how we can adapt to evolving conditions in ways that lessen the damage wherever we can, exploit those opportunities that are bound to emerge, and delay more serious consequences to give us more time. There are three philosophical questions we must answer:

1. How can we tread more lightly on this planet?
2. How can we buy more time to do what must be done?
3. How can we preserve for future generations that which is uniquely rare, beautiful and inherently natural about our world?

Somewhere within the solution we will need to active steps to preserve the various cultural mindsets that still exist, while using their knowledge to fashion a new world game rich in diversity, strategically relevant to our collective purpose and shared aspirations, yet systemically viable in the face of nature’s wakeup call. Jeremy Rifkin call this the empathic civilization. Now there’s a thought….

This is a reframing and expanded version of a previous article in which I mentioned the dual concept of worldview and mindset. I hope the distinctions made between these concepts - which is really the focus of this piece - act as a convincing argument for the intentional metamorphosis of the civilizational worldview, together with the preservation, celebration and, wherever possible restoration, of unique cultural mindsets and their stores of invaluable heritable knowledge. 

 

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[1] In alleging differences between a ruling elite and a compliant underclass I am not inferring the existence of any organised collective conspiracy (by the elite) and certainly not any global cabal intent on world domination. Nor am I even suggesting that any directed cause-and-effect relationship exists. Rather I acknowledge the greater likelihood of spontaneous emergence of divisions arising within society that are then exploited by individuals and groups according to their circumstances (though always in concurrence with the other tenets) through the assertion of power in various forms - including ruthless domination over others, ownership of property and other assets, networks of relationships, etc. 

 

The Self-Attribution Fallacy

If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1 per cent make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren’t responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.

The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers, across eight years. He found that the consistency of their performance was zero. The results resembled what you would expect from a dice-rolling contest, not a game of skill. Those who received the biggest bonuses had simply got lucky.

Such results have been widely replicated. They show that traders and fund managers across Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out they blanked him. The illusion of skill … is deeply ingrained in their culture.

 So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgement, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?

In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses. They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses’s scores either matched or exceeded those of the patients. In fact on these criteria they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.

The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.

In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded. Reading their work, it seems to me that if you have psychopathic tendencies and are born to a poor family you’re likely to go to prison. If you have psychopathic tendencies and are born to a rich family you’re likely to go to business school.

This is not to suggest that all executives are psychopaths. It is to suggest that the economy has been rewarding the wrong skills. As the bosses have shaken off the trade unions and captured both regulators and tax authorities, the distinction between the productive and rentier upper classes has broken down. CEOs now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they’ve captured than oil sheikhs.

The rest of us are invited, by governments and by fawning interviews in the press, to subscribe to their myth of election: the belief that they are the chosen ones, possessed of superhuman talents. The very rich are often described as wealth creators. But they have preyed upon the earth’s natural wealth and their workers’ labour and creativity, impoverishing both people and planet. Now they have almost bankrupted us. The wealth creators of neoliberal mythology are some of the most effective wealth destroyers the world has ever seen.

What has happened over the past 30 years is the capture of the world’s common treasury by a handful of people, assisted by neoliberal policies which were first imposed on rich nations by Thatcher and Reagan. I am now going to bombard you with figures. I’m sorry about that, but these numbers need to be tattoed on our minds. Between 1947 and 1979, productivity in the US rose by 119 per cent, while the income of the bottom fifth of the population rose by 122 per cent. But between 1979 and 2009, productivity rose by 80 per cent, while the income of the bottom fifth fell by 4 per cent. In roughly the same period, the income of the top 1 per cent rose by 270 per cent.

In the UK, the money earned by the poorest tenth fell by 12 per cent between 1999 and 2009, while the money made by the richest 10 per cent rose by 37 per cent. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009.

In his book The Haves and the Have Nots, Branko Milanovic tries to discover who was the richest person who has ever lived. Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots’ labour a rich man could buy. It appears that the richest man to have lived in the past 2000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him 14 times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.

Until recently, we were mesmerised by the bosses’ self-attribution. Their acolytes, in academia, the media, think tanks and government, created an extensive infrastructure of junk economics and flattery to justify their seizure of other people’s wealth. So immersed in this nonsense did we become that we seldom challenged its veracity.

This is now changing. On Sunday evening I witnessed a remarkable thing: a debate on the steps of St Paul’s Cathedral between Stuart Fraser, chairman of the Corporation of the City of London, another official from the Corporation, the turbulent priest Father William Taylor, John Christensen of the Tax Justice Network and the people of Occupy London. It had something of the flavour of the Putney debates of 1647. For the first time in decades – and all credit to the Corporation officials for turning up – financial power was obliged to answer directly to the people.

It felt like history being made. The undeserving rich are now in the frame, and the rest of us want our money back.

This article was written by George Monbiot and reproduced here with his permission. The Self-Attribution Fallacy was first published in The Guardian on 7th November 2011 (see www.guardian.co.uk). George's blogs are online at www.monbiot.com

 

 

Disrupting How it Was

Unusually I have settled down to watch the evening news on television. I am astonished (and yet not) by the way the Gaddafi regime has simply crumpled under the force of people power. It sets my imagination racing as to what might be next in this unpredictable and rapid escalation of social unrest.

I am also fascinated by some of the more conservative reactions we are witnessing to what are essentially peaceful civic protests. Evidently some powerful interests, including once-venerated institutions and current power brokers, feel sufficiently threatened to suppress outbreaks of pure democracy such as these, particularly when they occur outside the established norms. We will return to this idea shortly.

In a recent speech Ban Ki-Moon, Secretary-General of the United Nations (UN), advanced what he called five global imperatives for the future of humanity. In brief they were:

1. Sustainable development (including lifting people out of poverty and advancing economic growth)
2. Prevention of conflict as a framework for international cooperation
3. Building a safer and more secure world by standing up for democracy, human rights and peace
4. Supporting countries in transition
5. Working with and for women and young people.

He also intimated, probably justifiably from his perspective given the hubris and empirical habits of some Western nations, that this was an opportunity for all countries to set aside their differences and narrow, short-term interests, in order to cooperate in addressing humanity’s long-term needs.

Anyone who knows the man would immediately appreciate the sincerity behind Ban Ki-Moon’s proposed forging of a common agenda aimed at ensuring peace, prosperity, freedom and justice. On the surface these five imperatives appear to be a consistent, well-intentioned vision, possessing all the gravitas one expects from a person in his position.

However behind the integrity of one individual there skulks a lumbering behemoth, an international agency in utter disarray and diminishing relevance. Looking closely at the language used in Ban Ki-Moon's statement I am inclined to challenge whether such imperatives are a genuine plea for a coherent societal metamorphosis - or just another of those ill-fated public-relations exercises that appear and evaporate so frequently from within our various political and diplomatic theatres.

Personally I doubt such grandiose aims can achieve anything much, at least within the framework of global officialdom; certainly no more nor less than has already been tried with other initiatives like the Millennium Goals, for example. But on what basis can I possibly make such a claim?

I am puzzled and constantly irked by five recursive issues:

1. Is sustainable development really possible if it includes both conventional approaches to economic growth as well as saving the natural environment? If not should we be designing new systems with new intentions, new priorities and a new language?
2. Is democracy as it is currently conceived and practised the only philosophy capable of building a safer and more secure world? Or are we at risk of using democracy as a virtuous substitute for something far more viable?
3. If these imperatives genuinely offer the opportunity to shape the world of tomorrow by the decisions we take today, what is it about the decisions we are currently taking that have failed to create the world we most desire?
4. If one necessity really is to liberate women and young people why is that demographic not already sufficiently represented in the forums convened for making the decisions that will create the future?
5. Are those individuals and institutions currently in positions of influence the right people and institutions to instigate and lead change? In that context is the UN the most appropriate agency to be tackling societal transformation? If not what alternatives should we be crafting?

Naturally all of these questions demand comprehensive consideration and plausible answers. There are undoubtedly numerous, equally valid, strategic questions one could pose. But for me the crux of the issue is to be found in my fifth and final question. Those responsible for making today’s decisions are the same people in the same institutions who designed the world-system to function as it does. They populate NATO, the UN and the G20. Imagining these same individuals and institutions can design a system capable of achieving such different outcomes is tantamount to believing in the tooth fairy.

But let us review the situation, keeping in mind reality and truth have become mutant hybrids in this continuously morphing world. In order to contemplate the contextual implications of my question, we must set modern society, in all its various dimensions, against the broader sweep of our civilisation’s past 2,000 years. That is not an easy thing to do. Individual and collective realities are determined and shaped by our “window” (weltenschaung) on a world that is so dynamically complex it is almost impossible to hit the “pause” button on any aspect of it long enough for it to become clearer to oneself, let alone others. To make matters even more complicated every discrete “window on the world” comprises implicit yet unique sets of filters driven by instinct, volition and transitory emotions.

For example, if you are the kind of person that trusts the boundaries drawn unerringly on maps, if you believe political ideologies endure in abstract purity, if you imagine that national agencies still shape international diplomacy and that elected representatives control a nation’s destiny, then you may find this question offensive or simply crazy. What “was” factual in the past, you might argue, remains intact today.

If however, you believe like me, that no two nations are alike (some prosperous and in decline, others impoverished yet making astonishing advances; some vulnerable to the forces of change, others inexplicably resilient; a few (such as the US) posing as empires alongside empires (China) posing as nations; city states such as the Vatican and Singapore; countries in name only like England, Scotland and Puerto Rico; and even a territory such as Palestine that has no universally-agreed state mandate as yet) and that, as a consequence, it is all but impossible to propose an all-encompassing definition of the nation state, then you could be forgiven for perceiving current globalised conditions as being closer to those that existed during the Middle Ages. Albeit on acid or cocaine! In that context my question would be entirely relevant.

But let us play with this notion and bring these two contrasting weltenschaung together. Viewed through a polyocular lens contemporary society is incredibly messy, yet also astonishingly abundant and diverse. Power functions asymmetrically in different ways via multipolar interactions that constantly wax and wane. A few transnational corporations are wealtheir than many nations, their entangled relationships an unseen manifestation of contemporary power. Even pluralistic social networks and online activists can wield considerably more political influence than national governments these days, which find themselves trapped in unending antiphonic modes of reaction and readjustment. Unlikely conjunctions of public and private interests generate novel yet potent forms of innovation. Entrepreneurial billionaires influence the agendas of social enterprise and fund others directly… This topsy-turvy world exists like a thinly-disguised membrane over the more Matrix-like world of competitive global trade and international policy making with which we are more familiar. But that is not to imply that it does not exist.

In this extraordinary multifaceted global milieu conventional borders and standard taxonomies have become almost meaningless in some contexts - yet remain immutable frameworks in others. Multinational organisations and universal governance structures such as exist within the UN can appear neutered in such chaos. What have been proven to work in situations of dynamic complexity are: (i) coherent whole-of-system designs with intimate alignment between the various components within the system (ii) greater levels of connectivity and collaboration at a local level (ii) more fluid, temporary and adaptive policies and activities, (iii) much less formality so as to increase the speed of learning and change. And these factors, of course, are precisely why I question whether the UN (or any equivalent agency) is responsive and adaptive enough to elicit rapid universal cooperation at scale.

Having described the incredibly convoluted nature of the context in which we find ourselves (that is the contemporary human condition) we can now bring greater degrees of granularity to my question as it concerns the nation state.

Actually an agreed definition of the term nation state remains elusive. Let us suppose the state is the government and its institutions, while the nation is the summation of the relationships we have with others who live in close cultural, ethnic, linguistic or geographical proximity to us and with whom we choose to identify. The nation state is the marriage of these two (partly discrete yet intimately braided) ideas.

Now let us consider how, over the course of the past 65 years at least, national devices for homogeneity (via partisan ceremonies and rites) versus statist mechanisms for coordination (via civic and political engagement) plus control (via protectionist legislation and administration) have often subverted the potential for these two ideas to harmonise in ways that would enable continuing relevance for the nation state as a mechanism of viable governance.

Over the past two decades there has been an explosion of social activism aimed at overturning one or more aspects of the status quo. We have witnessed extremes of nationalistic fervour (US patriotism after 9/11) and brutal oppression (Libya under the Gaddafi regime). We have watched the Burmese generals edge towards openness as their activities came under critical scrutiny, while other militaristic regimes have entrenched their hold on power still further in a myopic yet ultimately futile resistance. Online protest websites such as GetUp! have become commonplace. Meanwhile a growing tide of civic upheaval in mainland China is balanced by the emergence of extreme right-wing fundamentalism in the US.

Where there is oppression of any kind people will eventually rebel. The unprecedented social and financial interconnectedness of our times (facilitated in large part by new digital media) allows humanity as a whole to express outrage at the many blatant inequities and injustices perpetuated within our current economic and political systems. At its source, the universal cry for renewal as expressed through movements like Occupy Wall Street or contrarian online information sources such as Alternet (for example) can be compared to the widespread civic disruption spreading like a bush fire across the Arab world. There are at least four pertinent system-wide characteristics to note:

1. Civic disruption, wherever it has occurred, has generally been greeted by jubilation from a surprisingly broad range of citizens - irrespective of education, conventional allegiances or supposed embedded differences (such as ethnicity, religion and gender)
2. Traditional rules of organisation, intervention, diplomacy and negotiation (including making concrete demands and statements of objectives for example) are being avoided, wisely I believe as instruments such as these would merely accord further legitimacy to the ruling elites
3. In each case, sooner or later, the predictable response of the state has been to repress further civil disobedience by deploying police or military force to "end" the protest
4. Civic unrest (the overt strategy of a universal movement resisting categorization or a fixed identity but demanding whole-system change) is escalating. It is not going away!

In these acts of subversion or solidarity (depending upon one's point of view) the supposed raison d’etre of the nation state is being shaken to the core.

The UN currently comprises 193 member states. The invention of the modern sovereign nation in or around the 19^th century was designed (and further refined within the framework of globalisation) as a mechanism for protecting discrete interests and furthering explicit agendas - most often those of the elite within each nation. Because of this history it should come as no surprise that the inclination of the nation state apparatus is to compete with other nations (in ideas, politics, trade, commerce, crime, religion etc.) rather than to cooperate. We have seen precisely this predisposition play out during COP15 meeting in Denmark where the overwhelming scale of the task to overcome nation state and sectoral interests dashed any hope that we could craft a simple, universally-binding, consensus to lower carbon-dioxide emissions and thus combat climate change. The schemes some governments are pushing are still grounded in obsolete notions of scarcity, competition and economic growth.

While one could argue that this competitive inclination of the state served society well enough during the industrial age, contributing enormously to productive efficiencies and the creation of individual wealth, it is hardly an energising idea for our times. Recent events and new technologies have exposed its inability to adjust to contemporary realities fast enough. It has grown corrupt, stale and lethargic.

In the immediate aftermath of World War II the state’s interests started to align more with the motives of wealthy industrialists and corporations than with the needs of ordinary citizens. The promise of protecting and nurturing civic life and human rights (through the provision of education, employment, health and security) started to unravel and, as that occurred, the gap between the rich and the poor widened exponentially. Now the state found itself liable for a range of escalating inequities that became even more glaringly obvious with the advent of new information and communications technologies. Today, for example, it is commonplace for CEOs of major corporations to earn salaries many times that of their employees. Investment bankers who do not directly contribute to the productive economy take home millions of dollars each year in bonuses. Yet (until recently at least) we have quiescently accepted that non-sensical, obscene reality as a necessary evil. It is not!

Against the broader background of societal change, old institutions, their stewards and recipients, will whither and die - much more rapidly if they cannot shift course to reinvent inbred assumptions and transcend past habits. While the UN has had some limited success with cooperative ventures in certain diplomatic theatres, (peacekeeping for example) the degree of collaboration required to create a worldwide common agenda of the form Ban Ki-Moon envisages is simply unprecedented. The assumptions and habits of this massive organisation are gravitational in their inability to adapt quickly. Different or more aspirational goals are probably out of reach for the organisation at this juncture.

But while I harbour serious misgivings that the UN is an appropriate forum for whole-system change, the fact is no other formally-instituted forum currently exists that has sufficient credibility (and thence buy-in) from the world’s citizens. That is also the reason we are going to see an increasing number and intensity of insurgencies and demonstrations around the world. In that regard all eyes must now be on Syria, Yemen, Bahrain... In the future it might well be the US or China - for nothing and nobody is immune when revolutions take hold.

The exciting prospect such revolutions open up is for the emergence of new kinds of imagined communities that are at once more strategically appropriate and systemically viable for the issues humanity is needing to confront. The greatest danger is that we will avoid our destiny, repeating history and failing to learn from vital lessons regarding human nature under stress.

The UN was originally conceived and established to help sovereign states deal with distinct problems for which it had conspicuous (indeed obvious) solutions. It now finds itself increasingly out-of-touch in a world-system experiencing cascading organisational collapse. Indeed even the notion of a coherent international community seems more and more antiquated in a multi-polar universe where a variety of influential hubs, private corporations, fluid networks and gated communities coexist in a hyper-complex ecosystem. The world map of circumscribed geographies no longer accurately represents this fragmented reality. In this environment the very concept of the nation state is under threat – unless it can revitalise its penchant for competition in a manner that targets global issues (especially those identified by Ban Ki-Moon) rather than traditional national rivalries.

Meanwhile, weighed down by bureaucratic inertia, home to technocratic hordes more intent on setting targets and establishing new agencies than resolving complex issues or transforming society's relationship with itself, the UN exists because it does - not because it actually does anything transformational. Faced with wickedly complex issues in an increasingly borderless world (and largely incapable of perceiving the links in this world-system) the latest tendency has been to proclaim every issue - including food, energy, climate, population, health, terrorism and poverty - a matter of international security. This is a great ploy for fund-raising but not very useful for resolving complex, multidisciplinary dilemmas.

At a time when the UN is struggling to find its role in this messy, fracturing world, where no two states are the same and more diverse modes of governance (and indeed democracy) are emerging across all levels of society, Ban Ki-Moon’s task is not an enviable one. Of course it is always easy to find fault with a list such as his. However I suspect not much thought has been given to the implicit assumptions behind these imperatives nor, indeed, what it will take that is contrary to what is already being done – by the UN and similar bodies.

The greatest danger always is that the usual suspects will continue to do what they have always done, perhaps with more enthusiasm or resources than before, expecting that the results will be different. Or, if I was more cynical, that they will appear to be trying to change things when their actual motivation is to maintain the status quo. This concern applies equally to aurocrats and dicatators as it does to democratically-elected representatives. Indeed the leaders of the so-called "free" world are as culpable as those anywhere. That is the more disturbing concern.

Thinking for a Change

The dilemmas facing humanity have become so complex they can only be resolved by comprehending the situation from a higher level of collective consciousness. Once that new state of awareness has been reached, however, we will be able to choose a profoundly different evolutionary path to that recently pursued with such self-interest and short-sighted enthusiasm.

Disruptions to the way planet Earth works, particularly those induced by the ingrained habits of seven billion people all aspiring to similar levels of affluence, can no longer be ignored. At some stage myths must give way to truths if disaster is to be averted.

As Paul Gilding points out so eloquently in his recent book The Great Disruption there is plenty to be positive about. But only if we think differently and more deeply about the human condition and rise above those beliefs and practices that have become an impediment to genuine progress.

Three priorities have surfaced from the fog of scientific evidence, propaganda (and sheer mischief) surrounding issues like climate change. First, policies aimed at putting a stop to unsustainable activities must be scaled up. Second, smart technologies must be applied to the underlying causes of our problems rather than to their symptoms. Third, we must reframe our thinking to embody entirely new possibilities for reimagining what we do (that is both socially desirable and economically feasible) and how we do it.

These priorities are as relevant for business as they are for governments and civil society. The time has long since passed when business could simply mind its own business. Indeed many of the institutions and practices conceived within the 19^th century model of industrial economism, a model that initially brought such affluence to so many, appear now to be steering us down a path to ruin. I am aware that it is impossible to prove such a thesis. But nor do I intend waiting until I have evidence I am correct.

There are many alternatives available to us, ranging from cleaner, adaptive industries and smarter, benign practices to fewer toxic raw materials and biomimicry as a model for organizing and innovating. Most of these alternatives are preferable to what currently exists. However we need to let go of old prejudices and fears that the future will inevitably be worse than the past if such new options are to be implemented quickly. This is the prime lesson informing Gilding’s thesis.

All of which is easier said than done of course. Tackling any one of these imperatives would be difficult enough. Finding ways to adopt all three presents a formidable challenge, not least because the customary ways for administering human affairs have shifted responsibilities to others. Deliberately reframing our thinking to escape the gravitational pull of the past will demand an expansive emancipation of mind, liberation from obsolete ideologies and dogma, and a collective, progressive and audacious awakening to higher levels of consciousness concerning our shared purpose.

Changing behavioural patterns is relatively easy. We do it all the time. Government policies, corporate marketing and public relations campaigns all effectively play on our desires or fears in order to manipulate how we behave. But whereas most present-day marketing efforts are commercially orientated, using psychology to escalate consumerism - even where prosperity without economic growth would be a more sane goal in today’s circumstances - we are failing to use those same mechanisms to endorse the reduction, re-use and recycling of our most precious resources. Clearly much has still to be done even in that regard. But changing our underlying beliefs is far more difficult.

Ultimately though, permanent behavioural change will stem from the structural redesign of our most life-critical systems – particularly those in which human beings interface with nature and with each other. It is often forgotten that all systems are perfectly designed to get the results they get. That is why natural systems remain so resilient.

The problem is that none of our social systems have been designed to consciously evolve. We are, quite literally, trapped in the past. That is precisely why our thinking has to change. In effect we must become architects of our own evolution rather than pawns in a game we assume to be controlled by others.

The inevitable transition to cleaner, low-carbon sources of energy (like solar and hydrogen for example) together with the use of smarter, more efficient, distributed networks that reduce the amount of energy we use, will eventually enable the complete eradication of toxic fuels. At the same time the industries spawned from this transition will generate untold wealth. Designing a sustainable and secure food system capable of providing nourishment for seven billion people or more is also desirable – and readily achievable. Re-engineering the fundamentals of the global economy to eradicate waste, promote equity and protect the resources we all share is also realistic.

But there is a catch. Before the trapeze artist leaps into space he must step off the platform on which he is standing. Systemic reinventions of this nature requires a strategic, emotional and “transcendent” commitment to the new story in addition to an appreciation of systemic design that is rare, so devoid of integral intelligence has our conditioning become.

In terms of systemic design and renewal there are two crucial keys to success. Both rely on our capacity and willingness to reframe our notions about what really matters, to boldly step into new ways of knowing and being, and to openly engage with others in that metamorphosis.

The first key is the ability to imagine and communicate an alternative social “meme” (together with compelling narratives) that supersedes more utilitarian goals – at least encompassing happiness, love and compassion in healthier balance with material wealth and well-being. This key unlocks hope and restores fairness. The second key is the ability to elude the curse of knowledge that traps us in an industrial past and allows us to make significantly different choices about the future. This key unlocks a sense of new possibilities and restores trust.

Unfettering an economy based on value exchange in the context of abundance (rather than one of compounding debt in a framework of financial scarcity, for example) could emancipate new forms of enterprise employing many more people than today’s sunset industries. Using renewable sources of energy to establish industrial ecologies that transform and adapt to a warming planet is far wiser than defending the past in an attempt to protect that which could destroy us. [Industry lobbyists take note!] Likewise, accessing peer-to-peer digital media to invite the collective expression of policies and even constitutions (instead of putting our faith in the increasingly detached whims of a few elected representatives) might provide a platform for a far more democratic and empathic society. And so on…

Such strategic choices become possible because of the most fundamental shift in human history: the emergence of a mode of inventiveness (comprising intelligence, foresight and wisdom) that allows new ways of being, thinking and doing to be envisaged and, through cooperation and invention, to be attained.

No doubt humanity can flourish. But only if we learn to transcend obsolete beliefs and fears to engage in deeper conversations that (i) include all salient features of the system we desire to create, (ii) anticipate the intended and unintended consequences of those desires, and (iii) lift the human spirit out of the mire of believing the past cannot be surpassed and that our situation is dire and will only get worse.

In facing a range of complex dilemmas it does us no good to continue to deny the truth. The global outlook is tense. Natural disasters, the spiraling cost of food, geo-political conflict and the collapse of natural systems all seem to herald an end-game in which the extinction of our species is conceivable. We are witness to cascading failures in the systems that support life. Family incomes are being squeezed. We try to do more with less. Politicians focus on trivia. Simple things seem not to work as well as they once did. We fret about how best to survive the present even though we care passionately about the planet and our children’s future.

Yet the solution is in our own hands. Burying our heads in the sand and ignoring reality will not help. Quarantining ourselves from reality we begin to lose the thread of affiliation that otherwise nourishes and sustains us. We cannot isolate ourselves from the truth however hard we might try. It only aggravates our anxieties.

Over a century ago an ambitious geo-engineering project was implemented. Responding to a major planetary issue of the time two German scientists, Haber and Bosch, made nitrogen-rich fertilizer available to farmers, thus significantly increasing the annual amount of nitrogen fixed on land. The unintended consequences were catastrophic: the human population mushroomed exponentially.

But having created the problem we must live with it. By participating in the actuality of our predicament we can restore hope while exploring practical pathways into the future. Our starting point is not the changing of a light bulb nor the purchasing of a more fuel-efficient car. On the contrary renewal begins with a sense of responsibility to each other and to the planet. Re-envisaging a new purpose for humanity must now become our prime goal. We must think big for a change.

A Tale of Death & Resurrection

As I grow older, more tolerant of a variety of cultural mindsets, more accepting of diverse views, faiths and belief systems, I detect an alternative wisdom reaching out to me with a persistence that has become irresistible. This wisdom is at once profoundly unsettling and intensely reassuring. Indeed such ambiguity makes it tough establishing which of these effects is the more authentic. An unresolved tension between them seems both palpable and necessary – a finely-poised attractor between contradictory forces that redefines human purpose and meaning.

I cannot lay claim to this being a new wisdom, though it manifests as such to me. I am deeply aware that human empathy and a benevolent ethos arise from a common impulse, innately grasped by many indigenous groups, for example, and which I will refer to as communion for simplicity’s sake, and that contemporary science as well as various social experiments have validated its critical importance to the future of the human species.

This wisdom is hard for me to fully digest and even more difficult to describe; partly because it emanates from emotionally charged convictions I find awkward expressing but also because of its relatively ineffable nature - a genesis arising not from Cartesian logic or rationalism but from a common bond illuminating and reflecting the sacredness of life.

Traumatic incidents during childhood (my father deserted me and my mother when I was eight years old and the suffering of losing the person I idolized most still intrudes upon my life in so many subtle ways) led to my avoiding any expression of intimacy with others lest these were misinterpreted, exposed my vulnerability, or were seen as a sign of weakness. But no longer. For some considerable time I have felt the compulsion to speak my mind. I have been branded a heretic, zealot, contrarian, amateur and an outlier. I suspect none of these were meant as compliments.

The world into which I was born, immediately following the second World War, was one of a strange and disquieting serenity – at least to a young boy growing up in rural England. After a century or more of unbridled nationalism and six years of bloody conflict across Europe and Asia a feeling of cautious optimism prevailed. Naturally life was still tough for many, including my family. We were very poor. In England at the time there was food rationing and recovery was slow at first. Gradually, however, a new normality emerged. I mostly recall unpretentious pleasures: train spotting at Uckfield railway station, harvest picnics in the fields at summer’s end, carpets of bluebells in the woodlands, gathering mushrooms in the misty dawn, cricket matches on the recreation ground, charcoal burners in the woods, itinerant gypsies in their brightly painted caravans, growing currants, raspberries and strawberries in our allotment and waving to the Breton garlic sellers as they cycled through the village...

In 1945 there were fewer than 2 billion people on planet Earth. Jubilation of having achieved victory in a war that shattered the ceremony of innocence dominated newspaper headlines. Confidence was at an all time high. There were scars to get over, their recovery assisted by the new movies celebrating heroics and creating myths that willingly distorted the truth. The futility and savagery of war received scant attention. A few people started to protest over the threat of a nuclear Armageddon but there was no mention of global warming, climate change, population growth, unsustainable consumer trends, endemic poverty or state terrorism. Early warning signals of an impending disaster went unnoticed. The future looked bright.

The distraction provided by wealth creation and the acquisition of goods grew exponentially. Affluent parish elders distracted ordinary men and women by organizing coach excursions to Brighton or Bognor Regis for those who had no other means of taking a holiday. Meanwhile big business, backed by a resurgent advertising industry, turned its attention to manipulating a gullible public and facilitating an explosion of productivity.

The stage was set although few people recognized this at the time. Distraction came in the form of peace. And possessions. From a situation where even sugar and meat were in short supply we rapidly moved into a situation where literally anything could be manufactured and bought. Televisions, automobiles, fashionable clothes, exotic fruit, vacations and experiences. Tools and gadgets to fulfill every possible desire began to saturate the market.

To be well-to-do back then meant owning a farm, small business, or having a car and being able to commute to the nearest town. School, too, seemed pleasurably humdrum. All the world’s problems had been solved. I sat in geography classes facing maps of the world where most countries, or so it seemed, were colored pink. The pink of the British Empire upon which the sun never set. A world in which anything now seemed possible and where certainty insinuated itself into every crack and crevice of community life.

Of course that world no longer exists – if it ever did. For the most part it was a comforting illusion. But one issue now dominates the future of human progress – an existential and potentially disastrous issue that few people saw coming. A global population fast approaching seven billion inhabitants, most with aspirations of increasing material wealth based on assumptions of continuing economic growth, had to be set against a progressively volatile context in which deteriorating environmental conditions, higher food costs, less available energy, escalating socio-economic and geopolitical failures and iniquitous gaps between the rich and the poor formed a potentially catastrophic fusion.

Today the situation is clear. The condition we created, deliberately and without conscience, is forcing us to face a new destiny. It now exposes the vulnerability of our thinking and points to the need to embrace an appreciative communion of interconnectedness and cooperation in stark contrast to more conventional mores and expectations (habitually driven by greed, envy, scarcity, competition and fear) resulting from the globalized system of industrial economism.

Seeing a new reality demands both foresight and conviction around a renewed purpose and intent. Accepting this as essential to human progress is tough enough. Redesigning society in order to practice a more appreciative collective wisdom is an entirely different proposition. Transformation and reinvention are pivotal as is the acceptance of physical constraints and finite natural resources. This, in turn, means relinquishing many of the assumptions we have long held regarding what is fundamental to human prosperity and what is not, what value we should place on economic factors in comparison with health, relationships, cultural well-being and contentment, and what is viable praxis rather than simply foolish habit.

So how does this wisdom of communion manifest? I can only speak for myself. I am more conscious of patterns, more able to map connections between scraps of information that were previously disparate, that seemed relatively unimportant at the time, or that somehow I simply convinced myself to discount. I recognize that sets me apart from many others, although I sense a growing affiliation around such wisdom.

Accordingly I and those of a similar outlook and persuasion are becoming more attuned to a reality (and its consequences) that many others seem unready to accept, unable to perceive or simply shy away from for fear of its more confronting implications. It is as though a veil is suspended between them and the improbable reality of a future existence in which it becomes both possible and desirable for all living beings to share equally in Earth’s available resources in a sufficient, altruistic and loving manner.

In truth my gradual awakening to an alternative wisdom, enabled by the thinking of new friends as much as personal reflection, has become a burden to me as well as a privilege I feel bound to honor. It is also a challenge I cannot avoid. As the birth of my new son, a gift in every sense of that word, draws closer I am conscious of an expanded sense of self and my purpose in life. This expanded consciousness goes far beyond anything I have previously experienced. It has transitioned me into a more empathetic and loving state uniting emotion with cognition.

The truth is never enough of course. Immunity to the reality of the human condition (through the spin and widespread deception of a vigorous public relations machine) is so inculcated in society it is easy to live an illusion and ignore contradictory evidence. But as each day reveals more of a truth that will determine our fate on this planet, I also feel more and more frustrated by the status quo and a greater compulsion to do something (anything) to disrupt thinking-as-usual.

In my view it ultimately comes down to fairness and morality. The critical domain requiring our unconditional attention comprises those established patterns of globalized production, distribution and consumption that have become utterly unsustainable - given the changing context. The mode of economic thought we take for granted, indeed blindly insist on pursuing, is enshrined within this exploitative system. At its extreme it is epitomized by the US model of capitalism. This model, so easily corrupted as we have recently observed, is an expression of rules based upon assumptions that are deeply flawed though seductive, nevertheless, in the overall scheme of things: namely that scarcity and competition drive human behaviour and that continued economic growth is necessary in order to maintain the social order.

Those last three words the social order are crucial to any proper comprehension of the situation we are facing. The rules as applied are crafted quite deliberately to benefit a small sector of society - namely the wealthiest individuals, corporations and nation states. It is a relentlessly iterative and untenable formula: by fostering competition for business and trade between countries, corporations pay lower taxes and produce more goods for consumption on world markets. Thus economic growth drives material wealth simultaneously mesmerizing entire communities and resulting in an unprecedented psychological lock-in to excess, greed and waste. Coincidentally it also destroys many of the social, cultural, environmental and spiritual conditions vital for human contentment, health and well-being while undermining the rights of workers and marginalizing the poor who remain slaves to this system.

We are only just awakening to the veracity of our predicament. Since the 1920’s a well-oiled public relations machinery, arising from an unholy alliance between governments, the media and corporations, and exploiting Freud’s research into our psychological motivations, has manipulated public opinion, keeping us compliant customers instead of alert citizens. In the words of Walter Lippmann it has “manufactured consent” and it has done this extremely efficiently by playing to our unconscious desires.

Sadly the mass production and consumption of goods we are taught to want but rarely need has instigated the crises we see all around us today – from the rising cost of food, to ethnic conflicts, the provision of energy from finite resources, the impact of a global monetocracy upon indebted states and individuals, the despoiling of the natural environment and the criminal practices of dictators, autocrats and unprincipled politicians and industrialists.

The need to speak out has become overwhelming. A new narrative is required; one of hope and happiness rather than hate and humiliation. Imagine what the world might look like if the rules were designed differently. If, instead of competing on the basis of scarcity, we were to encourage collaboration to generate new knowledge, grow uncommon capabilities and share skills within a spirit of abundance and self-sufficiency. Of course competition would still exist, but in a transformed setting governments and corporations alike would compete in providing economic and socio-political security, low taxes on ordinary wage earners, a decent education and a healthy and sustainable environment.

Most of today’s grassroots social activists and young entrepreneurs are desirous of such a shift. Furthermore they now possess infinitely more computing power on their laptops and iPhones than the entire US government had at the time of the moon landing. All we actually require is to generate trust, unity and a sophisticated appreciation of how best to liberate this new moral energy of communion in order to achieve success.

If collective power can be wielded with empathy and integrity, with coherence and conviction, corrupt and unsustainable practices will be dealt a death blow and elected officials will be kept honest. We will not need to jump through hoops in seeking common ground with those that currently ride roughshod over our humanity or despoil nature in pursuing their own selfish ends. We can change the world. I know it. You know it. So what is stopping us?

Congress of the New Middle Ages

The last year or two have witnessed no shortage of silver-bullet rhetoric to deal with the world’s most pressing challenges. A global economic “G-2” of the U.S. and China was proposed to sort out the imbalances between savings and deficit countries; the United Nations General Assembly devoted several days in September to the “Millennium Development Goals” that address hunger, poverty, and other socio-economic ills; grand summits were held in Copenhagen and Cancun to craft a global climate treaty; and experts spoke of a “Grand Bargain” to freeze Iran’s nuclear program.

It should come as no surprise that all of these attempts to solve global problems with the stroke of a pen have proven stillborn. A new “Concert of Powers” à la 19^th-century Europe, another “San Francisco moment” recreating the 1945 founding of the United Nations, or even a “new Bretton Woods” financial summit is not going to deliver geopolitical stability and worldwide prosperity.

Such antiquated thinking is a complacent vestige of a Western-led world. Even more fundamentally, it is a legacy of a Westphalian, state-centric world. That too has ended. We have entered a new Middle Ages: an era that most resembles the pre-Westphalian era of nearly 1,000 years ago. That was the period of history when the East was as powerful (if not more so) than the West, cities mattered more than nations, powerful dynasties and trading companies were engines of growth and innovation, private mercenaries fought in all wars, religious crusades shaped inter-cultural relations, and new trade routes over land and sea forged the world’s first (nearly) global economy.

What did diplomacy look like in the Middle Ages? First, it was characterized by complex multi-level relations: the Pope and his emissaries, Germanic duchies and vassal territories, Italian city-states like Milan and Venice, and great universities from Oxford to Bologna. Second, it was informal. For most of history, the chief criteria for diplomatic inclusion have been status and prestige, not legal sovereignty- which only came into being in the 17^th century. The formalized, bureaucratized foreign ministry as we know it today is a legacy of French nobleman Cardinal de Richelieu, who as an adviser in the court of King Louis XIII established a Ministry of External Affairs in 1626 and dispatched the most extensive professional diplomatic corps in Europe. As patriotism ascended, freelance diplomacy was curtailed.

But diplomacy, as the professional joke goes, is the second oldest profession. It long pre-dates the state, and will continue to thrive even as new ways of organizing people, territory, resources and ideologies emerge. Because diplomacy takes place amongst anyone who is someone, it is our best window into the changing structure and patterns of relations among the world’s leading authorities.

The best place to view what model of diplomacy lies before us in the New Middle Ages is the Swiss enclave of Davos, where each January the planet’s most influential heads of state, CEOs, mayors, religious leaders, NGO heads, university presidents, celebrities and artists flock for the annual meeting of the World Economic Forum (WEF), an event that over the past four decades has established itself as what “60 Minutes” last year dubbed “the most important meeting on Earth.” What CBS’s flagship program discovered was that this gathering of “capitalists, globalists, and futurists” seems to work precisely because it is neither formal nor official.

Davos has nothing to do with sovereignty and everything to do with authority: it’s peer-to-peer among anybody who’s somebody. Where else do hundreds of Fortune 500 CEOs, American cabinet secretaries, the mayor of London, prime minister of Catalonia, chairman of China’s Export-Import Bank, investor-statesmen like George Soros, rock-star activists like Bono, and billionaire hybrid executive philanthropists like Bill Gates speak directly and honestly, and form new ventures on the spot?

Compared to the modern inter-state diplomatic system, Davos represents anti-diplomacy—and yet it actually reflects the true parameters of global diplomacy today better than the United Nations. The reason is that in our ever more complex diplomatic eco-system, relations among governments represent only one slice of the total picture. Beyond the traditional “public-public” relations of embassies and multilateraism, there are also the “public-private” partnerships sprouting across sectors and issues. Qatar’s natural gas fortunes hinge on its arrangement with Exxon, India’s ability to attract foreign investment is contingent on support from the business magnates who make up the Confederation of Indian Industry (CII), and the alliance of the Gates Foundation, pharmaceutical company Merck, and the government of Botswana saved the country’s population from being wiped out by AIDS, to name just a few of the now literally countless such arrangements flourishing today. The third and often neglected dimension of the new diplomacy is “private-private” interactions which circumvent the state altogether. Think of the Environmental Defense Fund dealing directly with Wal-Mart to cut the company’s overall emissions by 20 million metric tons and install solar panels at 30 new locations. The diplomats at Cancun could only dream of such concrete measures.

All three of these combinations of negotiating partners thrive at Davos and in all WEF activities, which range from mini-Davos-style regional conferences to year-round multi-stakeholder initiatives in public health, climate change, anti-corruption and other areas. The WEF does what no U.N. agency would ever do: allow “coalitions of the willing” to organically “grow and go” - incubating them but also quickly spinning them off into self-sustaining entities; but importantly also letting projects die that fail to attain sufficient support from participants. In this sense the WEF is both a space for convening but also a driver of new agendas.

The WEF has long been a practitioner of today’s newest behavioral economic fad: “nudging”. The WEF’s founder, Swiss-German academic turned businessman Klaus Schwab, first declared a “Spirit of Davos” in 1983, claiming that the WEF annual meeting had become “one of those increasingly rare international events where formality can be dispensed with, where personal contacts can be made, where new ideas can be tried out in complete freedom, where people are aware of the responsibilities involved in belonging to an international community, where we have time to look at really important issues rather than everyday pressures.” It is, of course, an explicit homage to the mid-1920s “spirit of Locarno,” which urged the normalization of relations with Germany and its admission to the League of Nations. Like Locarno, Davos is not an institution but a place where agreements can be made in the hope of influencing subsequent decisions and events. The WEF has been ahead of the curve in promoting some of the signature issues of our time—from broadening the understanding of the ingredients of economic competitiveness through its signature reports than began in the 1970s to promoting good corporate citizenship years before anti-globalization protesters stormed Montreal and Seattle - yet rarely does it get any credit.

The credit always goes to the growing ranks of “Davos Man,” and often-misquoted term coined by Samuel Huntington in 1996 to denote an increasingly rootless global elite caste. But not everyone viewed the emergence of “Davos Man” as a bad thing. Contrary to the WEF’s reputation as a host for secret, if glamorous, deal-making, the Economist praised “Davos Man” as the necessary antidote to traditional diplomats who seal themselves behind veils of protocol, instead immersing themselves in the latest innovations, technologies and trends, speaking English as their lingua franca, and reinforcing thinking and debate through engaging with the media. Today the WEF has more followers on Twitter than any international organization, and uses Davos to convene “Global Town Halls” with live online participation to debate global priorities.

Surely Davos does not correct the “democracy deficit” afflicting the world’s power structures, but what it does better than any other is correct the “diplomacy deficit,” giving anyone it invites the right to represent themselves without interference or manipulation. NGOs speaking for the world’s oppressed, social entrepreneurs, and all manner of others seeking attention and funding get unobstructed access to the world’s richest companies, governments and philanthropists. Davos is where money and megaphones come together.

The WEF is an interesting proxy for America’s standing in the world as well. At Davos, American leadership isn’t embodied in feeble cabinet members mouthing pre-fab remarks, but through its modern-day Medicis. The Medici family of medieval Florence led the West into the Renaissance by commissioning artists like Michaelangelo, inventors like Leonardo da Vinci, and backing secular rationalists like Machiavelli. Far from being ignorant, aloof, and depraved, America is home to most of the postmodern Medicis, from Bill Gates to Warren Buffett to George Soros. Mr. Gates tackles global scourges through science, Mr. Buffett backs public works through investment, and Mr. Soros attacks autocrats with technology. What the old and new Medicis have in common is a disregard for antiquated notions of public versus private power and a focus on a new hybrid model that unites the best of both spheres. America’s global footprint is far greater than its declining share of global GDP and its increasingly unpopular president. Davos is where it needs to go in greater numbers to regain global respectability.

Davos is reflexively dismissed as “waste of time” by those either not invited or not interested in making contributions to the world beyond their own bottom line. But with the G-20 far less than the sum of its parts and the U.S.-China “G-2” more a nightmare scenario than solution, Davos represents a fluid yet far more resilient division of labor for the world. Nobody can stop the entropy that is diffusing power in the world. Instead, we need more Davos-like congresses to harness all the new power centers, from presidents to entrepreneurs to activists. Indeed, what matters most of all is not what happens at Davos but who copies it. Its demonstration effect is visible already in events ranging from the Clinton Global Initiative to the Saudi Arabia General Investment Authority “Davos in the Desert” conveniently set for the week prior to Davos.

Global governance is not a thing, not a collection of formal institutions, not even a set of treaties. It is a process involving a far wider range of actors than have ever been party to global negotiations before. The sooner we look for new meta-scripts for regulating transnational activities and harnessing global resources to tackle local problems the better. Davos continues to be a good place to start.

This article was written by Parag Khanna. Parag is a senior research fellow at the New America Foundation and author of “How to Run the World: Charting a Course to the Next Renaissance" published this month by Random House.

 

 

Bad Boys

In a previous posting some weeks ago I suggested that the US model of capitalism, fuelled by easy credit, driven by greed, and populated by a deluge of complicated financial products that few people even pretend to understand, is doomed. Many agree with me. It is a simple enough proposition. The evidence is clear. And it appeals to our sense of justice given the mess we are now in. Surely it is in our nature to seek a scapegoat? Knowing who to blame gives rise to a form of indirect emotional compensation.

But it is not as easy as that. The financial crisis that plunged Wall Street into panic and spread so rapidly across the world and into every economy is in many ways symbolic of the very worst of the corporate-dominated political and debt-based economic systems with which we are encumbered. Systems that need urgent reform.

The US is experiencing the effects of the largest leveraged asset bubble in history. It also happens to be the greatest regulatory failure of all time. The leverage institutions like Lehman Brothers, Bear Stearns and Goldman Sachs found acceptable beggars belief. For example, in mid-2007 the average large financial securities firm in the US market was leveraged 27 to 1. That this degree of leverage is unsustainable would be evident, I would have thought, even to an imbecile.

What is more these ambitiously greedy, arrogant and reckless companies were effectively unregulated. When left to their own devices they built a house of cards that was vulnerable to anything other than a simple market correction.

It is useful to examine the suite of corporate behaviours that eventually marked the downfall of these firms as the lessons are bound to inform future regulatory policy.

Influence Unbecoming
Possibly most obvious, in hindsight, was the unjustified, occasionally blatantly dishonest, influence and collusion being used by company executives to acquire and exert political power. Over the past few years this clout was clearly targeted at getting rid of many of the regulations that previously restricted these companies commercial activities.

Regulatory Passivity
The inability and unwillingness of various regulatory agencies to enforce what rules there were, particularly against predatory lending, helped the housing bubble expand. While a few regulators had sought to exert authority over financial derivatives, they were stopped by finance-friendly figures in the Clinton administration and Congress, thus enabling the creation of the credit default swap market. Even Alan Greenspan now concedes that that market (worth $55 trillion in notional value) is imploding in significant part because it was not regulated. This is government negligence on a massive scale.

Short-term Thinking
It was apparent to anyone examining historical trends that the United States was experiencing a housing bubble. Many key individuals in the financial sector, however, had somehow convinced themselves that there was no bubble. Others must have been less myopic, but they either kept quiet or their arguments were dismissed as cautionary mischief. In any case, all the Wall Street players had an incentive not to pay attention to any bubble. They were entirely focused on achieving stratospheric bonuses based on annual results. Even if they had recognised there was a bubble and were convinced the bubble would pop at some stage in the future, they had every incentive to keep making money.

Smoke and Mirrors
In each year between 2005 and 2007 profits in the financial sector were more than 35 per cent of overall US corporate profits. Consulting firms like McKinsey & Co. used this as evidence to suggest that the most profitable and successful industry in corporate history would most probably continue to rake it in – at least doubling already obscene profits and revenues over the coming decade. They saw only upside in being a banker. But instead of serving the real economy the financial sector was taking it over. We had allowed a sector that made nothing of value to take the driver’s seat.

Profits Before Social Utility
Effectively the corporate-driven economy was (and still is) being driven by what can make a profit, rather than what will also serve a social purpose. Although Wall Street hucksters offered elaborate justifications for why exotic financial derivatives, private equity takeovers of firms, securitization and other (so-called) financial innovations helped improve economic efficiency, by and large these financial schemes served no socially useful purpose.

Externalized Costs
Worse, these financial schemes didn't just create money for Wall Street money jocks and their investors. They often made it at the expense of others. The costs of these schemes were foisted onto workers who lost jobs at firms gutted by private equity operators, unpayable loans acquired by homeowners who bought into a bubble market (often made worse by unconscionable lending terms), and now of course the general public.

What Now?
In spite of such serious misdemeanours, what is most instructive about today’s financial meltdown is the inherent instinct of corporations to make money above everything else. Nothing will stop them. Nothing dominates their consciousness as much as profits and returns to shareholders, which they will pursue at any cost. If left to their own worst instincts, many corporations will even destroy themselves as well as the system that nurtures them, in their quest for profits.

In the past we tended to praise such focus. We rewarded CEOs with obscene payments for growing the business irrespective of how many people were thrown out of work. Some great economists even proclaimed that it was the sole responsibility of business to make profits. But the world has changed and there can be no going back.

It is rare that this lesson is so graphically illustrated. It is one the world must quickly learn, if we are to avoid the most serious existential threats our species has yet faced.

I suspect we will see almost immediate changes in the regulations and standards governing capital markets. We will see greater transparency in financial products and reporting. And we will see a new social contract emerge between business, government and consumers.

But the more interesting adjustments are more likely to arise from increased public awareness and activism as well as very different values and norms in society. In that regard I suspect it will not be long before we insist upon more ethical forms of capitalism, the overthrow of practices that reward the wealthy at the expense of the poor; and the deployment of more responsible and equitable forms of producing and distributing the world’s wealth.

I do not perceive this to be an idealistic nor necessarily utopian point of view. On the contrary it is most likely a vital pre-requisite for our own survival.

Myopic Merger Mania

Men in suits get so excited about large mergers. The bigger the better. I think it must have something to do with unlimited testosterone. Personally I have never quite understood what all the excitement is about. But then I’ve never fully comprehended what is so enticing about bags of money as an end in itself. It has little appeal for me. Perhaps such disinterest has been good for my reputation. It means I’ve been able to remain objective when clients have sought my advice on large deals.

Today the business of companies acquiring other companies is big business. But whoever said ‘may you live in exciting times’ didn't necessarily mean that to be a prediction of good things ahead. On the contrary, if you're like most investors, executives or employees it's more of a nuisance. You see, in the corporate world, exciting usually means risky. And there's probably nothing riskier or more prone to failure than merging with another company.

There are basically two kinds of mergers. Those that fail immediately and those that will fail within a five year window. Only 25 per cent of mergers actually work in the long term.

The reasons stare us in the face if we’re prepared to see them. For one thing, to state the obvious, all the excitement is generated around the numbers, large numbers – especially stuff like shareholder value and return on investment. Other significant factors are often ignored – ranging from longer term strategic fit and the harmonisation of discrete cultures, through acquisitive management competencies, to customer profitability. 

How am I defining failure? First it is where the original intentions (and promise) fail to materialise. In other words whatever the companies had in mind that motivated them to merge in the first place doesn't work out that way in the end. Secondly it is where shareholders suffer because operating results deteriorate rather than improve. Thirdly it is where one or both of these factors causes the companies to decouple – the most ignominious admission of failure.

If we just take the US market as an example we have seen literally scores of recent botched ventures. There was AOL and Time Warner. HP and Compaq. Alcatel and Lucent. Daimler Benz and Chrysler… need I go on? During the 1995-2000 M&A surge in the US volumes totalled more than $12 trillion. However within this same period, some $1 trillion in shareholder wealth evaporated. Stupid takeovers did more damage to investors than did all the dot-comes combined. What is even more remarkable is that these failed mergers were the work of the world’s most successful corporations advised by highly educated Wall Street investment bankers.

The failure of mergers and the subsequent demise of companies have many unintended consequences. Some acquisitions are just plain daft; ideas that were doomed from the very start. Sometimes the merged entity goes bankrupt, so spectacular is the collapse. At other times the failure results in the downfall of those that masterminded them. Sometimes companies are forced into reversing the process, at great expense, because of poor judgement, lack of foresight, financial miscalculations or cultural incompatibilities. Every so often a disaster is averted and companies pull the plug on the deal at the eleventh hour.

One has to ask why? If most mergers fail then why merge to begin with? If the risks are so high, why take the chance? Generally speaking companies merge for one of two reasons:

First of all it must make sense strategically. In other words, the aspirations of one or both companies can be achieved faster or more easily through the acquisition of the other’s strategic assets. But that, frankly, is rare. Often such synergies are contrived or manufactured by those who have instigated the deal. More commonly, as a result, mergers are undertaken because of greed and the illusion that bigger is better.

Secondly the perceived operating synergies and resulting efficiencies make the merger a seductive proposition. If that is the case we should, at some point after integration, see redundant functions eliminated and shareholder value increasing.

My company is frequently sought by Boards burdened by the ever present prospect of M&A failure to undertake what we have come to refer to as whole-of-system due diligence. This includes analysing everything from strategic alignment, management capability and organisational design, right through to culture and integration strategy - factors most often ignored, or thought less important, by the teams of accountants who typically drive key decisions.

It's important to appreciate that the standard three-month due diligence process rarely uncovers any of the potential flaws in a merger. That's because M&A due diligence processes typically have a single overriding goal which is to shield executives and directors from possible shareholder litigation.

Because of our work in this field we find ourselves in the privileged position of examining at first hand the holes that can derail a merger – gaping chasms that are sometimes so big you could drive a truckload of MBAs through them. This is especially the case with multinational joint ventures where cultural compatibility is a critical factor.

From our elevated position the reasons for failure become crystal clear. Yet these issues, often overlooked by the number crunchers, can be so easily avoided.

My favourite reports concerning mergers not living up to their initial excitement are things like one entity embellishing the truth while the other buys a persuasive Powerpoint pitch. I’ve actually witnessed that! Or two desperate companies merging on impulse, thus creating one big desperate company…

Seriously though, the most critical factors are as follows. The lessons to be learned from these are salutary:

• A lack of comprehension concerning globalism (or globaility if you're in the US) – the current business conditions that have arisen through various processes of globalisation. This frequently raises fundamental questions such as whether there are real synergies to be found in a potential merger or whether these could be found using alternative means such as harnessing new technologies, collaborative ventures, strategic alliances, etc. Lesson: Frame M&A discussions and make key decisions within the context of global markets and business ecosystems

• A flawed corporate strategy in one or both entities. So many contemporary corporations fail to use rigorous, real-time strategic intelligence to inform their planning and decision making that assumptions can be way off the mark. This leads to an illusion that they understand a particular market when in fact the opposite is the case. Lesson: Establish mechanisms for continuously channelling real-time strategic intelligence about dynamic conditions and market opportunities to key decision makers

• A paucity of experience and knowledge of M&A in the acquiring company’s executive team can often lead to the most elementary mistakes. Lesson: Ensure that you have M&A experience and the right skills on your team – if necessary buy it in for this purpose.

• Acquisitions are really about buying customers. Other assets are immaterial in comparison. But although customer acquisition is mostly taken for granted, customer profitability, which can vary widely, is frequently ignored. Consequently, where a small group of customers might account for a large part of a company’s capitalization, another group of customers might actually reduce the company’s value significantly. Acquisition analysts must appreciate that long-term company value is a function of the aggregated value of their customers. By understanding the economics of customer profitability companies can avoid doing deals that hurt their shareholders, identify surprising deals that create substantial wealth, and even salvage deals that would otherwise be losers. Lesson: Analyse customer segments and associated profitability to determine what to buy

• Misalignment of any number of emotional and cultural factors ranging from intentions and motivations to expectations. Cultural incompatibilities in particular can lead to an exodus of talent after retention agreements expire. Lesson: Make sure that you fully understand the two cultures and what drives people to work in both businesses. Be prepared to adapt recruitment and development processes to suit the merged entity

• A sub-optimal or non-existent integration strategy. We often find that the acquiring player expects to impose its corporate culture on the other entity. There is no better way to enflame fears and entrench animosities, thus making the task of integration much harder than it needs to be. Lesson: Take time to plan and co-design all aspects of the integration strategy. Be prepared to shape a desired corporate culture that transcends both current states

• The lure of profits can seduce executives into ignoring impacts on the balance sheet that might unwittingly destroy shareholder value. CEOs are under increasing pressure to reinvest cash and grow earnings, especially with competition being so volatile. If acquisitions are not undertaken, or so it is argued, competitors may clinch profitable deals instead. The danger is that succumbing to these pressures often has the effect of reducing the return on invested capital to value-destroying levels. Lesson: The balance sheet is just as important as projected profits – perhaps more so in the long term. Examine all options for growing profits and revenue before rushing in to an unwise acquisition

• Companies often resort to cost-cutting in order to increase return on invested capital. Perhaps duplication is identified in the merged entity. If two banks merge and they both have adjacent branches, for example, one can be closed. Merged companies, however, become myopically optimistic about the effects of cost-cutting. A lack of transparency and flawed assumptions in calculating potential benefits and synergies often lead to errors of judgement. Substantial savings usually don’t materialise because acquirers, caught up in the excitement of the deal, tend to overestimate what is possible. Of course yet another reason cost-cutting doesn’t work is that potential savings might have already been bargained away in the negotiation of the selling price. Lesson: Cost-cutting is not a panacea. It is a risky strategy and too often the result of lazy management habits. By all means manage costs sensibly. But resist the urge to cut deeply, or at whim, especially if that means wielding the axe to activities that grow long-term value - such as staff training, management development and customer access, for example

• If cost-cutting and other supposed efficiencies fail to make the deal sufficiently attractive, increasing revenue is another way executives believe they can make high-priced mergers pay off. The most frequent claim in this regard is that the deal will create enormous opportunities for cross-selling. While cross–selling does happen it is almost never to the extent the acquirer imagines. Lesson: Get real! Much of what you imagine in terms of additional revenue may not eventuate. Develop a worst case scenario and be prepared to live within that reality

Although I grant that some of these are comical, none are intended as jokes. They are real examples from recent, serious, multi million dollar merger proposals. Furthermore they draw attention to concerns that only came to light after standard due diligence processes had been completed and a green light given to the project.

The culprit, pure and simple, is ineffective governance and non-systemic due diligence. Surely it would be wise to insist that the burden of proof for mergers to make sense should be as high as their risk, their failure rate and the pain they inevitably cost all stakeholders. I can see no rational reason why Boards would not insist upon such a rigorous evaluation given today’s complex M&A environment.