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Sail on, O Ship of State!
Sail on, O
Union, strong and great!
Humanity
with all its fears,
With all
the hopes of future years,
Is hanging
breathless on thy fate!
The Building
of the Ship.
Watch the keynote by MCI WorldCom’s
Quoted by Brother Churchill to Brother Roosevelt during WWII
Sailing requires:
A map,
Knowing where you are and where you are going
Sails ( ways of
collecting and using energy ) A tiller and rudder to direct the
energy
A captain, navigator,
crew, anchor
Look, then, into thine
heart, and write!
1
Voices of
the Night. Prelude.
2
Tell me
not, in mournful numbers,
"Life
is but an empty dream!"
For the
soul is dead that slumbers,
And things
are not what they seem
Do the "right" thing:
Disintermediation Last updated on March 20, 1999
Punctuated Equilibrium and Disintermediation:
People are unset by politics as usual. What they dislike is the passion to "win" by any means, means attack and counter-attack. When "victory" takes priority over policy, there in no longer an interest in the common good, the national interest, common sense, and the spirit of the laws of the commonwealth.
Complex systems are not stable. From human health, to environmental ecology, to social systems and national and international political economies, there is an inherent propensity to instability. There is an inherent need for standards and regulators and regulations. Some of these regulators are internal, self correcting systems. There are external positive and negative feedback loops including the legal systems, elections, revolutions, bankruptcies, plagues, famines, death and wars.
Complex systems operate as some level of stability and instability, with periods of declines alternating with periods of growth. We live in times of short or long cycles of relative tranquil Equilibrium, with orderly growth, punctuated with periods of rapid change. The federal reserve system tries to "manage" economic policy to smooth out the bumps in the road. Elections try to smooth out the conflicts about who gets what, when and how, who pays and who receives, who is protected and who gets put into the trash can of history.
In economics change is called the business cycle of "booms and busts", in biology cycles are called periods of extinction and increases in the rate of change in the varieties of species. Niles Eldredge along with Stephen Jay Gould describe the history of life on this planet as evolving with "Punctuated Equilibrium". Long periods of boredom with sudden extinction and bursts of tumult and change.
In business history changes in the rate of change is called restructuring, reengineering, takeovers and mergers. In medicine changes are called illness or disease, because there is no theory of health.
Health is Physical Synergy. Sickness is the siphoning vs. funneling of energy or wealth, use vs. Narrow control or ownership, Comforting vs. Frightening Religion, high energy or low energy people and institutions, are characteristics of synergy, as a sick or health society ?
We have had a out break of win/lose - me and mine - the hell with the hind most, winner take all, activity. This discourages the losers, causes aggression, and is socially dysfunctional. A few institutions maintain high energy but the society is winding down. Synergy is spirit and systems for successful cooperation, institutional means of using aggression (learning for conflict), and rewards for all from social success (tide lifts all boats).
The biosphere’s climate is regulated by the "hot house" effects of gases as explained in the work of Gaea theory of James Lovelock in The Ages of Gaea, he uses the laws of thermodynamic to set the scene.
Molecular biology is an information processing systems, evolutionary biology is the nature of creatures and their connections with information, and the physics which explains everything. The first law of thermodynamics is the conservation of matter and energy. Nothing comes from nothing and nothing goes nowhere.
The second law is dis-symmetry, hot objects cool but cold object never spontaneously become hot, water does not run up hill.
Life is a process of collecting energy for the temporary reason of survival, having fun and reproduction. Edwin Schrodinger little book on " What is Life" looks at "aperiodic crystals" that move upstream against the flow of time. Life is improbability low entropy.
Claude Shannon information theory is that there is a loss of data but interference, noise never becomes meaning. Life is dependent on the use of external energy can be described in John Von Neumann mathematical model of entropy. "The Gaean Conspiracy" By Anodea Judith tries to form a human reaction and political platform based on order and chaos, a theory of social climate change using the same methodological paradigm., involving synergy.
The House Republicans are making fools of themselves "doing the Right Thing" in face of the facts, the law, and the popular will.
In a Democratic and free enterprise society the functional definition of the "right Thing" is determined by votes and the market. The whole idea of the Constitution was that there is no certainty, we can not have government by principle but by men. People are not angels, so protection of civil society has to be by the balance of power - one power limited by completion of other powers. Free debate and open election determines who wins - and who is "right" at the moment. When Joe McCarthy was popular he was "right" and the way to protect us from this clear and present danger to the rule of law and the Constitution was to see he became unpopular.
The law is determined by what courts decide after an adversarial case is made for both sides about the facts and the law. The impeachment of the President, the Law is uncertain, but since power is decided by elections - any change in the outcome of an election can only be justified by a overwhelming case of necessity.
Some of the early Colonies were theocracies. People grew quick tired of the dogmatic assertion of divine principles. Our form of government is not "Christian" but is secular, humanist, modern, relativist, the only overriding PRINCIPLE is of free speech, open debate and elections.
We have no external performance exams in schools and colleges;
We have a poorly organized and very expensive health care non-system;
We have private money driven politics.
Each persons election is supported by money from private interests, utilities, defense contrators, railroads, banks and land developers. Politics in our cities have caused serious "infrastructure" problems, uncontrolled growth and decay, ugly, inefficient, backward, sprawling, degraded, polluted, expensive, places to live and work and try to get from one place to another.
For example:
Robert Moses willfully did not connect Kennedy Airport by light rail to NYC because of the political pressure of the taxi and bus interest heavily controlled by the "mob". Chicago did the same for the same reasons. The time/cost of air travel be best improved by ground transport from city to airport and adds to the cost of almost everything we do.
Our country is not run by the majority, or popular will but by well placed willful or wealthy minorities such as the "mob", health insurance industry, what used to be the AMA , etc.
Electoral politics is only about who gets what, when and where, paid for by the winners. If you get elected the money flows in to keep you elected. BUT, the mood is shifting from primary concern for the protection of private wealth toward greater interest in the public welfare because of the necessities of international competition.
Others have better electoral systems that support better schools, therefore more efficient workers, using better tools and supported by a practical infrastructure. If you can fly to Frankfort, ( or London, Paris, Rome ) and have efficient airport, central city connections, go into a clean, attractive, well run and safe city, with modern communications, social facilities, ( other than big league sports ), museums, theater, music, parks, libraries, Universities, et al - is there not a competitive advantage to the ugly mess that Orlando, Austin, Atlanta, San Jose and other fast growth American Cities have become.
The core of the problem is a evil electoral system, supporting the best politicians money can buy. The issues of the next decade will be health, education and public planning ( the quality of social life ) none of which can be done without real electoral reform. Theses are Democratic issues so the short term decline of Republican Tax cut, anti-governmental politics become another 40 years in the wilderness unless they can resurrect "progressive" Teddy Roosevelt ideologies. The fundamentalist most be not be allowed to control the agenda. We all need a functional opposition.
In most of the civilized world there are secondary school exams known as A and O levels in England, baccalaureate in French, German Gymnasium, theses standards copied around the world, from Russia to Japan. We are the only organized culture with public education system unchanged since it was set up in the 1850' s. As Dewey said 100 years ago the structure was in place by the end of the civil war. We have a muddle of systems, made up of 15,000 school boards, superintendents, unregulated teacher colleges, text book publishers, and a curriculum set by a private panel in the last century ( The Carnegie Commission ) without external performance standards or methods for change.
The non-health care systems are even more fragmented and muddled and even more expensive. Every other advanced civilization has some pattern or public and state health providers and insurance. As the population column begins to bulge at the top the poorly educated work force will not be able to support the elderly' s desire for every kind of expensive medical care.
We have private public utilities, weak land use planning, and a capitalist mentality that has undercut the physical infrastructure - roads, bridges, bullet trains, optic fiber networks, water and sewers, parks and other public facilities.
It maybe we are so special because of history and geography that we need to evolve differently than other industrial societies - but more likely it' s just that our political system fails in certain critical ways to deal with change. Once we develop parts, organs, traditions, it becomes difficult to impossible to change them.
The destructive nature of size:
When people feel very uncomfortable because "things aren’t what they are expected or should be " there is anger, frustration, impeachment, radical cults and white buffaloes appear promising to return to a romantic past.
BIG always has serious weakness but also monumental strengths. Big units benefit from economies of scale which allow for backup resources that can cover or recover from error. Up to a point; then the whole vast edifice begins to crumble. The nature of world civilization in the last century has created wonderfully complex organization that can function against the grain. The United Nations is clearly a system fighting up stream - against nationalist and territorial instincts. Global banking, computer systems, communications, trans-national corporations, are not the natural evolution of small to large - but a temporary victory against nature and natural forces.
This century has gone from one to six billion people. The number of connection begin become so complex that the result is to reduce activity rather than increase activities, somewhere around three billion. Over a certain size the linkages begin to break down. More becomes less. The internet has LESS real communication and human community than it did a few years ago.
The challenge is to create human institutions that go with the flow - that fit the evolutionary potential of human beings. Human society has the capacity to function with less than perfect systems, we can manage with organizations that defy human potential and essential character of people. The price of being "out of the grove" or having social systems that push the limits of our biological nature is tension. Tensions can be useful but also dangerous.
Big is not better. Humans evolved in troops of about 40 individuals. The number of possible links among a group of 40 is 40! ( 40 * 39 * 38 etc.) a very large number. Three men and a boat catch fish, they are met at the shore by members of several households who share the catch, someone markets the surplus, someone does repairs on the boat and a pattern of activity and exchange is established as one of the many networks connecting the people of the village. From my experience in fishing villages there are thousands of big and little networks - connection between individuals and family units. The village has hundreds of connections to other villages as they import and export supplies, people and information. Almost everyone can understand the connections and their various roles in these complex human interactions. Small schools work better for the same reasons - people have evolved in small networks which have been critical for survival and progress.
When the town grows to 400 or 4000 the networks still function as subsets of each other. There are neighborhoods, extended families or clans, formal role sets such as teachers, police, full time priests, merchants and bankers, thieves and politicians. Now no one knows what everyone else is up to but can find someone who knows someone who knows. Information becomes second hand and hearsay. While gossip is a major village pass-time, in town rumor can disconnect from its roots and find a long life out on its own. The division of labor and specialization are critical to the town and cities and hand crafts become professional technical skills and products. The village shaman becomes a town medicine man or even a real physician. Schools and colleges sometimes need high levels of specialized skills that required size, departments, bureaucracy, certificates and final exams.
Over a certain size the linkages begin to break down and are replaced by formal rules and procedures. No one really understands what is going on outside the limits of their domains and have to depend on the process of administrative overhead to keep the system going. Large scale enterprise was based on military type organizations - troops of 40 or so - - formed into regiments within battalions with a captain or higher ranking officer in command who took orders from the division commanding officer who marched according to the directions of the general in control of the army. The massive armies defeated tribal and village self defense forces so nations and empires could be built. At this level of activity you are not expected to know or understand what is going on - just follow orders. Large schools and colleges with systems of superintendents, principals and department heads are traditional quasi- rational large scale organizations not very different from factories and military units.
When we get to units of 100,000’s and millions the command and control systems become overly complex, the overhead too high, and the logic fails. So goes the ancient and modern empires - from Rome to the Spanish Empire, the British and American, IBM and other international multinational super structures. The problem is human design as creatures of small troops and villages. We are not social insects but busy bodies that have a natural inclination to form cells, clicks, gossip circles, and are suspicious of others actors motives, dislike foreign or alien ideas and do not take well to a formal command structure from people we don’t know. There is an appearance of uniformity but it covers a wide area of chaos in relationships in big organizations and societies. Big organizations as big armies can survive and conquer despite their fundamental weaknesses but a better organized and tight phalanx of Greeks, led by the chrism of Alexander the Great, wiped out the disorganized hordes of Persia.
So BIG always has serious
weakness but also monumental strengths from economies of scale
which allow for backup resources that can cover or recover from
error up to a point then the whole vast edifice can begin to
crumble. The nature of world civilization in the last century has
created wonderfully complex organization that can function
against the grain. The United Nations is clearly a system
fighting up stream - against nationalist and territorial
instincts. Global banking, computer systems,
communications, Trans-national corporations, are not the
natural evolution of small to large - but a temporary victory
against nature and natural forces. This century has gone
from one to six billion people.
The political numbers:
Half the population is asleep and doesn’t participate but lurks as a sleeping beast - of the remainder:
A fifth ( 20 % of the population but 40 % of the voters ) are tradition "liberal", pro union, urban, minority, "progressive" They support cheap money - expanding public services - the core interests and voters of the Democratic party.
A
fifth are traditional conservative, pro business, less regulation
- hard money, small government. low taxes - the core voters of
the Republicans.
so:
All politics is after
the 20 % of the voters
( 10 % of the population ) who are in the center
3
Life is
real! life is earnest!
And the
grave is not its goal;
Dust thou
art, to dust returnest,
Was not
spoken of the soul.
most of the synergy documents
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GO TO: TODAY'S NEWS about Networks and Communications
Wait a
Minute: (Time out )
13 December,
1998
The impeachment follies have the danger of becoming evil;
It is said that people get the government they deserve. BUT, the "people" have shown a lot more sense than the national political system and the media. The facts are clear. There is a group of people who really hate Clinton and have been out to get him. After years of fruitless investigations they got him for lying, but not legally defined perjury, about a very seamy affair. Clinton is guilty of foulness, foolishness, and falseness but such are all too common, not unusual enough to be a high crime.
There is not the will or the way to impeach the President. This is all smoke and mirrors designed to get power or protect power - meaning only foul, foolish, and false politics.
Nixon said that his hate caused his fall - the hate of Clinton will do more harm to the haters than the hated. Local and State politicians and journalist know the "real America" - and both Republican and Democrats agree with the people - have some sort of censure - and be done with it. Enough is enough.
The National interest has taken second or third or last place by the witch hunters, by the Congress, and by the President in this matter. The procession of charges are excessive, Ken Starr is a clear and present danger to civil society -
Clinton’s really crime is a unusual sexual life and getting away with it. the crime of being different.
Some people are upset by the post-modern world.
As in an INQUISITION. the effort is a violent effort to hold back the future - in Spain and Latin America the modern world was held back for centuries.. They remained poor and backward but pompous, pretentious, and true to the old faith.
Deviants were accused and compelled under oath to answer all charges against them, thus becoming their own accusers. The testimony of two witnesses was generally considered proof of guilt the judges, would announce 30 days' grace for all heretics to come in and confess their crimes. When that period was up the trial of the accused and unrepentant ones began.
The penances and sentences for those who confessed or were found guilty were pronounced together in a public ceremony at the end of all the processes. This was the sermo generalis or auto-da-fé. Penances might consist of a pilgrimage, a public scourging, a fine, or the wearing of a cross. The wearing of two tongues of red cloth, sewn onto an outer garment, marked those who had made false accusations..
The names of the guilty were announced and punishments inflicted, ranging from fines and excommunication to imprisonment for life or burning at the stake for incorrigible heretics..
Reasons for being STUPID:
Dumb comes in four main types ( smart comes in their opposites )
First, mental capacity - augmented by practice, education and training - dumb by nature and nurture.
Second, continually using experience that no longer works - refusal to adjust to change or addicted to old habits, dumb by practice and tradition. The IBM's USSR ( USS-was )
Third, misapplication of principles - using false theory or unyielding orthodoxy in practice - dumb by choice or by force - Spainish religious history -
Forth, compulsive, irrational, diseased and deformed personalities - Stupid by pathology.
All of these are reflected in our current political situation.
Remember the fundamentals of American Politics:
There is just a dimes worth of difference between the political parties - they both need the same voters - moderates, those in the center.
The ONLY real issue is power - privileges and special services paid for by MONEY. The goal is control of critical levers of power in congressional committees.
Therefore, it doesn’t make much difference to the country who is elected, so the public really doesn’t care much but a lot of difference to the people in the trade so politicians are very interested.
The impeachment was only about getting votes for the people in power in congress.
NOW they are being stupid:
They are not stupid by nature or training,
so they are using methods that did work in the recent past but no longer work ( reason two above - misapplied experience ) attack politics - the theory that people vote against not for a positive program.
Newt and attack radio was almost completely based on the "cultural wars" attacks, the residual anger of white, southern, males who hated the "counter culture " hippies and anti-war, anti-Nixon youth of the 60's and 70's, and many aspects of the post modern world.
A
misapplication of FUNDEMENTALIST principles - number three above
- about sexual orthodoxy and on the part of the President's
compulsive sexual habits.
The school of AE21 will have the following characteristics: Teaching.htm
Human resources are the critical prerequisite to the process of building wealth, prosperity and the civil open society. The reasons for the "Wealth of Nations" or the relative poverty of "backwardness" has to do with the character and skills of the population. Curiosity and a positive image of the future are the reasons for the industrial revolution, first, second and third. The religious and political changes in England and the Low Countries in the 15th century made for the possibilities of the modern world.
What is less well understood are the "qualitative" nature of human abilities. There are the following stages, each not replaced by the next advance but over-layered with each becoming dominate in turn but not replacing previous models. As canals and bicycles still play an important role in European transportation, augmented by trains, cars and planes.
The first level is the "skilled crafts" - a long apprenticeship with hands on methods produces a high level of abilities - Cathedrals with stained glass, Columbus, clocks, water wheels and the first tools and factories of the first industrial revolution. Education was literacy - Grammar schools and basic accounting, drafting and organizing shills.
In the 19th century, higher education in the Agricultural and Mechanical arts began to pay off. The newly unified Germany began to surpass England because of excellence in technical training while Great Britain stayed with the Classical educational process - founded on Latin and Greek rather than Science and Math.
The United States quickly adjusted to technical training but "trade schools" have always have low status compared to "liberal arts" college preparation. High level technical Universities such as Georgia Tech, MIT, Cal-Tech, IIT, Stanford and Polly -tech parts of the mega-universities have made extraordinary contributions to economic welfare in this country and world wide. The second industrial revolution of electrical, biological and chemical engineering is based on formal training in math and science. The MBA in business maybe useful in production of rational "corporate people" and culture. The majority of mangers still come from the technical, legal and accounting professions.
The third level of human skill for Century twenty-one has to do with creativity in a global communications technology. We still need skilled craft people, we need to improve basic literacy and grammar, enterprise, with science and technology in complex engineering tasks.
Computer people carry the unhappy title of "software engineer" because they are trying to fit into an older model of categories in human resource management. Is someone who creates games and innovative web practices doing arts or sciences or applied technology ? If you visit a trade show in the computer - consumer electronics - communications business you find new younger people doing new things with a "strange" mixture of backgrounds, including a lot of "rock and roll music" nationalities - and very unclear standards of higher education and training. Smart is as smart does - and "stupid is as stupid does".
Most people who have ever lived on this planet, were born and died within a fifty mile range. Their perceptions are defined within what is called a tribal culture - part real and part superstition. Applied rational knowledge is fairly modern as a cultural style and still not seriously or firmly established as a norm. The irrational base of human understanding is clearly demonstrated by politics and commercials.
NOW as we enter into a global technical society our social world is as little understood as the physical. The new world order - lacks a vision or social psychological foundation.
The technology itself is revolutionary.
The global economy requires new models of thought. It’s not surprising that it is difficult and there is a lot of active and passive resistance. The leaders and leading institutions often don’t get it. Non-liner, transactional, mutually dependent rapid change appears to many as anarchy and chaos - morally questionable and in conflict with traditional values. That is because global transformations are a real revolution. Serious changes are disruptive of the existing order.
Social and Religious Conservatives are only 5 % of the population but 10 % of the voters. If the Republicans get 3/4th of their votes they win because the other marginal or floating voters split fairly evenly. Without strong motivation on social issues the Republicans are a minority party.
If the Democrats stay in the center and let the Republicans form a circular firing squad they win by a few points .. If they motivate the New Deal coalition they win by useful majorities.
The
critical voters are motivated by emotional appeals - worries,
concerns, dislikes and prejudices, stimulated by charismatic
appeals of political advertising and negative campaigns.
4
Art is
long, and time is fleeting,
And our
hearts, though stout and brave,
Still like
muffled drums are beating
Funeral
marches to the grave.
I
Because of the numbers - The lack of a working consensus
The
ship of state thus is without a rudder - We flounder without a
captain,
without vision, without
the knowledge of where we are and where the voyages are going,
The ship lacks sails full in the wind,
The ship lacks a firm hand on the tiller,
5
Trust no
future, howe'er pleasant!
Let the
dead Past bury its dead!
Act, act
in the living present!
Heart
within, and God o'erhead!
I
Thus it has been for more than a generation and will be until the system changes....
6
Lives of
great men all remind us
We can
make our lives sublime,
And
departing, leave behind us
Footprints
on the sands of time.
Ibid
The change is not tinkering with campaign reform, or blaming the Speaker or the President - but it the way the great ship is managed.
Proportional
representation and nationalization of the political parties have
been in the political experience of human societies ways that
have worked elsewhere. We need to look around the world to gather
experience and knowledge on how to run the ship of state - as we
did a few centuries ago - and make some fundamental changes in
the Second Constutional Convention.
.
7
Let us,
then, be up and doing,
With a
heart for any fate; 5
Still
achieving, still pursuing,
Learn to
labour and to wait.
Ibid.Henry W. Longfellow. 1807-1882.
(From the edition of 1886.).
The History of the Future:
Friday, November 13, 1998
The good, the true and the Beautiful as a political program:
As the great center - right of center ( moderates ) and left of center ( progressives ) struggle to find a tactical program that will provide VICTORY and power:
A strategic ideology can guide the day-to-day platform, motivate the troops and give a semblance of order, logic and reason to political appeals composed of fragments and popular program appeals.
The requirements for a long term successful campaign are moral values, truth and beauty.
The moral values: The good
Right: Freedom and property, individual empowerment
The moderates of the conservative right - love of property which allows the good life - requires the rule of law ( life, liberty and the pursuit of happiness ) Original values of the founding fathers - small, limited, divided federal government - 18th century liberals - Locke, Hamiliton’s Federalist, Low Tory
The Progressives: Civic Virtues, community progress
The liberals of the left center - love of the "good society", moral leadership to create a more "perfect" union, clean, safe, educated - with civic values and obligations - social evolution encourages tolerance, equality of opportunity, diversity, civil liberty - Jefferson, Mill, Teddy Roosevelt, FDR, "good government" progressives.
THE TRUE:
Freedom, private property and individual empowerment are historic processors of economic progress.
The rule of law with the protection of private property requires the consent of the governed. Freedom and free market conditions create functional trusts and monopolies and such wide disparities of wealth that social tension - class warfare causes rebellions and revolutions. It is in the interest of property to promote social justice and regulation of trusts, environmental side effects, reasonable planning, zoning, labor laws, taxes etc. Etc..
The
search for equality, social justice can and does destroy freedom.
In a popular appeal for "fairness", individuals are
subject to political correctness, social pressure against
achievement - the "dumb-ing down" of education, mass
media, the arts and political discussion. Socialism doesn’t
work because of limits it places on productive activity and
motivation - national deficits as welfare costs become and
excessive "social overhead" costs on all work and
saving. What you tax - you get less of - work and saving. What
you subsidize you get more of - health care costs, disabilities,
over production of certain commodities, military equipment,
welfare babies, etc.etc..
So the right needs the left and the left needs the right - both would destroy themselves and the society if they ruled without the constrain of the other.
The Beautiful:
The beauty of the image of the U.S. Constitution is the blend of Property and civic virtue - while you can have a market economy you can not have a market society !
The rousing image from the right: ( center )
Personal empowerment -
POSITIVE:
you can be what you work at being - the moral messages from
motivational movements ( Nightingale - Carnegie - Covey - many
others)
They do get
to social responsibility - a higher power and meaning;
NEGATIVE: but there is some of the devil to the hindmost - people that don’t make it are treated a little like Scrooge’s " aren’t here poor houses enough " and a little racism and anti-foreign, anti-Communist "Americium First "-
The rousing image from the left ( center )
The protective ( New Deal - fair Deal -) Good Community -
POSITIVE: A society that provides education, health care, social security, clean air, water, safe food - public works and economic protection when the free market doesn’t work;
NEGATIVE: But there is a protective union labor attitude - save jobs over productivity, protective trade practices, anti-business regulation, excessive law suits, environmental laws, labor, health and safety rules, etc. ETC...
First we
need to fix the problem not the blame.
Second, we
need to deal with facts, realities not myths and false images
Third, we
need to be global
Forth, we
need to be moral and have love for the earth, high hope and aims
for mankind.
First,
MONEY is not a fixed commodity but a state of mind.
Resources can
expand or contract in ways different from gold or classical
physics and economics.
Second, if
the people with a positive attitude support those in a negative
situation both will benefit.
The capitalist economies suffered from booms and busts most of the 19th and half of the 20th century. People learned from the great depression and hyper inflation how to run central banking so there were not a continuing crisis in banking, credit, bonds and currency supply. International stability and growth were promoted by private arrangement among central bankers and international institutions - the IMF for international settlements and the so-called "World bank" really a multi-lateral development fund.
Friday, November 13, 1998
Most likely to succeed:
Given these criteria which nations and regions are going to be most sucessful in the 21st century ?
USA Japan
ECU Overseas China - Singapore - Russia CHINA
Hong Kong -
Taiwan
The rule of
law 7 9 9 9 2 7
commercial
transaction costs
A sound
currency 8 9 9 9 3 6
open
standards
Consent of
the governed 9 9 9 7 5 5
Political
stability
Educated
population 5 9 8 8 7 4
work smart
Technological
infrastructure 7 9 8 9 5 4
communications
- transportation
low social
overhead costs 6 7 5 9 4 4
social
insurance fixed costs
productive
values 6 9 7 10 3 8
work hours -
producative life time
global
perspectives 5 9 8 9 3 5
Total 53 70 63 70 32 43
What applies to American Political policy are:
Educational
reform - nationalization of educational standards and teaching
qualifications ( left )
Vouchers and
charter schools ( right )
Infrastructure investments in transportation and communications standards (left) reduce Capital gains tax ( right )
Control of social overhead costs and transfer of Taxes from fixed producation costs and income to consumption via VAT (right)
Reform of the tort laws and uniform commercial codes.. our courts are a craps shoot.(right)
More global education - economic peace corps - ( left )
The greater use of export credits - FOREIGN AID - Using American ability to "create money" to create demand for American goods overseas - from grain to planes - ( left )
If the U.S. Treasury -
export bank - World Bank - create a trillion dollars that is used
to buy American planes, communications, consumer goods - there is
no real cost to U.S. and benefits for everyone, we never really
have to get the money back except to loan it out again.
New Products:
As Joseph Schumpeter described beautifully, enterprise and most of economic growth depend on new products. He created the economics of inventions and new enterprise let by merchant adventurers and what we now call entrepreneurs.
Starting in the 12th century with clocks, water wheels, wool, and exotic products from the east ; there is a short list of new products and process that were the engines of growth, industrialization, political and military power and wealth.
Most were refinements of agricultural goods which generated systems of wealth. The new riches made for increasing the effective demand for thousands of other products. International trade needed ships, and ships needs marine supplies, and plantations needed equipment and household goods as the cycle of growth and enterprise widened, deepened and expanded.
Wool, then spices, cotton, sugar, and tobacco drove the early commercial empires and were the sources of slavery, the factory system and the first industrial revolution of steam, iron and coal in the 18th century.
The second revolution in the 19th century was generated by oil, steel, ships and railroads built on cattle, grains, and scientific agriculture.
The third set of growth engines in the 20th century were automobiles ( roads, gas stations ) then planes, and electrified communications and appliances in combination with chemistry, creating plastics, radios, telephones and television. Industrial products replace agricultural as the major source of new wealth only at the beginnings of this century.
Each product goes from being exotic and expensive, to a common commodity. Each product offers huge profits and excitement, then becomes just another part of the expected. The computer, tele-communications industry at the end of the 20th century is the last of the "hard" products to generate vast new wealth, adventure, and enterprise.
As manufactured goods replaced agricultural goods as the basis of growth, so now software replaces "hardware" as the center of wealth, power, growth, extraordinary profits and attention. Software that does more than replace existing methods and processes, does more that inform and entertain, but actually produces new sets of production and consumer goods.
The forth industrial revolution in the 21st century are the Network Communication devices we now call telephones, Portable and wireless, radio and television, the internet, computers, PC’s, word processors, image processors, design processors, information processors, inventory, shipping, OEM, delivery systems , catalogs, stores, banks, travel agents, schools, all tied with a universal serial bus to a simple device. The device receives and sends on wireless, satellite, copper wire, cable, optic, radio waves or what ever is the low cost provider.
The engine which stimulates
a family of communications and hardware appliances and networks
of communications links, are the Universal Software standards.
Anyone’s application can work with anyone’s application
using anyone’s links and hardware. The palm pilot, lap top,
is the prototype of the universal device of the 21st century. The
extraordinary profits are not in commodity hardware but unique
software that makes all this easy and common. Microsoft is
unlikely but not excluded from production of software and
operational codes for simple, clean, universal, high density
digital systems ( MP3, HDTV ) which are cheap and work.
by Jorge Nef
Human Secuity and Mutual
Vulnerability,
Chapter 3,
IDRC, 1995
A New Strategy for
the Global Crisis
(a shorter
version of this brief appeared in The Washington Post, Outlook
Section, 20 September 1998)
by C. Fred
Bergsten
"The "Asian economic crisis" is much deeper, much more pervasive and likely to last much longer than anyone imagined. Economies that had grown 6-8 percent annually for two decades are declining by like or greater amounts, a swing of depression-era magnitude with incalculable political and social consequences. The contagion has already spread far beyond Asia, engulfing Russia and much of Latin America, and could do so even more violently in the days ahead. We now face a truly global crisis, which has already hit the United States hard and will do so with increasing force. "
International institutions are not regulators and can not stop the party but only try to clean up the mess after fits of unreasonable rapturous protuberance. The principle function of central banking is to take way the punch bowl before the party gets out of hand. International institutions need early warning systems that can at least warn - talk down or caution investors in over heated markets. The IMF and the club of central bankers along with the rating agencies do too little too late, clearly because they don’t want to hurt anyone’s feeling and are subject to political pressure. A further step is to state clearly that further debt and expansions will not be protected when it fails - notice that certain economies have gone beyond the pale and are on their own, when the bubble pops.
The European community set standards for national debts and limits of the national budget going to debt payments. Standards such as debt up to 100 % of GNP and debt payments of 20 % of national revenues is protected and maybe reasonable due to rapid growth or pump priming during a depression, up to 200 % of GNP limited protection to sovereign debt, over 300 % not protected at all. A debt insurance scheme with increasing premiums seems in order. Total national debts ( public and private ) need limits - because the ability to repay is limited as are real investment opportunities. Debt going into corruption, consumption, welfare and monuments should be very limited. The GNP can drop by ˝ in a few months so the standard is less than clear.. but some standards are clearly needed. Some reasonable level of national accounts must be a requirement to join the international financial system.
How is this to happen ? The leadership required has to come from Europe which now understands rational international systems and institutions - becasue of the history of the 20th century as follows:
1.) August
1914 and a long useless war caused by misapprehension of others
intentions.. and a run away military technology..
2.) A great
depression caused by narrow minded meanness, and excessive
nationalism, following the great unnecessary war - along with the
"red" scare caused by the Russian revolution which was
a direct result of the great stupid war...
3.) A Second
great war caused by the depression, hyper-inflation in Germany
and the failure of leadership following the First Great War ..
4.) The
creation of the Atomic bomb because of misapprehension of others
intentions that Germany was building a bomb - which they could
not and were not doing ..
5.) But the
American bomb made the Russians feel they had to have the bomb.
Misapprehension of others intentions with atomic weapons caused a
great Cold War which wasted trillions of dollars in useless arms
and silly international tensions driving Western attachments to
nasty, corrupt people and governments and undermining all
rational efforts and a functional world order such as..
6.) The
creation of the European Union, United Nations, IMF, the Marshall
Plan, NATO, in order not to repeat the errors of omission and
commission following the first great war but international order
and reason could not work very well in a cold war climate..
7.) The
second "red scare" blinded America to the realities of
the emerging world and led to misapprehension of others
intentions by Russia and China in Korea and America in Vietnam.
A rapid disconnect from rational thinking and reality based decisions caused by Televisions false images of reality, propaganda, and general dumbing down of complex issues into sound bits, began big time with the JFK mythologies, the marketing of power to the highest bidder and the decline in American political, educational, and cultural institutions.
Leadership at the end of the 20th century clearly rests in the European Community, China, Japan, and the rest of the "international community" without great obstruction but also without meaningful leadership from a dysfunctional American governmental process. So on to the financial crisis - more than a year and ˝ in the making and without a rational response from the great "super power". Too little, too late, no vision, no new initiates, hopeless nonsense about socialism, states rights, low taxes and less government from the ideological right that endangers public safety and welfare just as much as it did in the 1920’s and 1950’s, and the "liberals" paralyzed by ill-relevant 19th century concepts of value, money, labor, technology, trade and social democracy further unlinking the new deals fragmented remains from any concept of political theory or reality.
At such times, new leadership may emerge, from somewhere else. MAYBE.. or maybe not. The international business community depends - sometimes - on realistic thinking and some knowledge of the facts. The new libertarian technological elite is capable of new insights. Even the universities and the press are not totally useless.
First we need to fix the
problem not the blame.
Second, we
need to deal with facts, realities not myths and false images
Third, we
need to be global
Forth, we
need to be moral and have love for the earth, high hope and aims
for mankind.
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GO TO: TODAY'S NEWS about Networks and Communications
http://wmg.netcastnetwork.com/
Opening
address:
George
Gilder, President, Gilder Technology Group, Inc.; Contributor,
FORBES
ASAP
9:00 pm - 9:30 pm
Special
address:
Steve Forbes,
President & CEO, Forbes Inc., Editor-in-Chief, FORBES
Magazine
http://www.forbes.com/telecosm/
The four principles:
1.) The rule of law
2.) Sound
currency
3.)
Reasonable regulations and technical standards
4.) Rational
taxes
The Information Economy:
1.) Rapid decline in the
cost of hardware and communications
2.) Rapid
increase in usage
3.) Increased
speed of applications of new technical standards and symbols of
integrity
4.) Rapid
change in organizations
How do these tie together ?
1.) International law for
global commerce
2.) Global
currencies and banking - credit systems
3.) Global
communications standards
4.)
International standards for taxes, business regulation
The "new world order" requires systems of international regulation of global commerce. A rule of law for communications - rapid systems for deployment of new technologies and reasonable conditions for enterprise.
1.) Rule of Law
In the modern world the rule of law - require the consent of the governed. The priest king with traditional authority can not function in a skeptical, secular climate required by modern banking, business, science and engineering. Autocratic governments create a phony order that always becomes corrupt and dysfunctional. The rule of law requires cultural development beyond the family or village level such as still exists in Africa and Haiti, Civil society needs education, literacy, a middle class and a banking system - in other words the changes from a feudal medieval war lord society such as Russia, Saudi Arabia to that of Israel or Turkey.
The problem of gaining the consent of the governed is that the tradition is to spread benefits to voters without paying for them. This makes democracy inflationary that requires checks and balances including international supervision by markets and world financial institutions such as those that now exist in the European Community. The ECU ( European Currency Unit) is a model of an IMF currency unit that could stabilize and mobilize international trade and markets and a "real" world central bank. The IMF reserve drawing rights are money based on a basket of currencies and international reserves but with insufficient independence and competence to prevent IMF policies for cures being worse than the ailment.
2.) Stable currencies
A function of the rule of law is a real government, civil service, budget, currency and central banking. Without stability and order there can be no confidence in "paper" money. The sickness of the Kuomintang ( Nationalist China ) was displayed by suitcases of paper money. The Russians follow suit. International support should be limited by real numbers and real bankers to prevent currencies from getting way out of line of their real market values.
3.) Reasonable regulations and technical standards
Setting standards for currencies and other packet exchange systems on complex networks should be a primary function of international organizations, telecommunications unions, and development funds.
The Marshall plan for Europe in 1948 to 1950 produced the most rapid and solid recovery in history - in Western Europe - except in Great Britain. The plan provided stable currency credits for international payments and capital expansion. French farmers could get credit to buy French tractors ( or Renault cars with the help of Ford ) from French rebuilt Factories which could also get expansion credits in Franks backed by US Aid dollars.
The dollars ended up paying for the cost of American goods - which was a great boom for the American Economy. American Farms and Factories ended up with most of the hard cash from foreign aid. It is not clear that such a program really costs anything ( the expansion of the economy made everyone richer and no one poorer, so that the Tax money spent was repaid by higher domestic incomes ) and may well be a classic win/win situation.
The local currency repayment funds ( such as now exist in the food for peace program ) became a reserve and development fund to pay for roads and public works. A Marshall Plan for Eastern Europe, Russia and the USS-was would put American Business and economic professionals in Moscow, to approve a Russia plan that would allow consumers and investors to buy and invest in productive capacity using Rubble credits. Their repayments would be under the control of the Aid Agency and act as a reserve to prevent inflation. The Marshall plan was about 15 billion which is about 150 billion in today's dollars. The clear requirement is that the money be used by real business not politicians, priests, paupers or pirates.
4.) Taxes - Since civil society has high social and infrastructure costs, taxes are a cost of doing business. Competitive advantage can be based in the short run on cutting costs, not providing national education, health and welfare - fast trains, boats, planes and cars - fiber optic networks, great universities and research facilities but cheap is as cheap does. High cost facilities must product high quality specialized goods and services for global markets. Low cost facilities can only produce low cost commodities with low cost labor and low marginal returns.
The International Monetary Fund (IMF or Fund) and the International Bank for Reconstruction and Development (IBRD or World Bank) were both established at the United Nations Monetary and Financial Conference, held at Bretton Woods, New Hampshire, on July 1-22, 1944. The two were created to oversee stability in international monetary affairs and to facilitate the expansion of world trade. Membership in the World Bank requires membership in the IMF, and they are both specialized agencies of the United Nations. The World Bank was given domain over long-term financing for nations in need, while the IMF's mission was to monitor exchange rates, provide short-term financing for balance of payments adjustments, provide a forum for discussion about international monetary concerns, and give technical assistance to member countries. These functions are still generally true of both organizations, although the policies determining how they are carried out have been modified and amplified over time.
The Fund's legal authority is based on an international treaty called the Articles of Agreement which came into force in December 1945. The first Article in the Agreement outlines the purposes of the Fund and, although the Articles have been amended three times in the course of the last 47 years prior to 1998, the first Article has never been altered.
http://www.cftech.com/BrainBank/FINANCE/IMFHistory.html
There needs to be a new expansion and agreement including standards of Free Trade The WTO is the only international body dealing with the rules of trade between nations. At its heart are the WTO agreements, the legal ground-rules for international commerce and for trade policy. The agreements have three main objectives: to help trade flow as freely as possible, to achieve further liberalization gradually through negotiation, and to set up an impartial means of settling disputes.
A matter of character:
The ability of a master of political marketing, such as Bill Clinton and Newt Gingrich to bypass traditional gatekeepers is the problem. Special investigation is NOT part of the solution. The answer lies in more responsible political parties and more authority of traditional establishments.
In any society, firm or institution there are customs in the selection of leaders. The oldest process is birth - the creation of an aristocracy. Manners and morals were to be assured by traditions. The British royally has recently demonstrated the problems with inheritance.
American 18th century republican ideology believed in a natural aristocracy of talent as well as birth. The "civic elite" idea passed into the concept of the establishment. Business leadership, University Presidents, upper class schools and colleges, owners of the media formed a responsible community until the last 1960’s. George Bush is a perfect example of the type- , Prescott Bush, his father a U.S. Senator, and a partner in the Wall Street International investment firm of the Brown Brothers Harriman that included the John Foster Dullas, Secretary of State, Allen Dullas of the CIA, and other with close ties to the foreign policy establishment. The Free and Associated Mason’s acted as a "insider" club to assure behavior and character.
Since the advent of mass media and money in politics leaders can come from outside the establishment. L .B. Johnson according to Caro mobilized big money in national politics. Kennedy and Nixon ran modern media, marketing campaigns. They all had great flaws of character that would be "scandalous" today in the heat of rumor journalism. Neither the politicians or the reporters are "civil" and well behaved. One theory is that the detailed investigation of the President is a lesson in social morals and a lesson in how to select leaders. This is to blame the victim, the voter who is offered only false choices. To fix the problem not the blame, as Demning said, is to change the system that produces too wide a rage of error and defaults.
Japan can not solve most of its basic economic problems.
Bank reform requires a fundamental shift from combines of firms centered around banks and holding each others shares to corporate capitalism within trading groups and well as between trading groups. This requires a change from the way Japan Inc. has worked since the beginnings of modernization. The government is a committee of high level administrators that work within the system and have very little control of the system.
The size of Japan's bad debts may well be the most important statistic in the Asian financial crisis. Since the crisis struck, Japanese banks have become so beleaguered that their lending at home and elsewhere in Asia has all but halted, and they are closing many of their offices throughout the region. This has contributed to a scarcity of credit that has worsened the recession -- in some places the depression -- that stretches from South Korea to Indonesia.
The United States is c