The Fourth Economy: Inventing Western Civilization

The book is now available on amazon for kindle or in paperback, and on Barnes & Noble for nook.

Read it if
- you want to learn how a pattern of social invention and revolution that began in medieval times will define the next few decades
- you want to know what comes after the agricultural, industrial, and information economies
- you are tired of the drum beat of doom about the economy and want something hopeful

Western Civilization has been through three great transformations. You get to live through a fourth. This is the story of social invention and progress, a pattern of revolutions that has just begun to repeat. Welcome to The Next Transformation.

Sunday, March 18, 2007

The Swinging Pendulum of Social Evolution

The Rothschild brothers didn’t seem like elites when they began their career. Mayer Rothschild began his life living in a Frankfurt ghetto, forced to leave the sidewalk when even a young child ordered him to “Step aside, Jew!” He had the vision to send four of his five sons to the most important cities in Europe.

Mayer's son Nathan Rothschild was in London when the English began their war against Napoleon. This war was incredibly expensive. Coordinating efforts with his brothers, Nathan was able to raise huge sums of money for the British by selling war bonds throughout Europe – primarily through his brothers in Frankfurt, Paris, Vienna, and Naples. Nathan not only raised money for the British – he made the Rothschild brothers rich and famous. By the time of his death in 1836, he might have had more liquid wealth than anyone in the world. Because they helped to invent modern financial markets, the Rothschild brothers rose from the German ghetto to become elites with power enough to dictate terms to kings.

The Rothschild brothers and others like JP Morgan helped to pioneer modern financial markets and then, in the next century, philosophers like Keynes, policy-makers like FDR, and business visionaries like Charlie Merrill and Dee Hock “democratized” financial markets, creating access to credit and investment markets for the people. Alan Greenspan or Ben Bernanke is supposed to manage interest rates and reserve rates so as to do what is best for the general economy and the average person – not just a few powerful bankers. Access to financial markets is now considered a right.

Martin Luther, John Calvin, Huldrych Zwingli, and John Knox were among the revolutionaries who wrested control of the church away from the elites and helped to put it into the hands of the people.

Later, Louis XIV and Henry VIII help to pioneer the nation-state and then, centuries later, revolutionaries like Jefferson and Franklin wrested control away from the elites and into the hands of the people.

The swings between power held by the elites and the people seem to me inevitable. The elites pioneer and prosper. They are the social inventors who create the great institutions like church, state, and corporation. But once those inventions have become an integral part of the social fabric, along come revolutionaries who turn control of these inventions over from the elites to the people.

Next up for Western Civilization? Wresting control away from the CEOs, the last of the monarchs, and putting power into the hands of the investors, employees, and communities whose fate is so inexorably tied up in the actions of the corporation.

Am I a populist or an elitist? A Republican who wants the people’s interest represented by a trusted group of elites or a Democrat who wants the people to directly represent their own interests? At this point in history, I’m a populist, a Democrat ready to see the power of the powerful corporation dispersed.

13 comments:

Chrlane said...

I just want to see these people held accountable for the ravages they have dealt their customers in the name of innovation and progress.

You can threaten me with looking low class all you want, Ron, but for me class is about what we nourish ourselves, and others with.

My waffles are made with love for people I value, using the best ingredients I can afford. Nobody suffers when I make my waffles.

Get it? Good.

Chrlane said...

;)

Ron Davison said...

Now I'm thinking that I should have titled this blog posting, "The Awful Waffle of Social Progress: an examination into the nonlinear perturbations in social development and economic opportunity through the history of Western Civilization."

Chrlane said...

Seriously, though. From what I have gathered, the monarchs don't have the power they'd like to have, and the investors do have a fair bit more power than you are saying here. As much as they choose to have.

"The people" is a term I have a problem with as well. You are assuming "the people" have a clue, whereas their thinking is largely controlled by corporate interests.

If "the people" were capable of self-governing, they would not be so easily subjected. I have always asserted that leadership has to come from a leadership level. I do a lot of focus work on education, and still, I feel that leadership is essential. It's just that educated people are easier to utilize, and easier to reward.

How that happens depends on how well giftedness is filtering upwards. And that, in turn, is dependent on whether or not leadership is strong enough to build autonomy in it's ranks.

The current system is not about CEOs- it is about standards. And if you ask me, the average CEO could learn a bit from the remaining monarchies about standards. I am not suggesting they emulate them, only that they exchange the right values.

And if waffles are only for breakfast, then how come the waffle house is open for dinner? You said you ate there…

Chrlane said...

Oh yeah- and you mention a pendulum swing in your title- but all I see here in the meat of your post is a windmill action, always turning in the same direction. A pendulum goes back and forth. It's altogether a different principal.

One action creates an endless refinement, almost to the point of completely destroying it's subject if left to perpetuate itself without new fodder, whereas the other does manage to attain balance at least a fraction of the time.

Ron Davison said...

ChrLane,
You've given me lots of intelligent points to address. I'll see if I can do justice to your questions and rebuttals. (And my points will probably seem overly dogmatic as I attempt to make them in (for me) minimalist fashion.)

Power of monarchs
It's true that the power varied. Historically speaking, they didn't have long to live like Louis XIV - just a couple of centuries. But the state was (and is in other parts of the world) the dominant power at a particular stage of development. Society couldn't move on to the next stage without wresting that control away from monarchs.

Investors seemed to have more power when they were more concentrated, as in the days of JP Morgan. I think that this is one reason why we've had this surge in taking companies private - investors taking control of the companies that they own. Pension funds and small investors - who now hold the majority of stocks - have little influence over policy.

I totally agree with your point about building autonomy in the ranks and would be curious to learn more. That seems to me so essential to progress.

Waffle House restaurants are open for dinner but, I think, are busy at breakfast.

Ron Davison said...

ChrLane,
Pendulum suggested to me that we swing right (oh no! the robber barons have all the power!) and then we swing left (oh no! the labor unions have all the power) and back again. And in the midst of all this swinging back and forth that seems to attract the most attention, we make progress.

Chrlane said...

Well I can't eat sweets at breakfast time because I am hypo-glycemic, Ron. And I serve while grain waffles with a lot of fruit so they count as a balanced meal. :) And they are not antique, they are very fresh and yummy.

In any case, this issue of leadership engendering autonomy is a cultural one. It has roots in the earliest forms of conditioning we have as a society. All that boring stuff like child rearing psychology and nutrition weighs heavily into the capacity of the human consciousness to reach a state of potential where this autonomy can happen.

Here in the Western World, we are approaching the correct mind set, but are lacking the fundamental lifestyle with which to seed this renewed life culture.

For me, the challenge is in minimizing our current transient state of excess so that the next level of evolution is attainable. And that takes a lot of education, and the ability to express faith in a future outcome which may not yet be apparent because it is in it's very beginning stages.

It's shy I hope my work will be enabled by those who share my Maternal vision of the future as a better place, if we can be so bold as to place value on such an existential level.

I have always found that the easiest way to understand this movement, is through the singular example. Translating it to a larger scale has to come from the microcosm, and grow outward.

"Furthermore, there is a tight interrelationship between the macrocosm and the microcosm in the human sphere. Socrates says, “Must we not acknowledge, I said, that in each of us there are the same principles and habits which there are in the state; and that from the individual they pass into the state?—how else can they come there? (1) It can be paraphrased as “How goes the part, so goes the Whole”. In their science of politics, Socrates and Plato both saw this principle at work."

Chrlane said...

Sorry about the typos, Ron. That should read, 'whole', and 'why', respectively.

Chrlane said...

If our leaders are unable to follow these very basic lifestyle principals, there can never be hope that the populace will embrace them. It has to come from a leadership level. People are skeptical of leaders who are unable to lead disciplined lives within reasonable, intelligent confines.

And of course, a lot of this change requires a very dramatic shift in values. And what makes it appealing is that there does not have to be a considerable shift in wealth provided that this shift in perception can happen with reasonable conviction among the elite.

(Sorry for being long winded on your blog.)

Ron Davison said...

Ah, you Canadian women. What a blend of brains and beauty - it's no wonder I asked one to marry me.

Now I feel like we should be sitting in a booth at the Waffle House talking about this rather than pinging back and forth in comments.

Your comment about leadership as an opportunity change society through a "as goes the part so goes the whole" mechanism is very helpful. I guess this post is, in part, a comment about how we need to popularize what we've left to the elites; last century it was knowledge work and this century (I believe) it'll be entrepreneurship.

Peter Block once called the myth of leadership a collusion between control freaks and the irresponsible. That just makes more sense to me as I get older.

Thanks, again, for leaving comments that force me to think ... even if it is after I've already posted. You have no need to apologize for making intelligent observations.

Chrlane said...

Oh gee, well you've just made this Canadian woman very happy. I find your remarks about entrepreneurship thought provoking. Too bad you're already spoken for or might take you up on the waffle house.

Ron Davison said...

:)

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