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Kondratieff versus Close
Nicolai Kondratieff (1892 – 1938) introduced a theory about cycles of 50 to 60 years in capitalist economics. The cycles show a sinusoidal shape that can be divided into four different “seasons”: prosperity, recession, depression and improvement.
Those of you who know my model of human complexities (see below) will also recognize the same four situations or states, named in a similar but different way and also following each other in a chronological way, despite human tendensy to counteract the flow in certain stages. Rather than showing a sinus timeline I show a cyclic movement that evolves into an evolutionary spiral (not drawn in this particular drawing that represents just a single cycle showing the phases we go through).
Human Complexities
Using my own model I relate a number of human variables to the cyclic experience, as individuals and as communities. Each phase and change among them has much to do with the human psyche which would explain the linear fluctuations in time in both the Kondratieff and my (Close) model. We can also map generations on both models to see where they stood in relation to economic development or recessions and what emotional or cultural environment supported each phase. In the Kondrakieff sinus this is easily done against very specific chronological data. It is easy to plot also very specific events as points of reference, s.a. World War II for instance.
The points of reference help to relate the different models by synchronization in time and region. World War II got us (large parts of Europe) into a state of chaos for instance. It would be a “starting” point in my model due to the time reference that can also be further extended to a specific regional location. This you can read for Holland, Spain and the USA in chapter 11 of my ebook on the Global Shift (2011)
Then we could observe how generations evolve, one after the other, with the effects of the cycles of human complexities and the Kondratieff sinus of economic seasoning on them. In my model I show that people who grow up in a situation of wealth are being educated accordingly. This means that we are being educated with wealth as a matter of fact. I remember my own growing up phase in the midst of the post war culture of prosperity of the late 60’s early 70’s in Holland. We all wanted to be a millionair by the age of 30. What we were really doing was to create our own crises by mere cultural mentality caused by the environment in which we lived. Generations follow each other up every 20 to 25 years which would show another sinusoidial wave based on culture and mentality following Kondratieff in a different phase. We could probably draw the technological peaks with the mentality ones on the models, just to see how they influence each other.
In my model I do not relate necessarily to periods of 50 or 60 years for one cycle to complete as this may have to do with administrative economics rather than human (generational and environmental) complexities. I have even suggested that in prehistorical times a complete human complexities cycle could take hundreds or even thousands of years, affected more by natural environmental periods of abundance, interaction with hostile encounters or the chaos produced by natural disasters. When we look at the Chinese dynasties a direct link can be made with such cycles. Economics did not exist nor did therefor the Kondratieff sinus. My model did apply though.
Only now, the recent few hundred years we have found the cycles shorten to such an extend that we live through one or two complete cycles in an entire lifetime. My model hence relates to environmental circumstances (culture, war, periods of peace, nature, catastophes, crises, etc) as key influencial factors on human behavior and a historical clear reference with which we can relate human reaction and evolution both technologically and socially.
My model also introduces the line of sustainable human progress along which the traumatic human events can be plotted. This is new in any documentation. I use my transition phases (greed and enlightenment) while economists would only refer to entering and leaving the chaos quadrant as two seperate phases (bull and bear markets respectivily). The line of sustainable human progress is an evolutionary straight line that moves from chaos to wealth and beyond. The transition phases (greed gets us back into chaos and enlightenment gets us back to organized wealth) can also be seen in the sinus of Kondratieff.
Transformation of greed to wealth
Kondratieff shows an organic human logic in time phases with a build up of technological highlights and the economic effects. The same complex origin for progress can be found in the human complexities (psychology, education, culture) within the phase of chaos (war, depression) and enlightenment (the left hand side of my model). Humankind apparently needs stress to be inventive while in times of wealth and greed little to nothing new is added. Instead we see then an increase in risk avoidance, bureaucracy and hierarchies, which translates into a measureable increase in costs of society. This is also the reason of sudden collapse into a recession in cycles of about 7 years (domino effect).
- Year 1: market crisis (consumer crisis for whatever reason)
- Year 2: business crisis (expected turnover not reached)
- Year 3: government crisis (expected tax income not reached)
- Year 4: government dependent instances crisis (education, police, etc)
- Year 5: business downsized, fused, innovated, went broke..builds up again
- Year 6: government gets more tax income
- Year 7: government dependencies get more air
During those seven years all economic institutions go through reorganizations, eliminating bureaucracy and trying to open themselves up for innovation. Costs are eliminated and they are downsized, renewed their structures to get a positive impulse. The impulse gets everything into a new investment round that results in 7 perceived good years and then it starts falling back again. This would suggest that the traditional 7 bad years, 7 good years, 7 bad years, 7 good years could be expalined in a sinusoidal wave of 49 years. With economics we created an artificial environment that shows a more organized sinuswave than when interacting with the multidimensional complexity of nature and the chaotic tribal confrontations of the past.
Sometimes the economic years are stretched a bit after a capital injection, an overenthusiastic increase of national debt, etc. The figure we see returning all the time (“about 50 years” – equivalent to an ancient average generational lifetime) is just a logical reflection of our administrative economic organization of one natural year and our human “perception” of what we believe is good or bad. This would also suggest that if we would half the administrative year or extend it to two years we would see the waves shorten and lengthen respectively. This may be something for further study by someone even though natural seasons may still have some significance in our, otherwise highly automated artificial productivity.
It also has to do with our fragmented structure of society along a chain of economic dependencies. If we set up society differently (eg a Sustainocracy) then the economic world would never collapse. Sinusoidal waves would not exist because we eliminated the duality in our progress by concentrating on a single higher common purpose (sustainable human progress) with highly flexible, dynamically adaptive non fixed, hierarchical organizations. We unite our knowledgeable awareness with our adaptive productivity towards a permanent never ending goal.
What the Kondratieff model does not foresee is the piling up of an exponential curve within the current artificial sinusoidal. This is effect is caused in the last 40 years after the liberation of money for speculation around shortages by the entire, global institutional world. It coincides with the “information technology” era of the 5th Kondratieff wave, which is why it confuses the analysts. Taking also the limited Earth resources into account, the dip of the 5th Kondrakieff wave coincides with my crossing over from greed to chaos and a point of singularity of overall financial collapse.
The creditcrisis of 2008 has been just a warning signal. Banks will never recover despite the huge capital injections and government finances collapse all together. The Kondratieff’s winter and my model’s point of chaos are this time expected to be more dramatic then ever, making the Russian natural winter feel warm, and the Arab spring feel peaceful, compared to previous events. Some think that the solution lies in a new technological phase s.a. nano-technology. I personally believe that the next phase has nothing to do with technology or capitalist economics but awareness and a totally new type of society.
And that is where I come in with Sustainocracy. I cannot create a Kondratieff sinusoidal counter wave now to avoid a mayor crash, nor prevent local poverty from rising, or avoid a potential new world war. I can however introduce a new paradigm that can instantly transform current society, situated structurally in greed (recession) on the way to chaos (depression), into one positioned permanently in wealth (prosperity) by taking institutional responsibility today. This would maybe break or interrupt the sinus or introduce a new aspect that actually supports the sinus but from a different point of view. My own shortcut, interrupting the traditional ups and downs of society, has to do with our current state of collective understanding (awareness, consiousness).
We now collectively understand the above and the consequences of continuing. By introducing sustainocracy we now have a choice. We could trust the sinusoidal wave as an external matter of fact and realize that a new generation of prosperity is hopefully being born today to grow up and make it happen during the Konfratieff dip. We can also take responsibility and use what we know now to create a society based on new facts, a higher awareness, before it’s too late. Like building a Sustainocracy right now in ever city or region in the world.
The revolution of the consciousness
How powerful will people remain when the collapse continues and the point of singularity makes the sinus wave the deepest ever? What interest can people have in total collapse? How powerful can these same people become when they assume sustainocratic responsibility and turn the ship with consiousness and planned wisdom before organic logic does it with brutal force? If you are in a position of power today just ask yourself that question.
It can be done through human ethical behavior, leadership and awareness. It is difficul but worth it. I am doing it with people around me who have fragmented authorities and power (government, business, science, civilians) and they use it with me in purpose driven social and technological innovation. We do not place money in the center of attention but sustainable human progress, a clear environmental and social balance in circular economics of value creation. By doing so we create a rapid change in mentality and see a period of many decades and even centuries in reformatting and organizing our civilization with a positive consequences for economies. That I call the second quantum leap of human kind. Not by chance but by willpower and awareness.
AiREAS is the first sustainocratic venture in the world
Sustainocratic transformation is a voluntary act of responsibility
Effective keeping of human beings
Now that Sustainocracy is positioned and put into practice as new paradigm of societal complexity, affecting everything, it becomes interesting to reflect openly on the different ways of reasoning from the different worldviews. This may be a critical view because paradigms are based on totally different values. Someone who has lived both (money driven economics and value driven sustainocracy) can distinguish by experience and choice. Yet someone active without point of comparison inside the old paradigm will consider his or her views as the only truth.
Let us take this article for instance, that has been tweeted around the world today by many people, published by Forbes on Nov. 21st, 2012, written by a SAP specialist, Ray Rivera. It is titled: 5 Myths Of Human Resource Management (even though the link to the article refers to Human Capital Management) http://www.forbes.com/sites/sap/2012/11/21/5-myths-of-human-capital-management/
The article is a valid reflection about general practices in traditional business hierarchies. Seen through my old eyes of chief executive officer in a multinational I would most certainly review our internal policies with my HRM after reading the article. I remember our internal global policy back then to provide 10 training days per year to all our personnel. It was a hell of a job to find those days and get people motivated to do something with it. From a performance point of view it was useless, cost a bucket full of money and created constant absence in departments that needed to be filled up with people doing overwork.
All other remarks in the article are also valid. Take those of the financial incentives as perceived motivators. I remember sales people that tried to trick the system by submitting fake orders at the end of the year to collect their bonus. The fake orders were cancelled early the next year. In times of a crisis taking away any of the incentives becomes a burden. People leave a company simply because another one offers a nicer car. There is no commitment nor loyalty, just self interest. In fact, that is exactly what such hierarchies and policies attract: people with an individualistic, opportunistic, selfish attitude, equivalent to that of the company itself.
In a previous lifetime these issues were indeed of my concern. That was 20 years ago and they are still being published as novel and tweeted around as of general interest. Now, after crossing over to a new paradigm, the entire article becomes a reflection on what a Dutch author called “effective keeping of human beings” in a similar way as keeping chickens, pigs or cows. A particular sentence in the article struck me especially:
“How human capital becomes transformed into business value is still a black box”
When we look at the current world of business entities, performing around financial goals, we can easily recognize the “human farming” attitude. In the traditional paradigm this is normal and even worshipped by media, trading floors and governments. Human resources is a modern way of slavery where the business value of a human being is expressed by turnover per person or something equivalent. Such organization does not get the best out of people but the worst. Surrounded by short term financials, greed and more greed one becomes greedy and selfish automatically.
In the new paradigm there are no financial goals but purpose driven objectives. It is not the workforce that is asked to take responsibility, the company does, providing some kind of true added value to society. People do not come to work, they contribute. They do not need training because they train themselves. They do not need an incentives because the work itself and the achievements are a driving force already. People do not work in a hierarchical structure, they have a functional responsibility in a result driven team. The goals of the company are measurable through external progress. New people in the group assume responsibilities but change when the balance of the group requires the repositioning of the members, even when dealing with functional leadership. Leaders step back into the pack when they are done or when the group takes another direction for the benefit of the company and the purpose in persuit. There is equality and trust, no judging departments just connecting values among professionals for effective teamwork. People correct eachother.
Now that I know that such different types of organizations exist it is my choice to decide where I feel safest. Even if a sustainocratic organization is not yet functional in my neighborhood I can still behave accordingly and become the change that I want. I can also decide that I prefer such culture of hierarchical demand on me. Important is that one has a reflective choice when one knows.
Just like the other tweet today of someone claiming that it is nice to know that he didnot know certain things. One only knows that it would be nice not to know when one knows. This phylosophical reflection in reality states that when you do not know you cannot be held responsible for your actions seen from another paradigm. When you do know you may wish you didn’t, just to avoid responsibility. Now you know that different paradigms exist. What do you do? What responsibility to you take?
Purpose driven economy
With the kickoff of the first sustainocratic initiative in the city of Eindhoven (the Netherlands) the first step is made to create a “purpose driven economy”. What is the difference with what we have today? And why is it important for the rest of the world to follow the experiment in Eindhoven and, better still, start one of their own?
Current economies
Our current economies are not purpose but consequence driven. The human being is positioned as compulsory consumer. The entire institutionalized society is focused on creating a mountain of wealth around this consumer that gives a sense of abundance at all times. The only way to access this abundance is through financial means. Some of these means are individually obtained through the production, logistics and sales infrastructure necessary to maintain this mountain of abundance. Other get paid out of the hierarchies funded through taxation on this consumer organization. Or through speculation on material resources contained in this “having” type of culture. And finally also debt.
The consequences of such consumer economy show a growing tendency of (negative) influences that need attention through investments. Think of infrastructures, healthcare organizations, police, etc attending the attitude of greed and its effects on the human being, physically and mentally. This also shows an exponential growth which is equally reflected in the world economy through the costs of societies. At the same time we see our environment and human behavior deteriorate fast.
The model of economies of growth purely based on unlimited consumption and the consequences thereof, is obsolete because we use our natural resources wrongly, destroy our environment, sicken ourselves and eventually eliminate our evolutionary chances.
The consumer economy grows while destroying our selves and our habitat
Fragmented complex society
We know this now, including scientific proof, but have difficulties in changing the course of society. We created a very complex mesh of fragmented financial entities with dependencies and interests among each other on which powers and influences are being based. Each institutions has a perceived right to exist and defend its own interests. There is not one single institution that takes full responsibility for sustainable human progress. The institutional mesh is based on fragmented self interest and competition.
Key is the understanding that no institutional specialization can take holistic responsibility for human safety, health or sustainable progress. It is the human being itself that needs to take this responsibility. What went wrong in the consequence driven consumer economy was that the human being delegated its wellness through fragmented institutionalized structures that grew into tremendously inflated organs like an abscess or cancer would do on a sick body. Instead of serving humankind they try to serve themselves. This fragmented type of human organization is institutionally sick with the risk of the cancers to develop themselves further and destroy our evoutionary chances.
Purpose driven economies
The big difference with the old consumer economy is that it is not based on consumption and growth but on true value creation (purpose). It is not based on massive productivity and distribution but on local content. It is a circular type of economy where “purpose” is defined according local human needs, obtained through local effort and using local resources in a circular way.
To achieve a purpose driven economy an intense transformation is needed. But it can be done using the same institutional instruments of the old society. Each participant needs to cure its cancer like development and abuse and become functional again within the scope of local for local requirements. It requires a different mentality and true transformative leadership in each institution involved.
Abundance is not presented through logistic channels from around the world, it is created by local cooperative efforts. In such local cooperation we see the four traditional human values come together: attitude, creativity, environment and wisdom. Those values in the old economy were split into separate institutions that do not act locally but globally, not in an integrated way but based on self interest, greed and fragmented excellence. Now we bring this global expertise back to the local context.
Using what we have learned
The great advantage of today is that the old consequence driven consumer economy has left us with a huge amount of accumulated experience and material knowledge thanks to the concentrated specialized, fragmented functions of expertise that developed over time. This would never have occurred if this phase of humankind had not taken place. For a long time it was very constructive. Now it has become destructive.
We hence do not criticize our past but use the best of its elements in our new progress. We can of course be critical to those old time forces that try to prevent us from creating purpose driven progress. It is just a matter of time for that opposition to disappear. Eventually the purpose driven economies will develop there where the old one has become obsolete, entered into a crisis, providing room for renewal, not just in a physical, organizational sense but especially emotionally, spiritual and rationally when people become aware.
Complex transformative process
It is a complex process that is typically developed locally and bottom up with executive support to make it happen. The reason that it happened in Eindhoven first and not yet in another region is simply because this small Dutch town unites the essential ingredients to make it happen. What are these ingredients:
- Awareness at executive level
- Open democracy of true equality
- Level of education and experience
- The right people at the right time
These qualities produce the necessary flexibility that can address the future with adaptive determination in a complex modern world. People take responsibility individually, convince their surroundings to support change and find ways to make it happen. The purpose is found in the essentials of human existence: food, health, security, wellness (housing, energy, etc) and knowledge. When it becomes clear that the global consequence driven consumer economy is obsolete speed is required to create a new sense of reality and responsibility, including a change in behavior. When the time of old abundance is over, new abundance needs to be created, preferably on time.
Wellness is not a cost or right but the result of a responsibility and hard work (purpose) together. When circumstances change stability is found in change too. In a sustainocracy the purpose driven economy is initiated together. We do this by making human wellness a purpose driven issue of the local population with the support of the accumulated institutional excellence and enhancing potential.
The purpose driven society develops local for local using the institutional excellence of the old paradigm
Conclusion:
Purpose driven economic development based on sustainocratic complexities is needed to save humankind from the present day destructive expectations caused by the consequence driven consumer economy. If not we will face disaster. Yet if we assume responsibility individually and institutionally we also face a huge transformative challenge that will upset everything that we have known so far. The choice between destruction or working together on a healthier perspective is easy for me. I have become self aware and dedicated more than a decade to come to these views and initiatives. It is a start, giving comfort that humankind has a choice indeed. A choice that simply depends on one own and not someone else. But I realize that it is a difficult one, not only when one has to make it, but also for me to reach out to the world and make the choice known to all. If one does not know than no choice will be made. My personal challenge is hence multiple. Make it happen for myself, provide proof to my surroundings and reach out to all of you with sufficient clarity that you take sufficient confidence in the course that I have taken in order to let go of old securities and create new ones for yourselves and your direct surroundings.
Sustainocracy, the new democracy 