"Money … can symbolize work, power, love won, or love denied. It can take the form of expensive homes, expensive clothes, expensive presents. Luxuries become necessities. Debt compensates for all shortcomings. "For people to admit they can't afford things they want means placing themselves in a position of weakness," says Dr. Edward J.Khantzian, associate professor of psychiatry at Harvard Medical School. "They have to say no to themselves, and nobody likes that." - Time (October 1982)
Following on from my blog last week about our over-reliance on financial power, I'd like to redress the balance this week and give some examples of wisdom which have occurred during my lifetime. Last week I was feeling a little dark and didn't really give too optimistic a picture of human nature and its possibilities. However, believing in our capacity to act not just knowledgeably but wisely is a necessary step to behaving wisely in the future. So, in the spirit of visioning a better future, here are ten examples of true wisdom that I can think of that have occured in my lifetime:
1. Destroying the apartheid system (1991)
2. Breaking down the Berlin wall and the East:West German divide (1989)
3. Abolishing fox hunting as a blood sport in the UK (2004).
4. Closing down Guantanamo Bay & the US denouncing torture (2009).
5. N.Ireland and the UK agreeing to live side-by-side in peace (1998).
6. Cuba, an incredibly poor country, training some of the best doctors and donating a large number of them to caring for others in other third world countries.
7. Japan publicly apologising for many of their past war crimes (NB: the power of an apology can never be under-estimated. Research shows that receiving an apology has a noticeable, positive physical effect on the body. An apology affects the bodily functions of the person receiving it - blood pressure decreases, heart rate slows and breathing becomes steadier).
8. Women and other minorities are given the right to earn equal pay for equal work under EU legislation.
9. The Dalai Lama's 'middle way' policy demonstrates the power of inaction and peaceful protest. Is there another equivalent public figure today who represents so much with so little material resource?
10. Britain's defense of the right of all human beings to legal representation and protection against draconian policing with the active blocking of both a 90-day detention and the 42-day detention proposal by our Government (to allow terrorist suspects to be detained by police for up to 90 or 42 days before being charged ie formally told what law they are accused of breaking). Finally this measure was removed (blocked primarily by the extremely non-democratic House of Lords - furthering the argument to considering alternatives to our democracy as we know it today?).
"The truth is that Wall Street gamblers are one of the causes of our frequent business depressions." - Floyd W. Parsons, The Saturday Evening Post (October 1923). Since this episode we have witnessed 13 further recessions, not including our current one. What wise thoughts or deeds can come of this?
Monday, 30 March 2009
Tuesday, 24 March 2009
Our Relationship With Power..
..and Our Financial Institutions
Here are a few thoughts of my own on what has been happening to our society, particularly in the past couple of decades, particularly in relation to our financial well-being. Whenever we humans organise ourselves, power is a key dynamic, which can lead and develop wonderfully enlightened societies, but can also corrupt, deceive and manipulate the less informed members of the group. Financial power is possibly the most seductive and most highly prized currently in our 'first-world' cultures. There are of course alternative forms of power, including persuasion, humour, religion, fame, force and violence, social traditions (such as royalty), knowledge, etc. When it comes to our current banking crisis, it's clear to see what form of power has dominated. The question is HOW do we halt this craze of buying up 'investments' built on little more than distorted information and speculation? Clearly there has been and continues to be ample encouragement to continue doing this (in order for each of us to attain a little more security and so survival). Most people know this decision-making is based upon unreliable data at best and corrupt, distorted thinking at worst, in a very shady business environment. But no-one wants to stop it, not even our current Prime Minister .. WHY?
Contemporary thinking is that true power (with forceful coercion at one end of the scale and indirect influence at the other), requires reciprocity. In the instance of securing financial power, we have been 'reciprocal' in our economy's rapid crash & burn. But why did we all do it? Was it just a crazed greed, an almost group hysteria? I don't believe this is the main reason although I do think we have been in the grip of group-think, something I'll come on to in a minute. Firstly, let’s investigate the system and structures in place. Think of how we have been able to secure relief on our tax obligations, put reserves aside for old age (under the assumption that we are buying something of true value), living through the use of electronic money as well as credit. The government and the establishment (the power brokers of our time) have developed a system that makes it more difficult for people to live otherwise. How does one buy one’s home etc. if one does not have a credit rating? How does one safely retire if one does not have a pension? How does one hold down full-time employment as well as investigate the ethics, the security and validity of decisions being made on one's behalf financially (the services provided by brokers, fund managers etc.)? In the age of information we have never been so deprived of knowledge - or is it wisdom? It is here that the imbalance of power has developed (knowledge is an excellent source of power but how does it contradict with wisdom?).
Decisions can be made at lightning speed and in a matter of days, an individual dabbling in short-selling can go from being a simple “investor” to a bankrupted gambler. Banks can crash in a matter of weeks taking billions of our money with them. This is the system we have devised in our time, that is supposed to give us a measure of power and so assure our health, well-being and better survival. It has shown us now how it can also deliver the opposite. Good intentions are not nearly enough. Of huge concern is the way we rationalise and reason away the unknown factors regarding making financial decisions, which most people do without much question. This has been encouraged by the financial institutions, the media, many authority figures as well as our peers. The mental models, otherwise known as the belief systems, underpinning this system are that as a knowledge-based society, we operate best whereby we, the individual, do not need to know very much other than how to put his or her own skills to good use, where someone else with the 'knowledge' of the investment markets, will put their skills to good use on our behalf. An incredibly naive form of reciprocity as it turns out and demonstrates the impact of a deficit of true knowledge and more importantly wisdom. Even where true knowledge exists, there is often a deficit of wisdom where money is part of the equation. Look at decisions we continue to make about our wider environment, homelessness, starvation, benefitting from slave labour, human rights, good versus evil, our carbon footprint, and so on. Short-term financial well-being seems to dominate, particularly where we are ruled by the thinking that financial well-being equals more power.
When we trust in our financial institutions to do right by us, at least 2 erroneous assumptions being made:
1. All skills are equal
Not true! Where money is concerned, power becomes centralised where money is controlled and so those who manage our money automatically hold more power.
2. It is possible to procure reliable knowledge about an investment
Not true! The markets operate as highly chaotic, complex, interdependent and, as we have witnessed many times, corrupt and unstable systems. It is not possible to predict accurately what will happen given they are not directed simply by supply and demand forces.
How do we change our mental models (belief systems) of how a knowledge-based society can operate if we are to seek true wisdom, especially where financial power is concerned? Belief systems gain momentum (and hence power) as more people come to accept the particular views associated with that belief system as common knowledge (this is known as hegemony). Such belief systems define their figures of authority, such as Financial Directors and /or Politicians and consequently these direct the actions of the many. Within such a belief system, ideas form as to what is right and what is wrong, what is normal, acceptable as well as what is deviant. Within a particular belief system certain views, thoughts or actions become unthinkable as well as thinkable (read Foucault's philosophy of power, 'Discipline and Punish' to learn more). As a society we have followed these financial authority figures, believing, mistakenly it seems, that this will keep us safe. Delegating our financial decision-making to our financial institutions has done exactly what any philosopher of power would have predicted.
Authors such as Charles Handy (writer of "Understanding Organisations", etc.) make an important distinction between power and influence. Where power is money it becomes a highly unpredictable and potentially fatal 'moltov cocktail'. Should this be kept separate in order to direct and balance power in positive ways? What sort of society can we develop then; with what changes to our belief systems and authority figures; and how difficult is this change in reality? As the socialist writer, Upton Sinclair once said, "It is difficult to get a man to understand something when his salary depends upon his not understanding it". In our democratic election process today, money buys candidacy, votes and support for causes that are in the interests of certain influential power-brokers, rather than society at large. We have created quite the financial spider's web.
Sociologists talk of there needing to be a balance of power for relationships to work effectively. In structural sociological theory, power is an ongoing process of evolution and adaptation. Are we witnessing the time where the balance of power has become too unequal and with this, relationally, the system has destabilised and imploded? The bigger problem however is that we have developed a decision-making system with financial authority figures the ones with true power. They are the ones who created this system, and now they maintain it. With this system in place and because social systems are highly complex entities, society at large cannot easily change it, nor can those who created the dynamics in the first place. As can be seen now, this system is operating as any complex adaptive system would. It has become too unstable, too unpredictable and the cracks are appearing. HOW we as a society achieve a measure of equilibrium again will determine how many cycles of the same destabilisation we will see again in the future (we have seen a repeating pattern of destabilisation and recovery since The Great Depression in the early 20th Century). It is my belief that if we cannot change the dynamics of power within our society (and as such the belief systems that most people operate under), then this is not the last that that we will see of instability and harm to our planet. In Alvin Toffler's book 'Powershift', he argues that the third wave of power (the first wave being violence, the second being wealth) will be to shift power from being wealth to being knowledge. My observation is that even where knowledge is present, there is a huge deficit of wisdom due to this power imbalance - indeed too much knowledge leads to information overload and paralysis (Alvin Toffler recognises this too). How can we intelligently realise that many assumptions we make collectively about delegating our financial well-being to others 'more qualified' are flawed? Recognising flawed logic is something that our society has not yet become very skilled at. Our quest for a measure of power and so survival is delivering exactly what we do not want (flawed thinking usually creates a self-fulfilling prophecy eventually). As a society we handed over the mantle of power to the very people who created the problems in the first place, and now we are virtually unable to stop financial power brokers from continuing to make bad decisions to the detriment of our lives and our planet. Who could have predicted this? Many have. As a society we have the knowledge, but we still do not have the wisdom to do very much about it.
"We cannot solve problems by using the same thinking we used when we created them" - Einstein
"We are made wise not by the recollection of our past, but by the responsibility for our future" - George Bernard Shaw
"The function of wisdom is to discriminate between good and evil" - Cicero
"A man is wise with the wisdom of his time only, and ignorant with its ignorance" - Henry David Thoreau
"A child of five would understand this. Send someone to fetch a child of five!" - Groucho Marx
Here are a few thoughts of my own on what has been happening to our society, particularly in the past couple of decades, particularly in relation to our financial well-being. Whenever we humans organise ourselves, power is a key dynamic, which can lead and develop wonderfully enlightened societies, but can also corrupt, deceive and manipulate the less informed members of the group. Financial power is possibly the most seductive and most highly prized currently in our 'first-world' cultures. There are of course alternative forms of power, including persuasion, humour, religion, fame, force and violence, social traditions (such as royalty), knowledge, etc. When it comes to our current banking crisis, it's clear to see what form of power has dominated. The question is HOW do we halt this craze of buying up 'investments' built on little more than distorted information and speculation? Clearly there has been and continues to be ample encouragement to continue doing this (in order for each of us to attain a little more security and so survival). Most people know this decision-making is based upon unreliable data at best and corrupt, distorted thinking at worst, in a very shady business environment. But no-one wants to stop it, not even our current Prime Minister .. WHY?
Contemporary thinking is that true power (with forceful coercion at one end of the scale and indirect influence at the other), requires reciprocity. In the instance of securing financial power, we have been 'reciprocal' in our economy's rapid crash & burn. But why did we all do it? Was it just a crazed greed, an almost group hysteria? I don't believe this is the main reason although I do think we have been in the grip of group-think, something I'll come on to in a minute. Firstly, let’s investigate the system and structures in place. Think of how we have been able to secure relief on our tax obligations, put reserves aside for old age (under the assumption that we are buying something of true value), living through the use of electronic money as well as credit. The government and the establishment (the power brokers of our time) have developed a system that makes it more difficult for people to live otherwise. How does one buy one’s home etc. if one does not have a credit rating? How does one safely retire if one does not have a pension? How does one hold down full-time employment as well as investigate the ethics, the security and validity of decisions being made on one's behalf financially (the services provided by brokers, fund managers etc.)? In the age of information we have never been so deprived of knowledge - or is it wisdom? It is here that the imbalance of power has developed (knowledge is an excellent source of power but how does it contradict with wisdom?).
Decisions can be made at lightning speed and in a matter of days, an individual dabbling in short-selling can go from being a simple “investor” to a bankrupted gambler. Banks can crash in a matter of weeks taking billions of our money with them. This is the system we have devised in our time, that is supposed to give us a measure of power and so assure our health, well-being and better survival. It has shown us now how it can also deliver the opposite. Good intentions are not nearly enough. Of huge concern is the way we rationalise and reason away the unknown factors regarding making financial decisions, which most people do without much question. This has been encouraged by the financial institutions, the media, many authority figures as well as our peers. The mental models, otherwise known as the belief systems, underpinning this system are that as a knowledge-based society, we operate best whereby we, the individual, do not need to know very much other than how to put his or her own skills to good use, where someone else with the 'knowledge' of the investment markets, will put their skills to good use on our behalf. An incredibly naive form of reciprocity as it turns out and demonstrates the impact of a deficit of true knowledge and more importantly wisdom. Even where true knowledge exists, there is often a deficit of wisdom where money is part of the equation. Look at decisions we continue to make about our wider environment, homelessness, starvation, benefitting from slave labour, human rights, good versus evil, our carbon footprint, and so on. Short-term financial well-being seems to dominate, particularly where we are ruled by the thinking that financial well-being equals more power.
When we trust in our financial institutions to do right by us, at least 2 erroneous assumptions being made:
1. All skills are equal
Not true! Where money is concerned, power becomes centralised where money is controlled and so those who manage our money automatically hold more power.
2. It is possible to procure reliable knowledge about an investment
Not true! The markets operate as highly chaotic, complex, interdependent and, as we have witnessed many times, corrupt and unstable systems. It is not possible to predict accurately what will happen given they are not directed simply by supply and demand forces.
How do we change our mental models (belief systems) of how a knowledge-based society can operate if we are to seek true wisdom, especially where financial power is concerned? Belief systems gain momentum (and hence power) as more people come to accept the particular views associated with that belief system as common knowledge (this is known as hegemony). Such belief systems define their figures of authority, such as Financial Directors and /or Politicians and consequently these direct the actions of the many. Within such a belief system, ideas form as to what is right and what is wrong, what is normal, acceptable as well as what is deviant. Within a particular belief system certain views, thoughts or actions become unthinkable as well as thinkable (read Foucault's philosophy of power, 'Discipline and Punish' to learn more). As a society we have followed these financial authority figures, believing, mistakenly it seems, that this will keep us safe. Delegating our financial decision-making to our financial institutions has done exactly what any philosopher of power would have predicted.
Authors such as Charles Handy (writer of "Understanding Organisations", etc.) make an important distinction between power and influence. Where power is money it becomes a highly unpredictable and potentially fatal 'moltov cocktail'. Should this be kept separate in order to direct and balance power in positive ways? What sort of society can we develop then; with what changes to our belief systems and authority figures; and how difficult is this change in reality? As the socialist writer, Upton Sinclair once said, "It is difficult to get a man to understand something when his salary depends upon his not understanding it". In our democratic election process today, money buys candidacy, votes and support for causes that are in the interests of certain influential power-brokers, rather than society at large. We have created quite the financial spider's web.
Sociologists talk of there needing to be a balance of power for relationships to work effectively. In structural sociological theory, power is an ongoing process of evolution and adaptation. Are we witnessing the time where the balance of power has become too unequal and with this, relationally, the system has destabilised and imploded? The bigger problem however is that we have developed a decision-making system with financial authority figures the ones with true power. They are the ones who created this system, and now they maintain it. With this system in place and because social systems are highly complex entities, society at large cannot easily change it, nor can those who created the dynamics in the first place. As can be seen now, this system is operating as any complex adaptive system would. It has become too unstable, too unpredictable and the cracks are appearing. HOW we as a society achieve a measure of equilibrium again will determine how many cycles of the same destabilisation we will see again in the future (we have seen a repeating pattern of destabilisation and recovery since The Great Depression in the early 20th Century). It is my belief that if we cannot change the dynamics of power within our society (and as such the belief systems that most people operate under), then this is not the last that that we will see of instability and harm to our planet. In Alvin Toffler's book 'Powershift', he argues that the third wave of power (the first wave being violence, the second being wealth) will be to shift power from being wealth to being knowledge. My observation is that even where knowledge is present, there is a huge deficit of wisdom due to this power imbalance - indeed too much knowledge leads to information overload and paralysis (Alvin Toffler recognises this too). How can we intelligently realise that many assumptions we make collectively about delegating our financial well-being to others 'more qualified' are flawed? Recognising flawed logic is something that our society has not yet become very skilled at. Our quest for a measure of power and so survival is delivering exactly what we do not want (flawed thinking usually creates a self-fulfilling prophecy eventually). As a society we handed over the mantle of power to the very people who created the problems in the first place, and now we are virtually unable to stop financial power brokers from continuing to make bad decisions to the detriment of our lives and our planet. Who could have predicted this? Many have. As a society we have the knowledge, but we still do not have the wisdom to do very much about it.
"We cannot solve problems by using the same thinking we used when we created them" - Einstein
"We are made wise not by the recollection of our past, but by the responsibility for our future" - George Bernard Shaw
"The function of wisdom is to discriminate between good and evil" - Cicero
"A man is wise with the wisdom of his time only, and ignorant with its ignorance" - Henry David Thoreau
"A child of five would understand this. Send someone to fetch a child of five!" - Groucho Marx
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