We have been subject to a long period of group think driven by the dominant group -- i.e. the post WW2 and post-Cold War economies ... the G1 & G2 … 7, 8, … (i.e. USA, UK, …).

This period has flowered and seeded -- the next stage is emerging. What this next stage is, if it is sustainable, is anyone's guess, but it is likely to have a number of fundamental features: (a) diversity of opinion; (b) 'responsible' governance being defined as focused on the people (nation/tribe/etc), and not the abstract theory (globalised economics in the current case); and (c)  information efficient and highly disintermediated (low on unnecessary  'middle men').

My thesis has been, in the ongoing war of ideologies at my place of work (between systems and economic/policy think), that the key core issue from a sustainable governance perspective (a term that I use to mean viable governance with a twist of sustainability and a few chunks of climate change ... and stirred not shaken) is that the governance system that is likely to emerge as successful is the one that most closely maps onto the underlaying culture. This is the key: a form of harmonic resonance if you like. Therefore they are not the same because they come out of schools of economics (for example) but rather because they are rooted on their base stock.

This is, in essence, what Chavez has been saying and is now doing -- rather successfully. The South American situation is the one to watch for early signs in my view. Why? Many reasons, but two will suffice here I think: (a) there is some indigenous root stock still alive and enabling a new form of socialism that is in fact reverting back to what was there before European invasion; and (b) unlike those post colonial nations from the British period which are still largely in a process of recovering; the South American region is a couple of hundred years further down the recovery route. Hence, they are leading the new wave. Once this catches on then it will spread exponentially (or at least not linear).

So we can see, given enough of the parameters are positive, (and having energy sources is one of those), that new systems of grouping collaboratively will be developed -- multi bi-laterals rather than global uni-lateral (i.e. systems ones clustering, rather than subsidiary systems to an hypothetical master system at n+1 -- in this case seen as American Hegemony by anti globalisation protesters. Therefore , it is likely that the VSM can help reflect on this scenario and (a) its probabilities; (b) the possible consequences); and (c) the generative interventions that contribute to causation (or otherwise).

So, in summary, Russia, China, India, Europe, America etc will maintain their strengths based on how well their systems align with soft features which resonate with their respective psyche etc. For example, American individualism may work for Americans but may not work for others. Then we have the ecological issue/perspective of what works best at the inter system level -- i.e. is aligned Americanism more or less effective than aligned Chinese or Russian or South American etc.

Here below is a recent sample blog response that sent thorough to my particular clutch of governing servants by way of benchmark. It reflects, in narrative form, I believe, the issues I have outlined above.

added: Saturday, 11 October, 2008, 03:27 GMT 04:27 UK

I live in Hong Kong, and although the stock market has suffered here like everywhere else, the average person is not directly suffering here, because we have not been encouraged to live beyond our means like in the west. Therefore, we are all in a more stable position to withstand this onslaught. You might also like to know that our government has made a surplus for the last 2 years and has given us all a full rebate on our rates for the last 12 months. They are also giving us a $300 per month rebate on our electricity and gas bills for the next 12 months, and are giving 2 lots of $3,000 to every pensioner. There are other incentives too, and all this at a time when the financial world is crumbling. Maybe our government should offer a few tips on prudence! david ingram, happy valley


It, an others, can be found in the BBC blog:

What will end the financial crisis?

US President George W Bush has called for a "serious global response" to the economic crisis. What will restore confidence?

See: http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5449&edition=2&ttl=20081011091124


One might note the same sentiments could be expressed by Singaporeans (perhaps) who also live in a prosperous Authoritarian climate -- perhaps also well tuned to their harmonious development needs.

Therefore, I will wait and see whether the current moves to "work together" in a form of global G1 - G7 - G20 - Gn+1... collaboration rather than competition, (led by the great leader of the UK, Mr Brown I hear (http://news.bbc.co.uk/2/hi/uk_news/politics/7665645.stm), and very much based on our communal tax bounty, will bear fruit. I hope so, but I fear not.

To all the 'Hill Climbers' out there: 'Happy Valley'... one shoe size does not fit all feet.

Economic Catholicism is dead … variety is alive and regenerating.


I’ll finish with a concluding comment from a recent email from Luc (related to the Steve Keen topic) which I hope he does not mind me including here – I think it is right on message:

 

. . . . Now, the only solution to this hell is forgiveness: restoring trust through mutually getting rid of our debts and restarting to create wealth, not through compounded interest and profiteering from debts, but through creative human work. Exactly the contrary than labelling that work as a cost and making it a scarce resource, while it is our only source of well being and wealth. Keep the economy out of the stupid hands of economists. Let's go back to work, trading, wheeling and dealing through the creation of meaningful and trusthworthy human relations. Not the abstract HR, but real relations between real people. 

 

I agree entirely. What works is work. What is not ‘work’ is not going to work in this new stage. Whether it’s a workers ‘paradise’ is another matter altogether. There is no reason why it cannot be a reasonable sustainable standard of living for most. Dreams don’t work – except where they galvanise people, such as Martin Luther King’s speech on seeing the promised land (some days before he was murdered). Too many are too cynical these days.

 

Trickle down ‘wealth’ does not work. The invisible hand of the ‘market place’ is a proven myth. It is now the very much the transparent and open hand of our leader-servant based governance systems that are now being reactivated. My main complaint is that I think the costs of repairing this failed market ‘system’ on the way down should be deducted from the profits of those who benefited most on the way up. Given that most likely 80% of the wealth resides in the hands of 20% of the people (actually it is far worse than this I suspect) then it should not be too hard to locate them. (and don't expect the media moguls to help with this task!)


Now I’m sure there will be a contract out for me!


--- On Sun, 12/10/08, Ern Reynolds <[log in to unmask]> wrote:
From: Ern Reynolds <[log in to unmask]>
Subject: Re: Coerced Capitalism
To: [log in to unmask]
Received: Sunday, 12 October, 2008, 3:07 PM

        "Coerced capitalism" occurred to me while visiting in China.
 
        There it was explained to me by a George Washington University Business School PhD cybernetician that in China you could invest in anything you could dream up.  The only catch was, you could not take the proceeds out of the country! 
 
        Hence Shanghai has many gorgeous new office buildings that are "see-through" (i.e., have no tenants to reward the investors' sunk capital). 
 
        Its opposite to the meaning of "free market capitalism".
 
Ern Reynolds
 
On Sun, 12 Oct 2008 10:15:26 +0700 Maurice Yolles <[log in to unmask]> writes:
It strikes me that "coerced capitalism" takes on the same pattern of thinking as "coerced rights" where we are subject to despotic means by which the civil administration deals with apparent and often uncontested (sometimes because of the potential penalties applied) infringements of the law and by-law.

I wonder what the relationship is between "coerced capitalism" and "economic despotism"?

Maurice

On Sat, Oct 11, 2008 at 11:00 PM, Ern Reynolds <[log in to unmask]> wrote:
Try "coerced capitalism" as a descriptor.
 
Ern Reynolds
 
On Sat, 11 Oct 2008 13:07:57 +0700 Maurice Yolles <[log in to unmask]> writes:
I am not sure I am happy with the term Authoritarian Capitalism from an ideological perspective. Perhaps Regulated Capitalism is better, but then the same problems emerge no matter what it is called, that of pathological processes. It is of course such pathologies that allowed the unconstrained excesses of capitalist processes to develop.

So, whatever model one uses, the problem of the development of pathologies needs to be addressed.

Maurice

On Sat, Oct 11, 2008 at 12:18 PM, R Clemens <[log in to unmask]> wrote:
I liked Taeb's views (and I referred to the Black Swan in Metaphorum 2008 -- in any case, I live in the black swan river colony) but I did not get the shirt-to-food thing either.

I see less need for multiple banks -- short term efficiency (hmmm?) vs longer term lack of efficacy. I think we can see 'capitalism' and its associated innovations as a process that has largely run its course -- not an end state in itself. Most governance systems -- from participative democracy through to banking operations -- can be much more efficient with modern communications technology. I qualify capitalism because I agree with the view that we do not have it any more in any case -- rather we have some hybrid condition.

Hence, in my opinion, the phrase "21 Century Socialism" used by Chavez as a fuzzy handle on where he was headed. I am watching him and Putin and communist China to see what they are going to do with all the 'rope' they just bought on credit. (ref Marx/Lenin). I see Russia is now talking with Iceland. A nice straight line on the voyage down to South America. Another weak signal I'm waiting for (to satisfy my S4 hypothesis) will be the 'liberation' of the Falkland Islands! "Authoritarian Capitalism" is another phrase that has been seen lately.

Al Q: -- I doubt they are doing anything (assuming they actually exist outside Hollywood studios). No need to. If the 'twin towers' snake bite of 9/11 (which was a direct symbolic link to 11/Sept'73 in Chile, for those who care to see it) can be interpreted as having affected the 'Brain of the Firm' (aka GWB et al) then we can now perhaps see the poison affecting the 'Heart of the Enterprise'. Always remembering that time frames at higher recursion levels might mean that 5-years on our scale is somewhat less on a higher scale. What next? Anyones guess -- Decision and Control? That is what I liked about Taleb's audio -- he was focused on the dangers of using maths etc to obscure the fact that we just don't know some things (and that truth is useful for responsible governance).

Question: How much of this UK money is in Iceland to escape taxation etc? And how much of it (and other vast imaginary hordes of it) are the actual proceeds of the criminal sub-prime lending asset inflation bubble? If these so called savings are actually just the virtual memories and book entries of transactions within the credit bubble system -- then why should they be guaranteed?



--- On Sat, 11/10/08, Nick Green <[log in to unmask]> wrote:
From: Nick Green <[log in to unmask]>
Subject: Taleb
To: [log in to unmask]
Received: Saturday, 11 October, 2008, 3:07 PM


Taleb has just appeared on BBC2 Newsnight. Some of the points he made are probably right but in talking about "not being able to learn from the past" he talks about past crises. Paradox.
 
In our terms a large transient corresponds to a rare event (John Waters and I were just talking about infinite impulse response, modelling and estimating models). VSM is better than Taleb alone would suggest- even though he is Mr Time Series Analysis in many respects.
 
"How do you analyse a system?" I once said to Stafford back in the seventies. "Perturb it" he said. So we have the transient perturbation, the slope and step response of management. We would quickly find out something was wrong because we were measuring it in real time. The current problem seems to stem from the fact that the exposed risks weren't known (and we're not talking about rare events here).  Insuring depositors seems to be the right recovery strategy- as in so many professions removing perverse incentives seems to be the ultimate cure. That means more accountability- Taleb's remarks about Medicine (in the mp3) are particularly poignant there (doctors have few cures but plenty of remedies that can injure). I must say Taleb's remarks (on Newsnight) about mounting complexity seemed insufficient and the idea that buying a shirt (made in China) puts up the price of protein was obscure to me if not plain wild can anyone explain? Could this be one of Stafford's rubbish correlations? Mind you all events are at least weakly correlated. 
 
One thing is for sure speculators agreements to trade exist and can be analysed. Some are sitting, silently, on piles of cash, some are shaking in their boots with no cash. Who are they? For all we know Al Qaeda just found a better way to destroy infidel civilization other than by bombing.
 
Too much apocalyptic talk when all we need to do is firmly reform world Terms of Trade with the aim of Justice for producers and consumers through greater accountability: what products actually are, their provenance and, possibly, end user certificates. Indeed real time reporting on the web of how producers perform was recommended by International Auditors two years ago http://cybsoc.org/#realt
 
There was a time when as serfs we had to go the landlords house to bake bread, use a blacksmith and even suckle his children. Do we need centralized banks anymore in real-time webworld? They seem to be standing in the way of Fair Trade.
 
Best
 
N.
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Centre for the Creation of Coherent Change & Knowledge (C4K)
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International Journal of Organisational Transformation and Social Change
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International Journal of Organisational Transformation and Social Change
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