Now that the presidential election is over, I have decided to give our President and our country one of a series of selfless gifts. Number one: the discovery of the greatest lie of all.
The lie that prevents us from finding a permanent solution to our economic malaise. The same lie that prevents us from delivering a shining implementation of an economic framework the world can aspire to.
From the time I was a little boy I rebelled against authority. Not because it was the easy life to live, nor that authority in-and-of-itself was bad, but because much authority – I discovered – was undeserved and without merit. That same authority, under the watchful auspices of creepy socialism, tags those who challenge it as renegades and their message as a disturbance of peace. And yet, peace and prosperity are not the outcomes of unquestionable authority. Spiraling mediocrity is. And economic, financial and behavioral bubbles are.
For some 40 years I have battled against misplaced authority, and as an entrepreneur and CEO have developed some very effective ways to combat the resistance against mine. My favorite tools are reason and patience.
Tools of change
Reason is one’s most powerful weapon as it communicates the most important ingredients needed to induce change: insight, foresight, intellect, passion and authenticity. Patience is a skill, I must admit, took me some time to develop.
Rest assured, I still often reject patience as the pacifier to innovation. Frequently used to slowly smother outliers in a soup of conventional wisdom, and thus responsible for an agonizing slow-down in the progress of evolution.
Over the years I have not earned more respect for, but learnt to deal with people with a different capacity, composition and appetite for change. And sometimes only the pain and discomfort they personally discover, or rocks their well manicured social walled-gardens, can become the welcome wind in the sails of change that speeds the decision making process.
Change, or die hard trying
The reason for that gloating introduction is only to explain to you that I fully expect, and I am duly equipped to cope with the flood of resistance by nay-sayers, who after years (and lifetimes) of submission to undeserved authority, would otherwise have to admit their life and the authority they imprinted on their children, has been nothing but a lie.
I cannot live without telling you my discovery (and its resolve in my upcoming book), for I believe that coming clean on that lie will induce the change needed for the United States to clean house and once again regain the authentic trust and respect of the world. I wholeheartedly believe in Thomas Paine’s credo for our country:
We have it in our power to begin the world over again. — Thomas Paine
3 Step recovery plan
While our economic problems on the surface may seem insurmountable and daunting in complexity only the supposed experts could possibly begin to understand, upstream economic innovation can erase that complexity and speed up our recovery in an easy to understand 3-step recovery program.
- Step one on the road to recovery and to begin the world over again is a long overdue admittance of guilt. Not the guilt that stifles our resolve, but a guilt that describes the many red flags and the gigantic opportunity costs, incurred from the lies that led us to comfortably ignore reality. It is time for us to admit to the guilt of our self-imposed economic foolishness. The kind of guilt that builds strength and ends recurrence.
- Step two is to develop a new economic framework under which recovery can take place, keeping in mind that such a framework incorporates the dimensions larger than our country alone, but of a new global meritocracy a growing connected world aspires to (with each country governing at their own pace).
- Step three is to implement that framework to each domain – subject to the new rules of engagement – with the goal to promote renewable socioeconomic value each country aspires to, with the pragmatic specificity and flexibility needed to drive maximum self-governance and independence.
I will describe those steps in full detail and much more clarity in my upcoming book, but for now let’s lift the veil off of step one, the biggest lie.
So, dear President, step one of the recovery of economy is the admittance of the lies we tell ourselves. Here is our greatest and most bashful one:
We who live in free market societies… — Ronald Reagan
It is not hard to find similar expressions of this blatant lie from our most well-known economic geniuses. Alan Greenspan, Ben Bernanke, Timothy Geithner and many before them have uttered similar lies, duly reverberated in public speeches by all the Presidents that employed them. Yet their lies are likely nothing more than white lies, as I believe they are inherently good people doing their best.
But their best is just not good enough.
Simply because economists, by trade steeped in the wisdom of regurgitated hindsight are not entrepreneurs, don’t know better and thus have a hard time coming up with the foresight needed to fundamentally reinvent our macro-economics, upstream. Not in the least aggravated by the massive political cloud and equity attached to the current way of downstream thinking, applied to actions that may at best dampen uncomfortable economic aberrations, but do not and will not affect the more dangerous downwards trajectory of the economic curve.
We have a problem with freedom in this country. Not that we lack any aspiration to it, but we apply Neanderthal economic constructs to freedom. Even Milton Friedman, in all his wisdom to embellish on free-markets, failed to identify the pragmatic rules for a marketplace to operate freely.
None are more hopelessly enslaved than those who falsely believe they are free. – Goethe
We are hopelessly enslaved by an unequal distribution of freedom that systematically diminishes the authentic merit of socioeconomic value and production over the frills of its financial arbitrage. And capitalism without merit is a bold lie.
Even after Martin Luther King left us some important lessons behind, we have learned surprisingly little about freedom.
Is freedom the inability to speak up to your boss in fear of losing the health insurance you and your family depend on? Is freedom the inability for an immigrant worker on a H1B visa to disagree with their boss in fear of being sent back to their country of origin? Is freedom defined by the compliance of wearing a shirt and tie to be taken serious?
Is freedom the inability of the majority of little boys to decline their mass male mutilation (circumcision) within hours of birth? Is freedom the burning desire for segregation (i.e. Black Entertainment Television) to compensate for the racial inequality that is still so prevalent. Is freedom the need for kids to learn about and emphasize the color of their skin in school, and not to consider it moot?
Is freedom the expectation to work from 9 to 5 in a box (cubicle) with limited exposure to sunlight and less than half the size of a regular bedroom? Is freedom the need for two spouses to work to support a decent education for their children? Is freedom the dependency of public schools to raise money from parents to stay afloat?
Clearly our implementation of freedom should make us think twice about suggesting other countries to follow suit. But a similarly stark list of contentions to freedom can be made to measure other countries’ levels of freedom (I should know).
The grand prize of freedom is not won by the country that produces the shortest list of contentions, but by the country whose freedoms support the socioeconomic values it holds in high regard.
The need for freedom
The word freedom ignites the same Pavlovian effect as the word sunshine. No one will argue the need for either. Yet both freedom and sunshine need to be applied correctly to be effective and promote health. Too much sunshine is damaging, as is too much unbridled freedom.
Freedom can also be outright bad. As in a young child licking his birthday cake in front of all his guests, who are supposed to enjoy the same cake later (yes, it happened). Or as in financial systems in violation of free-market principles artificially regulating the merit of production (yes, it happens all the time).
Freedom cannot be left to its own devices. And a certain amount of regulation is needed to correct those who abuse freedom to the detriment of others. Since abusers will attempt to disrupt the authenticity of any economic system.
But freedom is an economic imperative for a single overriding reason. The reason countries like China will have a tough road ahead in forging economics that can encircle the world. For only (the proper deployment of) freedom can shake off the detriment of socialism and consistently produce the outliers needed to make our world a better place.
The relativity of freedom
The beauty and the curse of freedom is that everyone has their own definition.
The freedom for the public to bare arms is not a freedom every country endorses, neither is the freedom for women to bathe topless in public. Some countries endorse the separation of church and state, many do not. Some countries acknowledge patents, and some do not.
Hence, there is no single definition of freedom, nationally or globally, and thus our economic model should not be constrained by the assumption of just one. And certainly not one that is static and resents the impending change all nations, in search of economic betterment will go through at their own pace.
In an increasingly global economy, the need for an economic framework that embodies everyone’s dynamic interpretation of freedom and merit is more important than ever. Especially because down the road, the evolution of freedom will not be defined by countries, but by the merit of its interconnected people.
The road to freedom
The road to freedom is littered with misplaced assumptions that we have already arrived.
We should not leave it to the “best practices” of traditional economists to design an economic recovery that has no precedent. Not just because their hindsight is a terrible prognosticator to foresight, but because those economists believe we have already arrived.
Never before have we or the world faced such serious economic consequences, and we should not try to patch that up with more downstream optimizations from those at the “Schools of Economic Science” who are taught and inclined to keep perpetuating the improper macro-economic constructs and complexity.
Sustainable economic recovery can start when we acknowledge that we are on a never-ending journey of freedom. And that even though our implementation of freedom may have brought us the most riches, it is far from what earns us the prize of beauty or respect as “the leader of the free world”.
The future of the United States depends on our ability to reinvent ourselves (upstream). The question is not if we can reinvent ourselves, but when. And for me the time to deploy authentic economic freedom could not come soon enough, and the reason I have even greater gifts forthcoming.
- Price loses its value when money loses its trust. — Georges van Hoegaerden - February 20, 2015
- How to build a sustainable company - February 10, 2015
- Economics: A system designed to maximize personal freedom protected by the paradoxical rules of collective freedom. — Georges van Hoegaerden - February 2, 2015
- Capitalism without the deployment of operating principles that secure a meritocracy is an oligarchic system in violation of the most rudimentary definition of freedom we owe ourselves. — Georges van Hoegaerden - February 1, 2015
- Equality is a fantasy of extraordinary proportion. — Georges van Hoegaerden - January 21, 2015
- If no man is created equal, why then do we debate equal pay? — Georges van Hoegaerden - January 21, 2015
- CalPERS pre-empts asset allocation - January 21, 2015
- Homogenization of people is a bad idea, we ought to focus on the value of our differences, not on the rut of our commonalities. — Georges van Hoegaerden - January 14, 2015
- Only realism can breed justifiable optimism. — Georges van Hoegaerden - January 14, 2015
- The fix to improving asset management’s effectiveness lies in its reinvention, not in the optimization of its bloated past. — Georges van Hoegaerden - January 13, 2015