Sunday, March 19, 2006

Open Source, etc: Part Deux

Right. Now we move on to the part of the program related to socialism, flattening, wealth creation and (I promise) creativity. But the creativity part is at the end. It's the pay-off. So stay tuned. And I'll try to be brief and bullet-like. And if you believe that...

OK. Wealth. Economically, that's what we all strive for. It is fashionable to talk about "creating value" and being "productive," but what it all boils down to is creating wealth; economic power. And what is wealth?

Wealth is, at its base, a the ability to do stuff above and beyond simple survival. Or, as I like to quip to my marketing students: wealth is a measure of excess food.

If you have to hunt and gather all your waking hours to survive, well... that sucks. And you have no wealth. Period. In order to free up some time to do other stuff  -- sleep, paint on cave walls, dance, bowl, play Xbox -- you need to be able, either individually or as a society, to produce food (and other necessities) more efficiently. Makes sense, right? If you invent a spear thrower that allows you to shave an hour a day off your hunting, you can work on improving your cave. A better cave equals... wealth.

A better way to look at this might be Colonial America vs. Modern America, now that I look back and think about how bad that caveman analogy is. Sorry.

As late as the early 19th century, more than 90% of the country's total productive efforts were spent on agriculture. In the 1780's, it was around 95%. Which meant it took 95% of the country's workforce to keep everyone barely fed, because malnutrition was still a huge problem and modern food storage, transportation and other technologocial improvements hadn't begun to kick in. By 1870, the number was down to 50%.

As of 2006, that number is down to less than 1%.

Think about that for a sec. From 1850 to 2006, about 50 years, almost half the people in this country stopped working on producing food, and started working on other stuff. What was that other stuff? Wealth. Or the beginnings of it.

This whole thing started in Egypt. I know, this is another digression, but it's a wee, fun one. In order to produce enough (and more than enough) food for the country, you needed to understand the Nile, since the seasonal flooding of the Nile river basin is what really contributed to the agricultural productivity of the area. To grok when to plant (i.e., when the Nile was going to flood and receed), how to build the various watering and drainage systems, how to store grain for the off-season, etc., you need people who aren't "just" farmers.

You need "meta-farmers." People who can "think about farming stuff" rather than just doing it. To do that, you need wealth. Why? Because wealth (excess food) is necessary to have any time at all to think about stuff. In Egypt, the priest caste became the ones that "thought about stuff," and their thoughts about seasonality, math, building, etc., became inextricably woven into their thoughts of religion. Which sounds weird to "modern us," because our engineering and scientist castes are the ones who are "paid" to "think about stuff."

But it's not such a weird idea, having priests/God-servants be the ones who create wealth. Why? Well, if you believe (as almost all religions do), that God created everything, then those who provide a means for the increase of the fruits of the earth are... well... God-like, eh?

Management guru Peter Drucker (who died last year), once said: "Innovation is the specific instrument of entrepreneurship... the act that endows resources with a new capacity to create wealth." Well, the priest caste in Egypt:

  • endowed resources -- agricultural

  • with new capacities -- astronomical understanding of seasons for better crop yields; pottery for grain storage that defied pests and time; irrigation to extend growing periods

  • to create wealth -- more food for less effort

Because of them, Egypt grew to be the strongest and wealthiest civilization of its time. You can't build pyramids, armies, art and culture if all your people are farmers. You have to free a few up to "meta-farm." They, in turn, enable fewer farmers to feed more people, freeing up even more people to do "wealth" stuff. Virtuous cycle continues. Hopefully. Until Rome comes along and kicks your ass. Oh, well.

So... to create wealth (or value or productivity or efficiency) in any sector, you need ways to move more (or at least some) effort into the "meta"  arena from the "mundane" arena. From the "doing it" portion of the program to the "thinking about it" sector.

You have to do this stuff to create wealth. It's a law. How you do it, though, is the study of economics and politics. And, often, sociology, psychology, morality, ethics, law, military science, religion, art and other crap (I get tired of saying "etc." all the time).

Various political systems define the government's role in the creation of wealth and how much it will interfere (the bad word) or encourage (the good word) private enterprise. Economic systems define how individuals and groups work together to move things up the wealth mountain. Governments usually choose the economics of the countries they govern. Or try to.

The nice thing about wealth (vs. morality, happiness or how good a dancer you are), is that it's easy (or easier) to measure how well you're doing. If you got more of the goods, you're winning.

What's America got that makes it so wealthy? Well, we've done very well with our mix of political and economic systems. We're a (ready for this, kids) representative democratic repupublic venture capitalist system with multi-jurisdictional socialist tendencies. Yeah, I know. You probably thought we were just a "democracy," with "capitalism" tacked on. If that long piece of hooey gives you a, "What the...?" moment, don't fret. It's complex. And part of the reason it works so well is the complexity. And the cracks between the bits are what many of our arguments over "coservative" and "liberal" are all about.

This will be a three-parter, it seems, as I'm late for "Chronicles of Narnia." And if you haven't seen "Chronic of Narnia," do that, too. But before we go, let's parse out that last, enormous definition of "The American political and economic system:"

  • Representative democracy -- We don't vote directly for most stuff, especially at the state and federal levels. We vote for representatives and they do stuff.

  • Republic -- "And to the Republic, for which it stands..." We're not a "pure" democracy, either. We're a republic. And that means that we are governed not just by the idea that "majority rules," but the idea that individuals have sovereign rights. See "Bill of Rights." The "majority" can't vote to take away the rights of specific individuals in a republic, unless they take those rights away from everyone.

  • Venture capitalism -- People investing in businesses in which they don't do the actual work. Stock markets, etc. It seems natural to us (doesn't everything we do?), but it didn't really start until relatively recently in history. The first company to issue stock was the Dutch East India company in 1602. So this idea of having an economic system (supported, encouraged and regulated by the government) based on "group ownership" of businesses (hmmm... "meta management...") isn't a foregone conclusion historically. But it works real nice.

  • Multi-jurisdictional socialist tendencies -- This is the tough one, and the one that will (in part 3) end up beign about (I promise) Open Source and creativity.  Socialsm, in its purest form, means that "the means of production are collectively owned and democratically administered by society as a whole." Yes, Virginia, socialism and democracy should go hand-in-hand. In a moderated form, however, social programs are ones in which some subset of the "means" (chosen programs) are administered by some subset of "the whole" (government workers). Any work done by the government for the benefit of its citizens is, technically, a socialist program. Because in a purely democratic, capitalist society (often called "libertarian"), the government does little or nothing. Individuals are responsible for their own well-being. If they want to get together on their own and contribute time, effort or money to build roads, hospitals, armies, etc.... great. But when the government collects taxes and does stuff with 'em (roads, hospitals, armies, schools, etc.), that's a form of socialism.

Usually, "liberals" and "conservatives" when they argue about "small government" vs. "big government" are arguing about where to draw the line between capitalism and socialism, or between democracy and repulicanism. What's good for "the group" vs. "the individual?" How much of "the means" should be controlled directly by the venture networks? How much should be influenced by consumers in the form of their voting/taxes? It's a good way to spend an evening, arguing over that line.

So... Open Source... it's "free" software. But not really. Because someone is paying for it, either in time, attention or effort. But it does provide value to those people using it. And we're now (as I say again and again) in "The Age of Content," where the tools of creativity are those that most deeply influence the growth of wealth.

What does all this mean? Is it good? Bad? Why won't I just stop yammering about political and economic models and finish the damned post?

Pipe down. I spent a long time finding all those links to Open Source software so you'd have something to play with... I'll finish the thing when I'm good and ready. Go look at Blurbhalla while you're waiting.

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