Dave Pollard's environmental philosophy, creative works, business papers and essays.
In search of a better way to live and make a living, and a better understanding of how the world really works.



July 29, 2010

How a Community-Based Co-op Economy Might Work

Filed under: How the World Really Works, Preparing for Civilization's End — Dave Pollard @ 23:15

Most people have been brought up to believe that the competitive, grow-or-die, absentee-shareholder-owned, “free”-trade “market” economy is the only one that works, the only alternative to a socialist, government-run economy. This myth is perpetrated in business and other schools, by the media, by accountants and lawyers and bankers and, of course, in the business world. This amoral-capitalist economic model has “succeeded” in the same hostile way our species has “succeeded” — by brutally suppressing, starving for resources, using power to steal from, and, when all else fails, killing off anything deemed a “competitor” or threat to its monopoly on power and resources. It relies on massive subsidies and near-zero interest rates thanks to well-rewarded political cronies, on political graft and corruption worldwide, on oligopoly and restraint of competition, on wage slavery and worker ignorance, on phony money and unrepayable debt, and on advertising, human insecurity, ego and greed to create an artificial demand for its shoddy, overpriced crap. And, on top of all that, it’s utterly unsustainable.

For an alternative, natural economy to work, we either have to wait for this amoral-capitalist economy to collapse (which it will, but probably not for a few decades), or we have to plant the seeds for this alternative economy in the cracks where the current one is already failing most badly — at the community level where the economy is most obviously failing to produce meaningful work, sucking resources, wealth and opportunity out, and dumping mass-produced and imported crap that ends up in the landfill, and pollutants in our air, water, soil and food that make us sick and contribute to climate change. But before we can plant these seeds we need to unlearn the nonsense we’re taught and told about economics, and learn how a healthy economy actually works.

Perhaps the best way to explain this is by showing models that contrast the features of the amoral-capitalist economy with those of a cooperative natural economy. Let’s start by looking at two enterprises, a traditional amoral-capitalist one and a cooperative natural one:

Amoral Capitalist Enterprise

The diagram above is a slightly cynical but not unfair depiction of how most entrepreneurs taught amoral capitalist economics start and run their businesses (and I advised hundreds of them, so I’m not making this up):

  1. It all starts, sadly, with the entrepreneur’s dream that s/he has a better idea, something that the “market” will love as much as s/he does. It’s likely to be something that competes with products or services already offered by established companies, but somehow “differentiated” from them. It’s also likely to be a one-person enterprise to start, and a one-boss enterprise thereafter. Businesspeople who try to do it all themselves are almost sure to overstress themselves, make fatal mistakes, hate most of what they do, and fail, often early and spectacularly.
  2. Advised by “professionals” who went to the same business schools, the entrepreneur sets up the company as a for-profit corporation, borrows heavily (and expensively) for “start-up” costs, and then hunts for sources for materials and labour to make his/her products and services. It’s quite possible that investors, seeing this as a high-risk investment, will want a large return (high interest rate) and equity position (controlling interest, especially if profit and growth targets are not met) in return for that risk. Once production is started, the company needs to fund customer receivables, inventories, capital equipment, and lots of start-up expenses. Its balance sheet is scary, with no resilience if there are sudden changes in the economy or market, and with a ton of money tied up and no room for error.
  3. Now our poor entrepreneur has to go head-to-head with established competitors to try to attract customers. S/he will often spend an enormous amount on marketing and advertising to do so. The debts pile up, and little has been sold yet. Our entrepreneur is not sleeping well.
  4. The idea will now either pay off, or not. Chances are, with incumbents willing and able to take discounts to fend off new competitors, our entrepreneur will not make profit and growth targets. The business might be shut down and liquidated by unhappy lenders and investors, or taken over and the entrepreneur ousted. Or, more simply, it will just run out of cash, and/or make a few naive, fatal decisions.
  5. But just maybe it beats the odds and succeeds. Now it has to meet grueling annual growth and profitability targets to meet the investors’ demand for a very high rate of return on their investment, to compensate for the heavy risk they took.
  6. And if it grows it will start to attract the attention of large corporate competitors, which can use their money and position for dozens of usually-effective tactics to crush this upstart. And if it still succeeds, they will shrug, sigh, and make the entrepreneur an offer s/he can’t refuse. The exhausted entrepreneur will usually take the money and run. And either retire, or start all over again (probably not as successfully) with another idea.

This unhappy process explains why most traditional enterprises fail, and why the biggest companies in most industries form collusive oligopolies that control the market, the politicians, and the media, and become “too big to fail” (so if they do screw up, the government — the taxpayer — bails them out).

It has evolved this way for simple Darwinian reasons. It’s what works when the “market” is given some simple (amoral, dysfunctional) rules to operate and is then left to its own resources. It’s a Frankenstein monster, but it was inevitable.

Now let’s look at how a community-based, cooperative economy could work, if it were made up of natural enterprises that “flew under the radar” of the corporate giants, and used a completely different set of processes and rules to get established and operate:

Cooperative Natural Enterprise

  1. Our natural entrepreneurs don’t try to do everything alone, and they don’t decide what their offering is to be until they’ve done their market research and identified something in the local community that is needed, and not being met by established companies. As our economy starts to fall apart, such opportunities might be present in just about any essential sector:
    • A food co-op, that grows and distributes local, organic foods using permaculture or other sustainable methods (i.e. not dependent on monoculture, wage slave employees, massive oil-based chemical fertilizers and pesticides, and massive irrigation).
    • A co-op on the Mondragon model that makes and repairs high-quality, durable, customized clothing from local, sustainable materials.
    • An energy co-op that establishes, augments and manages the collective renewable energy of the community.
    • Building and furniture co-ops that construct and refurbish buildings and furniture using local materials and labour.
    • A housing co-op that builds and co-manages homes and community common spaces for its members and the community at large.
    • A local water and water resources stewardship co-op.
    • Information, media and technology co-ops that collect, store and disseminate information to the community.
    • Theatre, art and recreational co-ops that help the community realize that entertaining yourself is more enjoyable, engaging and fulfilling than consuming packaged entertainment produced elsewhere.
    • You get the idea.
  2. Now, in a process called Peer Production, the local people interested in becoming suppliers, customers or investors of the offering that will fill the unmet need from step 1 above, self-organize and become partners in the enterprise, and co-design the offering to meet their specific needs. This is not rocket science; the reason it isn’t done in traditional economy companies is that it doesn’t scale well up to the multi-national level that traditional enterprises need to grow to to continue to exist.
  3. The partners now decide which of them will work how many hours in the enterprise and what they will be paid (dependent on their time availability, personal income needs, and the needs of the enterprise — but with little differential between highest and lowest hourly rate, and with an appreciation that the enterprise is not for-profit and must manage its costs prudently).
  4. They will also decide how much short-term working capital they need (likely to be much less than a traditional enterprise requires, for reasons that will become apparent in a moment), how much the existing partners are willing to invest, and how much they’ll need to obtain from the local Credit Union (which is another local community-based co-op), and what rate of return on investment they will offer (since the product is being made by its potential customers to meet an unfilled need, the risk is low, and so is the needed rate of return). Based on these calculations, they will be able to set a zero-profit price for their offering, and confirm with potential customers that this is viable before even thinking about production.
  5. Now the partners can pre-order, and prepay the cost of, the offering that they have co-designed to meet their requirements. Additional customers may be brought in at this stage on the same basis. There are no receivables and no unpaid inventory to have to worry about, or to finance. And the Credit Union which is a partner in the co-op will actually buy the equipment and then lease it to the co-op, knowing that the risk of the enterprise failing is low (and hence the lease payments will carry a low risk premium) — so there is no equipment on the balance sheet either, and no need for capital financing. The enterprise begins its life almost entirely debt-free, and stays that way. And the equity is the partners’ — the workers’ — not that of some absentee outside group demanding huge returns, growth and profitability.
  6. Finally, the offering is produced to the customers who have already bought and paid for it. No expenditure is needed for advertising or marketing, and there is no need for the enterprise to grow, or to earn a profit (just enough to cover its costs). The balance sheet is small and lean, giving the enterprise resilience to deal with changes in the economy and market. Because it’s local, it creates local employment, respects local customs, is better for the environment, and minimizes transportation and other distribution costs. Everybody wins.

As co-operatives of many different types have found, the hard part in doing all this is the re-learning of what collaborative enterprise is all about. It takes a lot of practice, but it’s a natural human endeavour. There are excellent facilitators who can help with enterprise formation, the basics of peer production, invitation (of people in the community to identify and explore unmet needs), consensus, and conflict resolution. Most lawyers, accountants, bankers and traditional consultants should be used as little as possible, since they tend to perpetrate the traditional economy myths and lack the information and experience to know what’s needed in cooperative, natural enterprises. In time a new school of professionals practiced in the natural economy will emerge — I’ve heard that Credit Unions in Germany, for example, now offer “turnkey” financing packages for local wind and solar energy co-ops, complete with training.

As we relearn how to make a living for ourselves, we will be able to help each other out, and establish networks and alliances to share skills, knowledge and resources. I can imagine the growth of a Gift Economy (or what I call a Generosity Economy) blossoming in the abundance of appreciation, know-how, saved time and strengthened relationships that a cooperative natural economy engenders. With time, a community might be able to wean itself off dependence on the amoral-capitalist economy entirely, so that when that economy collapses it will already have made the transition to a steady-state natural economy, and be in a position to help other, unprepared communities with the terrible struggles they will then face.

It’s entirely possible, if we have the will to do it. I see it starting to happen already in some progressive communities that have Transition Initiatives underway. But I have a sense that it will take a few more economic, energy and ecological seismic shocks before many will wake up to the need to find a better way to live and make a living. I’m not sure it won’t be too late by then, but, if we’re in time, we’ll have some models and communities to show us the way.

June 28, 2010

G20: A Corporatist Show of Force and Power in Toronto

Filed under: How the World Really Works — Dave Pollard @ 21:10

Toronto Star photo G20 June 26-2010

Toronto Star photo

A great corporatist hoax was perpetrated in Toronto during the G20 this past weekend, and both the Canadian public and most of the mainstream media bought it hook, line and sinker. To anyone who has ever participated in an anti-globalization protest, this will not be a surprise.

There were over 10,000 police in the downtown streets, in many places every 10m on empty streets and en masse in other places. Yet if you look at the photos of the so-called “anarchist vandals” who smashed windows of American Apparel and other big US-owned chains on Saturday, you won’t find anyone being arrested or challenged — in fact you won’t see any police in any of the pictures of vandals at all (but lots of cameras, of course). Similarly, the police cars set afire were seemingly driven in advance by police into the centre of the publicized demonstration area, and then left, empty, unlocked and unwatched. Shortly thereafter, the empty cars were attacked and torched by the vandals with no obstruction from the police, who are nowhere to be seen in any of the much-publicized photos (see for yourself below).

Then, beginning shortly after the totally-ignored vandalism occurred, large masses of heavily armed police charged peaceful, stationary protesters, beating and arresting dozens apparently at random, and charging the crowd, firing tear gas and rubber bullets at groups just milling around, seated talking or singing together. The unprovoked violence of the cops then continued for the last 36 hours of the G20 meeting, as gangs of heavily-armed police shoulder to shoulder threatened, arrested, bullied and charged at people going about their business in neighbourhoods throughout Toronto, seemingly with no purpose except to instill anger and fear of the police, and incite retaliatory violence.

Here is a collection of photos and videos that pretty well speak for themselves:

“We weren’t just handcuffed. They also put cuffs on our legs, around the ankles. Once we got to Eastern Avenue (the site of the temporary detention centre) we were put into makeshift cages. They were about six metres by four metres in size. For a while, they kept moving us from cage to cage, as we were being processed and the charges were explained to everyone. We were strip searched. It is all kind of blurry. Once we got to speak on the phone to a lawyer, we had some idea of what was happening and knew that we might get out on bail the next day. We did not get any water for 12 hours.We could not wear our shoes in the cell. It was so cold. It felt like it was five degrees and we were in our t-shirts. There were no blankets. There was just a narrow steel bench and a port-a-potty with an open door.”

Toronto Star photo G20

Toronto Star photo

The big surprise of the event is that the police gangs beat up, arrested and caged in a makeshift prison many journalists and professional photographers including representatives of the corporatist mainstream media, who had been set up to film and report on the “anarchists”. Bad idea: The publisher of the mainstream Toronto Star called the show of force “a brutal spectacle that failed the city“. An interviewer for TVOntario was appalled by what he saw first hand, and tweeted his outrage for hours. A reporter for the right-wing corporatist Globe & Mail wrote Police G20 Tactics Give Toronto a Black Eye saying:

Come to Toronto, for work or pleasure, and enjoy having your civil liberties trampled and your right to free expression stifled. Avail yourself of our hospitality in a crowded detention pen, with free stale buns and water when (or if) your hosts get around to it. Partake of an invigorating massage, courtesy of police officers wielding truncheons. The best part – there’s no charge! Except that seems to mean the cops will pick you up, hold you, then let you go without ever following through criminal charges or prosecution, suggesting they had nothing on you in the first place.

The mainstream media as a whole seem a bit bewildered by all of this, but none of them has yet said what the indymedia knew all along: the masked “black bloq anarchist” vandalism was a carefully-staged photo-op for the gullible media, to justify the $1.3B security price tag for holding the ludicrous primp-and-preen G20 “leaders” circus right in the midst of Canada’s biggest city (essentially shutting down the whole city for a week, with a cost to workers and businesses of billions more), and to discourage and discredit legitimate anti-globalization protest.

As in previous large-scale protests, there is substantial evidence that many of the 10,000+ police “hired” for G20 security worked undercover, in plainclothes, and as infiltrators/instigators of the “anarchists” and perpetrators of the vandalism. Since the vandals are all conveniently masked and unidentified (no police around to unmask them), we will never know.

Will the mainstream media figure it out? Stay tuned, but don’t hold your breath. And don’t hold your breath, either, for the dumbed-down Canadian majority to realize they’ve been had. The whole world was watching, but precious few realized what they were really seeing.

October 27, 2009

Bailouts for Dummies

Filed under: How the World Really Works — Dave Pollard @ 20:06


Chart of U.S. Consumer Inflation (CPI)
Chart of U.S. Unemployment
Chart of U.S.Dollar Indices

Lately I’ve been reading more about economics, in self-defence against all the corporatist-government thievery and lies going on out there.

I’m aware that most people find what is happening in our economy and financial systems unfathomable, so I thought I’d try to simplify the complex. I confess up front this is a substantial over-simplification, and I’m not a professional economist. Recent events really boil down to governments doing what they’re told to do because their self-serving advisors have made them so terrified of the consequences of not doing so, that they feel they have no alternative. It’s not so much “too big to fail” as “failure is not an option”.

Our modern economic system is founded on a false premise — that unregulated ‘free’ markets are the most efficient (free of waste) and effective (they will produce better ‘collective’ outcomes than markets that government manages or intervenes in). This has been repeatedly shown to be false, but it still governs mainstream economic, and conservative, thought. In most countries (other than the US and struggling nations) experience with the failures of the ‘free’ enterprise market system — laissez faire capitalism — has led governments to play a significant, if not dominant, role in economic regulation and decision-making. These are what are called “balanced economies”, where governments intervene to limit the excesses of self-serving private interests and to provide goods and services (like health care and education) that the majority believe should be available to all, regardless of wealth or income.

Where there is no balance, as in struggling nations where the government is weak or hopelessly corrupt, the result is a hegemony (total dominance) by a wealthy elite that effectively owns and dictates policy to politicians, regulators and judges. This near-monopoly of consolidated power is variously called corpocracy, corporatism, or fascism. Many right-wing ideologues like Mussolini believed such a hegemony was the much-sought “benign dictatorship” that would act in the collective interest more knowledgeably and efficiently than any democracy. There is a second school of right-wing libertarian ideologues, especially in the US, who believe that the ‘market’ is able to act in this fashion, and that any government intervention will necessarily worsen every situation.

The problem is that the US has never had a ‘free’ market economy. It subsidizes large corporations to the tune of hundreds of billions of dollars, and ignores international legal and ‘free’ trade rulings that go against American corporations. It uses its economic wealth and power to bully other nations into giving it easy and uncompetitive access to their resources, labour and markets at bargain prices. So the current state in the US is an “unbalanced economy” — one where a few rich corporations essentially dictate policy to governments. Any government that refuses to play ball is threatened with the withdrawal of reelection funds by these large corporations in favour of other parties and candidates. In the US it takes a huge amount of money to get elected, and dueling with the corporatists is political suicide. It is not surprising, then, that the wealthiest 1% of Americans now control more than half of the nation’s total wealth, resources and private property, and that while the top 5% of Americans have achieved staggering real increases in wealth and income over the past 40 years, real net wealth and real income for everyone else have declined.

The US economy was substantially built on war. Most of the accumulated wealth of the country was made through war and “defense” activities, a large proportion of American innovations stemmed from huge military investments, and military and defense spending still directly or indirectly provides 20-30% of US economic activity (economic production and jobs).

On top of this, our global economy is addicted to growth. Without steady, continuous, unending growth, corporations could not raise capital or borrow money, so they would collapse. The stock market requires sustained double-digit growth in profits to keep it from collapsing — current share prices have an implicit “price/earnings multiple” that assumes continuous rapid growth in profits, forever, and if you took away that profit growth, shares would be worth substantially nothing. Every stock market ‘investment’ is a gamble on perpetual growth.

This exhaustive need for growth has led to (a) globalization — opening up markets in struggling nations to fuel affluent nation revenue growth, (b) a huge supply of credit to encourage citizens to borrow more and more, and spend more and more (notably larger and more expensive houses), and throw out and replace more and more, (c) the replacement of one-income families with two-income families, so that more cars, gasoline, child care, restaurant meals and other expenditures are needed to permit these two-income families to focus most of their lives on their jobs, and (d) ridiculously and artificially low ‘official’ interest rates, to encourage reckless borrowing to be used for even more consumption.

Over the last 50 years, this system has been ratcheted up tighter and tighter, because if any of these four growth factors dries up, growth ends, the stock market collapses, housing prices collapse, corporations collapse, and the global economy plunges into depression. Bad for corporations, bad for incumbent governments — we can’t have that. To keep this whole thing going, governments began, in the Reagan years, to lie to their citizens. They ‘recalibrated’ how unemployment and inflation are calculated, so that both ‘official’ numbers were much lower than the more honest numbers that had been reported up until then. If they reported honest inflation numbers, people would panic and demand higher wages and indexing of pensions and social security benefits. If they reported honest unemployment numbers, people would riot. So, while the ‘reported’ average rate of inflation in this decade has been about 2%, the true average rate of inflation (as anyone who manages the family finances intuitively knows) has been, until recently, about 10% — a doubling of the cost of living every 7 years (see first chart above). And the true US unemployment rate is not 10%, but 21% (see 2nd chart above), and has averaged 12%, not 5%, this decade. If you’re not feeling ‘better off’ as a result of all the reported GDP growth over the last few decades, that’s why.

A couple of years ago, this whole system of ‘perpetual growth’ and deception started to come unsprung. Essentially, American citizens ran out of money, and spending capacity. They’d maxed out their credit cards, borrowed against their inflated home values to the hilt, and, thanks to real inflation, their 30-year slide in real disposable income had pushed them to the point they just couldn’t spend any more. On top of this, they were so deep in debt that they were terrifyingly vulnerable to a loss of either bread-winner’s job, or to illness, or to an increase in interest rates. Many of them were already paying usurous interest charges on ill-advised debts and sub-prime mortgages — rates as high as 30% annually, and, as the book The Two Income Trap describes, an average rate of 16%. When you can get 16% or 30% annual return on your mortgage loans, you’re prone to take a lot of risks.

The last straw was the spike in gasoline prices. So US citizens, responsible for driving 72% of all domestic GDP, suddenly stopped buying. Housing sales, especially in cities, collapsed as buyers vanished from the market. Housing prices followed suit. The whole set of dominos started to fall. Without inflated house values to borrow against, credit started to dry up. Suddenly banks realized that house prices couldn’t be depended on to rise forever, and their mortgages were suddenly higher than the value of the properties they ’secured’. People unable to pay the outrageous interest on their debts realized this too, and rather than banking on a recovery, just defaulted, and walked away from their homes. This was especially true among speculators, who weren’t living in those houses anyway — they were just buying them no-money-down (like the infomercials said) and waiting for them to go up for a quick flip.

Now you have all these financial institutions, which over the last 50 years have grown from 10% of the US GDP to over 30%, panicking. They’d bought all these junk mortgages and repackaged them to hide their risk and now people were saying they weren’t going to buy any of these ‘financial instruments’ until they were sure they weren’t contaminated with these now-worthless ’sub-prime’ loans. That included other banks, which suddenly refused to lend to each other. With no liquidity, the entire over-extended, risk-crazy banking system went into free-fall. No one could get money. Everything started to collapse.

The banks went to the government (then run by the idiot Bush) and said “You have to bail us out, we’re too big to fail. You have to give us trillions of dollars in loans and loan guarantees. You have to basically underwrite, with US taxpayer dollars, the entire US financial system — 1/3 of the whole US economy — and indemnify us all from losses on these bad loans. There is no alternative. It’s not just us on the line, it’s the whole economy, and perhaps the stability of the government.”

So the governments, Bush’s and Obama’s and all the governments of all the affluent nations of the world (because some of them had more invested proportionally in this worthless US debt than the US itself had), all ponied up trillions of dollars to guarantee or refinance all the (unknown amount of) worthless debt that the financial institutions had created. They wrote a blank cheque to the banks, with virtually no strings attached. A catastrophe was averted due to a whole series of fortunate occurrences. Because the crisis was global, the printing of trillions of US dollars with no underlying value didn’t collapse the US dollar. Ironically, because the crisis pinpointed the fragility of all the world’s banking systems and currencies, it actually drove people to buy more US dollars, since it is (for a while longer anyway) the world’s official ‘reserve’ currency — the one all others are officially gauged against. It’s the currency that the World Bank and IMF have essentially deemed ‘too big to fail’. So (as the third chart above shows), the 25-year-long steady collapse of the US dollar — due to its impossible debt levels and trade deficits even before the crisis — actually paused during the crisis. It is now resuming, as worry sets in about US debt levels that have spiked by several more trillions of dollars.

Now, the interesting thing is that, when the governments paid trillions of dollars in extortion to the banks to bail them out for their reckless lending decisions, what they did with these trillions was not use them to restore liquidity to the banking system and start lending again to banks and mortgage companies and people whose houses had lost most of their underlying value. No, that would be risky behaviour, because these houses just weren’t good collateral in the first place. The banks found it was far more profitable to evict homeowners and sell off their homes for what they could get for them, than to lend money against houses that were worth — who knows what? So instead, they plowed those trillions into something they thought less risky — the stock market that had collapsed on the heels of the housing market collapse.

When they started doing so, the S&P 500 had fallen from nearly 1600 to 680 (i.e. it had lost 60% of its value, as had the Dow Jones Index). Once they’d thrown those billions in taxpayer dollars into the stock market, they’d pushed the index back up to nearly 1100 (an increase of over 50%). And because much bank investing is leveraged, they’d made a fortune in the process. The banks were happy — and ready to hand back most of the free taxpayer bailout money they’d received. The corporations were happy — their share value was back up so they were no longer in serious financial difficulty. The government, looking at these huge paper profits, and increases in share values, could joyfully declare the recession “over” and pat themselves on the back for averting a Great Depression.

Unfortunately, it’s been one more quick fix, one more ratcheting of the fragile, creaking machinery of the industrial growth economy one click tighter. The underlying weaknesses remain unaddressed, and the wreckage is massive. Real unemployment is 21%, and it will take decades to recover from this. US housing prices remain, well, unknown. There are so many houses that have been put on and taken off the market in despair that no one really knows what any property is now worth. When there’s so much supply and no demand it’s anyone’s guess. The ability of citizens to spend their way out of this recession remains horrifically low, even if they’re stupid enough to bid prices back up again until they’re hopelessly in debt. The value of the stock market today bears no reality whatsoever to the earnings of the companies in it — it’s driven solely by excess liquidity created by the government using taxpayer dollars, which has no ’safe’ place to park, so it’s in the stock market by default (bonds, the other ’safe haven’, are earning paltry rates like 1%).

What effectively happened is that our governments printed trillions of dollars in currency that will have to be paid back by future generations (i.e. they ‘borrowed’ trillions from future taxpayers) to give to banks to prop up the stock market. That’s what the bailout was all about.

Alas, it’s even worse than that. Obama and the bankers have to find some way to push up the value of real estate, because as long as most people’s wealth is tied up in it, they’re going to be unwilling or unable to spend on anything else. They came up with a clever idea. They’re using government money, via the housing authorities and Ginnie Mae (soon to be as bankrupt as Freddy Mac and Fannie Mae), to tempt people with small amounts of cash that they can use towards down payments on new homes. Because this allows people with no money and no credit to buy houses that they can just walk away from (thanks, taxpayer!), and because of the leverage this ‘free’ money offers, its effect, according to the researchers at Automatic Earth, could be to keep the value of houses at more than twice what their ‘real’ value would be in an unsubsidized market. So what happens to house prices, borrowing capacity and the taxpayer’s guarantee money when these artificial ‘incentives’ are removed? The same thing that will happen to the stock market when all that bailout money has to be paid back to the government. Crash.

mortgage guarantors

As the chart above shows, the US federal government (i.e. the taxpayer) is now virtually the sole lender in the US housing market. In today’s analysis in Automatic Earth, there’s a prediction of how much damage is to come from this ‘mini-bailout’:

It has cost the American people trillions of dollars to prop up the market to the present day, where general price levels have fallen “only” 30%. All attempts to keep the market alive have failed miserably, at least, that is, from the point of view of ordinary Americans.

With the government support about to vanish, the future prospects for home prices and the building and mortgage industries are Halloween material, while Bank of America (which bought Countrywide) and Wells Fargo (the country’s largest mortgage lender) face increasingly shaky days. Home prices are ready to go into a freefall. When the smoke clears prices will be down 80-90% from their peak. Needless to say that will cause such a chaos it’s hard to predict what America will look like.

Now, here’s a quote from today’s CNN economic summary:

The dollar rose to a two-week high against the euro Tuesday after a report showing U.S. consumer confidence deteriorated sharply in October boosted the greenback’s safe-haven appeal. The disappointing confidence data bodes ill for U.S. growth because it indicates lower consumer spending, which accounts for 70% of the economy. Without U.S. consumers, the world economy is also unlikely to recover as swiftly as hoped.

“When the U.S. consumer is not likely to continue spending, it means it’s going to be a long, drawn-out type of recovery. Nothing is going to happen overnight,” said Dan Cook, senior market analyst at IG Markets in Chicago. “So we see that drive to risk aversion.” The Conference Board’s U.S. consumer confidence index fell to its weakest since July and well below forecasts.

The insanity continues. Investors are rushing to the ’safe haven’ of the US dollar because of bad economic news, despite the fact that that US dollar now has almost no fundamental value. The possibility of the US ever being able to repay $16 trillion in government debts, even in the mythical perpetual growth industrial ‘free’ market economy, is zero. The US dollar has value for the same reason the stock market has value — money has to go somewhere, and the other places to put it look even worse.

This is how Ponzi schemes are built — on the psychology that some idiot will always pay more than something’s worth if they can be convinced that another idiot will come along who will pay even more.

Until we run out of idiots.

So now you know, in oversimplified terms, where our precarious economy sits, and how it got there. Prices are going to go down, a lot, as sure as gravity, and in an economy that is addicted to growth, and whose existence depends on perpetually increasing prices, and debts, and spending, and profits, that will be catastrophic. How soon that will happen, no one can say. It probably depends on when we run out of idiots. Because it’s going to be ugly, I hope it happens gradually. For the sake of our children and grandchildren, the victims of this theft, who will suffer its consequences for decades, I hope it starts soon.

(If you want to keep up to date on where all this is going, and learn more, The Automatic Earth is worth reading regularly).

October 13, 2009

Natural Learning

Filed under: How the World Really Works — Dave Pollard @ 17:52


critical life skills
Since the recent Unschooling conference call that Jerry Michalski put together, I’ve come to realize how much damage schooling does to us, and how essential it is for us to rediscover natural learning, if we hope to make the world a better place. I intend to create a “personal practice guide to unschooling” over the next year, and I’m starting to think what it might contain.

Because the terminology is fraught with misunderstanding, let me start with a few definitions:

  • Unschooling is taking your child, or yourself, out of the school (institutional education) system, and allowing learning to occur more naturally. 
  • Deschooling a society is the dismantling or abandonment of its school systems. The term can also be used in the sense of deschooling oneself — by becoming aware of and unlearning the institutional propaganda of how learning really occurs that we have picked up from our own years in the school system.
  • Home Schooling is an ambiguous term. It often means replicating the school system in the home, with the curriculum and indoctrination of the parents replacing that of employed teachers — really the antithesis of unschooling. But some people use the term to mean unschooling that occurs principally in the home.
  • Natural Learning is my own term for allowing learning to occur naturally, i.e. without structure, goals, timelines, grades, measures, programs, teachers, classrooms, coercion or curricula (think of how foxes learn from their mother).

Many of those whose children are unschooled appreciate that, if you really want your children to learn naturally, you need to first examine your own schooling and how it has affected your view of how learning occurs, and deschool yourself. The paradox is that most of us have no other model — we have at some point come to accept that institutionalized, formal schooling is the only way to learn. And, just as we cannot be “taught how to learn”, my attempt to develop an alternative framework for learning, to share with others trying to deschool themselves, could understandably be seen as both fruitless and ironic.

We have two things going for us: Nature is constantly showing us another, more natural way to learn; and the Internet has provided us with an astonishing amount of unstructured information that requires us to stretch our natural learning muscles to use it effectively.

I had the good fortune to have one year of unschooling during my formative years, which ruined me for subsequent schooled education but which gave me an appreciation for natural learning’s effectiveness, joyfulness and inherent superiority. I know it works. And while many shrug off this kind of learning as something only suited for people with unusual native learning ability and parents willing and able to mentor their children, I think this is defeatism. This defeatism is evidence of the learned helplessness that is inculcated in us in order to perpetuate our ghastly neoliberal education system that, in my opinion, saps children of their natural creativity and capacity for learning. It’s the same defeatism and learned helplessness that prevents most of us from making a living for ourselves in Natural Enterprises — even though we’d be happier and more productive if we did so, and the world would be much better off.

My model for deschooling yourself, my “personal practice guide” for natural learning, will be based on a combination of my own unschooling experience, my observation of how people are using the Internet to learn, and my observation and study of how wild creatures learn.

It will start with the principle that there is no ‘best’ or ‘right’ way to learn — we all learn differently. What’s more, we are constantly learning — taking in, assimilating, filtering, processing, storing and applying information — even when we’re not conscious of it.

Although there are a host of different learning styles, the work of Nancy Dixon and David Kolb suggests that learning generally involves five activities: experiencing, observation, reflection, conceptualization, and application. The richer the experience, and the more competent we are at observation, reflection, conceptualization and application, the more we will learn.

The experience of actually doing something, or at least watching someone who is competent at doing it, is obviously richer than having someone at the front of a classroom tell us about it, or reading about it in a textbook. So one way to rediscover natural learning is to get out of classrooms and away from books and screens and learn something by watching experts, by doing it ourselves, and by practice — the true meaning of apprenticeship. Alas, in our modern world many craftspeople no longer have the time, and are insufficiently accessible, to offer to demonstrate their craft for others to learn. Fortunately, just as young people are inherently curious and delighted to learn, most skilled practitioners are delighted to demonstrate what they do. All we need to do, most of the time, is ask politely and ensure that we aren’t disruptive.

So step one in the process of deschooling yourself is learn something new, not online or in a book or classroom, but through apprenticeship — experience, observe, reflect, conceptualize, apply, and practice it. And as we do that, ask questions, because that is not only critical to learning, it is critical to the craftsperson’s or practitioner’s development of the capacity to demonstrate, an absolutely critical and increasingly rare ability that is essential to natural learning. Don’t look up or design a curriculum for your learning of this new skill. Just go learn. Discover how natural and intuitive it is.

Once we have learned something this way, we can then try learning something online or through reading and research. If we really want to learn it competently, we need to identify a mentor — but not a teacher. The mentor’s role is very similar to the demonstrator’s role in apprenticeship learning — answering questions and acting as a ’sounding board’. The mentor doesn’t tell you what to learn, or how to learn, or assess how well you’ve learned. That’s the learner’s responsibility. The mentor is responsive and the process is conversational. The mentor is selected by the learner, not assigned to him or her.

I learned this as an advisor to entrepreneurs over many years. My role was to listen, to answer questions and. occasionally, to tell interesting and useful stories, never to tell people what to do or how to do it. I’ve tried to apply the same hands-off, sounding-board approach in my work as a manager, but it was largely unappreciated — most people have been so propagandized and beaten down by the school system and the hierarchical work world that they want to be told what to do and how to do it. They don’t want the responsibility for doing so themselves. They have lost interest in learning, and then lost the capacity to learn.

This learning is (like schooling) a collaborative process, but the roles — learner, demonstrator, mentor — are very different from the roles of “teacher” and “student”. Even as we practice things we are just learning, we are already beginning to exercise all three roles. Others (including demonstrators and mentors) have much to learn from observing us demonstrating our mistakes, and the process of our becoming more competent.

So the key, I think, to natural learning lies in developing capacity in all three roles (learner, demonstrator, and mentor), allowing ourselves more (and more varied and stimulating) first-hand experiences, and becoming more competent at observing, reflecting, conceptualizing, applying and practicing what we’ve learned. In the process, we learn not only new skills and competencies, but about ourselves.

The second great challenge in rediscovering natural learning, it seems to me, is in recognizing the impediments to such learning that our modern dysfunctional society has put in the way of learning. In my earlier study I identified these ten obstacles:

  1. We don’t allow ourselves (and our society doesn’t allow us) enough time for wonder.
  2. Our workplace activities and our home routines are often repetitious and stimulus-poor.
  3. We don’t do anything together anymore.
  4. We get too much of our life experience second-hand (from books & movies, and online).
  5. We suffer from imaginative poverty — we won’t let ourselves imagine, and now we’ve largely forgotten how to imagine.
  6. Our lives are too organized and too scheduled to allow serendipitous experiences and hence serendipitous learning.
  7. In this world full of terrible knowledge and awful realities, we are becoming afraid to learn. We cannot bear too much reality, too much bad news, and we don’t want to accept the awful responsibility that knowing and learning brings with it.
  8. The current institutional schooling system impedes and discourages self-directed and undirected learning.
  9. The media have addicted themselves, and us, to facts rather than meaning.
  10. We have ‘desensitized’ ourselves — we process everything mainly with our left brain, so we no longer really see, really hear, really smell, really taste, really feel.

The workarounds to these ten obstacles are fairly self-evident, I think.

If you’re a natural learner.

October 6, 2009

The Problem with Rights

Filed under: How the World Really Works — Dave Pollard @ 14:40


g20There’s an interesting editorial in the NYT today that argues that, abhorrent as they might be, videos depicting extreme animal cruelty should not be banned in the US, because to do so would undermine the right of free speech/expression. The Supreme Court, it appears, is poised to agree with them, in reviewing a recent ruling from an appeal court.

The Times’ editorial staff weasel around the issue of whether the two current exceptions to the right of free speech (”obscenity”, whatever the courts in their arbitrary wisdom choose to define that as, and “child pornography”, including cartoons) are justifiable using the same reasoning — clearly the NYT doesn’t want to wade into the maelstrom over whether the depiction of child abuse, as distinct from the actual commission of that horrific crime, should be illegal.

Even more weasel-y, they bring up the old red herring — if animal torture videos are banned, will PETA ads become illegal if they depict animal cruelty committed by consumer product labs, the military and factory farms. And they suggest that if courts are allowed to further broaden the exceptions to first amendment rights, it’s a slippery slope that will lead to no free speech rights at all.

This is a cowardly act by the Times, and it’s intellectually dishonest. They had an opportunity to grapple with the whole complex issue of “constitutional rights”, which is an important issue that this case directly relates to. They weaseled out, and the only result will be to legitimize violent “entertainment” and obfuscate the truth about what laws, courts and police actually protect.

Although the UN, and most countries, have promulgated whole codes of “human rights”, the truth is that there are no inherent “inalienable rights”. What is called a “right” in any society is an evolving collective judgement, and convention, of what is and is not acceptable behaviour. The invention of “rights”, if you read their history, was designed to protect minorities and the disempowered from the actions of ignorant majorities and corrupt politicians. What they protect today is something else entirely.

If you want to see what a sham the US first amendment and similar “rights” of free speech are, just go and protest against the G20 or any other body with wealth and power. You will see that you have no “rights”. In many cases, so-called charters of rights are actually coopted by the rich and powerful to justify and defend oppressive behaviour. Corporations in most countries now have “rights of personhood” that are used to leverage their already vast power and bully those who dare challenge it. The view of Homeland Security (and many other law “enforcement” bodies) has consistently been that all “rights” are contingent on their judgement of whether they pose any threat to the existing power structure, and can be ignored or abrogated at their discretion.

So, thanks to “constitutional rights”, you have today an “inalienable” right to organize a Nazi goose-stepping march in military uniforms through the communities of oppressed minorities; to bring concealed weapons to public political events; to make and circulate videos of hideous animal torture; to pollute the world beyond the tipping point of climate collapse; to incarcerate and abuse political opponents in secret prisons, compliant adult family members in “the privacy of your own home”, and helpless farmed animals in pursuit of profit; and, if you have enough money or power, to buy politicians and lawyers who will ensure that you get away with any behaviour.

But you do not have the right to protest against any of the above atrocities in any effective, disruptive or “disorderly” way. You do not have the right to a clean or safe environment, free from suffering, poverty or oppression.

It’s time progressives gave up the fantasy that codes and declarations of “rights” are anything other than a sham, a smokescreen to conceal the fact that laws and principles protect and defend only the rich and powerful, and that what is acceptable (to enforcers of the law) behaviour in the world is what the rich and powerful say it is. It’s time the NYT and other organizations that purport to reflect and influence public opinion spoke the truth: there are no “rights”, only responsibilities and obligations, of every individual to speak out and act against all behaviour that causes harm or suffering to any living creature.

Like the abused animals in these videos, we have no “rights”, and the sooner we all realize it the sooner we can start to bring about changes that are needed to make this world livable and humane again. We cannot count on lawyers, judges, courts, police and politicians for support or help — they are lined up precisely against us in this work, in defence of their rich and powerful clients.

And, apparently, we cannot count on the New York Times, either.

May 11, 2009

The Future of the Media: Something More Than Worthless News

Filed under: How the World Really Works — Dave Pollard @ 21:29


adding value to information

Nearly 15 years ago I was asked to give a speech at a conference of Canadian mainstream media types and ‘content aggregators’. I quoted Marshall McLuhan (”Information is always trying to be free”) and told them that, in 15 years, if they didn’t change, they would be extinct. Specifically I told them that they had to do more than regurgitate stories from the newswires, and that if they wanted to be paid for their work they would have to do something valuable — either provide information content that was actionable, or provide some service that added value. I described seven ways to add value to information (see chart above):

  1. Provide an actionable alert about something new and urgent.
  2. Provide an actionable briefing about something new and important.
  3. Provide the results of a survey of informed people that has never appeared anywhere else.
  4. Provide genuine research that explores an issue in depth and gives readers/viewers a thorough and useful understanding of the issue, and which asks important and provocative questions.
  5. Provide guidance on what the readers/viewers should do about this information (something more valuable than “be on heightened alert”)
  6. Provide a gauge or measure by which people can self-assess what they know about an important subject vs. what they should know.
  7. Organize a real-time event where people can engage with each other and with people who know more than they do, about an important subject.

The media types laughed at me. They insisted “this is not what the mainstream media do”. I insisted that if that was so, they had better start looking for a steadier job. As usual I was a bit ahead of my time, but not by much. The mainstream media are drowning in debt and losing readers every year, and their only answer is to try to find ways to force us to pay for the same old content, what I call “worthless news”.

Bill Maher famously said “The job of the media is to make what’s important interesting.” And the above list provides seven ways to do so. So why don’t they do their job?

Well, for a start, it costs more to do these seven things, and media companies are notoriously cheap (that’s why, a century ago, media barons were so wealthy). It’s risky. It’s hard work. It requires real skills. And it requires the company to really know its readers/viewers. The mainstream media fail on all counts. The alternative/indymedia, by sheer force of numbers and the astonishing range of new technologies at their disposal, are proving more capable of all seven ways of adding value to information than the stodgy old media.

There are exceptions. Some local newsmedia do some excellent investigative reporting of local issues (corruption, neighbourhood pollution, local culture). The New Yorker provides great analysis on important issues like government torture, American cultural phenomena, and environmental issues. The NYT, in its weekend and special editions, does some admirable long pieces and multi-part investigative series. The Op-eds in both The New Yorker and the NYT are often insightful and informative, not just empty rhetoric. So are many of the environmental articles in Orion.

A lot of people are asking what will happen if most of the mainstream media fold — where will the raw ‘news’ that most of the new media write about come from then? The reality is that most of the ‘news’ in most of the mainstream media are not information items at all — they’re entertainment items. In fact many of them are entertainment items about the entertainment industry — pure pap. Much of the ‘news’ comes from wire services that, increasingly, use vast networks of freelance reporters, rather than having their own staffs, so in the worst case after the mainstream media’s demise, freelancers (who already work for next to nothing) will have to become part-time reporters, and earn their living doing something else. In that case the raw news reports (most of which aren’t actionable in any case — more worthless entertainment) will end up being served up by millions of part-time freelance reporters, who will provide their copy and multimedia free (it won’t cost them anything) just to see their name in the byline of all the narrowcasting blogs and e-newsletters that will thrive once the newspapers and the remains of real radio/TV journalism disappear.

A larger problem is that, even now, there is a dearth of skills at doing the seven things that add value to information. Doing great research is a rare ability, and insightful research is lost in oceans of superficial, thoughtless regurgitation and academic esoterica. Few people care to take the time needed either to do great investigative work, or to think creatively and profoundly about what all the mountains of facts really mean. And the short attention spans of most of their potential audience is not a great encouragement either.

But it’s interesting to see how, no matter how the intermediaries and governments and corporatist packagers of drivel to dumbed-down consumers obfuscate, trivialize, neglect and deny any obligation for doing the real job of adding value to information (and making what’s important interesting), somehow there is always someone out their to take up the slack. Government censorship has never been a match for citizens’ passion to know important truths. The education system can never quite stamp out all the creativity and intellectual curiosity of its inmates. And there is always someone out there prepared to risk everything to speak truth to power, to the deceived, to the deniers, and to the ignorant.

For all the worthless news served up to us by the dinosaur media conglomerates, there is more useful, valuable information available to us today than ever before, and the magical thing about it is that the people providing it are doing it not for money or glory, but because they care about the truth. And the more they inform us, against all odds, the more we come to care too. And when a connected, organized group of people come to care about something actionable, watch out: there is no stopping them. It’s the phenomenon that has brought down tyrants and empires, and brought us just about everything that is worthwhile in our struggling society.

As Margaret Mead said: Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.

Category: The Media

April 25, 2009

An Unschooling Manifesto

Filed under: How the World Really Works — Dave Pollard @ 09:01


kelvin high school
a photo of my high school, c. 1969

In Grade 11, my second last year of high school, I was an average student, with marks in English in the mid 60% range, and in mathematics, my best subject, around 80%. Aptitude tests suggested I should be doing better, and this was a consistent message on my report cards. I hated school. As my blog bio explains, I was shy, socially inept, uncoordinated and self-conscious. My idea of fun was playing strategy games (Diplomacy and Acquire, for fellow geeks of that era — this was long before computer games or the Internet) and hanging around the drive-in restaurant.

Then in Grade 12, something remarkable happened: My school decided to pilot a program called “independent study”, that allowed any student maintaining at least an 80% average on term tests in any subject (that was an achievement in those days, when a C — 60% — really was the average grade given) to skip classes in that subject until/unless their grades fell below that threshold. There was a core group of ‘brainy’ students who enrolled immediately. Half of them were the usual boring group (the ‘keeners’) who did nothing but study to maintain high grades (usually at their parents’ behest); but the other half were creative, curious, independent thinkers with a natural talent for learning. The chance to spend my days with this latter group, unrestricted by school walls and school schedules, was what I dreamed of, so I poured my energies into self-study.

To the astonishment of everyone, including myself, I did very well at this. By the end of the first month of school my average was almost 90%, and I was exempted from attending classes in all my subjects. I’d become friends with some members of the ‘clique’ I had aspired to join, and discovered that, together, we could easily cover the curriculum in less than an hour a day, leaving the rest of the day to discuss philosophy, politics, anthropology, history and geography of the third world, contemporary European literature, art, the philosophy of science, and other subjects not on the school curriculum at all. We went to museums, attended seminars, wrote stories and poetry together (and critiqued each others’ work).

As the year progressed, the ‘keeners’, to my amazement, found they were struggling with this independence and opted back into the regular structured classroom program. Now our independent study group was a remarkable group of non-conformists, whose marks — on tests we didn’t attend classes for or study for — were so high that some wondered aloud if we were somehow cheating. My grades had climbed into the low 90% range, and this included English where such marks were rare — especially for someone whose grades had soared almost 30 points in a few months of ‘independent’ study. The fact is that my peers had done what no English teacher had been able to do — inspire me to read and write voraciously, and show me how my writing could be improved. My writing, at best marginal six months earlier, was being published in the school literary journal. On one occasion, a poem of mine I read aloud in class (one of the few occasions I actually attended a class that year) produced a spontaneous ovation from my classmates. 

The Grade 12 final examinations in those days were set and marked by a province-wide board, so universities could judge who the best students were without having to consider differences between schools. Our independent study group, a handful of students from just one high school, won most of the province-wide scholarships that year. I received the award for the highest combined score in English and Mathematics in the province — an almost unheard-of 94%.

The experience spoiled me for university — I graduated in two years, which was all I could bear, by taking extra courses and summer courses, just to get through it. And the independent study program, despite its extraordinary success, was not repeated in subsequent years. Part of the justification for the pilot program had been to free up teachers’ time to spend with students who needed more individual attention; yet the dubious reason we were given for its cancellation was that “it was unfair to deprive the average students of the presence and example of the more outstanding students”.

All this is by way of introduction to my thoughts on PS Pirro’s excellent new book on Unschooling, which is in effect what my belated “independent study” experience was an example of. Here’s an excerpt to give you a flavour of the book:

The world of the classroom is so unlike anything the real world has to offer – with the exception of other classrooms – that kids can excel at school only to find themselves utterly lost in the real world. Some people think this is the result of failed schooling, but a few of us suspect otherwise. We suspect that this sense of displacement and confusion is actually the result of schooling that succeeds in its most basic unwritten objective: to keep you dependent, timid, worried, nervous, compliant, and afraid of the World.  To keep you waiting. To keep you manageable. To keep you helpless. To keep you small.

Educated, confident, creative people are dangerous to the status quo, dangerous to a centralized economy, dangerous to a centralized system of command and control. Those in power don’t want you educated. They want you schooled.
 
It is not up to teachers or school administrators to figure out what you should be or do. It’s not up to the State, it’s not up to your guidance counselors. It’s not up to your parents. What you do with your life ought to be up to you. What you learn ought to be up to you.  How you navigate the world and create your place in it ought to be your decision. Your life belongs to you.  School does its best to disabuse you of this notion. Unschooling celebrates it. Unschooling puts the responsibility for creating a satisfying life squarely where it belongs: in the hands of the one living it.

PS presents 50 reasons why schooling is, in every imaginable way, bad for us and our society, and then 50 reasons why unschooling, which she defines as “learning without formal curriculum, timelines, grades or coercion; learning in freedom” is the natural way to learn. She argues that we are indoctrinated from the age of five to cede our time, our freedoms, and what we pay attention to, to the will of the State, so that we are ‘prepared’ for a work world of wage slavery and obedience to authority. We are deliberately not taught anything that would allow us to be self-sufficient in society. And in the factory environment of the school, where teachers need to ‘manage’ thirty students or more, ethics and the politics of power is left up, from our earliest and most vulnerable years, to the bullies and other young damaged psychopaths among our peers, to teach us in their grotesquely warped way. As PS explains, it is in every way a prison system.

Unschooling, by contrast, starts with the realization that you ‘own’ your time, and have the opportunity and responsibility to use it in ways that are meaningful and stimulating for you. When you have this opportunity, you just naturally learn a great deal, about things you care about, things that will inevitably be useful to you in making a life and a living. Your learning environment is the whole world, and you learn what and when you want, undirected by curricula, textbooks, alarm clocks and school bells. You develop deep peer relationships around areas of common interest, once you’re allowed to explore and discover what those areas of interest are. And the Internet and online gaming allow you to make those relationships anywhere in the world, to draw on the brightest experts on the planet, and to communicate powerfully with like-minded, curious people of every age, culture and ideology.

Many people argue that unschooling will only work for the very brightest and most self-disciplined children. On the contrary, I think we are all perfectly suited to unschooling until the school system begins to beat the love of learning, the ability to self-manage, curiosity, imagination and critical thinking out of us. By the time we have reached the third grade it becomes much more difficult, and my success in unschooling in twelfth grade was, I will agree, due to my above-average intelligence and initiative — most of my intellectually-crippled peers just couldn’t manage by that time without the strictures they’d become accustomed to. They had long ago lost the desire to learn, and to think for themselves.

If every child was unschooled — given the chance to explore and discover and learn in the real world what they love to do, what they’re uniquely good at doing, and what the world needs that they care about — then we would have a world of self-confident, creative, informed, empowered, networked entrepreneurs doing work that needs to be done, successfully. We would have armies of people collaborating to solve the problems and crises facing our world, instead of going home exhausted at the end of the day seeking escape, feeling helpless to do anything that is meaningful to thems or to the world. We would have a world of producers instead of consumers, a world of abundance instead of scarcity, a world of diversity instead of what Terry Glavin calls “a dark and gathering sameness”. We would have a world of young people choosing their lives instead of taking what they can get, what they can afford, what is offered to them. We would have a world of people who are nobody-but-themselves, and who know who they are, and how to live and make a living for themselves.

In the final part of her book, PS encourages us to check out unschooling gatherings in our own area, and find out more, find out what we can do to grow this important movement. She describes some of the groups that are organizing travel adventures to enrich unschoolers’ experiences even further, and provides a host of resources for further reading and exploration of the unschooling movement.

I’m growing increasingly convinced that if we have any hope of coping with the crises that we face in this century, it lies in the generations now in the “school system”.

More precisely, it lies in getting them out of that system, and making this the last generation of “schooled children”.

Given the damage we’ve done to the world — due in no small part to the “education system” that has molded us — damage that future generations must reverse, it’s the least we can do for them, and, at last, for ourselves.

March 29, 2009

Links of the Week: March 28, 2009

Filed under: How the World Really Works — Dave Pollard @ 22:49


Atlantic Fin Sector Charts

The US Behaves Like An Emerging-Market Corporate-Crony Nation: From a former IMF Chief Economist, in the Atlantic, a familiar story, except that, unlike Russia and Argentina and other emerging nations, the US is ‘too big to be allowed to fail’ (charts above are from this article). This is essential reading, and the ‘hopeful’ scenario on its final page is bone-chilling (thanks to Glenn Greenwald for the link):

The crash has laid bare many unpleasant truths about the United States. One of the most alarming is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time…

“Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders.”

[Other stories this week on the economic crisis and bailouts in particular:

An Economy Where Almost Everything is Free: ABC interviews Wired’s Chris Anderson on how in the next economy, you’ll give everything except premium ‘wraparound’ services away for free, and ‘make money from zero’, and Jeff Jarvis on the transition to Peer Production, “giving up control of your customers” (actually, giving up control of your enterprise to your customers). Click on the ‘Show Transcript’ button to view the full text. Thanks to Cheryl for the link.

Do Just Three Things Per Day: If you’re having trouble Getting Things Done, Colleen says try limiting yourself to working on just three projects/activities per day.

The Genetically Modified Poem: Another perceptive and conceptive work from Dave B: “You hardly need to read anything else.

What Happens When Your Local Paper and TV Stations Disappear?: Rob says that, like in any ecosystem that is suddenly devastated, there’s a slow, innovative road to recovery.

The Wisdom of Crowds for Decision-Making: Caterina Fake is incubating Hunch, a new software that aggregates collective knowledge into decision trees that will help you make the decision by asking yourself, and answering, a series of questions. Thanks to Kathy Sierra (via Twitter) for the link.

Why Sharepoint (and Other Overengineered ‘Groupware’) Almost Never Works: Nancy summarizes the finding of just about every user I know that deployed groupware solutions are always suboptimal. Message to companies: Stop deploying these tools, and use simple, ubiquitous, user-friendly tools for social networking instead.

The Dysfunctional State of Info-Sharing in Business: A new survey says that people in organizations mostly share what they already know and agree on, and rely too much on consensus and not enough on critical discussion, and that the amount of discussion and info-sharing doesn’t correlate with the quality of resultant decisions. Thanks to Tony Karrer (via Twitter) for the link.

The Difference Between Libraries and Schools: A young video-blogger makes a clever case for unschooling. Thanks to Michelle P for the link.

Why We Shouldn’t Trust Experts: Experts are overrated, but because there’s no accountability, no tracking, we don’t realize that in the long run they’re no better at decision-making and forecasting than random. Want proof? Look at this hilarious prediction from 2006 by Wharton prof Jeremy Siegel, who is still telling us everything’s a deal today.

Shhh! Mexico is Not a Failing State: Yeah, let’s not get Mexico mad at us by suggesting that it is, or they might let loose their corrupt cops, gangster governments, drug mafia, starving and angry farmers, and tens of millions of economic refugees on us.

Obama Plans to Make Canada-US Border Crossing Even More Bureaucratic: For both our sakes, we should cancel NAFTA now. It never worked, except for the corporatists. And it’s looking more and more, in Afghanistan and elsewhere, as if Obama is just as clued out about the futility of imperial wars and massively complicated “security” processes and bureaucracies as Bush was.

An Acronym for Sustainability: LEARN: Localize, Educate, Adapt, Ration, Negative Population Growth. Thanks to Lucas for the links.

Just for Fun: Now you can use Twitter to get each of your plants to tweet you when they’re thirsty and thank you when they’re not. Thanks to Theresa in Vancouver for the link.

Thoughts for the Week:

  • From Jeremy: “Foresight reads weak signals, not major reports – Arie de Geus said ‘act with foresight: act on signals rather than on pain’.”
  • From Michael Wiik: “We know our body is more aware of reality than we are. It sees more than we see. It hears more than we hear.”
  • From children’s story writer Philip Pullman: “We don’t need a list of rights and wrongs, tables of do’s and don’ts: we need books, time, and silence. Thou shalt not is soon forgotten, but Once upon a time lasts forever.”

March 19, 2009

Power Laws and Power Dynamics

Filed under: How the World Really Works — Dave Pollard @ 22:59


power curve
Christopher Allen has his article on social networks and power laws up today, and it’s worth a read. He makes the point that the size of a group or network is only one part of the social dynamic, because not all members of a group are ‘equal’, and, particularly in larger groups, a small proportion of members tends to dominate. This is all according to the Power Law theory (Clay Shirky is most famously associated with this), which is illustrated above: Most members of such groups fall in the “long tail” to the right side of the curve; each of them has relatively little influence on the group as a whole, but collectively, because of their large number, this “tail” can be long enough to “wag the dog” (if they’re sufficiently organized and enabled and inclined to do so).

What interests me, more than the non-egalitarian nature of such groups (especially hierarchies), are the power dynamics of groups that are purportedly equal. We have been conditioned by the multiple hierarchies in most of the groups we participate in (including families, workplaces, and recreational teams), to wait for ‘leaders’ to present themselves (or be assigned) in the groups we are part of. We tend to find self-organization opportunities (or necessities) bewildering — there’s kind of a tacit “who’s in charge” question floated, a ‘holding back’ waiting for someone to direct the group.

It doesn’t take long, however, with a bit of practice in Open Space or in unorganized collaborative activities (”pick-up” sports, karaoke, dances, and some collective work-bees), we quickly re-learn the art of self-organization. Once you get used to self-organization, it’s hard to put up with ‘organized’ groups again, with their bullies, louder voices, self-designated leaders/followers and wallflowers. So you get a complex power dynamic working:

  • The people who are used to holding sway (people normally in a position of wealth or power) will naturally talk first, and start to display dominance behaviours (talking loudly, interrupting, aggressive body language, pulling rank, assigning tasks, making decisions ‘for’ the group)
  • The people who think they have something to say but who are unable or unwilling to exercise dominance behaviours to ‘compete’ with the first group will disengage, and their behaviours will show it (looking away, multitasking, crossed arms, moving towards exits, daydreaming)
  • The people who want to curry favour with the first group will start exhibiting submissive behaviours towards them (leaning forward body language, nods)
  • The people who are overwhelmed and reluctant to contribute out of fear or shyness will start exhibiting non-directed submissive behaviours (legs drawn up, self-touching, intertwined fingers) and trying to decide who to defer to; anything they are coaxed to say will be immediately discounted or ignored

Some of these signals and dynamics are quite subtle, and many of them are not even noticed by others. If you have come to prefer self-organized egalitarian groups but work for an organization where this is rarely or never authentically practiced (most hierarchies pretend to have/tolerate egalitarian groups, but this is only for effect, and such groups actually have little or no real authority), this can be so exasperating as to make you culturally incompatible with the organization — you’ll find hierarchical group activities so toxic you’ll quit, or your rancor or disengagement will get you fired.

My sense is that this cultural tension is creating a constant power disequilibrium in many organizations:

  • People who are at the top of hierarchies are finding it harder to attract and retain sufficient obedient submissives and patient sycophant climbers
  • Hierarchies with too many ambitious dominants are being crippled by more and more violent dominance competitions (leading to high burnout rates)
  • Some former egalitarians are being seduced by increasing power and wealth to behave like, and finally become, top-of-hierarchy dominants
  • Mostly-egalitarian groups are being exhausted by the need to constantly reprove/expel incorrigible dominants and ‘bring out’ incorrigible submissives

Picture a society made up of equal numbers of chimps (hierarchy, top-down organized culture) and bonobos (egalitarian, self-organized culture). Yes I know these are somewhat exaggerated sterotypes. The chimps had worked fine together when they were a monoculture, because everyone quickly learned their place in the hierarchy and decisions were made and followed accordingly. The bonobos had worked fine together when they were a monoculture, because they worked out everything by consensus without power dynamics.

But now they’re mixed together, and worse, the older members of the diverse culture are mostly chimps and the younger members are mostly bonobos. The dominant chimps are unhappy because the bonobos won’t defer and obey. The submissive chimps are unhappy because it looks like chaos — no one is clearly in control, telling them what to do. And the bonobos are unhappy because the dominant chimps are bullying and not listening, and the submissive chimps are not participating and speaking up.

In the real world, the power dynamics are at once much subtler and much more complex. There is no truly egalitarian culture, and many of us have blind spots as to our use of and acquiescence to power. Nor is there any truly hierarchical culture — we don’t always defer to people higher in the hierarchy (especially if there is no direct line of responsibility or authority), nor do we always want or expect people lower in the hierarchy to defer to us. Besides, position in the hierarchy is usually subjective and context-determined. So in fact the power dynamics and cultural tensions described in the bullets above are ever-present in almost every group or organization to which we belong.

So 7 and 50 may be ideal sizes for Work Groups and Enterprise Groups, but their success will be strongly determined by the cultural mix and power dynamics of the group members. That’s even true, the idealist in me acknowledges with a sigh, when the Group is substantially self-selected. We cannot know the personality and power culture of people until we’ve worked with them in a variety of situations. And of course, we don’t even know ourselves perfectly, nor how we can delude ourselves, or be seduced, to act in ways very different from those we claim to espouse. Some of the constant power struggle will be going on inside each of us.

March 11, 2009

Bottom-Up Democracy: Selecting Our Representatives Face to Face

Filed under: How the World Really Works — Dave Pollard @ 22:55


congressional districts cartogram
There has been a lot written lately about the need to reinvent our economy from the bottom up — community-based natural enterprises owned and operated by people right in the community, providing local products to local customers, responsibly, sustainably, and powerfully connected, with each community only exporting goods that are excess to the needs of the community and importing what cannot reasonably be produced in the community.

A major problem with this ideal is that our political and economic systems are to some extent inseparable: As long as we have a top-down political system whose officials are disconnected from local economies and citizens and beholden to very wealthy and powerful multinational lobbyists, that political system is going to be at loggerheads with a bottom-up community-based economic system. This political system will do everything in its considerable power to disrupt and destroy an entrepreneurial economic system that would take away all its financial funders’ power, wealth and influence. In fact, our political system has already and always done so — trade regulations, legal indemnifications, tax breaks, corporate ‘rights’ and massive subsidies are all skewed in favour of multinationals and against the interests of local enterprises, labour, the environment and local communities.

Many anarchists (that is, people who believe the less government the better) espouse simply eliminating government power and infrastructure, but that actually plays right into the hands of the corporatists, since it essentially leaves corporations to govern themselves. You only need consider Exxon Valdez, Bhopal, GMO, well-financed climate change deniers, all the Bush war profiteers, and all the corrupt and incompetent bankers that gave us the current economic collapse, to see what deregulation and self-regulation produces.

A few political thinkers have suggested that we could replace the current hierarchical political system with its precise opposite — a bottom-up democracy where each community would pick its own representatives from among people they knew well, those representatives would in turn pick their representatives at the next-higher level, face to face, and so on. This approach has some obvious problems, but let’s see how it might work.

Suppose we designed a computer to create two hundred Regions of one-two-hundredth of the total number of eligible voters in a country each, in such as way as to make them as contiguous as possible (i.e. no opportunity for gerrymandering). So, for example, suppose the US has 200 million voters. Each Region would have one million voters. Each Area in each Region would have ten thousand voters, and the Areas would be computer-generated in the same way. There would be 100 Areas in each Region, or 20,000 Areas in the country as a whole.

Now suppose that within your Area, comprising the ten thousand voters in your contiguous area, you could self-select to belong, with anywhere from 75 to 150 others, to a designated Community. You would have to choose one, and if you didn’t want to do so, you would be automatically assigned, by the same computer program, a Community of the 100 people in your immediate contiguous proximity. Every four years you would have the opportunity to self-select a different community, or stay with the one you were in (provided you were still living in the same Area).

Next, every four years, your Community members (75 to 150 people) would get together and select a Community Representative (CR) from among their own members. The one hundred (or so) CRs in an Area would get together and select an Area Representative (AR) from among their members. These CRs would also constitute the government of their Area. The one hundred (or so) ARs in a Region would get together and select a Regional Representative (RR) from among their members. These ARs would also constitute the government of their Region. And the RRs would constitute the federal government, and select a President or Prime Minister and a Cabinet. Powers would be allotted to the President/PM/Cabinet, to the Federal Government (the 200 RRs), to the 100 Regional Governments (each with 100 ARs), to the 10,000 Area Governments (each with 100 CRs), and to the one million Community Governments (each with 75-150 voters/members). Hopefully with no overlap!

Could this work? Imagine if you could choose 75-150 people from among the ten thousand voters living closest to you to constitute your political Community. Can you imagine self-organizing this way? Can you guess who you would choose as your CR? Is s/he currently an elected official? Now draw an Area around where you live consisting of about ten thousand voters. Who might the 100 CRs in this area select as their AR? Is s/he currently an elected official? Could this whole system be corrupted by party organizations preying on citizen indifference to corral people into faux communities they could control?

Now consider that your Community (unlike your Area or Region) is made up of people who are not necessarily living contiguously — they are people from all over your Area. What powers and authority, currently residing with some anonymous group that just happens to live in the same town or neighbourhood, would they have, and what kind of power shift would this represent?

I have a pretty good idea who I would end up with in my Community. I also know who would aspire to be our CR, and I think I know that the person we selected to be our CR would not be one of those politically ambitious members. It would, instead, be someone we trusted, someone we would choose precisely because they lacked political ambition.

Imagine if it worked like this all the way up — CRs, ARs, RRs, all selected because they were modest, trustworthy individuals. Would we have a real democratic political system, immune to lobbyist influence, party bullying, manipulation and power politics?

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