Sunday, August 16, 2015

Fecund Collaboration

Last night I listened to Meera Allen’s Manifesting Destiny radio show streaming live from Bondi Beach, New South Wales, Australia.  The 15,557 kilometers that geographically stood between Charlottesville VA and the beach melted as I listened to Meera speaking with my dear friend and colleague, Kaya Finlayson.  Kaya is the producer and director of the film Future Dreaming: A Conversation with David Martin and the interview was scheduled in anticipation of the film’s premiere in Sydney on August 29th.  As I listened, I was caught up, for a moment, in my profound love and gratitude for Kaya’s generous impulse to weave my words into an aesthetic masterpiece – truly an amazing experience of some of humanity’s best.  Sure, we had shared many hours of conversation on film but in this interview, I was hearing words, phrases and thoughts that I recognized not as my own but rather as those I’ve had the honor of articulating in a fashion that others can share.  In the candlelight at the dinner table, emptied of our amazing dinner of bounty from our garden, Colleen and I listened in silence.

The interview was born of Meera’s passion for finding conversations with people who are at the vanguard of humanity and its revitalization.  Kaya’s film (shot by video alchemist Dan Freene) was born of an invitation that he and I received to join Julio De Laffitte in Antarctica for the maiden voyage of Unstoppables.  Julio’s vision of creating the Unstoppables movement was born of his certitude that humanity needed a convening of great, intrepid souls who were ready to take themselves and their engagements with the world to a more purposeful level.  Julio and I met at a conference I led in Sydney organized by Christine McDougall and co-hosted by Robert Prinable and Peter Hojgaard-Olsen.  Christine has spent years exposing hundreds of people to the work that I’ve done and has been a close business and life partner.  Christine was introduced to me courtesy of the work of Ken Dabkowski who, as an employee at The Arlington Institute, recorded and broadcast my speeches there for global distribution.  I was at The Arlington Institute as a board member invited by John Petersen with my primary responsibility focused on economic foresight.  I was introduced to John Petersen through the quiet diplomacy of Morgan Percy… and so it goes.  In a 90 minute window, I was transported across nearly two decades of amazing people without whom this interview would not have happened. 

As we’ve been getting ready for the film’s release, we’ve had some amazing moments of humanity.  Kaya and I are deeply committed to insuring that the film has the broadest possible audience as we see it as a gift to humanity.  A theatrical release done under a Creative Commons license is certainly not a first but it is still all too novel.  But we were kindly shown how much the film means to many of those in the list above – people for whom the film can be a vital part of their life’s purpose and mission.  In these conversations, we’ve been given the opportunity to examine our own predilection to see what we perceive to be our “best interest” without appropriately engaging ALL of the interests at play.  We’ve had the honor of incredibly robust friendships and relationships that have shared their desires to be deeply part of the conversation regarding how this important work is distributed.  And we’re better for these conversations. 

As I reflect on the process of this film coming into existence, I know that it represents an artifact in a world beyond the conventional view of collaboration.  Sure, on a purely mechanical sense, Kaya’s production genius, Dan’s videographic skills, and my synthesis of many topics of interest were stitched together to make a film.  However, if we see collaboration in the artifact, we neglect to see the subtle and profound effects that others have on making the ecosystem possible into which the artifact can manifest.  Had Julio not formed the Unstoppables, invested deeply from his own resources to fund the venture, and invited Kaya and me to the trip – there would be no film.  Had his business – JDL Strategies – been unsuccessful, he would have lack the provisions to make the Unstoppables vision and reality.  Had Christine held my relationship with her in a proprietary fashion, I would have never been in the venues which gave rise to Julio and my connection.  Had John Petersen not offered the stage of TAI for my economic foresight and critique, my voice could not have been in the podcast that Christine heard while running in the morning.  And had Buckminster Fuller not been so careful in his articulation of a better view of humanity, she may have missed the subtle echoes of his work in my living.  Collaboration is not just the manifestation of the finished product.  Rather it is the formation of ecosystems of fecundity from which we know fruitful bounty will emerge without attaching ourselves to the artifact of one or another defined or expected form.

I am deeply honored that each of these luminous beings has crossed my path and have, for some moments longer and some shorter, shared a piece of my journey with me.  I know that, without any one of the strands, the tapestry of Future Dreaming would not have become the elegant homage to humanity that it represents.  And I trust, as we step forward, we deepen our resolve to honor all those who open the fertile soil in our lives into which we plant the seeds of our efforts and intentions so that we can, in fact, provision a bountiful harvest – A More Perfect Union.

For the film, check out

Sunday, August 2, 2015

Wealth or Feet of Clay


Boston Consulting Group compiles an exceptional review of the global asset management industry and publishes their data in periodic reports.  In their Global Asset Management 2015: Sparking Growth with Go-To-Market Excellence publication, they reported that in 2014, global assets under management (AUM) grew from $69 trillion to $74 trillion between 2013 and 2014 representing an 8% increase.  AUM grew fastest in the Asia-Pacific region at a rate of nearly 12%.  The top 10 U.S. managers increased their dominance in the marketplace capturing 68% of all asset flows into managed portfolios, an increase from the 53% capture they had in 2013.  It is quite fascinating to realize that, for the first time in modern financial history, AUM for managed accounts (money controlled by corporations and individuals) surpassed the global GDP at just over $73.5 trillion.  Just sit with that for a moment.  Individuals and corporations reportedly control more of the world's wealth than the world's wealth.

Now, on one level, you can look at this data with a rather apathetic eye and presume that there's a bunch of big numbers; somebody out there must be doing their job; and, there's really nothing about this that the common person can understand anyway so, what the heck.  And, if you take this approach, you are in very good company.  Most people view these numbers with a blurry eye and go back to Facebook to see what some cat was doing on the latest hilarious video.  But there are some rather important insights that should come leaping off the page to even the most casual observer when considering these pieces of information.  A couple of pieces of data that should be cause for more careful consideration are the following.  According to State and U.S. Census data, pensions and other liability managed accounts (managed funds that have contractual obligations to return principal and investment income) currently are funded at about 74% of the level they would need to be to fill their fiduciary obligations.  The returns that would be required to close the gap on these funding shortfalls has not been possible (using traditional investment disciplines) since the 1970's.  In short, while record accounts of private and corporate-managed assets are growing, the pension expectations for most global citizens is grossly under-provisioned and the situation is worsening.  Second, the growth of private and corporate AUM is nearly 300% of the actual GDP growth.  This means that, far from reinvesting in the future, individuals and corporations with resources are plowing their money into their own treasuries and not reinvesting these assets in the engine of future economic activity.

As he was just getting his reign off the ground Nebuchadnezzar had a dream about a statue with a head of gold, chest and arms of silver, belly and thighs of bronze, legs of iron and feet made of clay.  While he was watching the statue, a rock smashed into the feet and the entire colossus collapsed and was scattered.  In the interpretation of this dream, the prophet Daniel discussed the coming kingdoms that would be progressively less glorious and more ruthless that would one day be crushed due to their brittle resolve.  I like this story as an analogy for the applicability it has on the global economy as we now can observe it. 

The 1 percenters love to talk about wealth inequality and resource distribution disparity with some justifiable reason.  There is entirely too little consideration for the abject failure of business models which have spent the last 34 years listening the siren song of Jack Welch who, on August 12, 1981, in his speech "Growing fast in a slow-growth economy", served the elixir of unconsidered "shareholder value" as the driving impulse for business.  In an effort to maximize the value of the corporation - saying nothing of the return of value for reinvestment - his approach encouraged anti-social behaviors.  An excellent indicator of the failure of this model is what the OECD refers to as Base Erosion and Profit Shifting (BEPS) in which corporations shift their declaration of profits to tax havens thereby removing from their local economies the value of the enterprise formation often sought by the very localities from which revenue is shifted.  In the past few years, American companies like Apple, Caterpillar, Cisco, Google, Pfizer and Starbucks have reported trillions of dollars of profits in countries that explicitly facilitate tax evasion.  The top five countries aiding this malignant behavior are Netherlands, Ireland, Luxembourg, Bermuda and the United Kingdom.  When you add up the U.K. Commonwealth countries, these collectively represent the most egregious complicit conspirators.

When you look at the off-shoring of financial assets, the increased control of financial assets in the hands of individuals and corporations, and the growing use of BEPS, you can certainly see that the feet of clay are on the verge of getting smashed.  And the smash is going to come from the weight of the unfunded pension liabilities that are already staggering and mounting.  Private investors are flush with capital and financial assets while the vast majority of the population is not.  Companies, acutely aware of this problem, are off-shoring financial assets at record and growing rates.  And in the short term, this is smart.  But in the longer term, it's foolish. 

Consider this.  The official estimate for the insolvency of the U.S. Social Security program is estimated to really hit the program in 2033 - 18 years from now.  With deficits of over $70 billion per year and with the combined 75-year unfunded liability for the programs exceeding $13.4 trillion dollars, the U.S. economy is on the verge of seeing the liquidity to support the U.S. consumer population reduce by as much as 23%.  When spending gets reduced by 23% in any major consumer segment, the effects are massive.  And where do you suppose the cash for these shortfalls will come from?  Do you suppose that the hundreds of companies who squirrel their cash in the Netherlands and Commonwealth countries will take on the financial responsibility for these failures?  Do you suppose that the $74 trillion in managed accounts will suddenly decide to unleash for the benefit of those from whom it's been harvested?  Absolutely not.

Which leads me to the reason why I started writing Inverted Alchemy in the first place.  We've got 18 years - half a generation - to come up with entirely novel models on how we define, distribute and manage wealth.  The $74 trillion in financial assets are illusory.  They are numbers on a page and they convey the illusion of control.  We now need to consider how to characterize wealth not as horded assets but as proximity to and interactivity with assets and productivity.  And if we're smart, we'll start doing this sooner rather than later.  The good news is that we'll have to do it anyway as the current system is entirely incapable of lasting.  So let's start new conversations now rather than waiting for the rock uncut by human hands dealing its fateful blow to the feet of clay.