Wednesday, May 31, 2017

With Laws Like These, We’re In Our Own Prisons


When Gordon Moore published his article “Cramming More Components onto Integrated Circuits” in Electronics in 1965, he had no idea that he’d promulgated a “law”.  He was making a series of hypothecated observations limited to semiconductors in electronic machines.  And his observation – far from being a “law” – was an interesting convergence of a technical and technological challenge to the 1767 Sir James Steuart law of Supply and Demand (also not a law) built on John Locke’s 1691 treatise, “Some Considerations on the Consequences of Lowering of Interest and the Raising of the Value of Money.”  Locke, Steuart, Adam Smith (1776), Alfred Marshall (1890) and Moore and their respective “law” contributions are appropriated in every conversation about the “Knowledge Economy”, the “Digital Age”, and the “Internet of Things” with wanton negligence both of their substance and their extrapolation. 

I have been watching the flying wing race formerly known as the respectable America’s Cup – once one of the world’s most storied sports.  Chasing the Auld Mug since 1851, sailors pitted their mastery of the elements against one another to demonstrate valor and tactical brilliance befitting the Cup.  In 2010, the America’s Cup was raced in multihull 27m boats and in 2013, CIA engineer turned billionaire Larry Ellison poured money and lawsuits into the once elegant cup transforming racing into one of the saddest comedies of our time.  Now the winged hydrofoils reach speeds over 44 knots (50mph) at over 2.5 times the speed of the wind!  But comically while technology made the boats flying machines with horizontal airplane wings it also introduced another alarming feature.  The race cannot be conducted if the wind is too strong.  That’s right.  All the digital design brilliance cringes in the face of… you got it…, THE WIND! The race must be sailed in winds ranging from 5 to 25 knots.  And if you’re a Kiwi, you know how devastated you are to win multiple races only to have your sailing victory vacated because Oracle’s boat couldn’t handle the wind speed… in a RACE!  We’ve engineered our way into a world in which a sailing race can only tolerate moderate winds.

Those who extol the misapplication of “Moore’s Law” or the “Law of Supply and Demand” share a common fallacy.  These social maxims describe a constrained two-dimensional projection of a system in which analog reality is necessarily rejected.  Supply and demand presumed that people would consolidate their views of value exchange through the sole utility of state-associated monetary units.  Supply never calculated the regenerative or replenishment costs of inputs and required a persistent state of colonial expropriation of energy and elements from enslaved lands kept in abject poverty and political impotence.  Demand never contemplated conscious use as opposed to linear consumption to extinction.  Missing from the “law” was the human corollary of commons-based access and beneficial use exchange.  Moore presupposed hegemonic reliance on electricity without contemplating a world in which light, acoustics, kinetics and other energies may be superior and more widely applicable.  And in both cases, by reciting these conjectures as dogma, what passes for science, technology, innovation, and progress serves to further limit and attenuate the consideration of competing and superior options as to do so would represent an existential threat to the very fiber of manipulated social engineering – the communications and monetary system. 

At a recent conference, I was impressed with the negligence of “thought leadership” in perpetuating the catechism of digital sclerosis.  Ironically, I pointed out that the convergence of these two laws – digital fiat currency and exclusive digital animation of systems upon which we depend – means that we as a society have provided state and non-state actors a single point failure which is easily exploitable.  Now a miniature electromagnetic interference can appropriate or erase our economic system and disrupt the very nature of living.  Rather than heterogenous multi-modal adaptive systems, brittle susceptibility is the unchallenged sequalae of what we call innovation and advancement.  Reckless prattle from the celebrated likes of Elon Musk and Stephen Hawking about the dominion of machines – that the robots will one day turn on humanity – is relevant only in a world in which humans continue to build their prison cells and shackles using ever shrinking, increasingly myopic views of matter, energy and their digital organization.  Artificial Intelligence is an oxymoron at the collective scale.  Those who extol or fear it are probably least capable of apprehending the nature of intelligence.  For intelligence comes not from the diminution of contemplated options but from the expansion thereof.  It comes from the considered critique of unquestioned assumptions.  Oh, and it comes from actually reading the fantastically narrow sources from which sweeping generalizations and “laws” are derived. 

The America’s Cup is a harbinger of the Moore’s Law fallacy.  Yes we may get more precise.  Yes we may go faster.  But we will be less capable of handling the analog diversity of the real world and it will be that very world that will welcome us to reconsider our arrogance with dynamism at speeds exceeding 25 knots.  Time for the intrepid sailors to muster to humanity’s stormy dawn.

Saturday, May 6, 2017

Ain’t Got Time For That


I’m sitting on a plane flying from Australia back to the East Coast of the United States.  I read the Wall Street Journal and the Financial Times in between my 150 e-mail catch up (still have over 200 to go).  Both newspapers featured stories about the U.S. unemployment rate allegedly dropping – that message grabbing the headlines – while subtly acknowledging that the actual workforce engagement numbers also dropped.  In countless blogs, I’ve addressed the tragedy of our national workforce statistics which focus on the highly misleading notion that unemployment includes only those who have been recently jobless and ignores those who have been structurally dislocated from the workforce.  Laborforce participation is now standing at 62.9%.  Far from the headline rate of 4.4% unemployment, we’re at over 40% in reality.  Many of the employed making around $12/hour or about $25,000 per year.  We’ve got baby-boomers living on Social Security and pensions and young people living on $25,000 per year.  That means that MOST Americans are seeing a reduction in their standard of living.

In a related story, a friend of mine posted an article about the calamitous negligence regarding the environment which has put humanity on an extinction course.  And, “How,” you say, “are these stories related?”  Well, thanks for asking.

I’ve been contemplating humanity a lot lately.  And with good reason, I tell myself.  Over the past several years, I’ve been overwhelmed with the mountain of evidence that shows that humans, when presented with compelling evidence of alternative existences which would be demonstrably superior to the conditions in which they find themselves, choose status quo destructive paths far in excess of constructive alternatives.  And the reflex to this observation is a bull$#!+ platitude about risk-aversion and fear of change.  “What if…?” is the consensus paralysis that…
  • ·       keeps an executive holding onto a failed institutional model for fear of losing titular relevance;
  • ·       keeps a talented person from recognizing that lack of self-care has persistently harmed relationships;
  • ·       keeps government agencies charged with economic development resisting approaches that demonstrate the ineptitude of their bureaucracies;
  • ·       allow fund-managers to lose their clients’ funds with impunity when superior performance is accessible and less expensive; and,
  • ·       justifies inaction based on a cosmology of a “better” beyond.

In the face of these and an abundance of other illogical behaviors, I pause.  OK, consensus apathy is rampant.  Self-harm far exceeds harm done by others.  Rapid suicide is epidemic.  Slow motion suicide through obesity, substance abuse, destructive lifestyles etc. is pandemic.  The Adam Smith heroin of rent-based marginal wage living is being pedaled to students to justify lifetimes of indebtedness.  Get a degree. Get a job.  Get a mortgage.  And who wins?  Oh, that’s right.  The people who are selling the story by consuming the labor infantry like cannon fodder.  So what’s the point in caring?  What’s the motivation to do something?  If We The People are self-destructing, is there any reason to work to stem the tide?

I watched the film Gold on the flight from Melbourne to LA.  The movie is roughly based on the actual story of a group of mining prospectors who duped investors out of billions of dollars in an alleged Indonesian gold mine.  By salting the assays, the geologist in the film provides the impetus for a gold-rush frenzy that spanned the globe.  The story purportedly ends with the geologist getting pushed to his death from a helicopter flying low over the Indonesian rainforest while thousands of investors clamor for justice.  At one point in the film, an investment banking executive is asked how this all happened.  His explanation was that nobody – not the Indonesian government, not the corporate executives, not the investors, not the bankers – wanted to know whether the gold strike was real because they all wanted to believe that it was. 

Unemployment, complacency, suicide, gold.  What do all of these have in common?  Probably a lot.  They are all based on social narratives that in and of themselves are unconsidered.  Unemployment is bad and should be avoided.  Right?  But is “employment” a considered social good?  Complacency lets me get away with inaction which preserves my position.  But is it ethical to perpetuate a system that we know is absorbing resources to a futile end?  Suicide – fast or slow – is a tragic waste of life.  But is the organic persistence of a meaningless life a better alternative?  Gold is a safe-haven in volatile times.  What?  How long are we going to keep that myth alive?  A metal that has little utility in most lives is worth the reckless speculation of millions? 

Towards the end of the movie, the main character gives an acceptance speech when he’s awarded the Golden Pick Ax Award.  In his speech he extols the value of the persistence of a prospector.  Against all odds – the elements, government corruption, malaria, heat, cold, harshness, violence – the prospector persists based on the siren certainty that the strike is somewhere just beyond the next sunrise.  Love lost.  Health destroyed.  Trust violated.  Integrity out the window.  All because the quest justifies it.  And as I sit on the plane reflecting on the film, I recount my own Quixotic journey.  Am I any different?  Does my life matter?  And more fundamentally, what does “matter” mean after all? 

The Apostle Paul – the most influential contributor to the mislabeled “Christianity” since most of the “beliefs” of the religion are Paul’s, not anything attributed to Jesus – made the observation that without hope of an after-life, life wouldn’t be worth living.  What is it that allows us to accept this madness?  We come up with an ideal construct defined by a mythical, unverifiable “other” condition.  Then we denigrate the notion of humanity by ascribing bad behavior to being “only human” as though that’s a bad thing.  Then we convince ourselves that our own notions (ironically, a hubris that advances the ludicrous proposition that we could apprehend an ideal and recognize it if it was in our grasp and that what we have now is NOT that) are trustworthy.  Then we enter into this bizarre torture of setting aside present goodness so that we can somehow access a better disembodied “other”.   Is it any wonder that society is destroying itself and the earth when so much of our dogma is based on the explicit defilement of human experience and the earth?

Over 40% of Americans have check out.  The Department of Labor refers to many of them as permanently disappointed. And of the 60% that are working, most of them are also disappointed.  Not doing what they love.  Not engaging life with meaning and purpose.  Not experiencing a quality of life that feels worth living.  And all because of the siren of “tomorrow”. 

Here's my view.  There is no tomorrow.  There’s no “better”.  If you’ve chosen a path that involves misery today, there’s a better than even chance that you’ve neglected the goodness around you now and you’re not very likely to see it tomorrow – if you get a tomorrow.  Something bad happened to you.  Someone did you wrong.  Your health isn’t what it used to be.  You don’t have enough income to cover the bills.  Guess what?  That’s all going to be there again tomorrow when you wake up.  Oh, that plus your could-have-been narrative today.  So the hole will be deeper, the tunnel darker, the metaphors more cliché.  There’s no “meaning” to life.  We’re not on this planet to win or lose.  Physics tells us that matter can neither be created nor destroyed – it can only alter forms and motion.  So your life isn’t going to “matter” in some sort of mythical way.  My life isn’t going to matter either.  And it isn’t because life is not about some future consequence.  Life is about stewarding NOW.  It’s about taking each moment and choosing to engage it in such a way as to fully experience what it offers.  It’s about bringing your best and inciting the best in others.  And repeating this over and over again as long as you have breath.  If what you’re doing isn’t the best it can be, stop doing it.  Pause, breathe, feel the inescapable beauty of your body and the world around you and do what you’d love to do.  With any luck, you’ll find others similarly persuaded (as I have) and before long you’ll be living – not for some disembodied future – but for the ever-unfolding presents.


Sunday, April 30, 2017

Magnets, Means, and Errors


Did you ever wonder what the world would be like if a notable person had never been born?  Did you ever realize the futility of that musing and wonder how it is that the work of one person could shape the whole of humanity in profound ways far beyond their intentions?  Well, today we celebrate a birthday.  No, not mine!  And my how I loved turning 50 this past week and the great celebration that attended the event.  No, the birthday in question was 190 years earlier – April 30, 1777 to be exact.  Like me, he was intrigued with mathematics.  Like me, he taught about magnetism and the universal principles associated therewith.  And like me, he was fascinated by light and the manipulation of light through lenses to understand its essence.  But unlike me, he thought that, “the world would be nonsense, the whole creation an absurdity without immortality.”

The birthday we celebrate today was none other than Johann Carl Friedrich Gauss.  And the reason why I care about his birthday is singular.  He gave humanity one of its most toxic cognitive forms of bondage.  And together with his French collaborator (of sorts) Adrien-Marie Legendre, Gauss is unconsidered at our collective great peril.

In an effort to predict astronomical movements – principally the orbits of planets – Gauss developed a computation known as the Gaussian gravitational constant which is built on a mathematical notion of least squares.  This algebraic notion – that observable phenomenon can lead to forward predictions and thereby minimize measurement error – was innocent enough for its immediate application.  When one is trying to figure out where a planet is going to be in three days hence, this math had its utility.  But, like other astronomical innovations, Gauss’ work unleashed a toxic divination impulse that has become the root of our modern scientific inquiry and the bane of humanity.  The notion of prediction based on linear regression.

Now some of you hate math and, acknowledging that, let me explain something.  As the abject failure of pundits and analysts have shown in the 2016 U.S. Presidential election, if you measure consensus assumptions, your conclusions are entirely wrong.  In 2006 and 2007, I correctly described the conditions and the timing of the Global Financial Crisis in 2008[1].  Was I forecasting an outcome using predictive analytics?  No.  I was merely observing irrefutable documented behaviour in an occult industry and critiquing the system level convergence that was certain.  From mass pandemics (the Asian bird flu) to resource shocks to social paroxysm (the Egyptian multi-coups), the “trained” and the “expert” are left agape when linear regression behaviour is punctuated by disequilibrium events.  Regrettably, education’s obsession with the scientific method have taught regression but have assiduously ignored its dominant fallacy – that we know the variables that matter and we recognize that which is significant.  Elementary statistics teach us that interrogatory inquiry presupposes:
1.      Known variables;
2.      Known scale in which these variables operate;
3.      And Measurement Error.
Interestingly, the same discipline teaches us the error of untested assumptions about normalcy, kurtosis, skewness, and orthogonality.  However, the modern education system and the scientific method upon which it is built fails to account for these in every instance diminishing the efficacy of social and technical interventions.  Put another way, in the world of obsessive prediction and outcomes, we rely on our elementary algebra which seeks to solve for y in the classic linear predictive model:
y= mx +b
where y is the expected outcome; x is the variable(s) we think have an association with an observable; m is the scale or range in which x operates; and, b is unexplained variance.  This formula presumes that we know both the association between observations and effects (an entirely fallacious assumption), we understand the scale in which variables operate (an entirely untested assumption), and that the remainder is “unexplained”.  We don’t hold the possibility that the entire ontology projected in regression may in fact be prima facie false.

Here's the problem.  We are not conditioned to ask any of the fundamental assumptions that underpin the error of statistical divination.  We want to “know” what’s going to happen.  We want to “control” outcomes by manipulating variables.  But what we constantly ignore is the fact that the human analog experience does not happen on 2-dimensional scatterplots through which lines can be drawn.  Every struggle you’ve had; every emotional pain; every sense of loss; is based largely on the fact that you projected a plane in a dimension around which you built a narrative.  Often those narratives involved others.  But they had their narratives, their frameworks, their projections.  And just because a dot showed up in your world and a dot showed up in mine doesn’t mean that the lines that you connect and the lines I connect go in the same direction.  In fact, it’s certain that they do not.  So one day, using the exact “same” data, we arrive at different conclusions.  And then we expend amazing energy trying to re-narrate what we didn’t understand in the first place.

Gauss gave us a 2-D god-complex in a multi-dimensional world.  And as long as we subscribe to either of those features (the error of 2-D or the god-complex) we insure nothing but pain for our existence.  Our obsession with the “future” is nonsensical.  Making up stories and myths about immortality – a prerequisite for Gauss – implies that the present is insufficient.  And with that measurement error, all other measurements (and the measurers) will be disappointments. 

.[1] Martin, David E. “Social Contingent Liabilities and Synthetic Derivative Options” EUPACO-2, Brussels.  15, May 2007.

Sunday, April 16, 2017

Easter Requiem - Stop Buying Hope


 Hope.  What is about humans that so desperately want to cling to hope? 

That’s right.  Put down the chocolate bunny.  Back away from the brightly colored eggs.  Put a wrinkle or two into your frilly spring dress bought special for today.  Get serious.  What’s the deal with hope? 

For starters, it’s your mind playing a sinister seduction trick on you.  You’re telling yourself that there’s another condition – a better job, a more loving family, a nicer house, a purpose for… uh…. (more on that later) – that is remote from the present.  And isn’t it somewhat ironic that our perception gets objectively overridden by the exact same set of neurons which shape our view of the present and then convince us that an indeterminant, unobservable “other” will be “better” than the fully apprehendable “now”?

And why did I pick today to write this post?  Quite simple.  Because the power of myth – the animating impulse for judging the present to be inferior to some other, some later, some “out there” – is enormously animated by the way we tell the story of Easter.  And don’t think you can dodge the bullet my Jewish friends – Passover is no different.  Remember, we got to Egypt because Joseph was exiled by his family and sent to a far-off country where he provisioned the very family that rejected him!  Sure, we can all remember the story of slavery but we assiduously deleted the story about how we got there.  And a few weeks into 40 years, remember how we longed for the good ole days in Egypt?  But I digress.

Hope exists because we are taught to want.  Want exists because we are conditioned to compare.  And all of these dynamics are fundamentally pathologic because they ALWAYS rob the present of its completeness, its adequacy, yes, even its abundance.  In mathematical terms, hope is the imaginary error in our unexplained variance.  And more insidiously, it’s an admission that we’ve elected contempt for the present over our unfounded notion that we could concoct a “better”.  And how seductive is that?  We get to “believe” (once again, a self-referential delusion) that we can architect a more palatable scenario than the whatever situation we’re in at the moment. 

I love the Easter story that the Christian faith doesn’t explain very well.  It’s the one of Mary Magdalene.  Yeah, that Mary.  The one who was living her grief, sorrow, love, and passion when she went to visit the tomb of the man she loved and followed.  Sanctioned history approximates her pouring perfume on her beloved’s feet before the crucifixion.  And on that morning, she’s just doing what she knows to do as an expression of love – coming with fragrances to anoint her beloved once again.  She’s not hoping.  She’s not believing.  She’s doing.  And on the way to the tomb, sure she’s probably thinking, “Why did he have to be so damn stubborn?”  “Why did he have to piss so many people off?”  “Why couldn’t we have just lived a normal life like everybody else?”  “Why couldn’t he have seen how much I loved him?”  “Why wasn’t my life good enough to convince him to stay and let go of the mission?”  Cut the pious crap.  She wasn’t singing Easter songs.  She was crying.  She was mad.  But she was doing what she knew how do do – show love.  And when she found the empty tomb of the story, she even turns to Jesus and thinks he’s a gardner.  It’s not until he says her name – “Mary” – that she recognizes the man that just three days earlier was the center of her world.  And there’s the problem with the mind that manufactures “hope”.  It doesn’t slow down and recognize that the impulse that animates the unconsidered reflex of hope could be the very same impulse to say, “slow down and observe.”  “You’re missing something that’s standing right beside you.”

The Easter story is as much about this tender reunion as it is about death and life.  And we miss the point when we fail to see that in the sanctioned story, the Jesus who could fly, walk through walls, appear and disappear, that Jesus, stayed at the tomb to meet Mary.  No one talks about this.  Did he hope she would come?  Did he believe she would come?  Nope.  He knew that Mary wouldn’t miss a chance to anoint him and he waited for her to come.  Easter is NOT a story about hope.  Easter is not a story about belief.  It’s a story about certainty.

Now by now you’re probably thinking – what’s this got to do with economics.  Well here’s the dirty little secret.  Hope, want, and belief are GREAT for business.  Relationships end, great!  Hire lawyers to get what you deserve, counselors, therapists.  Drink.  Drown your sorrows.  Buy new clothes.  Change everything to rid your world of those memories.  Take down his pictures.  Need the house or car, great!  Spend more time at the office, drown yourself in so much work that you have to eat out, fly, drive, stay in hotels.  Today sucks!  Great!  We’ve got a pill for that, we’ve got the dream vacation that will give you all you can eat and drink all-inclusive.  This incarnation is tough.  Great!  We’ve got a heaven that’s waiting for you as long as you worship, restrain, conform, tithe, and repress.  Oh, and that should do wonders for your emotional well-being so you consume to drown out the scarcity and repression-induced lack of fulfillment.  Whether it’s the actual lottery or the metaphoric one, consumption is more fueled by hope of a better (experience, life, status, reputation, appearance, you name it) than it is based on an adequate present. 

When someone is hawking “hope” (or its ugly ephemeral cousins faith and belief), there’s a pretty high probability that there’s a present reality that is being neglected.  The promoters of hope are lacking a fulfilled power illusion.  The promoters of faith are lacking the discipline and vulnerability of deep and abiding inquiry into the knowable and the ease of unknowing.  The adherents to belief are lacking the certitude that life is an ever-present unfolding which is complete in each of its moments.  Not surprisingly the stories and myths that give us these sugar-coated placebo realities – whether it’s Paradise, Avalon, or any other distant “Bliss” – are told by aspirants, not by those who truly live.  The Arthurian ideal was to live in a way that modeled fully living.  Our addictive, consumptive, void-filling existences are merely indictments of an illusion created by the story-teller – not the protagonists. 

So my Easter celebration is an acknowledgement of the pain of endings.  Sure I had my dose of hopes and what-ifs.  But more importantly, this requiem is about allowing that grief to be seen for what it was – a projection of my own blindspots and senses of inadequacy – which can now vanish in the sunrise of a day which is met with simple gratitude for what is.  Nothing more.  Nothing less.  Just is.  And yes, I’m going to have some chocolate and while I’m eating it, I’ll give thanks for my dear friends in Papua New Guinea who grow, ferment, and roast it so that I can have the smile it brings to my face.  Thanks Mama T.  And Happy Easter.


Tuesday, March 28, 2017

Lend Me Your Ears


The evil men do lives after them;
The good is oft interred with their bones.
So let it not be with David Rockefeller.

On the 20th of March, 2017, David Rockefeller died.  One hundred and one years, 9 months, and 8 days.  He is one of the few people about whom it can be said that he died amassing approximately a dollar for every second of his life (3,211,660,800 seconds).  I had the good fortune of interacting with the Rockefeller family as well as a number of their colleagues and advisors around the world – most notably in the Middle East, Russia and China.  And together with a few of his living colleagues, I have observed the life of David with considerable intrigue.

David’s passing marks the convergence of a rather ironic series of events.  In one of the most frequently recounted quotes attributed to David Rockefeller in 1991, the media’s discretion celebrated in his aspiration to a “supra-national” “world government” was the same media whose indiscretion and breathless incredulity led to our current political environment.  Had the media exercised more “discretion” we might have avoided confirming David’s warning that, “the supra national sovereignty of an intellectual elite and world banker is surely preferable to the national auto-determination practiced in past centuries.”  Recent political events across the globe have demonstrated the effect of a political system accommodating an unconsidered, Twitter-feed-attention-span electorate.  His recommendation may indeed be ill-conceived but the current alternative isn’t demonstrably better.

It is David’s speech to the United Nations Ambassador’s Dinner on September 14, 1994 (he starts speaking at 1 hour and 45 minutes into the C-SPAN video) that captures my attention as I reflect on his life.  This man of the world, this globalist both revered and feared by many, based his world view on a very simple premise – industrial scarcity.  And with a last name like Rockefeller, those who clamor loudest about the New World Order and the ills of the Council on Foreign Relations, the Bilderberg Group or the Trilateral Commission allow their frenzy to blind them to the wisdom deployed by Mr. Rockefeller.  I find it amazing that those who rail against the system that allegedly “doesn’t work” fail to see the elegance of a system that, in fact, is working precisely the way it was designed to work!  The 99%ers lose credibility when they don’t carefully examine the engineering of the system that has been working since the mid-1800s for the very few who architected it.  And more importantly, conflict, strife, and immeasurable energy poured into conspiracies, diatribes, and marches not only achieves no salutatory effect – in fact it energizes the very machine that is the purported enemy.

Anyone familiar with the Breathing Enterprise and Integral Accounting framework can examine the genius of the universe effectively deployed by the few that sought to control the many – with great success.  They not only were masters of alchemy:  oil (commodity) into banking (Chase Manhattan Bank – money); government social order built on fear of communism (custom & culture) into the social technologies of the Council on Foreign Relations, the Trilateral Commission, and countless other cover operations (technology); and unique access to information through the Office of Strategic Services (OSS) and the CIA (knowledge) into the massive perpetuation machine of advisory roles that became agencies of control from Kissinger and Carter right up until the present (well-being). 

A careful examination of the Rockefeller Foundation reveals the mitochondrial transformation of the perpetual motion machine which enjoyed the aspirational fantasy status in an enraptured public eye while fueling the sense of not-quite-good-enough – the most insidious form of human scarcity of all – among the very same population. 

David Rockefeller was a study in calculating equanimity.  He was a master of rising above duality.  He was an analog man in an increasingly digital world and he used his ascended position to achieve remarkable feats.  And as a case study, we fail to include the abundance of insight available to us if we don’t respect and deeply understand what made the man and his mission work so effortlessly.  David was, to so many, a possible teacher of how systems can work.  And rather than critique his morality (or lack thereof, depending on one’s world view), I would heartily commend learning from the man and his method.  For if we seek to form a More Perfect Union – a system that works for all of us a bit more – we must carefully study models that work (regardless of their motives) and take the best lessons from them to build a brighter future.  Denigrating and judging merely dismisses the abundance that eluded David in his life.  Let it not be thus with us.

Rest in peace. 


Tuesday, February 28, 2017

Willfully Practicing Ignorance


Monday, February 27, 2017 will be a day I remember for a long time.  The truth is I remember most days but Monday was special.  In partnership with my team at M·CAM and growing number of the leadership at CNBC, my Innovation Alpha-based CNBC IQ100 powered by M·CAM U.S. equities index was celebrated with two articles and three on-air segments.  And with good reason.  The CNBC IQ100 powered by M·CAM has done something that hasn’t been seen since 1954.  It grew over 40% in a 12-month period.  Far exceeding the “Trump-rally” of the S&P, NASDAQ, and Dow Jones Industrials, our Innovation Alpha method continues to demonstrate the unique insight that M·CAM provides the market and shows that by measuring the quality of corporate innovation, far greater investment returns are accessible in the equity markets.  That’s good news, right?

Well, not so fast.  It was 1999 – nearly 20 years ago – when I first demonstrated the algorithm that powers our current market methodology.  By 2000, Inc., Forbes, and the Wall Street Journal had published articles about our methodology.  The U.S. Senate Banking, Finance, Government Oversight and House Judiciary and Commerce Committees had all heard that there was a way to reliably measure innovation in American industry.  By April of 2001, our methodology had been demonstrated around the world in the EC21 Conference in Europe to the State Council of China.  The Financial Accounting Standards Board (FASB) spent weeks in our offices in Charlottesville and in meetings in Connecticut to embrace the rationale of our methodology in accounting standards now promulgated around the world.  But on February 27, 2017 my index out-performance is a result of one thing: willful ignorance.

I’m puzzled over the monotony of my last several decades of experience.  As evidenced by the CNBC IQ100 and its celebration on Monday, making qualitative measurements of corporate innovation and its use affords reliable market visibility on value.  Where researchers like Dr. Hall, Dr. Shapiro, Dr. Lemley and countless other economists tried to understand innovation through quantitative lenses, M·CAM always held that the intent – not the artefact – of the innovation impulse was relevant in understanding innovation.  And intent can be proactive and constructive or can be reactive and destructive with respect to value.  Rather than adopting a predatory instinct to exploit this insight exclusively for our commercial advantage, M·CAM maintained over 1/3 of its corporate activities in Innovation Literacy – the explicit sharing of our capabilities with others.  Periodically it’s been welcome – primarily in countries seeking to build their economic capabilities.  Frequently it’s been rejected or ignored by G-20 countries bent on profligate spending on defense, infrastructure, energy, health-care, and telecommunications.  That’s right, when the public’s money is being spent – reliable, qualitative assessment of innovation is unwelcome.  That feels wrong, doesn’t it?  Shouldn’t public procurement concern itself with the quality of the technology it procures?

Not so fast.  The problem governments have with reliable, qualitative assessments of innovation is that it makes occult patronage far less viable.  If best quality or best service was the mandate, precision matters.  But when officials in government directly benefit from influence afforded by incumbent multi-national companies while in office and land in cushy Government Relations roles in those same corporations upon their departure from Public “Service”, pointing out material misrepresentations is unwelcome.  And this is as prevalent in Australia and the U.S. as it is in Papua New Guinea and Somalia.  Over the next 10 years, Australia’s government choices will cost its citizens an avoidable loss of over $50 billion.  In Papua New Guinea, reckless financing of oil and mineral projects will lead the country into functional insolvency despite its vast wealth of resources.  In the U.S., President Trump’s commitment to defense and infrastructure will lead to an annual loss of over $750 billion in inefficient spending.  The EU will pour billions of euros into “innovation” funding programs which have already been demonstrated to merely re-distribute money – not create industries or wealth.  These governments all know it… and continue the status quo.

How did we get here?  The answer is quite simple: surrogacy.  When ordinary citizens acclimate to the notion that “someone else” needs to take care of them, the ceding of individual accountability and discernment supplies the power leakage that accumulates in bureaucracies.  This power overwhelms the public service intentions of officials who realize that they are the gate-keepers of the public treasury.  And patronage (in the best of cases) and graft and corruption (in the most common cases) are born.  But remember, corruption is a derivative not of bad individual actors.  Rather it is the consequence of mass abdication of personal accountability and responsibility.  When We The People acknowledge that WE are responsible for our own actions and our destinies, than our interest in remaining engaged and informed goes up.  When we surrogate our well-being to anonymous public sector agencies, we fuel the abuse that besets us.

Over the coming weeks, Inverted Alchemy is going to take on a new form.  You, the readers of this blog, are going to help select the themes you would like to learn more about.  I’m going to listen and respond.  Since 2008, I’ve tried to point out what I think matters.  Now it’s your turn.  And together, maybe we can begin reclaiming a bit of our accountability and in so doing Create a More Perfect Union.


Sunday, February 5, 2017

Working Class Illusions...Australia Style


Over the past few months, I’ve been exposed to the Australian Technical and Further Education (TAFE) system.  In a class-based, caste-inspired social engineering experiment, Australia took Adam Smith’s division of labor principle to the extreme insuring that the erudite universities preserve their fraternity of elitism and broad irrelevance (Australia ranks last on the OECD’s measure of industrial engagement with universities – behind Mexico!) while the “working class” are afforded sufficient skills to serve as grist for the industrial mill.  In 1946, Sir Eric Ashby callously observed:

“Here is the criterion for determining what subject or parts of a subject should be taught at a university. If the subject lends itself to disinterested thinking; if generalisation can be extracted from it; if it can be advanced by research; if in brief, it breeds ideas in the mind, then the subject is appropriate for a university. If, on the other hand, the subject borrows all its principles from an older study (as journalism does from literature, or salesmanship from psychology, or massage from anatomy and physiology) and does not lead to generalisation, then the subject is not a proper one for a university. Let it be taught somewhere by all means. It is important that there should be opportunities for training in it. But it is a technique, not an exercise for maintaining intellectual health; and the place for technique is a technical college.”

“If it breeds ideas in the mind”!  As though a plumber may not be as likely to encounter a notion of genius as an ivory tower ensconced academic!  Really?  And the Committee on Australian Universities in 1957 warned of the risk of any technical institution daring to venture into the realm of the Academy as they would present a risk to the “urgent national need” for skilled and semi-skilled labor.   In 1899, the State of Victoria was the home of the first inquiry of the Fink Commission (named for Theodore Fink) which sought to improve the quality of the mechanical and technical training efforts of the 19th century.  In what was to overhaul both primary and secondary education (as well as reify the divide between university and vocational tertiary education), the turn of the century brought with it the “development” imperative to insure that sufficient tradesmen were available to meet the requirements of the industrial and mining mandates of the country.  In short, with the exception of the University elite, education is a means to a “gainful” employment for the industrial, social, or economic mandate determined by…, well, no one is really quite sure.  At no point is the individual considered relevant in setting the purpose for their industry – they are just expected to rent their labor to whatever industry the establishment deems relevant.

I am fundamentally concerned with the absence of a meaningful critique of the theoretical underpinnings of the Adam Smith and Marxian argument which merely recites the dogma of labor vs. elite.  From the fourth century BC forward, the notion of division of labor has been rooted in the meeting of sufficiency at a caloric level (consumption to combustion / extinction).  Ibn Khaldun would be appropriately referenced in his work Muqaddimah in which he discussed the communal requirement for division of labor.  Arguing that division of labor allows for the needs of a community to be met more efficiently if tasks are divided than if individuals have sole responsibility for all necessities, Khaldun anticipated the rise of the industrial model in the 14th century.  Focusing on Smith and Marx orthodoxy (not to mention Alexis de Tocqueville, Immanuel Kant and others) leads to the reification of the linear notion of production as a means to consumption and extinction without addressing the underlying moral constructs surrounding:

  • A.     Replenishment of matter and energy rather than the extractive / extinction utility;
  • B.     Consideration of who sets the priority for what is manufactured and to what end;
  • C.      Purposeful despotism when labor is allocated against priorities set by hierarchy into which choice labor allocation has no correlation to real or perceived need; and,
  • D.     Notions of equivalence to those things that do not serve a consensus “need” but rather are seen as standards of “development” or artifacts of “status”.

When one is building a ship or a road, technical precision is the difference between fit-for-service and structural failure.  When one is dressing a wound, changing a bed-pan, welding a steel frame, designing a house – some standard of care is essential.  And I’ve been engrossed in reading what is required to meet the technical education standards for these and hundreds of other careers.  At the same time, I’ve been examining the University end of town.  The profligate elitism that permeates the dichotomy between tertiary education in Australia borders on the comical.  I’ve made the very recent mistake of reading doctoral dissertations from several of Australia’s leading universities and what I find amazing is the degree to which they are largely over-weight literature review and underweight substantive contribution to advancing the state-of-the-art.  Ironically, Australian universities measure their academic relevance in large part on the number of times their work is cited paying no attention to whether their work is being celebrated or impugned.  All publicity is good – apparently. 

In short, neither end of the social engineering experiment is serving the public good or global relevance.  But the failure is one that transcends the current social discourse.  The root concern is that there is no clear vision – no organizing principle – around which the industry of education can rally.  Complacency fueled by the illusion of over two decades of economic growth without a recession has led to a generation of politicians and civil servants who merely recite their mantras about jobs, innovation, and growth, without a single clue as to what any of these mean in a global market context.  Australia will be spending over $120 billion dollars on defense over the budgeted future without a clear doctrine justifying what it’s actually defending and against whom these defenses are aligned.  Australia will be building infrastructure for growth but cannot articulate what purpose this growth will serve.  And nowhere in the dialogue is any recognition that Australia – a net consumer of other people’s ideas, services, and programs – could invert that dynamic and become the world’s leader in the unleashing of innovation from across the globe. 

What does this mean?  First we must examine the core capabilities of the fully functioning education ecosystem.  As the abject failure of pundits and analysts have shown in the 2016 U.S. Presidential election, if you measure consensus assumptions, your conclusions are entirely wrong.  In 2006 and 2007, I correctly described the conditions and the timing of the Global Financial Crisis in 2008[1].  Was I forecasting an outcome using predictive analytics?  No.  I was merely observing irrefutable documented behaviour in an occult industry and critiquing the system level convergence that was certain.  From mass pandemics (the Asian bird flu) to resource shocks to social paroxysm (the Egyptian multi-coups), the “trained” and the “expert” are left agape when linear regression behaviour is punctuated by disequilibrium events.  Regrettably, education’s obsession with the scientific method have taught regression but have assiduously ignored its dominant fallacy – that we know the variables that matter and we recognize that which is significant.  Elementary statistics teach us that interrogatory inquiry presupposes:

  • 1.      Known variables;
  • 2.      Known scale in which these variables operate;
  • 3.      And Measurement Error.
Interestingly, the same discipline teaches us the error of untested assumptions about normalcy, kurtosis, skewness, and orthogonality.  However, the modern education system and the scientific method upon which it is built fails to account for these in every instance diminishing the efficacy of social and technical interventions.  We are not as much facing a 4th Industrial Revolution[2] as we are a Scientific Renaissance.

And while the exceptional “successes” of modernity – from Bill Gates to Mohammed Yunnus to Eleanor Ostrom – have changed the scale, scope and impact of incumbent modes of human interaction, they have not fundamentally ushered in new modes of thinking, examining and engaging a world in a regenerative and productive way.  At the margins, Hunter Lovins and others have pointed to an opaque future in which biomimicry opens new design and engineering consideration.  This is an important harbinger of humanity’s future.  But for global citizenship to be possible with as many at 10 billion inhabitants (or more) on the Earth, integral isomorphism will be required.

What is Integral Isomorphism?  Ironically, it’s quite simple.  It’s the way the world and the cosmos works.  From intergalactic conductive matter, to light and magnetism, to photosynthesis to mitochondrial respiration within our cells, observable principles are evident in unconstrained fractals and these principles underpin the animating impulses of relativity, thermodynamics and quantum mechanics.  Unconcerned with linear duality, integral isomorphism engages persistent, generative, infinitely orthogonal dynamics of activation, transmission and perpetuation where systems are regenerative at every level.  In other words, to be a productive citizen in the 21st century, a person has to expand their sensory ability, entertain divergent contextual perspectives, synthesize and integrate multiple perspectives and narratives with tolerance, see the costs and benefits of all actions to all actors within the ecosystem, select appropriate tools to form reproducible experiences, and optimally engage rather than consume the environment in which we live. 

For education to be relevant in the 21st century, it must be emancipated from the linear industrial construct of creating rent-based industrial employment and social pacification and liberated to enable citizens to productively engage in valuable pursuits at the individual and collective level.  This is not an indictment of industry – it is the recognition that as industry is already in the throes of transformation, so too must education transform. 


.[1] Martin, David E. “Social Contingent Liabilities and Synthetic Derivative Options” EUPACO-2, Brussels.  15, May 2007.
[2] Schwab, Klaus.  The Fourth Industrial Revolution.