THE MORE THINGS CHANGE THE MORE THEY REMAIN THE SAME

THE MORE THINGS CHANGE THE MORE THEY REMAIN THE SAME

James R. Fisher, Jr., Ph.D.

© April 28, 2009

“If a great change is to be made in human affairs, the minds of men will be fitted to it; the general opinions and feelings will draw that way. Every fear and hope will forward it; and they who persist in opposing this mighty current will appear rather to resist the decrees of Providence itself, than the mere designs of men. They will not be so much resolute and firm as perverse and obstinate.”

Edmund Burke (1729 – 1797), English statesman

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A WRITER WRITES:

Jim,

I have to admit that in-depth talk of financial instruments gets my head spinning, IQ be damned. Are you familiar with the concept of Capitalism 2.0? (I forget if we've discussed it.) I wish I'd come up with the idea myself.

Ironically, this movement called 2.0 is really a call for people to follow Adam Smith's much better rounded, more generous and enlightened idea of Capitalism.
I've read where you disparage my favorite economic system lately, and you're certainly not the only one.

But what you really - and rightfully! - Have gripes with is Primitive Capitalism (my term this time), the 1.0 version perfected by the Robber Barons and still alive and kicking, if wounded, on Wall Street today.

T

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DR. FISHER RESPONDS:

New York columnist David Brooks makes a lot of sense to me. He is an Edmund Burke fan as you are an Adam Smith. I am no expert in the field of political and economic thought but am not embarrassed to have a point of view. Consequently, I can take from those with whom I can relate and develop my own ideas from that vantage point, encouraging others to do so as well.

My view is that there are very few enlightening or original ideas and so we tread on the political and economic philosophies of those of our past. My wonder is why that is so, why so preoccupied with science and technology when people in much more primitive circumstances provide us with the lighthouse of our ways, and without it we would be stumbling in the dark.

You say, “You wished you had thought of capitalism 2.0,” when Japan, Inc. was practicing it in the 1960s and 1970s, and abandoned it for old time capitalism in the 1980s and 1990s and then the bubble burst.

In SIX SILENT KILLERS (1998), I broke down obsessive-compulsive behavior into (1) cultural, (2) psychological, (3) corporate, (4) political, and (5) economic. I did so because I saw how an organization could go from start-up to mild success, where everyone counts, to stratification, in fighting, to delusions of grandeur and invincibility to economic collapse.

It has happened several times on a grand scale with booms and busts across the world, and, always, with the soul searching after-the-fact, acting as if out of the mist new ideas miraculously appear, and society moves on.

One of the tragedies that I have observed over and over again is the fact that societies are so self-estranged that they fail to understand what they are doing when they “buy into” ideas of another culture at the expense of their own. Take Japan, Inc.

To wit, in SIX SILENT KILLERS, I wrote:

“There is a saying that the Japanese are obsessed with people and realize profits. Americans are obsessed with profits and realize people problems. This is not necessarily true, but it is commonly thought. It is reputed that the Japanese understand and play the business game far better than its inventor, the United States. History is kinder to these commonly accepted remarks than one might like to admit.

“Alfred Sloan, the legendary leader of General Motors, once boasted that GM, although forced to lay off tens of thousands of workers during the Great Depression, continued to pay stockholders dividends.

“A Japanese industrialist, even if circumstances dictated such action, would never think to say, much less boast of such a deed. Openly valuing profits above people would destroy his relationship with his workers and produce chaos.

“What is remarkable about the Japanese executive’s confession is that Sloan’s boast has the same impact on American workers and with a similar long range effect. It is not limited to a company or a country because it plays the same way worldwide:

(1) Focus on workers, and they will focus on the needs of the company;

(2) Form a partnership with workers, and they will work to sustain that partnership;

(3) Practice what you preach and workers will preach what you practice.

“There is no great mystery here. Workers can be channeled to do good or imploded to do great damage.” (pp. 124 – 125)

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Yes, I am aware of capitalism 2.0, as Bill Gates has defined it in terms of “Creative Capitalism,” where corporations sacrifice profits to the public welfare.


Perhaps this could be incorporated into The Fisher Paradigm © ™ which looks at organizational development in terms of intellectual capital and the power of people, that is, as a single entity.

A company, community and country are composed of an organization "personality profile," "demographic profile," and "geographic profile."

The idea here is that an organization is an organism as much as a collection of individuals. When a company-community-country loses its identity (personality), no longer is aware or accepting of what it is demographics), and denies its cultural baggage (geography), it flounders with the same consistency as the individual does.

Edmund Burke, who was an institutional man as is David Brooks, viewed property in terms of human and societal development, but he also believed in the institution of the monarchy and a hierarchical structure to society.

Japan in the 1960s and 1970s was not unlike what I saw here with start up companies having mild success, where everyone counted. Japan resisted the stratification never becoming top heavy with management, and even kept the political infighting under control, but not the delusions of grandeur.

Japan, Inc. forgot its limits, forgot it was a group oriented culture and not an individualistic society, forgot that 80 percent of Japanese industry was “mom & pop” and depended small business friendly tax and incentive base, and not skewed towards the Toyota and Nissan mega corporations.

In fact, in 1989, before the bust, two Japanese executives, Morita Akio and Ishihara Shintaro, feeling their oats and independence of the United States, wrote a book titled, “The Japan That Can Say ‘No’: The Card for a New US-Japan Relationship” (1989).

I read the book and the content was even more disparaging of the US than the title. The authors saw the pendulum of economic world power swinging from the United States to South East Asia. With the rise of India and China, they may have been a bit premature. On the other hand, India and China seem to be repeating the same sins of profits and markets before people.

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Most of us would agree that knowledge is not wisdom, but how many of us would agree that people are more important than profits? Moreover, how many of would question the wisdom of progress? How many stockholders would sacrifice 10 percent of a dividend to house the homeless, feed the poor, educate the ignorant?

More than you might imagine I would think. Stockholders have never been asked that to my knowledge, at least recently.

The greater problem is not greed. I don’t happen to believe most people are greedy.

The greater good is sharing when you have little to share. I’m not impressed with Bill Gates. I studied the man and he was as ruthless early in his career as the Robber Barons. It is easy to be magnanimous when you are not needy yourself. The great wealth creators in our country as in many others, if not all, have had much in common with criminals on their way to economic empires.

We put a high value on “out smarting” the other guy. We call it “finessing” him. We have a whole litany of euphemisms for success when the brutal reality is less glamorous.

Would Detroit have benefited from capitalism 2.0? I don’t think so. I spent a lot of my youth in Detroit during my summer vacations, knew Detroit automotive executives, and UAW autoworkers as well. It was to my mind an industry that obsessively contemplated its own navel enamored of its own sensual obsession with "bigness" and "boldness" in matters automotive, and the world be damned!

Then, too, although never being interested in automobiles, per se, I read a lot about the bicycle mechanic Henry Ford, who incidentally practiced capitalism 2.0 early on but with a pragmatic goal – to make his workers able to buy his Model A and Model T Ford.

Read about Ford. He was a contrary sort and a bigot, but he paid $5 a day when the going rate was $1 a day, created a retirement and profit sharing plan, in fact, in 1916, he wanted to share the dividends with the community, but was defeated in the court by shareholders who preferred he simply issue dividends, and let the community fend for itself.

Finally, I don’t disparage your capitalistic system. It has had a good run, but my question is: does it bring out the more admirable qualities in man? Does any economic system? Certainly, Soviet communism didn’t.

Notice all the characteristics of obsessive-compulsive behavior I alluded to earlier. That is the minefield that we are in now. What is on the other side? I don’t know and am unlikely to be there when people such as you get there. It sounds melodramatic but I believe it true. We have finally become a single human race and social justice is not a dream or an ideal, but a necessity for our survival of human beings.

Be always well,

Jim

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