Creative Destruction

When you have a secure base, Creative Destruction is far more attractive. We invest a lot in our careers, our relationships, our homes and our identities as we build a life. The more we know we will be okay, the happier we are to lean into destruction. The more we trust that destruction to be an act of creation, the happier we will be to pick up the sledgehammer ourselves. That is why I don't believe protecting workers is about stopping destruction. Provide the empowerment directly. Don't protect the job. Empower the person. A Universal Basic Income beats a Minimum Wage. Ensuring we all have the ability to walk away, is the best way to ensure we can walk towards.

Creative Destruction

I think we are living in a particularly interesting time. This is where capitalism shows its true value in my opinion. I say this at a time when this value is being discounted by the opposite actions of very interventionist governments.

The value is that of creative destruction. The best ideas continue to survive. People are still earning some money, maybe less, but some. People are tightening their belts but the world is carrying on. They will still spend their money on what you are doing IF it is the best use of their money.

To a large degree... having to fight means the best ideas and most efficient users of resources will be those that survive. In a centrally planned economy, things don't fail... on the outside. In fact, things that fail actually attract resources like a black hole.

That being said, while this creative destruction is probably good at `taking out the trash'. I am sure some great ideas (for the future) will not work right now because of the harsh environment, and I am sure that this process is a painful one for lots of people.

But... how do you improve if you aren't allowed to fail?

Fist to Mouth

Creative Destruction dismantles long standing ways of doing things in order to make way for innovation. It scales the idea of “making yourself redundant”. There is a punch you in the face obvious problem with making yourself redundant. It requires trust. Fool me once, shame on you style. When you realise that someone has the ability to cut you loose like a gangrenous limb, after solving their problem, one option is to make yourself irreplaceable. To stop trusting. To create artificial barriers to entry and negotiating power. Little secrets people don’t want known. Stuff they know you know they wouldn’t want in the newspaper. Dirt. The only way to truly want creative destruction is to be an owner. Then, and only then, do you have an incentive for the problem to be solved. Otherwise, the real incentive is to make sure you, personally, are a part of the problem solving. You want the problems to go on. To release the power of creative destruction, we have to detach our identities from problems. To build buffers of cash, and engines of capital, that support us beyond hand to mouth living. That make us celebrate a job no longer being necessary, because it means a problem has been sustainably solved.

Creative Destruction & Infallible Ships

After reading Fen's comment on `Creative Destruction' I purposefully held back on responding until Stu did.

Fen:

If left to right itself a year ago ,the sub prime problem would have swallowed most financial institutions in the US. Lehmans!!

stu:

You talk about the peculiar belief that we could build something infallible, but in the next paragraph you imply that if we intervened we could stop these bad things from happening.

Of the two scenarios (intervention/non-intervention), intervention seems to me to be a much clearer example of us believing we can make something infallible.

I find the image of the Titanic a useful one. But for different reasons. If the titanic had been save by an intervention... say, a chance passing ship, perhaps another 20 titanics would have been built. Maybe... and this is not a nice thing to think of, the tragedy of the failure saved us. Unsafe ships sink, people re look at the model and build something that works. That is where I think Capitalism is at its best.

Perhaps the lesson here is that we shouldn't be building titanics.

As for the systemic risk of the Financial system, I can't comment. Despite 8 years of studying Finance and Economics, I can't claim to understand how the financial system works. Banks are opaque beasts at best.

This ogre of systemic risk I feel is perhaps an excuse used to justify intervention. Intervention that keeps the Titanic afloat.

Long enough for more titanics to be built and more people to die?

I don't think this crisis is an example of failed Capitalism. I do think it is an example that there isn't any obvious answer as to how to intervene when periods of destruction happen.

Manchester

For a relatively small island, the United Kingdom has a lot of flavour. People can tell from accents which city others come from even though these cities are neighbours. While language pulls us together, people clearly value signals of where they are local. Manchester is the second largest city in the UK. It's unplanned urbanisation was on the back of a textile boom which lead it to become the world's first industrialised city. Before industrialisation, most of us would have been 'different but rural'. The underlying sounds of our lives would have rhymed. Cities bumped up the extremes. Wealth and poverty. Boom and bust. The cities population peaked in 1931 at 766,311 (530,300 now, with 2.7 million in Greater Manchester). Manchester lost 150,000 jobs in manufacturing 1961 and 1983. Creative destruction, or just destruction, depending on whether you landed on your feet. In times of change, local is something you can cling to.

Manchester Montage

Hard and Soft

The backers of most ways of thinking think of their approach at its best. Whether you call yourself a Communist, Socialist, Capitalist, Scientist or you are Religious, I think we all aspire to the good life and I haven't ever met someone who is malicious in their belief.

Capitalism at its best is similar to Science at its best. It is not an answer. It is a recognition that we don't know and things are complex, so we follow a process that needs continual tweaking. This recognition that no one actually has the answer is what lead to a devolvement of central control that along with the Industrial Revolution has helped in making an incredible dent in poverty. Poverty remains not because there isn't enough to go around, but because of some of the negative side effects. In absolute terms it is hard to find groups of people who are worse off.

Fewer people in the world are poor. #Poverty #DataViz #Inequality From: http://t.co/4wJQAPcBsv pic.twitter.com/KilGUhR2Yx
— Max Roser (@MaxCRoser) December 16, 2014

Capitalism at its worst is similar to Religion at its worst. Once you have found something that works, you can become more resistant to change and more entrenched. When your business model becomes about defending something that used to work, or slowing progress in order to eek out extra profit. The thing is this isn't Capitalism in the same way that Science isn't a defence of anything. If it turns out to be wrong it should be changed. Any reluctance to challenge the status quo can't be defended by anyone proclaiming to be a 'Capitalist' or a 'Scientist'. This is the same as Muslims who are abhorred by ISIS and argue for people to stop even referring to them as Islamists. Good Capitalism, Good Science and Good Religion evolve as our needs change, understanding improves and morality progresses.

Here are four interrelated problems that people who defend Capitalism will be very aware of. The point is the solution is still being figured out.

1. Incentives

The fingers pointed at 'Evil Bankers' presume that investors in banks are happy about the situation as well. Capitalism is good at figuring out through supply and demand what the price should be for products and so shifting around resources effectively. What is still being figured out is how to motivate and compensate people. Money can lead to quite dysfunctional behaviour as the single, objective, bottom-of-the-line measure of what you think of someone's performance and how they are rewarded. Since there is normally no internal 'market mechanism' for what someone gets paid, it ends up being a poker game with their boss. Pay them enough so they don't leave, but not enough that they get lazy. If you can get a sense of how much value they are adding, you still want to be paying them quite close to that is slightly above what would make them leave. This means money ends up being focused on far too much in remuneration discussions and in most jobs where value is even slightly subjective, it will likely be a source of unhappiness.

2. Risk

This is also linked to 'Evil Banker' accusations. The heart of what makes a good businessman is the ability to manage risk. Risk is at once an insanely complicated thing and ridiculously simple. The complicated bit is that we actually really don't know what is going to happen in the future. That is the point of creative destruction. Things work till they stop working, there is a little chaos, you lose some fat, and you move on. There may be lots of pseudo-science that goes into pretending we can manage risk, but actually it is really the Black Swans* that blow you out of the water. The problem with 'Evil Bankers' is connected to the incentives issues and risk management. As an investor, approaching banks is a nightmare. You know that the incentives end up being focused on short term gains while ignoring long term risks. Designing the correct incentive structure is an unsolved problem. A lot of investors don't touch banks because of their size and complexity and think it is a problem. Banks are really useful things and part of the destruction of mass poverty. That doesn't mean all internal problems are solve. The simple bit is that if you guard against putting your eggs in one basket, but keep focused enough investments that are in productive assets, you can have decent control over risks and sleep easy. You. Have. To. Keep. It. Simple.

Two ways at looking at risky Black Swans. Portman is hotter than Taleb obviously.
*A Black Swan is a very high impact, very low probability event

3. Waste

This is an example of both the incentive problem and the 'like religion at its worst problem'. Once a company is successful, clients are comfortable, and staff are comfortable, the incentive is to milk the cash cow for all it is worth rather than being on the edge and risking new competitors. There is a lot of work for works sake. Go to a hairdresser and he will tell you you need a haircut. Go to a plastic surgeon and she will tell you you need some wrinkles removed. Ask a website designer if your page needs a refresh and there is very little chance they will say, 'actually, everything is fine'. The answer isn't that central planning would reduce the waste. It is just that friction still exists. Companies like Uber, ZipCar and AirBnB are examples of how eventually, forces do exist to eat away at that fat.

4. Agency

This one drives me nuts. The agency problem comes about because you need to delegate. If you are going to guard against the risk of having your eggs in one basket, you have to hand some of your eggs to someone else. The person running the business and doing the work is different from the person whose resources are being used to do the work. It is good that you can separate your own resources from your own labour in order to manage risk and play to your skills. But this separation means you need to get the incentives right so that there is less waste and the risk is controlled. Your eyes can't be on all the eggs so you have to trust the person you have given the other eggs to. Their eyes are obviously primarily motivated by what they get paid or other things (power, prestige etc.) . Capitalism has allowed the globalisation of the world which has huge benefits in terms of things getting done by the people who are best at them. But it also means that there is distance between you and the people who are doing the things for you. Distance and trust are unhappy bedfellows. There is still nothing better than looking someone in the white of their eyes, knowing their name, and perhaps even knowing where they live (that sounds a bit creepy).

So those who argue for Capitalism are not saying it is perfect. There are lots of unsolved problems. What we actually need is for more of the people who 'hate money' to get involved and understand the challenges. The solution to many of the softer problems lies on the other side of the hard problems. We aren't going to get to them if we define ourselves as soft or hard. The external problem is also that we actually get very upset by relative wealth disparity even if we are richer, and it becomes tougher and tougher to accept absolute poverty in a world where there is already enough to go around.

One Thousand Years

"A society grows great when old men plant trees whose shade they will never sit in," says the Greek Proverb. Wealth compounds. The most powerful investment force is time, and the reality is that our working life is incredibly short. About 80,000 hours. If the main aim of that working life is to meet your consumption needs, you never get to the compounding. You are always starting. Yet we have a dilemma. Who is it fair to pass that wealth on to? Step one is survival. If fair means everyone starts from scratch, then all we will be about is survival. There is more.

The European Wars of Religion were partly a push back on inherited wealth. The Conspicuous Consumption of the Aristocrats and Church in the face of overwhelming poverty. Refugees and fortune seekers fled to America to start again in an industrialising nation where creative destruction allowed an opportunity to change your path in double quick time. Then what happens for the next generation?

Warren Buffett says he wants his kids to have "enough money so that they would feel they could do anything, but not so much that they could do nothing." His son, Howard, has recently written a book looking at how to reapply Dad's investment techniques to the world of Social Value. Social Value Investing looks at how to provide a management framework for effective partnerships between the public, private and philanthropic sectors.

The problem with both Governments, and the majority of people, living hand-to-mouth is that salaries (and income tax) never get the chance to compound, because they are consumed. There is a whole other world on the other side of the looking glass. To become a custodian rather than a consumer, you need to change the maths. That starts with changing the time frame. Organised people sometimes have 5 year plans. What would a 1,000 year plan look like? That ceases to be about you. That ceases to be about your immediate family.  That busts open the possibilities of what can be achieved.

Through the Looking Glass

Beyond the Storm

Price is simply a clearing mechanism. Supply and demand are the brutal price setters. This means defining your source of income in a fixed way is incredibly dangerous. You don’t know at the start of your career how those forces are going to throw you around in their storms. There simply has to be flexibility. A way to surrender into the chaos should it come. For the vast majority of people, work is a funding device for their expenses. What comes in goes out. A Buffer can allow some give should creative destruction provide a solution that doesn’t include you. An Engine can allow you to focus on something that isn’t subject to the master winds of supply and demand. A Buffer is enough Capital to buy you time to breathe and reskill. To change direction. An Engine earns more (on average) than you spend (on average) and can set you free to focus on value. A salary is the price of your labour. Price is not value. You determine value. Not supply. Not demand. You.

When things get Mad

Freedom of Movement

Freedom of movement is the way to dismantle privilege. Privilege is inherited barriers to entry. Bring down the walls. As a South African, I have always felt I will know Apartheid is truly over when the electric fences and burglar bars come down. Rich countries have the same issue, they just place the fences on the borders. GMB Fitness talks about the foundations for physical autonomy – strength, flexibility, and control. These are the keys to moving with ease. Financial autonomy is all about being able to move easily. That is why I believe so wholeheartedly in the Four Freedoms (Capital, Goods, Services, and Labour). To understand privilege, understand borders. Understand the monopoly of control in bubbles. If you want to dismantle privilege, start by letting people live where they want, work where they want, work for who they want to, and buy what they want to. Start by trusting people to make their own decisions. Empower the word yes. Empower the word no. Reduce the barriers to entry and let creative destruction do the rest. Trust people. From the bottom up.

Barriers to Entry

Not a Zoo

Wifi is not a product of colonialism.The Renaissance was more of a Naissance as trade, travel and communication brought Northern Europe's 'Barbarians' into the fold of the globe's team effort of learning. Much like happened in China after Genghis and Kublai (Mongols) 'conquered' China and founded the Yuan Dynasty. If Wifi (or anything 'modern') is a product of colonialism, then the Industrial Revolution wasn't born in Britain. 

We learn off the back of what has been learnt, bring our own understanding to whatever we hear and see from others. Our collective knowledge far surpasses anything any one of us will ever know or understand. So yes, the Industrial Revolution was born in Britain. It was born to ancestors from all over who discovered and created maths, writing, philosophy, science, politics and all the other bits that created the conditions.

My two homes, South Africa and the United Kingdom, are struggling in different ways with the idea of decolonisation. 

The 'Mud Hut Fallacy' is the idea that before European colonisation, there were only savages living in Mud Huts. This fits nicely into the idea of a 'Civilising Mission'. A naive understanding of decolonisation would have it that that means going back to mud huts. 

Decolonisation is linked to the Anti-Globalisation movement. Neocolonialism is the idea that multi-national corporates, and capitalism, are continuing the domination, but just in a different form. A push back on one global solution being imposed on local people. Ironically, it seems the 'Take Back Control' Brexiteers end up sharing language with those who would consider themselves on the far left. Even if their motivations are different.

Both the colonisers and the colonised want control of their local areas. Time has past and you can't wave a wand and undo it. Our identities have changed. Our histories have changed. You can get an understanding of that. You can do a better job of empowering local communities while improving essential freedoms of movement.

One of my Pet Peeves is when visitors to South Africa, or other parts of the continent, moan about how some of the cities look like anywhere else in the world. Authenticity gets mixed up with lack of technology. Uniqueness or difference as a territorial constraint rather than a natural development. Game parks, yes. Bustling cities, no. My gut reaction is, 'we are not a zoo'.  The technological progress that comes around the world belongs to us all. A big chunk of the Tech Wizards of Silicon Valley are immigrants. London has also changed drastically. Authenticity doesn't mean protecting your vision of what others should be.

The fact that London, New York and Johannesburg are closer siblings than to their respective rural areas creates lots of tensions. Rural areas tend to protect identities. Cities create them in a constant process of creative destruction. Both have value.

At the heart of the problem is a tension between control and respect. Empowerment and power. Discovery, and protecting what is important to us. Identity politics where our identities are up for grabs.

Lions don't wander the streets of Joburg

Start with Space

We live in a hand-to-mouth, pass-the-parcel, kick-the-can, pay-as-you-go economy. That has underlying assumptions and puts you at the mercy of feast and famine cycles. Creative destruction is both powerful and useful. For survivors. To survive, you need to build in a “margin of safety”. Meaning you have to leave space. To build space. The only thing you can plan for is that things won’t go according to plan. Hand-to-mouth means spending everything you earn. Pass-the-parcel means if your customers don’t get paid, you don’t get paid. Kick-the-can means spending now because you assume future growth will be able to pay for current spending. Pay-as-you-go means one generation pays for the next. Think of Pensions as the predecessor idea to Basic Income. The big question then was also how do you pay for it? The answer then? Working people pay directly to retirees. Retirees die, working people retire, and children start working. Merry-go-round. Until people live longer and people have fewer children. The way to build, is first to build space. Then build engines.

Reverse Hut Tax

Hut Taxes were used by the British Colonies to force people out of subsistence lifestyles after the Anglo-Somebody wars. In South Africa, this led to the Bambatha Rebellion in 1906, which galvanised the post-war identity of the Zulu people. If you need to pay taxes, you need money to pay it. This means problem solving needs to have a number put on it. One way to think of a Universal Basic Income is as a “Reverse Hut Tax”. It allows people to reinvest in the basics. To have sufficient money to have parcels of time where they don’t have to think about money. To rebuild a base, that allows them to survive periods when a hand-to-mouth, pass-the-parcel, economy is not functional. To build basic competencies (that get outsourced when you are just one link in a fragile value creation chain). We can be seduced by specialisation. Just doing the one thing we are good at. That is fine, until it isn’t. Winters aren’t a surprise. Creative Destruction requires periods of unlearning and rebuilding. Without endurance and resilience, creativity can have no roots to draw sustenance from.

Bambatha

Reserves and Containers

There is a long list of stupid things I have done. In 2014, it could seem like a very risky thing to be doing for me to have stepped away from the corporate world. No longer having the certainty of a salary. No longer wanting to work for money. But you need to unpack conspicuous risk. When you look at a salary, it is not as safe as you think. The idea of a job for life is not there anymore. You are dependent on the financial well-being of the company you work for. Part of stilling your own waves of money anxiety is being able to understand business in general. How do you know whether a (your employer’s) business is in a position to survive? Businesses are more fragile than we think. It isn’t just about how good their product/idea is. The strength of their reserves (capital) and container (barriers to entry) matter even more. Pushing responsibility to owners/managers to still our financial anxiety when creative destruction constantly attacks the forces of supply and demand, is structural risk. Structural stupidity. I got to have a stab at another way of approaching life, because I had built reserves and a container separate from my job or the companies I was working at.

Smuts Trolley Races Teams

Detached Learning

We constantly need to be learning. It is only in a world that is reliably and predictably the same the next day that you can limit the set of skills you have. 

We need to have curiosity and pay attention to a world wider than ourselves. You can’t assume what you are doing, even if it is working, is going to be the same. If you have studied something for seven years, it is not relevant if those skills become redundant. Especially in a world of artificial intelligence and creative destruction. First in line for automation are things that are repetitive and make money. 

When the rules of the game change, you need to be able to adapt to whatever the new rules are. This makes it important to detach from identifying with what it is you do for money, or are going to do for money. 

We can’t rely on jobs for life. Either for meaning or for sufficient financial reward to finance the rest of our activities. Even when you are in a great team you like and are well rewarded in, teams change. Like the analogy of a boat that gets regularly repaired until every part has been replaced. Is it the same boat? We end up being loyal to companies or countries that like George Orwell’s Big Brother don’t actually exist other than as a perpetuated story. 

Ken Robinson said the three keys to happiness were where you live, who you are married to, and what work you do. It used to be where you were born, someone from the neighbourhood, and what your parent of the same gender did. 

Now our choices have exploded, and the choices evolve.

Identities and Interdependence

We think of new things in ways we already understand. Imagine a horses body with a man's torso. If you were a bat, how would it feel to 'see' with your ears? If you were poor, how would you get yourself out of the situation? It is very hard to strip away how we already see when we look at the world. Quite often we understand the way our world is, and we can visualise the way we want the world to be. We can't quite see how we would get from here to there though. We want to moan about the way things are. But we are scared to change. We don't want to lose what we have. But we want something else.

Daniel Dennett talks about the confusing idea of taking two species and selecting just two bits and asking wouldn't it be better if this had that. A horse with wings. A cat that talked. A elephant with stripes. Things that are possible in isolation may not be possible together. They each came about through millions of small little tweaks that led them to a specific combination. Each characteristic is part of a larger orchestra. It doesn't exist in isolation. You may not be able to get from here to there.

We like to separate things into small chunks. To identify things. To create boundaries. Frameworks. Boxes. Rules. These boundaries are completely artificial and a tool we use to think. To create stories we think we understand. A queen bee, for example, is not distinct from the hive. The worker bee is not distinct from the hive. The hive is a single organism. Extend that further and we are not distinct from bees. No bees. No people.

Computers do amazing things by combining very simple 'dumb' things. Strings of 1s and 0s create decision paths that lead to 'intelligence'. A sensor may just be able to tell if it is light (1) or dark (0), but combined with many, many other small decisions it may be able to drive a car. So once a large, complicated organism grows and sees something else, we are very unsure about what to tweak.

Which is why creative destruction becomes so important. Quite often the change comes from people who are starting from scratch. Once you become very attached to the way you do things, you need to be able to plan a way to transition from here to there. Often that requires a completely different way of looking at things. There is no path sideways. You have to step back. There is no elephant with ears that work as wings. There is an elephant. There is a bird.

Sorry, no Dumbo Dumbo.

This is why change often happens without permission. While people are discussing the path or gaining consensus, someone else gets it done. Change also doesn't happen in an orderly fashion. There is no straight, predictable path of progress. Sometimes things bubble along frustratingly with no progress. Sometimes they go backwards. Then a better way emerges. Some changes uproot everything. Our world was designed around horses. Then the car came along. Now our world is designed around cars. They are everywhere. Maybe they will disappear too as they learn to drive themselves and we don't need so many. Maybe to go forward, we have to go back to walking.

Cars that drive themselves may have dramatic knock on effects. Everything is connected in ways we don't fully understand. If cars drive themselves, do we all need to arrive at work at the same time? Can we live outside the city? Do kids need to go to the same schools to save Mum & Dad driving time?  Do businesses need to have fixed locations? What else can 'drive itself'? What jobs become redundant. How does that change our world?

The world is incredibly complicated and interconnected. The wonder of human creativity is the ability to connect dots. To make wild, illogical, passionate leaps. To ask questions. Then to figure out the balance between conserving the things we love, accepting that things are bound to change, and putting aside the way we see the world to see both how it is and how it could be. A balance between questioning and practising. 

Exciting, nerve-wracking and without boundaries or identities.

Hiding in the Shire

One big shift for me to become a true Soutie is getting used to the seasons. I grew up in Durban where Winters are warm enough for beach weather, and Summers are boiling. The seasons here on Mud Island are distinct, and there are very much four of them. Gardens that disappear completely and burst into life. Particularly where Gem and I have set up home in the Shire. Straight out of the story books, there are hobbits everywhere gardening and farming. Endless Summers have their appeal, but I love the changing character of this corner of the globe that makes weather so topical. It has strengthened its hold on my heart during the Covid Lockdown, when we are all cut off from each other. By ocean, border, or car being immaterial. The lessons of Autumn and Winter seem apt. Unlearning and stillness. Creative destruction. Reskilling. Survival. Time to reflect on what truly matters and what is permanent. Moments when we can’t do anything, because there is nothing to be done. Moments to acknowledge those who have to do, because they have no other choice. Moments to be grateful for our ability to survive challenges and connect seasons. Till we can hold each other once again.

Gem Sketches the Shire

Fear of Success

Money is made by solving problems in containers for people with money. The key is being able to communicate with the decision-maker-with-money, in language they understand. Know who is paying. Know what they want. Know what success looks like to them.

Neville Scott has spent a career helping business leaders design solutions to problems that can be implemented. He starts his process by understanding “the School Playground”. Problems have deep histories with complex origins. Solutions to single problems have unintended consequences and layers. One problem we are all trying to solve is that we need to eat. We have to get paid. If we permanently solve the problem we get paid to solve, that can be a problem. Creative destruction is a powerful fear-inducing force, without sustainably looking after the problem solvers. 

Protagion - Active Career Management is holding a virtual conference where I will be part of a free panel discussion exploring how building buffers (for resilience) and engines (for endurance) of Capital can help ignite your creativity. Free from the fear of success. 

Through the Seasons

I am a Soutie. One foot in South Africa and one foot in the UK. I grew up in Durban where winters are warm, summers are hot, and it is mostly green all year round. I married an English Rose and now live in the middle of the Shire, where I am learning the ways of the Hobbit (slowly). The seasons are distinct. From short days to long. From leafless trees and bare gardens to overflow. “Endless Summers” have their appeal, but the idea of seasons as a foundation for growth makes a lot of sense. Creative Destruction requires broad framing. Busyness is a form of laziness. We need to step back and identify what is really important. Unlearn the distractions. Invest in the foundations. See the connections that matter, and prune cross branches and sucker growth. Sustainable Growth isn’t always up. Tough times will come repeatedly. The key is making sure the winters don’t kill the roots, and tending potential. Springs come repeatedly too.

88 Keys

Two ideas I am very passionate about are Global Citizenship and a Universal Basic Income. 

Globalisation and Global Citizenship aren't the same thing, but they are connected. I love local flavour, but I am also not opposed to the standardisation of the boring. A piano has 88 keys, but allows for a wide variety of music to be played. There are also a number of musical instruments. The instrument we pick up, or the music we choose to play should be free from the privileges and prejudices of the past. I want us to be able to celebrate similarities and differences. I want us to be able to create communities and share common goals. To be free to be a part of something bigger than ourselves that gives our lives meaning.

We are just waking up. We are becoming conscious of our bits and pieces like a baby learning to use its various limbs. Our past is a mess of mistreatment of each other that is very hard to unravel. The victors and losers in the past were based on geography and family. We have started picking apart the hereditary privilege and prejudice, but still overvalue the idea of meritocracy, and take too much credit for our successes. Life is very random, and much of our real wealth is shared. I believe a Universal Basic Income is the simplest way to ensure that we share in our common wealth, and from that firm base can choose paths and ladders to suit.

Political Globalisation

I am not a believer in the Nation State. Like money, businesses, languages and various other tools we use to communicate in bigger groups, they can help people connect to strangers. The problem is the outgroup. By definition, Nation States are exclusionary and the post-Empire systems of the last 100 years after the World Wars have created a system of Global Apartheid. I don't think it is okay to look out for 'your kind' without taking consideration of the interconnected world we live in. I will continue to cheer on the weakening of National sovereignty as various global institutions become more entwined in effective Global Constitutions (e.g. Universal Declaration of Human Rights). At the same time I would like to see smaller areas, Cities and their surrounding areas, empowered to reflect the more specific tastes and agreements of their local communities.

Uniting

Economic Globalisation

Part of why poverty has been hammered over the last few decades has been the increasingly interconnected world economy. The ability for goods, services, technology and capital to move around the world to where it is most needed is an incredibly powerful engine of global wealth creation. We have however learnt some massive, painful lessons over a century from the wolves of creative destruction. We need strong buffers to allow people to make long term decisions rather than being focused on living hand to mouth. The birth of Industrialisation saw Hut Taxes which forced people out of subsistence life styles because their labour was needed. I see a Universal Basic Income as the reverse. It provides the guaranteed buffer that permits the freedom to explore. Wolves at the door may be a great motivator, but the only thing you think about is escaping the wolves. That is no way to live.

There are better motivators than Wolves

Cultural Globalisation

The spread of culture is the most challenging form of Globalisation. We have completely butchered it in the past. Civilising Missions and entrenched ideas of supremacy showed very little respect for, or understanding of the subtleties or nuance of hundreds and thousands of years of learning to approach life from completely different perspectives. We are getting better, but I think this is going to be our biggest and most divisive challenge of the next 100 years. Developing the empathy and emotional intelligence required to challenge the way we see things. In the battle of Globalism v Nationalism, walls are going to come up whenever our 'Us v Them' wiring kicks in.

Overcoming Supremacy

We exist through our relationships. We do not live in isolation. How we experience, create and act as custodians of the world we have have inherited and will pass on, all depends on how we treat each other. Get that right, and a world of music exists inside 88 keys.

Cut the Fat

Price is not value. Daniel Kahneman points out that while we might be intuitive grammarians, with our ears bristling when someone butchers our mother tongue, even those with years of training in statistics are not “intuitive statisticians”. Some truths require slow deliberate thinking rather than rules of thumb. Truths like there are no gods of investing. Investors who will agree “price is not value” will fall foul of this too when talking about “their value”. Everyone likes to believe they are the one that adds the value. That can’t be replaced. That other people can be cut out of the value chain, because other people are the fat. A high price is not an indication of value. It is more likely (1) scarcity, or (2) barriers to entry. An obstacle to creative destruction is that we all need to eat. We all need to get paid. We all need a source of wealth. The only way anyone will be prepared to be made redundant is if we believe we are included in the future that exists on the other side. Money is made by solving problems for decision makers. One of our problems, is that (without capital) we need problems. 

Are you the fat?