Category: Institutions and Revolutions

How Excessive Inequality Will Lead to Revolutions

Cory Doctorow’s post ‘EXTREME WEALTH INEQUALITY WILL ALWAYS DEVOUR THE SOCIETIES THAT PRODUCE IT‘ and the associated longer piece ‘Shared Destinies: Why Wealth Inequality Matters‘ make an interesting point about a limit any society can accept in terms of inequality. They are worth reading.

inequalityHe argues that there has always been some threshold beyond which societies undergo a readjustment – either peacefully or through more violent revolutions. “The more unequal a society is, the more out-of-balance its policies will be.”

Of course inequality is on the rise now after a historic low in the mid-20th century. The question is whether we are getting close to that threshold (as populist successes would imply) and whether this threshold is changing with new technology. In any case this issue needs to be addressed in particular as the economy sputters and does not manage to bring along some part of the population.

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How to Overcome The Critical Issue of the Working Poor in the Collaborative Age

New technology and the rise of the independent worker is a factor for creating “working poors” – people that work hard a substantial amount of their time but do not earn enough to support their families. This excellent post addresses the issue in an interesting manner: ‘Work please but poverty, no thanks: how can we avoid the rise in the working poor?‘.

“The growth of new forms of self-employment provides an additional dimension to the in-work poverty challenge. In almost all countries, in-work poverty is higher among the self-employed. A recent study on self-employment showed that there is greater polarization in incomes for the self-employed than for employees.”

This is clearly a challenge that needs to be addressed and that our current employment system underestimates. On the other hand it was Henry Ford who spontaneously increase the wages in his factory to create the virtuous circle of the Industrial Revolution and the associated consumption and he did not need any regulatory incentives. How can we make the operators of the Collaborative Age that it is in their interest to guarantee minimum earnings for their contributors?

“In any case, it is vital not to underestimate the risk of allowing in-work poverty to continue unabated – when people feel that they are losing out despite playing by the rules, the risks to society extend beyond precariousness to decreased social cohesion and increased populism.“

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How it is Important to Always Sow Seeds Rather Than Seek to Reap

I like this beautiful quote by Robert Louis Stevenson: “Don’t judge each day by the harvest you reap but by the seeds that you plant.”

It is too true that we often focus on the result, on the outcome but sometimes forget that what is important is to sow the seeds continuously. Now some of these seeds will grow and fructify, and some (many) will not. Nevertheless as it is always difficult to know which ones will grow, it is better to sow more than we would strictly need.

I find this sentence to be particularly applicable in the field of creativity and entrepreneurship. It is important to continuously sow some seeds. Some will unexpectedly grow beyond our expectations. In any case we will have created avenues of growth for the world and brought a contribution to other people.

Let’s sow more. And we’ll reap more eventually… but that is not what is the most important.

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How Greatness Brings With It the Seeds of Destruction

Robin Sharma wrote about Marcus Aurelius’s quote “After fame is oblivion“: “What I’ve learned as I deconstruct empires of geography, creativity, productivity and prosperity that have fallen is this: the very fact of greatness brings with it the danger of destruction.”

Clay foot of fallen colossus
Clay foot of fallen colossus

It is amazing how that is often true. It might be linked to a feeling of superiority and being invincible; or from the fact that people or organizations simply take advantage of the benefits of their position without striving anymore for improvement.

It happens often and is actually quite good news for upcoming competitors, and it participates to the renewal of successful people and organizations. Some rare successful individuals and organizations are able to keep the fire and the restlessness to continue to improve.

When we are successful in some area, this is a choice to be made. And it needs to be conscious.

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How Machines Are Rising in Financial Institutions

This NY Times article ‘At BlackRock, Machines Are Rising Over Managers to Pick Stocks‘ says it all. Traders are being replaced by machines. Or indeed, by less glamour teams of programmers.

As the article explains this is indeed a defensive move by the bank as “actively” managed funds bringing in high management fees are much less successful nowadays (studies have long shown that the returns of actively traded funds are mostly driven by luck anyway).

It is thus a drive towards lower costs. But due to the traders’ remuneration this move might actually create more programmers jobs than reduce traders jobs!

The interesting part of this situation is that the increasing access to information is making professions that had better access obsolete. This was the case for financial traders, and they do become obsolete, together with their Adrenalin-laden world.

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How to Create Disruption With Small Steps

In a complex world disruption does happen, always with far reaching consequences. But creating disruption is hard. I am in the midst of an experiment with my venture CleanuC (trying to disrupt the way the nuclear industry tackles decommissioning) and it is tough to change things although it would seem the system should be ripe for change.

One way to look at creating disruption is to proceed with small steps. This might seem paradoxical, but I truly believe that it is the right way to go. Proceeding with small steps relies upon experimenting, gauging the reactions of various stakeholders and improving the model until reaching a condition that is ripe enough to create a real tipping point. It is a bit similar to the Lean Startup concept of product development, in that case it is about disruption.

Moreover the small steps approach is also deeply antifragile as underlined by Valeria Maltoni in this excellent post ‘How Small Things Make a Big Difference‘ that serves as an inspiration to this particular post.

Proceeding with systematic small steps, with perseverance, is not contradictory with huge disruptions. It is just a way to reach more effectively the tipping point. When do you start the first small step for a big change?

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How Daring Ideas May Be Beaten, And Start a Winning Game

Following on our previous post ‘How to Create Disruption With Small Steps‘ I like to share this quote from Goethe: “Daring ideas are like chessmen moved forward. They may be beaten, but they may start a winning game“.

I find this quote very inspiring because it shows how we sometimes need to sacrifice some of our ideas in our small steps strategy, and lose some battles in order to win the overall jackpot.

Actually it is quite necessary to live through small disappointments and setbacks. But if our disruption vision is good enough we will eventually find a way to express and implement it in a way that will win the day.

In our strategy it is essential to know how to sacrifice some stuff that is not so important for what we really believe in. The process might be tough at times, and necessary. Ready?

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How the Collaborative Age Abundance May Change our World

Cory Doctorow excellent Locus column ‘Cory Doctorow: The Jubilee: Fill Your Boots‘ raises interesting questions about the ultimate evolution of society in the Collaborative Age – what I would call the Abundance utopia.

The point Cory Doctorow makes is that it should be possible to live in a world of abundance leveraging on the rhythms of nature to minimize our environmental impact. The point is then to accept that things don’t necessarily work all the time. This drawback can be compensated by technology coordination.

“Technology hints at another model, one that hybridizes the pre-industrial rhythms of work and play and the super-modern ability to use computers to solve otherwise transcendentally hard logistics and coordination problems.”

“Using bright green, high tech coordination tools, we can restore the pastoral green, artisanal autonomy that privileges mindful play over mindless work. The motto of Magpie Killjoy’s Steampunk zine was ‘‘love the machine, hate the factory.’’ Love the dividends of coordinated labor, hate the loss of freedom we suffer when we have to coordinate with others.”

I strongly encourage the read and the thought that freed from the needs to coordinating large organizations, we could live a life far closer to the rhythms of nature while enjoying abundance.

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How We Need to Shift from our Environmental Scarcity Mindset

Cory Doctorow excellent Locus column ‘Cory Doctorow: The Jubilee: Fill Your Boots‘ completed by his own post introduction ‘my column on how technology could let us work like artisans and live like kings‘ hints at interesting historical facts about our current vision of world ecology.

In particular he explains how since the 1970s and the book Limits to Growth “scientists, sf writers, economists and environmental activists have wrestled with the question of abundance — how the “green left” transformed left wing politics from the promise of every peasant living like a lord to the promise of every lord living like a peasant.”

The assumption of scarcity which stems from this approach (itself closely related to the limits of our Mother Earth so visible from photos of the space missions from 1960s) coupled with the assumption that well being was necessarily related to a significant usage of natural resources led to the development of a strong culpability feeling for all of us – and the feeling that we could only expect a decrease in our comfort level.

This scarcity assumption is still the premise of many comments on environmental issues. It is an issue in some instances but overall, we seem to have increasingly decorrelated energy consumption from growth. Would it not be possible that in the Collaborative Age we manage to have abundance within the capability of Mother Earth?

The point here is that some of the 1970s assumptions that govern the way we manage environmental politics might need to be revisited in the light of recent technological developments.

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What the Limits of the Revolution of Generative Design Are

Generative design, coupled with additive manufacturing (3D printing) is creating new designs for mundane parts and mechanisms. Overcoming the limitations of conventional manufacturing, new shapes can be formed, optimized in weight and amount of material, to fit the same functions.

This approach is still in its infancy but we can expect to see this new line of design expand rapidly in particular in some industries where weight is paramount such as the aerospace industry. Further there are even some developments around Deep Learning Generative Design where the design is created using deep learning neural networks.

The trick however is to have identified the functions and constraints properly, because these designs will accept much less excursions and unexpected treatment. Optimization always brings less resilience. A challenge in the near future will be a proper treatment of risk and resilience in this design strategy.

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How Industrial Revolution Comparisons Are Not Comforting

In a very interesting article ‘Industrial Revolution Comparisons Aren’t Comforting‘ economist Tyler Cowen analyses the consequences of the revolution on labor and wages. In particular it shows that real wages actually went down during the period of adjustment for the average worker.

power-loomsI am fond of historical comparisons and parallels and this recommended article is a very interesting analysis. One important and interesting quote: “By the estimates of Gregory Clark, economic historian at the University of California at Davis, it took 60 to 70 years of transition, after the onset of industrialization, for English workers to see sustained real wage gains at all.” And Tyler Cowen compares the situation to the actual stagnation of wages since the late 1990s in developed countries.

One element of worry is of course that the Industrial Revolution led to the development of certain ideologies which led to revolutions and political instability and volatility – and much suffering.

Are we watching the same evolution now? This might be an issue to watch closely. I am not as optimistic as Tyler Cowen that this time we should be less extreme and more reasonable: the inclusion of developed countries in the Fourth Revolution will create substantial new sources of instability.

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How the World is Not Yet Flat

Keeping all due respect to Thomas Friedman and his great best-seller book ‘the World is Flat‘, I have to observe that it is not quite the case yet. This stems from my observations as a globe-trotter and my activities as a publisher.

world is flatHaving moved from Singapore to France a few months ago I re-discover the convenience of online buying of groceries, books and all sorts of equipment. That was not possible even in Singapore (a developed country but a too small market in the midst of developing countries for most e-shops, and that also has some protectionist traits).

At the same time as a publisher I get requests from people from various countries like South Africa or less developed countries who want to get a paper copy of our books. Because e-bookstores are not convenient there I need to organize specific logistics from the digital printing shops we are using – and they are all located in western countries.

Notwithstanding the recent hints at increased protectionism, new technologies have brought an unprecedented access to information and dematerialized content. As for material goods, there are still wide differences and gaps due the maturity of distribution channels between countries.

The world will be flat when there will be an equality in the distribution of material goods globally. It is going in that direction but there is still a lot of way to go.

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