Yet another crisis goes through Europe and the US and lots and lots of observations, wishes, interviews every day clarify what is happening. Or don't they ? I am not always happy with the explanations and analysis and over the last days I have tried to summarize my understanding. We have made a few choices and have accepted a few mechanisms that I feel are at the fundament of our crisis. Let me briefly state them.
1. We have a very strong belief that we live in a mechanistic world, that is to be understood Cartesian and follows the Newtonian laws of physics. Evidence in physics if of course different, and I am personnally convinced that we lack a serious systemic view on our economy. We think we can de-construct the world, optimize the different pieces, and eventually the sum of all those optimised pieces will be optimal for the economy and society. Wrong. All traders optimize their positions, the total is a catastrophy.
2. There is a complete disconnection between our products, services and actions, on the one hand, and their purpose (value, sense, meaning) on the other hand. A mortgage is made to allow non-capital holders to access to house ownership, and not for financial performance of the bank. What value do our companies create ? Real value added I mean. This lack of purpose or sense, is what makes our economy so short term oriented.
3. We have commoditized everything and those commodities become the center of our economy. It is no learning the learning in a school that is central, but getting a diploma. The CO2 emission is no longer a problem, since we made it a commodity and we can pay it off. Worse, we can sell our polution to third world economies that are very happy to get some money for it. Nothing changes in the real economy. We still polute.
4. We have introduced management by objectives (and not by values), since our economy only deals with commodities. People are paid for volume, not for value added. Bonusses are paid to dealers that do a lot of volume, sales people are paid for the volumes sold, schools are appreciated for the numbers of students.
5. We have standardised our educational system (both the childrens education at home and in schools), leading to the creation of clones. By pampering youth and not allowing them to develop their own learning, we keep them "young" and "dependent". We prepare them ideally for the commoditized world.
6. Since there is disconnection between product/service and purpose or utility (served by a marketing that is nowhere oriented to information anymore), we foster a rough consumerism.
7. The risk/reward balance that was so crucial for the development of capitalism does not exist anymore. Reward has nothing to do with risk anymore. Reward is independent of the result (the golden parachutes, only as an excessive example).
8. The community, the interaction of individuals in order to create a bigger unit, is no longer existing. The role that the community played in sense-making is therefor non-existing anymore.
9. Finally we all pray to the fitish of growth, where we know that there are really limits to growth.
This is probably the first generation that is obliged to actively take care of the next generation in its economic approach, if we would still like to have a following generation. There is probably no time to continue closing our eyes for yet another generation.
For those intelligent optimists that still care, what could we do? Well, deal with the 9 points that I have raised. On a personal/individual note we have to take our decisions concerning our belief in a systemic approach to reality, our role in consumerism, and our belief in the fetish of growth. As a society, we might want to care for our educational system, and the way how we could re-construct community. As a company, we might want to investigate our values, our value added, our sense and meaning, our attitude towards 'commoditation' of the economy, the introduction of management by values and rewarding our managers for it, and about the reintroduction of the risk concept.
For those that are not convinced, try and explain what happens to your children. Feel how it feels while you are trying it.
On the individual parts (5,6,8 and 9):
Reminds me that we have a book in Germany that is called "Gerneration doof" (gerneration stupid). It essentially deals with this problem and traces the origin of the German educational crisis - people getting less social and interactive - back to the 70's.
The only drawback of that lecture is, that it is non-scientific and polemic. It was helpful to me so now I know among what kind of people I am living ^_^.
Great comment, I'll surely quote you one day.
Posted by: Simon | October 17, 2008 at 08:19 AM