Archive for the ‘Socionomics’ category

Madoff & Cultural Change in 2009

December 28, 2008

Bob Jacobson (Total Experience blog) recently posted about the Madoff scandal, and I quote:

“In every culture, the battle of the classes is so intense it overwhelms ethical considerations. Every apparent ally is lauded by those who constitute the culture’s moneyed class — and when the fraud betrays the ideology of wealth, it is he or she who pays the price, not those who enabled them to play their predatory games by idolizing them.”

Our culture has enabled them at every turn, symbolically and materially, through a lionizing media, aspirational pop culture, and the continuation of a false American Dream we’ve been sold. We’ve lived the last two decades in an culturally inflated bubble that protected us from having to consider smarter alternatives.

But during the good times, Madoff worked his community hard. It is during the so-called “good times” that people overly trust, and when hitting the bear market, they need cash and start to ask questions. Madoff was trusted because he represented a class and way of life people aspired to. In the spirit of irrational exuberance, he was a credible investor. The fact that the Ponzi scheme was exposed just NOW is a positive signal. A 3-decade long scheme was exposed, which had to happen at some point. The sign of the times to notice is that the Madoffs (and Fulds and Princes) are getting flushed out, the times of inflated CEgOs are ending.

Madoff does not represent a tipping point toward more bad times, but calls (in investment terms) a “bottom” where investors get flushed out of the markets so a new cycle can start at the depths of pessimism. It is also a culturally symbolic bottoming, with its Jungian synchronicity of occurring near the winter solstice when humans observe the progressively diminished cycle of sunlight. We may see a few more bottom signals in the year to come, however.

These patterns can be seen as historical, and therefore repeating and repeatable. We’ve gone through these cycles before, in the Gilded Age before the 1900’s, the 1920’s before the crash and what we call the “Great” depression. With some analysis of these earlier cycles, we can see that values changes once the shift is big enough. Mentioned in the prior post,  The Fourth Turning (1996) refers to the last cycle as an Unraveling, ending in the crash of massive debt, just as in the prior Unraveling cycles.

Kondratieff (1926) observed these secular cycles in Soviet and capitalist culture, and named these same cycles after the seasons. The lionizing of the rich is inherent in the last cycle. The Crisis cycle follows an Unraveling, and values changes when the reality of the economic and cultural change becomes obvious and accepted across a large population.

We are seeing a such a shift in values already, and we will see an emphasis on sustainable living, workable human scales in economics and systems, humane enterprises, cooperative (and less cut-throat) markets. The Millennial generation was not invested in Madoff’s schemes, and because they have largely observed the crash from a distance (not as heavily invested as the Boomers), they may be able to draw their own conclusions about value and sustainable practice and investment. They will be inclined to invest their energies in the new energy, infrastructures, and new agricultural projects that will sustain their future and away from the corporatist hold on things.

Because these changes are secular trends, developing over and lasting for many years, they seem to assume a kind of destinal trajectory. Our collective expectation that things will change positively will help to create a new foundation of values. And while Millenials are rejecting the Boomer’s last legacy that led to crisis, the Boomers will also help lead the way out of the crisis. What else can we do?


Creative Capitalism for a Crisis Time

December 18, 2008

One of my doctoral committee members, Alex Pattakos, blogs for HuffingtonPost and wrote Meaningful Capitalism: Change We Can Believe In

In response to the article and some of the comments, I said:

Organizations pursuing meaningful entrepreneurship are not in strong evidence by the media. We ourselves should become the new news media that changes the emphasis on what gets reported. People learn from success stories, and the meaning of success itself is and will be changing. People’s values will slowly change as their society shows these shifts in many tangible and subtle ways.

We knew this collapse was coming at some point. Capitalism was already being referred to as “late” by many writers and thinkers, over the last decade or so. Most of us just did not know what to expect our how it would appear on our national and global scene. The Crisis time we’re in now nearly exactly matches the historical theory of Strauss and Howe’s 1996 book The Fourth Turning.  And because we are now in a Fourth Turning, a Crisis era, the times are compatible with Alex’s recommendation.

The crisis of capitalism should not be framed in the “greed” dynamic – there have been greedy exploiters since before the time of Draco. Certainly Kim Jong-Il can be seen as greedy. The corporate form is merely a modern organizational framework, and is a structure developed in response to laws and conventions. It can be changed. People bring their values to work and their organizations, and as Americans facing a new crisis and a new era, we need to take responsibility for the redesign of these institutions.

Flash: Money buys happiness!

June 3, 2008

Who says? According to a Harvard/UBC study published in Science, so that’s about as authoritative as possible. How so? The title Spending Money on Others Promotes Happiness, tells you something about it.

In an HBS interview, co-author Michael Norton explains:

“Intentional activities—practices in which people actively and effortfully choose to engage—may represent a promising route to lasting happiness. Supporting this premise, our work demonstrates that how people choose to spend their money is at least as important as how much money they make.”

The crisp abstract does not read like a new-age nostrum

Although much research has examined the effect of income on happiness, we suggest that how people spend their money may be at least as important as how much money they earn. Specifically, we hypothesized that spending money on other people may have a more positive impact on happiness than spending money on oneself. Providing converging evidence for this hypothesis, we found that spending more of one’s income on others predicted greater happiness both cross-sectionally (in a nationally representative survey study) and longitudinally (in a field study of windfall spending). Finally, participants who were randomly assigned to spend money on others experienced greater happiness than those assigned to spend money on themselves.

While they did not generalize beyond the economic proposition of personal income > spending on others, the theory certainly extends to giving one’s time and personal commitment to others.  It is so obvious we overlook it on an everyday basis, unless the giving has become part of our lives and being.By then we don’t think of it’s tie to happiness, as it should be. Would this not fall apart out of sheer irony if we did for others to selfishly satisfy a desire for personal happiness? Happiness is an outcome of good works and a life lived in full. As Marcus Aurelius said:

“The happiness and unhappiness of the rational, social animal depends not on what he feels but on what he does; just as his virtue and vice consist not in feeling but in doing.”

It was/is so with my parents, who (literally) tithed to the Episcopal church all their adult lives, and they volunteered full-time in retirement and gave most of the rest of what little they had to their community, to community theater, the United Way. The Christian outlook and central spiritual act involves loving your neighbor, reinforced by just about all the parables. (It turns out they were actually right about most things!)

Who’s Your City? (Toronto!) Who’s your Company?

March 15, 2008

Richard Florida’s latest dive off the springboard of the Creative Class shows up in geography – where you choose to live determines your destiny. In the Globe and Mail, Florida himself reviews the premises and thesis of the book Who’s your City?

Where we choose to live, argues the director of the University of Toronto’s Martin Prosperity Institute , is crucial not only to how we live and who we share our lives with, but also to what kind of career we end up having.

In this passage, he describes how this “geographic clustering” is dictated by five basic personality traits: openness to experience, conscientiousness, extroversion, agreeableness and neuroticism.

The choice to live in a certain city – essentially a situated culture with its unique set of circumstances – generates an enormous new set of options for the individual. It has taken us three years of continual learning and exploration to become Torontonians-in-training. However, even on the very part-time basis of one week a month, we have created a huge network of new friends by choice (all of them brilliant, smarter than us, well-informed politically, constantly culturally creating, attractive, socially engaged, etc.). We have recreated Toronto in our own idealized image of the place, and that has led to some extraordinary connections that could never have occurred in the US. These relationships have led to extraordinary opportunities as well – in business, research, and intellectual communities, as well as artistic, creative, and self-exploration opportunities.


Now, shift the unit of analysis of cultural ecology of the city to the cultural ecology of your career or business. I own and manage a small design research firm, Redesign Research, and we thrive on designing new information services, researching the ecologies of use for product innovations, and advising organizations on configuring their strategies and operations to best pursue innovation. I live in two cities now – hometown Dayton and newtown Toronto. Which one will better suit this business model in the future?

Focus the lens a notch deeper – where do you choose to work? Given the geographic traits of Florida’s thesis – openness to experience, conscientiousness, extroversion, agreeableness and neuroticism – which of these do you experience in your workplace? Which do you want more of, less of? To what extent does geography map these traits to the firm? So what organizations – and what cities – what nations – seem to hold these traits?

If you haven’t figured it out yet, Richard Florida left the US (Virginia) for Toronto, where he is Academic Director of University of Toronto’s Martin Prosperity Institute which takes an integrative approach to the study and creation of jurisdictional advantage. (I am at U of T as a visiting scientist myself). When I meet Richard, I’d like ask him how and why he chose Toronto. Given his distinction as an American that explored and wrote about the evolution of North American cities, he’s quickly becoming a new century’s Jane Jacobs. Jane’s vision of a city of neighborhoods seems well loved (if institutional), in Toronto; now Richard is finding who lives in those neighborhoods (and why) makes all the difference.