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The New Realities Part IV: It’s All About the IBCs.

Human progress is marked by the transition from one socio-economic modality to the next, each reflecting man’s principal means of satisfaction. Historians and anthropologists call them ‘ages.’ The Stone Age was followed by the Bronze Age, Iron Age, Agrarian Age, Industrial Age, Technology Age and most recently the so-called Information Age. Over the last century or so, during the industrial, technology, and information ages, science and engineering dominated allowing massive industrialization and gains in productivity and wealth. During this period epistemological activity was marked by the scientification of everything. Wealth defined success. The framework of the prevalent modality during any given ‘age’ is manifested in all aspects of human interaction. For example, to wage a credible argument and earn the respect of peers in the academic world since the early twentieth century, one had to be able to identify independent and dependent variables and replicate results, ceteris paribus. This gave rise to a number of new ‘sciences’ including political science, economics, and sociology, which have worn their scientific wardrobe with neither consistent appeal nor comfortable fit.

Today, we are realizing the limits of our science-centric modality, especially as we attempt to navigate our way through current crises. It appears economists have had it mostly wrong most of the time. Political scientists and sociologists are having equal difficulty explaining observed phenomena. The result is that Ideas, Beliefs, and Convictions – the IBCs – are on the rise as a locus of analysis. Not since the period of the Enlightenment in the eighteenth century, when we moved away from the mystical to the rational, has the swing of the pendulum toward empiricism been arrested. This shift back toward IBCs signals a subtle but critical transition in our socio-economic modality from the information age to the cognetic[1] age. What and how are being replaced by why as the central question.[2] Scientific method is being rebalanced with a reconsideration of the arts, philosophy, religion, and history as we attempt to make critical decisions – hopefully in time to save our fragile social order.

As we have both benefited from and endured the scientification of everything, the time has come to rebalance our analytics with an equal or greater consideration of why things are the way they are, not just what and how we do what we do. In my doctoral research, I study why presidents do what they do in foreign policy. I search for the threads of influence and thought that result in decisions that affect millions of lives. In the process, I build cognetic profiles that include the intellectual capital and cognitive disposition of presidents drawn from an historical examination of their education, experiences, socializations, and indoctrinations. What I have found is not earth shattering, but is also nearly universally ignored by scholars in this period of scientific preference. The principal driver in presidential decision-making is not empirical data, logic, or even politics; it is the intellectual capital and cognitive disposition that form a president’s cognetic functionalities. ‘Facts’ only become so by permission—granted by IBCs. Asking why allows us to both explain and predict decisions. It gives us a sense of meaning that empirical data never does, which produces a more coherent model to understand and explain our world.

Shifting our search to why—toward a cognetic age where IBCs matter again—will also impact how we measure success. Wealth, or net worth, may be replaced by net well being as we shift our preferences toward things that have meaning, not just utility. This has profound implications for how we live our lives and form relationships toward people and their organizations. If you have a company focused on what and/or how, you better start thinking about why. If you counsel people about their investments, well being may be a more appropriate framework for quarterly reviews than net worth. If you are charged with the task of defeating terrorism, IBCs may be much more important than economic aid or nation building, and much more effective than frisking grandma at the airport. If you are a teacher, make sure your students also search for meaning while they are identifying, articulating, and calculating the whats and hows. And, if you are President Obama, you had better stick to your why—“Hope & Change”—even in the face of sophomoric ridicule and partisan intransigence. That’s why you were elected.

IBCs matter, perhaps more now than they have in many decades, and may just unlock some powerful solutions to seemingly insurmountable challenges.

[1] Cognetic is used here as simply meaning ‘thought into motion’ or the operationalization of IBCs where IBCs are as meaningful, if not more, than empirical/scientific data. It is borrowed from the definition provided by Lt. Colonel Bruce K. Johnson, USAF, on “Dawn of the Cognetic Age: Fighting Ideological War by Putting Thought into Motion with Impact” accessed at http://www.airpower.maxwell.af.mil/airchronicles/apj/apj07/win07/johnson.html. Johnson serves as Air Force Reserve chief of strategic communication plans at the Pentagon.

[2] Marketing consultant Simon Sinek explains the connection between why and inspired leadership – and its importance over what and how at www.startwithwhy.com. You can also see his TED presentation at http://www.youtube.com/watch?v=u4ZoJKF_VuA.

By William Steding|2017-05-25T21:12:37+00:00May 9th, 2010|The New Realities|0 Comments

The New Realities Part III: Ultrapreneurism

My father’s generation created wealth through their corporate citizenship; join one and remain there for many years while vesting in a retirement plan and/or buying large cap stocks and holding on to them for just as many years. This was a very viable path to economic security. In 1979, upon graduation from college, I took a step in that direction by joining the marketing department of Pacific Northwest Bell, an AT&T regional operating company. But, to the unspoken vexation of my father, I left seven months later to strike out on my own in the media business. At my father’s memorial service in 1995, one of his friends who eulogized him said that my father never really understood what I did, but acknowledged that I seemed to like it so “so be it.” I was then thirty-eight years old and within two years would be retired (financially self-sustaining) myself. I had become what was known as an entrepreneur, creating wealth outside of, and often in spite of, the corporate world.

As social economist George Gilder celebrated entrepreneurs in The Spirit of Enterprise (the bible of Reagan-era entrepreneurs), he described them as those who “know that genius is sweat and toil and sacrifice and that natural resources gain value only by the ingenuity and labor of man.” He argued entrepreneurs “create the wealth over which the politicians posture and struggle … they sustain the world.”[1] Gilder’s is an over-romanticized celebration, but he aptly captured the spirit and sentiments of my generation of wealth builders. But we too are fast becoming obsolete, replaced by ultrapreneurs who are even less systemically connected and are quickly adapting to new market conditions marked by interdependence, complexity, and volatility; and who are producing new inverted strategies of wealth creation.

It is worth understanding the conditions that give rise to this new breed I call ultrapreneurs. Globalism has many effects, driven principally by the liberalism of trade and geometric acceleration of enabling technologies. As Nassim Nicholas Taleb successfully argues in The Black Swan the world today is best described as a “recursive environment” where an “increasing number of feedback loops … cause … snowballs and arbitrary and unpredictable planet-wide winner-take-all effects.”[2] As complexity compounds, the improbable occurs with greater frequency, which brings to question a number of things, especially investment strategies. In effect, the curve of distribution—the bell curve—flattens causing calculations of risk/reward to consider that the probability of outlier events (high positive and high negative returns) to be relatively more likely than they have been in the past.[3] And, if complexity accelerates even faster—without contemporaneous codification of rules and consequences—the curve could become inverted. Translation: playing within a standard deviation of the mean is no longer justified based on an assessment of relative risk and reward. Add to this the emerging reality that systemic market risk increases in a complex financial system that has yet to develop command and control mechanisms, and that now also includes systemic fraud risk, the question becomes not whether one should be in or out of the market, but how one operates away from the market. Furthermore, those who continue to chant the mantra of the long run are fools (or they simply don’t know how to interpret the short run). In a complex interdependent market staring at either the mean or the horizon actually exposes one to more, not less, risk. The better perspective is to view the landscape from a reasonable altitude, looking down, as events unfold, not out at the horizon.

There are a number of people who argue that the end is near—that social collapse is eminent (even secularists).[4] However, I would argue that Gregg Easterbrook is closer to the mark in Sonic Boom: Globalization at Mach Speed. Easterbrook claims that “job instability, economic insecurity, a sense of turmoil, the unfocused fear that even when things seem good a hammer is about to fall … are part of a larger trend, and no rising tide will wash them away.” But he also points out that globalization has positive aspects: “ease of communication, more freedom of speech, markets closely attuned to consumer demand, [and] rising education levels in the developing world.”[5] Adapting to this world requires a high degree of intellectual flexibility—an embrace of ideological agnosticism that produces a transcendent state of mind allowing creative reinvention. This is the mental mindset of the ultrapreneur. He or she is the ultimate free agent who has the same work ethic as an entrepreneur, but who remains as disconnected as possible from systemic risk and who prefers anonymity to fame. They are hyper-independent, stealth, and highly adaptive. They do not recognize traditional boundaries or conventions and find leverage in intelligence, not natural resources—and never debt. They prefer networks to formal enterprise and may even operate through multiple identities. They are a product of the natural evolution of social order in a complex interdependent world. Ultrapreneurs will be the winners in an increasingly risk-laden world.

[1] George Gilder, The Spirit of Enterprise (New York: Simon & Schuster, 1984), 18-19.
[2] Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable (New York: Random House, 2007), xxii.
[3] Hedge funds are the early interpreters of this strategy. What killed many hedge funds was not investment strategy, it was leverage.
[4] See Joseph Tainter’s 1988 The Collapse of Complex Societies, or Niall Ferguson’s more recent “Complexity and Collapse” in the March/April 2010 Foreign Affairs.
[5] Gregg Easterbrook, Sonic Boom; Globalization at Mach Speed (New York: Random House, 2009), xii-xiii.

By William Steding|2017-05-25T21:31:07+00:00May 4th, 2010|The New Realities|0 Comments

The New Realities Part II: Referential Power

While mega-trends are producing hyper-freedom (see New Realties Part 1), the nature of power—how it is acquired and deployed—is changing as well. Traditionally, power has been viewed as exclusively coercive—primarily through negative induction—to serve what the Athenian leader Pericles called “the most fundamental of human motivations: ambition, fear, and self-interest.” Metrics of demographics, geography, and natural resources dominated. As Thucydides observed during the Peloponnesian Wars, “the strong do what they have the power to do and the weak accept what they have to accept.”[1] Hard power dominated in a world considered zero-sum, where every winner was matched with a loser. In the latter twentieth century, Harvard’s Joseph Nye introduced the concept of soft power that includes both positive and negative influence by non-matériel means in a plus-sum (win/win) interdependent world. Today, the world is changing further still, moving toward new processes that recognize the disaggregation and diffusion of power in a global, as opposed to state-centric, framework. At the center of this phenomenon are the relative decline of U.S. power and the rise of free agency that enables a third form of power: referential power.

The decline of U.S. power, even if only in a relative sense among other state powers, causes much debate and consternation. After the Soviet Union collapsed the U.S. stood as a unipolar power, unrivaled in hard and soft power. Following 9/11, U.S. foreign policy entered a period of hubristic overreach that caused a self-inflicted degradation of power. For many, even suggesting decline is profoundly unpatriotic and inherently foolish.[2] If we are smart, however, it should not matter. It is a waste of words and worry. The paradox of power is that both too little and too much prove to be undesirable. As foreign policy scholar Michael Mandelbaum recently illustrated, the “power problem” is similar to what economists call the “resource curse,” which occurs in countries that dominate a particular resource, like oil. They invariably, as do countries with too much power (like the U.S.), adopt policies that weaken the state by over-reliance on the resource, or pernicious use of their power.[3] But again, this should not matter if we recognize our errors and master the concept of referential power.

So what is referential power? As an admittedly exaggerated illustration, consider what it would be like if all NFL football players immediately became unrestricted free agents and were allowed to form new teams without the influence or control of the NFL, team owners, or the players union. Alliances and teams would be formed around particular interests and capabilities without the constraints imposed by the deposed oligarchy. Disaggregated and diffused ‘power’ in this sense would be recognized, accumulated, and realigned through negotiation by each player based on how they complemented each other’s skills and capacities—to win the next Super Bowl. Power in this sense becomes referential, granted by and between participants who rely on one another’s skills and capacities to realize the highest and best application of their own.

In a much more gradual and constrained fashion, referential power is being deployed in the global system today, negotiated by both state and non-state actors around specific objectives that may be targeted at security, economics, or other social aims. Actors are perfecting the art of coopetition, of competing to cooperate. China competes very effectively with the International Monetary Fund to cooperate with African political and business leaders on many industrial development projects. According to Howard W. French of The Atlantic they do so without the heavy-handedness of the U.S. such that they are perceived as “our friends” throughout Africa.[4] As the metrics shift from demographics, geography, and natural resources towards intelligence-based metrics, so does the nature of power. If the U.S. is to continue to enjoy a differential power advantage over the long term, our leaders must recognize this changing power paradigm. And, this model of networked, referential power can also be applied locally; you are your own free agent.

On the local level, following the mantra of think globally, act objectively, one must reconsider how to align with resources and authority to accomplish cherished goals. Identifying like-minded people (through relational networks) and forming a special-purpose, objective-specific network that defines the objective, designs the solution, and drives implementation is the basis of transcendent objectivism; ad-hoc, organically formed alliances where power is granted referentially and resources and authority follow the solution to its realization. Attraction, not coercion. Government in this process is not a headliner. It plays a supportive role. Transcendent objectivism is a design that is scalable, up or down, locally or globally, among individuals or states. At its core is referential power.

[1] John Baylis, and Steve Smith (eds.), The Globalization of World Politics (3rd ed.), (New York: Oxford University Press), pp. 50, 167.
[2] For a recent argument against ‘the declinists,’ who question the enduring primacy of American power, see Josef Joffe, “The Default Power: The False Prophecy of America’s Decline.” Foreign Affairs, (September/October, 2009): 21-35. See also, Paul Kennedy, The Rise and Fall of the Great Powers (New York: Random House, 1987); and Jeremy Black, Great Powers and the Quest for Hegemony (London: Routledge, 2008).
[3] Michael Mandelbaum, “Overpowered: Questioning the Wisdom of American Restraint.” Foreign Affairs (May/June 2010): 114-119.
[4] Howard W, French, “The Next Empire.” The Atlantic (May 2010): 59-69.

By William Steding|2017-05-25T21:25:11+00:00April 25th, 2010|The New Realities|0 Comments

The New Realities Part I: Hyper-freedom

The collision of two mega-trends is creating a new level of freedom unprecedented in history. The decline of state-centric social order—particularly in the global West—and the exponential proliferation of digital technologies means that boundaries and limits are rapidly disappearing. This has extraordinary implications for all of us, but most of all for those engaged in activism and/or entrepreneurship.

Our state-centric, government-based form of social order—of collective action—is facing imminent decline. While new, networked forms of collective action will replace governments and their bureaucracies—avoiding social collapse—there will be periods of extreme discomfort marked by social upheaval and occasional (and hopefully isolated) violence. The rise of Tea Party anger on the one hand, and emerging social networks like Facebook on the other, are harbingers of this transformation. The proliferation of NGOs (non-governmental organizations) is another. This is not an ideological-driven transformation, although battle lines will be conjured along ideological lines by political aspirants; it is the result of an overburdened and dysfunctional system; an induced failure. Government simply cannot and will not be able to continue to perform all the duties it has accepted via constitution and assumption.

In the United States, government’s structure, processes, and institutionalized corruption are rendering it obsolete. It won’t go away completely by any means, but the scope of its duties will narrow, and functionally it will offer little more than resources and authority. It can play a valuable, albeit limited, role. In the future it will rarely design or implement policy. It has lost those capacities. It will more closely resemble what the Founding Fathers intended. The most important thing for each of us is to be on the right side of the transformation. Those who scream at government, stoke hatred, or choose violence will lose. Those who embrace government’s new limited and redefined role—who view it as a precursor to hyper-freedom—will prevail. Freedom always has. Freedom always will.

Meanwhile, the promises of digital technologies are just beginning to be realized. The principal benefit: cheap and reliable connectivity that enables the communication of ideas from ‘alternate spaces,’ will produce previously unimagined alliances and solutions, operating at the margins of traditional or conventional institutions. In short, we ain’t seen nothin’ yet. The world that columnist Thomas Friedman calls (simplistically) “flat” is in reality a complex of layered and vertically integrated networks; neither hierarchical nor unordered. Advances in new forms of energy are just one area where hyper-freedom will be expressed. The advancement of economies, security, healthcare, and education in developing countries is another likely category. Intelligence-based security systems are a third. The dominant ‘natural’ resource in all of this is intelligence, created out of a velocity of idea convergence that will create metrics of productivity one can only dream about today.

The decline of government and the rise of technology do not change the nature of our issues or objectives, it simply allows us greater freedom through which to design and execute solutions. At the door of this new reality of hyper-freedom lay two fundamental commitments. We must first realize it is an opportunity, not a threat. Then, we must take the leap of faith and put ourselves out there in this new connected world and share our ideas, resources, and talents. We don’t have to become digitized technocrats, but we must commit ourselves to new avenues of work. Social activism and commercial opportunities must be pursued through professionally managed objective-specific networks, open to any worthy participant regardless of archaic qualifiers. Those who feel threatened will most likely characterize this as socialism—many already have. They will advocate policies of isolation. But this is not socialism; it is transcendent. It is a higher form of democracy, which echoes Abraham Lincoln’s “of the people, by the people, and for the people.” Those who see it as an opportunity—as hyper-freedom—will achieve great things for themselves and for society. They will be the new stewards of “life, liberty, and the pursuit of happiness.” Which side will you choose?

By William Steding|2017-05-25T21:29:12+00:00April 19th, 2010|The New Realities|0 Comments

The Next Neo: Neo-fascism

Fascism is characterized by three core elements: concentration of power, hyper-nationalism, and right-wing conservative political and social views. Fascists consider every domain of social order – security, economics, education, religion, and politics—as malleable in whichever direction supports the imposition of their will. Coercion is the lifeblood of fascism. Whether accomplished through overt violence or oppression of any modality, individualism—human and civil rights—are its enemy. Identity is imposed, as a reflection of the values of elite ideologues who seek power in what they view as perilous times, when social and political trends are threatening their nationalistic disposition. Adolf Hitler and Benito Mussolini were perhaps the world’s most famous fascists, but a few radical American neo-conservatives appear to be leaning toward the fascist model more and more everyday, led by Dick and daughter Liz Cheney, John Yoo, and William Kristol.

This new small group of emerging neo-fascists, might be easily dismissed as a sideshow that should be considered as little more than fodder for the entertaining rants of late night, quasi-news programs like Jon Stewart’s Daily Show except for the fact they are intelligent and highly connected to the existing political apparatus of this country with plenty of sympathetic followers in the media. In addition, they have the support of Christian nationalists (aka the Religious Right), akin to Mussolini’s relationship with the Vatican in the run-up to World War II. In short, they have a huge head start over what Hitler and Mussolini had, and like these ideological predecessors, they are rising at a time of political, social, and economic instability. We ignore or dismiss them at our peril. And, as they incite fear at every opportunity, they will no doubt gain support from the disaffected and dispossessed whose numbers are increasing at an increasing rate, and whose principal interest is to recapture their position in an ever-organic social order that appears to be selecting against them.

While the content of Dick Cheney’s legacy is being revealed slowly, concealed by a steady invocation of national security, the nature of his legacy has been cast. His incessant summons of fear, support of executive power, affinity for war, and disregard for legal rights and the rule of law are his corner posts. Recently, his daughter Liz, joined by William Kristol, in (Dick) Cheney-esque style, called for the identification of those attorneys in the Department of Justice who previously had represented Guantanamo detainees. Labeled the “al-Qaeda Seven” by Liz Cheney, she characterized them as Osama bin Laden sympathizers in an attempt to expose them reminiscent of McCarthyism in the 1950s. John Yoo is the inscrutable legal counsel who penned the rationale that twists the Constitution in favor of a unitary executive by employing abstractions of narrowly selected founding history to offer absolution to his neo-fascist brethren. As Mickey Edwards at The Atlantic characterized them, “they are statists, pure and simple, dismissive of law, dismissive of the Constitution, dismissive of freedoms. They love power, not freedom.”

By William Steding|2017-05-25T22:15:22+00:00March 12th, 2010|General, The New Realities|0 Comments

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