Working together… taking risks together.

Landing
Landing (Photo credit: Rhubarble)

44 years and one week ago, we worked together and landed on the moon. We invested massively as a society and we all took the risk that the mission may fail. Yet, we came out of it benefiting not only from the pride of such an amazing achievement, but also by the myriad technologies developed by the process to achieve said achievement. No money was made, no one became dirty rich over it, if it failed it would have ruined no one’s lives except the individual astronauts who were willing to take the risk for all of us and yet, we all gained in the long term.

We gave up short term gain by investing money, sweat, blood and tears on such a grand venture for all mankind.

We would have all gained from the investment in engineering and research regardless of the success of the mission, and a few heroes who went on that flying firework were the ones that took all the risk.

Business firms like Xerox invented  the PC as we know it (ethernet, GUI, etc.) They worked to create long-term value for their business, not simply to get short-term gain at all costs.

Wouldn’t that be nice if we could get over our religion of individualism and do the same today?

The ultra-individualism developing over the past decades has lead to short-term thinking, massive risk-taking and wholesale destruction of the social contract that kept all of us united and building a better world together. We excuse it because of the myth that anyone, without regards to luck, familial connections or access to capital can somehow become an individualistic God (read: billionaire) by simply working hard on that idea that changes everything.

Yes, some people have done that and helped the world – Steve JobsBill Gates, etc. However many, many more have not and what’s worse is many have discovered the best way to become a God in an individualistic secularist world is to cheat the system, find the loopholes where you can make money without adding value, where you can perform rent-seeking.

Firms like FedEx and UPS cut costs by providing terrible customer service because it saves them money in the short term, even though it could cost them customers in the long term. They rely on the barrier to entry of cost to get away with it, just as the wireless carriers in Canada regularly work to ensure that no real competitor exists against them so they can provide the worst quality server and most expensive data plans without fear of repercussions.

Many businesses have stopped trying to create value for society, instead trying to make competition difficult, if not impossible.

Our government systems have evolved from systems which work to improve the well being of all, into systems designed to maintain the status quo and only help those who are already successful – social darwinism by any other name.

We had a grand financial and economic experiment for the past 20 years. An experiment designed to take the wealth of the richest people and increase it without adding any significant value to the economy, all without risk – rent-seeking on a grand scale. These investments were nothing like the risky investments by the rich English bankers in the days of exploration – investments to build boats to bring the riches of the orient back to Europe or investments into building railways to connect millions and allow factories to be built. These investments were designed to be risk-free money producing money without any consideration for the production of value for society as a whole.

This whole house of cards collapsed in 2008.

Trillions of dollars were wiped from the account books in an instant and most Americans, heck most people worldwide had no say in this risk-taking, so their hands should have been clean when it failed. Those who taken the risk should bear the brunt of that gamble failing.

Yet, they haven’t.

In fact, those who did the risk-taking, those who gambled and lost have come out better than before from this. The economy has already recovere for them. Yet the contractors who build their houses, the factory labourers who build their goods, their software programmers who program their software, the doctors and nurses who take care of them, the teachers who taught them, the workers who pave their roads, even the barristas who makes their coffee are all still paying for their failure, and worse the government – our government – has made it clear that they aren’t going to even try to get any of the money back from them. The true failures of the experiment suffered nothing (or barely) while we, the labourers and the creators, suffer the most to save them from becoming failures.

We suffer in order to save these people from becoming fallen Gods, even though that’s what they already are. We are all sacrifices at the alter of individualism.

We went over 40 years from a world where the heroes brought back pieces of the stars to us, to a world where we all have to sacrifice to the fallen Gods of our individualistic religion, even if it costs us our soul as a united society.

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The best way to lose is to not change.

Abandoned house behind Rockland Lake
Abandoned house behind Rockland Lake (Photo credit: Elephi Pelephi)

Last year, I read in Harvard Business Review that the most difficult position for a business to be is at the top of it’s sector. You are making lots of money and doing well, but you are also the target of all of the competing organizations and, to make matters worse, you generally require the world to stay the same as long as possible to stay up there. Otherwise, you need significant capital investment in innovation because you can’t just copy your competitors as they try to imitate you.

Everyone is watching your every move to find mistakes or little ways they can crack your castle. Case in point, look at Apple. It’s surprising how much everyone enjoys taking the top guy down a notch whenever they can.

Ironically, the article mentioned that being number two is actually pretty sweet though. Tou have the most money of the non-top players, you can copy the good innovations that the top guy has and build on them yourself. You usually have enough capital to invest in solid R&D, and since you aren’t at the top, your shareholders are not as adamant about “not wasting money on R&D.” Samsung has done a great job copying Apple and then doing minor innovations to make their products just a touch better for short periods of time.

For many years, I believe Apple got around this issue by having a genuine salesman, Steve Jobs , convince the shareholders to allow for some pretty heavy investment in design and development. That it would pay off in the long run. It really did, the stock took off, the iPad, iPhone and App Store really have changed how we all interact with the world, and are the best selling products in their sector.

However, with the new CEO, who is not a saleman, but more of a technocrat, they are slowly sliding. The investors are demanding dividends instead of value creation. They don’t see that iPhone is still outselling everyone else. No one is pointing out to them the fact that the profits last year by Apple dwarfs the entire revenues of Google. They don’t have a CEO who is able to show them that investment in good R&D generally implies higher yields down the road in exchange for lower yields right now like another iPhone or iPad. They don’t have a CEO who knows how to rile the troops and make them uncomfortable with where they are at. The iPhone 5 was the most boring update I’ve ever seen.

Why do you think Apple is sitting on such a stockpile of money? Why do you think every update they are doing is incremental or price based?

Steve Jobs understood the cardinal rule about the universe – Always expect change. You don’t ride a wave by swimming behind it.

Unfortunately, many businessmen, technocrats, politicians, and general elite hate this rule. It’s so much easier to work and plan if everything stays the same. Over the past decade I’ve read article after article with this common mistake. Many assume, or hope, things will always stay as they are and if they don’t stay as they are, they assume that we need to work 100% to maintain the status quo.

This is the birth of the Capitalism is the best system of economy, democracy (or our variant of it) is the best system of government, the current layout of federal and state powers are the best way to do it. This is why we hear “Don’t ever question the status quo.”

This is not due to maliciousness though, it’s due to the fact that the status quo, a stable system, is the easiest system to control. Technocrats, politicians, and elites are already in power. They want the system to stay the way it is so their plans (some of which are utopian) can be enacted as they see fit.

This is the key to why they will all eventually fail.

You cannot stay in power indefinitely by forcing a status quo. While, in theory, if you maintain the status quo as long as possible, you will be on top the heap as long as possible. if you control the change, encourage it, and guide it, you will survive the fact that the world changes and we must all change with it.

But, simply put, the best way to lose is to stand still. The game is always changing, the world is always changing, and even if you control everything, general complexity theory will eventually kick in and all of your models and theories will be for naught.

Absolutely nothing is permanent. Once you realize that, it’s a whole lot easier to move on to better things.

Sometimes it sucks, but that’s what faith in the future is for.

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