Joyce Appleby: Liberalism and Republicanism in the Historical Imagination
Niall Ferguson: The House of Rothschild: Money's Prophets, 1798-1848
Jonathan Israel: The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806
Jerry Z. Muller: The Mind and the Market : Capitalism in Modern European Thought
In late 1968 I took Jann Wenner to lunch on the Bank of California’s expense account. I was head of Marketing Research but not yet a vice president.
I was doing research on the future of the music business in San Francisco. I knew of Wenner as a ski bum who, with the help of Ralph Gleason, had started an every-other-week newspaper called Rolling Stone.
Jann brought me up-to-date on the finances of his fast growing newspaper and told me he wanted capital to expand and to buy out Gleason. He wanted a loan from the bank of over one hundred thousand dollars. At the time Gleason had put up more than half of the capital used to get started. Wenner planned to give Gleason a small percentage of the new cash infusion.
I was offended. I told Wenner that the bank would not make such a loan; that it was immoral to cut out such an important founder as Gleason who was the music critic for the major local daily newspaper.
The reality was that I could not personally make bank loans nor could I convince a bank loan officer to do so. Banks, no bank, would make a large loan to a start-up without 200% collateral.
Wenner remembered this offense six years later when my first book, The Seven Laws of Money was published by Random house. He told a staffer, Ben Fong-Torres, to write a nasty review. It was the only negative review the book ever got.
What could be more absurd or ridiculous than to give advice on aging?
I have never paid attention to people giving advice on aging. Why should you?
To get to 100 years old, your heart must beat 3 billion times. That is a lot, more than any living human can understand or explain. Thinking someone knows how to get to 3 billion heartbeats is absurd.
My advice is about making old age comfortable. In my early thirties I learned how to practice zazen, which is sitting meditation with an empty mind. I have continued to do this practice ever since, daily (weekdays) for a half an hour. Now in my old age I can sit comfortably doing nothing for hours or days on end, comfortably.
That is a very helpful practice when your energy is low and nearly all your close friends are dead. I’m glad I can do it. I have led a very energetic life; now is the time for serenity.
I am not advocating for any specific form of meditation nor for any of the ideas, like enlightenment, that presumably are attendant. Most rewards for meditation, such as enlightenment, seem overrated. But being serene in old age is a great payoff.
When the new campus for Lowell High School was about to open in the Fall of 1963, the San Francisco School Board voted to end the century-long history of Lowell as an academically select college prep school that fed graduating students into U.C. Berkeley and Stanford.
That set in motion a 25-year sequence that included me.
The current School Board has voted to do the same thing again. Will it have similar repercussions?
Nearly sixty years, ago, Ruth Kadish organized the alumni of Lowell to stop the downgrading of the school to ordinary status. She succeeded with the help of many illustrious alumni including the Governor of California, Pat Brown, (who was in the Lowell class of 1923 with my father,) along with Walter Haas, Cyril Magnin, Alexander Calder, William Hewlett, Art Hoppe, Dian Fossey, Warren Hellman and many other prominent and well-off alums.
At the same time Ruth created SCOPE, (the blue ribbon Service Committee on Public Education) to lobby the S.F. School Board to improve the entire S.F. public school system.
SCOPE was influential in significantly improving the schools for the next decade until Mayor Joe Alioto, in a pique of racist anger at the court-ordered school integration, made the school board elective.
My three children went to Lowell. My son left to go to an early charter school called The Urban Pioneers where he was usually outdoors and comfortable as a hyperactive young man.
Ruth made me the second president of SCOPE in 1964-65. I was president of the Young Republicans and a banker. Very respectable.
With little to do, as Ruth ran the political side of the organization, I decided to create an Education Fair to show teachers the latest teaching tools available on the market. The Fair was held on a weekend on the campus of San Francisco State College. Teachers at Lowell each had a budget of $200 and the Fair was very successful.
One of the attendees was Stewart Brand. Stewart was so impressed with the educational tools he saw at the Fair, that he spent the next year trying to raise foundation funds to take the Fair national. He used Dick Raymond’s non-profit, Portola Institute, across the street from the Menlo Park train station, as the potential funding recipient.
He gave up on getting grants and took his 1963 Dodge truck, with the resources he found at the Fair and much more on a trip around the U.S. to the many hippie communes springing up in 1965-67. Based on the needs he saw on his travels he decided to return to the Portola Institute and publish a magazine with the relevant information and tools. He opened a store, warehouse and publishing venture next door to Portola called the Whole Earth Truck Store.
The newsprint magazine became the renowned Whole Earth Catalog. When Stewart closed the Truck Store and published The Last Whole Earth Catalog in 1972, he took the money to create the Point Foundation which funded hundreds of projects in the hippie world, the environmental movement and the socially -responsible-investment movement.
I was on the Board of Portola and conceived of Point as a non-profit alumni association of Portola. Stewart put me on the Point Board and made me President two years later.
The rest is history. That was a seminal point in American history. Very little of that history is covered in Wikipedia but will be the subject of many books over the coming half-century.
Bill Graham already had a reputation when the first Trips Festival occurred at Longshoreman’s Hall in San Francisco in early 1966. He was connected to the Mime Troupe.
I was there at the gate taking the money on the first night at the request of Stewart Brand, one of the three organizers of the Festival ( the others were Ken Kesey and Ramon Sender). Stewart knew I was a banker and we knew each other from the Portola Institute and the San Francisco State College Education Fair that I had put on.
The festival was too exciting. I couldn’t be at the gate taking money when there was so much fun going on. I asked Bill Graham who I knew as the business manager of the Mime Troupe to handle the money. He was known to be honest about money.
When he saw the overwhelming size of the hippie crowd and the wild music from the Grateful Dead, Big Brother and the Jefferson Airplane he was hooked. He joined with a good friend of mine, Chet Helms to start putting on hippie concerts. Graham continued that direction the rest of his life.
Chet was a gentle, tall, kind true hippie who brought Janis Joplin to San Francisco. Graham promptly screwed Chet when Graham got control of the Fillmore Rock Auditorium and told Chet to go to hell.
A few years later, after Chet had been running the Avalon Ballroom successfully, he came to me with a political problem. The City wanted to shut down his ballroom because the neighbors (imaginary people) said the noise was too loud and the crowd was making a mess. (All untrue. The building had super sound insulation and Chet cleaned the sidewalks meticulously.)
Chet had already hired a lawyer to fight the issue at the Board of Permit Appeals. The lawyer was Michael Stepanian who was a partner with Brian Rohan. Both were stoned hippies and pretty much useless. I told Stepanian to keep his mouth shut and say what I told him to say. Which he did.
I knew the Board members and approached several of them, me, a bank vice president, and explained that Chet Helms was a hard-working decent honest guy. His operation was clean and well run. I had the majority of votes for Chet at that point.
Then, into the Board room walked Bill Graham in a hippie clown outfit and said boisterously that he was the leader of the hippie music scene and said he had a handful of telegrams from prominent bands who supported Chet and the Avalon Ballroom. He threw the telegrams at the Board chair and walked out.
The Board was made up of ordinary San Francisco straight politicians. One was the president of Olympic Savings and Loan.
I knew at that moment we had lost. And we had.
Nearly a decade later the lead minister at Glide Memorial Church, Cecil Williams, where I was the business manager, had arranged with Quincy Jones to put on a concert on behalf of Glide Church. We got the Cow Palace that can hold 10,000 comfortably. It was certain to be a sell-out.
Cecil assured me that Bill Graham, a good friend of his, would not put on any competitive performance the same night. Of course Graham did just that with another black pop-jazz composer. We had to scramble to get 5,000 people just to look decent. Most of the 5,000 were from Jim Jones’ People’s Temple brought in buses.
In the end Bill Graham died by his own hand in a helicopter accident. Flying with his girl friend, Melissa Gold, wife of Herb Gold a friend of mine, on a very foggy night when his salaried pilot said it was too dangerous to fly; Bill told him to fly or be fired. They ran into a 115,000 volt power tower and were fried.
Some friends of Abbie's asked me to put on an evening talk for him.
I expected about 1,500 and hired a hall that later became a cooking school on Polk and Turk. This was sometime in the mid 1970’s. I mark time by the main girlfriend of the time. Since the one at that time lived in Marin, Annie, I know why I didn’t have a girlfriend with me that night.
It was very easy to do anything in the hippie days. I reserved the hall, booked a few bands and got out the PR. I don’t remember doing it. It was so easy and automatic.
The night of the event, the bands were playing, the crowd was dancing. I had someone on the window taking the $5 or $10 that was the admission.
Then I was called away to talk to Abbie. We knew each other from encounters over the early hippy years. Abbie was around the corner in the back of a dark van on Eddy. It was about 7:30 in the evening. Abbie told me he was terrified of some danger and refused to come in and speak.
I said that I had gone to a lot of trouble to set up this event and he couldn’t back out. He said he was not going to speak and that it was dangerous for him.
He had all the outward appearances of a paranoid. A little shake and an agitated head.
So I walked back to the hall, made the announcement without explaining what an asshole Hoffman was. I told everyone they could get a refund at the front window. Which is where I personally went.
Giving out money is not a job for someone else.
It turned out that only one-third wanted a refund. The rest were happy dancing.
I went to a panel discussion of ‘5 powerful women’ who shaped the hippie era.
It wasn’t true. The panel was put together by an academic who laid her Marxist nonsense on a great historical event. Only my co-author, Salli Rasberry who was one of the five, qualifies as a woman who was powerful and shaped the hippie era, on the panel. Rasberry was the mother of hippie. She is a force of nature.
The whole panel repeated what Rasberry said, so it was a good panel.
Two things came up for me. The hippie world began with smoking dope (pot). It was illegal, fun and not addicting. This truth created the world of pot smokers as a cohort of outlaws. Hippies became one coherent group of outlaws, with pot as the membership ritual and pot smoking the common symbol of camaraderie. My son calls this ‘ the hot tub people’.
Pot led to other drugs, psychedelics such as LSD and mushrooms.
Which is an important point. I took psychedelics so I know what happens when you take them.
You learn that the world we live in is a created world. We have an agreed upon consensus. This led to several outcomes for the hippie world.
One was the hippie sense that we can create a better world than the currently agreed upon consensus which the hippies set about creating. After about 15 years the hippie-created world merged into the previously created consensus world. Both worlds changed significantly.
A few people stayed in the hippie world. A few others tried to stay in the hippie world and fit into the agreed upon world. They smoke a lot of pot and hold down day-time jobs. Still others fully joined the agreed upon world and set out to make changes in it. That group includes me.
Those who joined the agreed upon world have never forgotten that this is a human constructed reality. Many of us recognize it as a cultural creation. This is also a perspective that one can get from meditation.
Just reminding my readers: There are many worlds. Ours is only one of many constructed worlds.
At the moment we have two different politically created worlds. Maybe someone will remind us of that.
In discussing the current techie paranoia about robots putting people out of work, I wrote that the hippies prove the opposite.
“20 hippies living together could live on the income from one of them working, and they did. And plenty of them did and stayed home smoking pot the rest of the time.”
We may have some of that again. At its peak in 1998, 67% of eligible workers were in the labor force. That has dropped to the current 62%. Compared to the past, 3 million more people of working age 25 to 54 are not working. I think they are staying home smoking pot and playing computer games.
As I said in the same earlier blog: “Hippies were Americans. The truth is we used our free time to create a new world. We created home-schooling, comics, bakeries, organic farming, organic groceries, cheese, new sports (mountain bikes) and thousands (yes thousands) of new businesses including the home computer industry.”
Simply put: we live in an incredibly rich society and many people can chose not to work. But because the American spirit is restless and always imagining a new and better world, we Americans create new desires, new industries and we are always pushing commerce ahead of us.
Americans, left to their own devices will always create new demands and new businesses. That is very American and a driving source of global commerce.
There are many cultures that contribute to the growth and vitality of modern commerce (Israel and Japan are notable) but America is the elephant in the room. America has had two extraordinary efflorescences. A baby boom after the Civil War and a larger one after WWII called the Hippy Revolution.
There will always be new work for humans so long as the American spirit survives. The hippies embodied much of the essence of America. They were dirty like Vikings (as opposed to Japanese), believed in ‘tabla rasa’ inborn goodness of people. They were optimistic but had a religion of Armageddon. They wanted to make the world in their image and many of them were doers.
The hippies found that 20 people could live on the earnings of one person and they did. 19 got stoned, hung-out and wandered the world. They, like others, had no reason to work.
Hippies started their own businesses to change the world and over time the few founders hired the rest as employees. The hippies created much of the modern world from the organic food revolution to alternative fuels, to robust bicycles, to new fabrics, health, education, new music, pleasure drugs and even the personal computer. Much more of course.
The hippie efflorescence of core Americanism makes sure that a few people will always create new industries to employ many others.
I have a good friend who is a foodie. I actually have several friends who are foodies. In the one case, she always asks where each element of the dinner I serve comes from. It is usually 80% from Safeway, 10% Trader Joe's and 5% Costco. I’m declasse and proud of it.
Safeway does many things that I consider brilliant, but one thing ranks as genius. (Safeway is owned by Cerberus, that also owns Vons and Albertsons.)
I remember the hippie days when the dump-bins around Safeway were the place to go for food. Enormous amounts of food had to be thrown out everyday.
I remember the evolution of food banks in the late hippie era when much of the same food was donated to the food banks instead of being thrown out.
We have now entered a new era, for which Safeway deserves a genius award. Safeway sells the food that used to be thrown out or given away back to us.
The first place I noticed this is the chicken chunks. This is really the shredding of the roasted chickens that didn’t sell the day before. It is delicious. Stores that don’t sell all their roast chicken have plenty of shredded chicken the next day. The same is true for fried chicken nuggets and turkey.
Then I noticed that there are many containers of fresh sliced fruit. Usually perfectly ripe for immediate use. This is all the fruit that was close to being thrown out. It has been carefully sliced to get the ripe parts out and put into fresh fruit containers.
Finally there are all the containers of mixed veggies that are in small chunks, often packaged with cheese or a dip. Again, veggies that were ready to be thrown out, sold for perfectly ready luncheon snacks.
To me this ranks as a way to use food without throwing it away. Selling it to us in a desirable form. Simple living genius.
A writer I generally respect (George Gilder) wrote a Wall Street Journal article on getting the economy started again. He got the fundamentals right. You need an abundance of new business start-ups. New businesses become big businesses. A simple observation that many can not make.
The writer goes wrong when he makes policy recommendation for getting new business started. He is a writer after all. I have helped more start-ups in every field get started, than any person living or dead.
Gilder focuses on the lack of loan funds in banking. Absurd. Banks don’t lend to small businesses and never have. They only lend on 180% collateral.
I’ve never seen a business person starting who lacked funds. Friends and family know who can start a business and they are 100% the source of start-up funds plus starvation and other forms of simple living deprivation.
If funding isn’t important, what is?
People only start a business in an environment with two qualities: (1) a network of friends who are optimistic about life. The hippies were wildly optimistic about the world they were creating and they created more new businesses than any group in history. (2) there must also be a milieu of cooperation. Business survival depends on friends, community and support from everyone around.
So how do we create an optimistic environment with people who have a desire to help each other?
The answer to that question is the answer to business and economic growth.
The title of this blog should be ‘I apologize’. But it is hard to apologize for the end of a great boom that I helped cause.
I have caused several great changes in my society.
* I and only I had the knowledge and was in the right position to have created the modern international credit card. The first international money.
* I and only I had the math skills and was in the right place to raise bank savings account rates which a decade later brought down the savings and loan industry. Its gone now.
* The greatest force I helped unleash was the economic boom from 1984 to 2006.
I am ironically apologizing for the collapse of American economic growth from 2008 until today; as well as the global impact of the American failure to grow. I caused the great boom that preceded it.
It is very simple. From 1974 onward I provided business advice to hundreds of small businesses starting out. I wrote books, taught classes and travelled the country giving lectures. In the San Francisco Bay Area I organized the Briarpatch which had over 1000 small businesses including some members in Seattle, Portland and Minneapolis. This created the greatest boom in small businesses in history. Here is a chart going back to 1981.
It was my approach to business that spread the enthusiasm for new business and generated a 90% success rate for small business survival (the opposite of the normal 10% survival after three years rate).
This chart for the U.S. shows that it was my work and the apprentices that I trained that created the economic boom of 1984 to 2006.
Small businesses create vast employment that is half the total of all jobs. Many of these small businesses ultimately grow to be the big businesses that provide the other half of the jobs.
The proof of my role in this business explosion is that I was invited to create small businesses in Sweden and I created 4,000 new businesses from 1978 to 1985. My approach was copied in Germany a short time later. I replicated my success.
The chart comes from a paper by Steven J. Davis U. of Chicago. Data is from the U.S. Census.
I met a couple at the next table at dinner in a neighborhood restaurant. They had owned a shoe repair shop nearby since the early 1970’s. We connected when I mentioned being one of the founding partners in a business called Shoe Goo.
A group of us founded Shoe Goo in 1973 in Menlo Park California. A group of us were runners who ran together on the track between the Portola Institute and the Stanford Research Institute. I was one of four board members of Portola, an education research group. The chief was Dick Raymond who was a key runner (Dick died a few months ago). Others included Doug Engelbart from SRI now noted for inventing the ‘mouse’ and Bill English, first manager of Xerox Parc where the modern computer screen interface was invented. Another runner was the founder of Runner’s World magazine who moved to Portland and helped found Nike.
The importance of this running group has to do with the shoes we all wore: sneakers, also called tennis shoes. Sneakers, when used for running, wear out quickly. We were running long distances in those days. I ran 6 miles around Golden Gate Park every Saturday and Sunday with friends, in sneakers.
The solution was found by Dick Raymond who created a product called Shoe Goo. A black plastic gel in a tube that we used to put on the worn out heels of our shoes.
We started marketing Shoe Goo in the same designed tube that still carries its name. Another friend who was a hot shot in marketing, Paul Hawken, offered to be one of the partners and do the marketing which was becoming hard for Dick who had plenty of other things we were doing. Sales grew rapidly for two year, then Paul announced that we had to sell the product to Kiwi because we were in too vulnerable a spot with only with one supplier of our raw material.
We all took double or triple our investment (a few thousand dollars) and thanked Paul. Dick was not so obliging and held a grudge against Paul for years.
Our new friends in the shoe repair business told a story that I had never heard about Shoe Goo. They said Shoe Goo was great for creating an adhesive surface. If you couldn’t get a new sole or heel to attach to a shoe bottom, put Shoe Goo on the surface and leave it overnight. The next day anything could be glued to it with traditional shoe repair glues.
Now you’ve read my story. Look on Wikipedia. You’ll find a product of the same name with the same design with a completely different history from Southern California. It is in the top hundred products by sales volume on Amazon in sports goods.
Kiwi had a similar product on Amazon called Kiwi Shoe and Boot Repair which now has a different label.
What is the real story about Shoe Goo?
Back in the wild hippie days, I helped Margo St. James found a hookers organization called Coyote. I gave her an office and some foundation money to get started as well as abundant operational advice.
For the first five years, until Margo was seduced by the anti-male feminists around her, Margo gave me full credit for my role in founding her organization.
This is by way of introducing a subject my readers will never have encountered anywhere else. I got to meet many hookers (street working prostitutes) as well as call girls and others in the trade. I met them in unthreatening, none business social situations.
One old tale that was widely believed was that sex with many men would keep a woman from getting pregnant; that men’s sperm would fight each other’s.
Years later, when I was involved with the research done for the Institute for the Advance Study of Human Sexuality I learned that the old tale from hookers was probably right.
There are three kinds of human spermatozoa. One aims just to impregnate the ovum. One aims to attack spermatozoa from other males. The third is intended to create a more acidic vaginal environment to thwart other males' sperm.
The ratio of these three types of sperm varies with the occasion; it depends on frequency of ejaculate, time of separation from the female and other situational contexts.
The other related sperm phenomenon that was passed on from old hooker tales and was confirmed with recent scientific methods is that sperm success is sometimes related to female orgasm. In careful studies it has been found that after a female organism the cervex is likely to dilate and allow entrance to more sperm. In some instances the uterus also displays a pulsating movement that moves the ejaculate toward the ovum.
If you are looking for the original research on these issues add the term ‘academic’ to your google search and be prepared for paywalls around every article.
Here is a good summary of the research.
A gay friend pointed out how many members of top Apple management were gay. He is getting this from the local gay newspapers which also report a generally high proportion of gays in top management of many American companies.
My first reaction is that Apple was founded as a hippie company and retained its hippie roots. Steve Jobs was a hippie every day of his life.
That led to another thought: how much does the gay movement owe the hippies?
I can personally testify that gays were unnoticed as different and were openly welcomed by hippies who were not judgmental about sexual matters. In the hippie business community that I organized (the Briarpatch Network) there were many businesses operated by gays. We never noticed it.
I finally noticed it when Harvey Milk ran for San Francisco city supervisor and began going to all the hippie parties. He got widespread support because hippies liked him. Being gay was not of importance.
The role Glide Church played in the liberation of the gay community, with Ted McIvenna’s Sex and Drug Forum, is unquestionable. I also see a major role for the hippies, too.
The hippy world brought chaos to all American norms. The hippies searched the world for new perspectives and new ways of living.
In San Francisco they found a Zen priest, Shunryu Suzuki san, who had come to America particularly to teach Zen to the people whom he viewed as open and curious. By 1971, when I found his disciples, he had a solid organization alive and vital. In the middle of the 'scene'.
I spent many years learning about Zen and practicing its teachings. Suzuki, who wrote Zen Mind, Beginners Mind, had one main disciple, Dick Baker, who became a close friend of mine. Dick, was brilliant and exciting in an exciting milieu.
Zen seemed to offer a new approach for humans. Sitting motionlessly for hours, days and weeks, with an empty mind brought a clear view of the world without the on-going video that endlessly plays in our heads. The empty-mind-world was fascinating to me. The teachings that explained it as the 'original mind' or 'big mind' were a well developed 2,500 year old oral tradition. That rationale on top of the experience was also fascinating.
I remained associated with Zen for the next four decades. Unfortunately the hope and promise that Zen appeared to offer me, turned out to be imaginary. Zen is no different than the mainstream American religions that failed their followers, too. Zen, like Methodism, Lutheranism, Reform Judaism and the rest of the mainstream religions became ideological caucuses for the Left wing of the American Democrat Party.
This hit me painfully when a 40 year practicing Zen abbott (Norman Fischer) gave a favorable memorial pitch for a Jew-hating communist poet. The same view of the world he held when he started practicing Zen at age 18.
I realized that sitting on a pillow, quietly for any amount of time, hours, days, years, does not help anyone get through the period of age 20 to 25 when the brain becomes hardboiled and freezes all original thought capacity.
Too bad.
Zen fails. People who practice Zen will not come out appreciating the be-here-now world of commerce if they started out with the normative anti-commerce values.
After about six years of successfully creating a network of small businesses in the San Francisco Bay Area, with over 600 members, at the time, I was invited to Sweden to help Sweden get new businesses started.
Sweden had a poor record for start-up businesses. It was common to build housing projects with several thousand housing units and not even one private laundromat or convenience food store.
I showed the Swedes how to get small businesses started. They paraded me around the country where I would talk to small business people and potential start-ups. The first place I talked was to a group of about 30 in Filipstad.
After talking for an hour to an audience that only pretended to know English, I had the group take a break and stand up. Then I had them go around the room and announce one thing their business needed. They each had one thing that they needed badly: 'Some one with a truck who goes to Stockholm once a week', ' some one with a commercial grade wood plane', ' a good bookkeeper who can work part time'....etc.
What happened then?
Chaos ensued. They all went to talk to each other about how they could help. The din of noise was all in Swedish. The group finally broke up for lunch.
The lesson for small business start-ups? Every business needs a little help and every business can help another business. Cooperation is the key ingredient in helping businesses get started and surviving.
Within four years Sweden had its first burst of new small businesses, 4,000.
The Swedes taught the Germans. The Germans brought the Phillips (me) small business start-up approach back to the U.S. with funds from the German Marshal Plan. A small circle.
This graph says two things to me.:
One advances the hypothesis that I have had for a long time. The second is an explanation for the current long economic doldrums.
In 1974 I started an organization with several other people called the Briarpatch Network. This was a network of hundreds of small hippie startups in a nearly infinite range of businesses. It began as people who came to meet me in a wharf office I had set up shortly after publishing the Seven Laws of Money. Hippies came to me because they knew that I understood finance and that I was sympathetic to their interests. Along with the first coordinator and many subsequent coordinators of the Briarpatch, we built an organization that rapidly reached 600 members and remained at about that size for the next ten years. I would say that our membership was well over 1000 small businesses. Over that period of time there were 5000 to 6000 employees.
It has been my hypothesis that this explosion of small businesses was the source of the very rapid growth of America from the late 1980s until the early 2000's. The hippies learned from me and from each other that the best way to start a business is to cooperate with everyone else in that business and nearby businesses. Cooperation was a very hippie value that gave us nearly 90% success rate for business startups over a five year period. That compared to a 10% success rate among non-hippies businesses.
I know that the Briarpatch methodology of cooperation among start-ups worked because I duplicated the pattern in Sweden starting in 1980.
I think this chart in some ways is a reflection of the hippie interest in starting businesses and the Briarpatch success model that was widely imitated.
The second issue is that the hippies maintained a very optimistic view of what they could do in the world and what their impact on the future would be. This led them to start businesses and led them to start innovative, imaginative businesses.
It is my contention that this optimism is necessary for business startups to be abundant and that this business optimism has been on the wane for the past 15 or so years. Partly due to politics, meaning the Democratic Party, and certainly due to local hostility to commerce evident in the mistreatment of Uber and AirB&B as well as the horrible enactment of a rising minimum wage.
If my hypothesis is correct we will not see rapid economic growth again in the U.S. until we see an optimistic pro-business, pro-commerce climate. The kind one finds in Israel.
In hippie days, an acquaintance of mine, Lyall Watson, published a summary of a Japanese monkey study. It immediately became fact among the hippies of the world.
When Lyall’s material was later discredited as research findings it remained among hippies and New Agers as a parable.
Lyall’s version was that monkeys on a river near Kyoto were given dirty sweet potatoes and observed. The potatoes were to attract the monkeys to the research station. The researchers, after a few years, observed that more and more monkeys learned to wash the sweet potatoes before eating. They observed that this phenomenon spread to other monkey troupes all over Japan including other islands. Watson said that once the number of monkeys who washed sweet potatoes reached 100 it spread to the entire population promptly. That was his ‘hundredth monkey theory’.
This became a parable, that when enough people hold a new insight it spreads by mysterious waves to every other human.
Careful review of the data found a real truth that I hold dear.
Only young monkeys learned to wash their sweet potatoes. Old monkey never did. Young monkeys taught other young monkeys in other parts of Japan. It spread by direct contact and only slowly from young to young.
The truth I learned from this study is that only young animals are capable of learning new things. At some point the brain becomes hard boiled and no new learning occurs.
I have picked age 23 as the point when human beings become unable to learn anything new. They get stuck in the world view, the values and often the lifestyles they acquired before age 23..
Maybe a few people out of a hundred can learn after age 23. They are the anomalies that occur in all natural phenomenon.
This explains a great deal of human behavior that I observe. Nearly everyone is stuck with the brain they had at age 23 with no capacity to learn thereafter.
There was a rapid surge in the number of small businesses and commercial innovations in the United States beginning in the mid-1970s and extending into the late 1990s.
Since I was personally involved in the development of this small business climate and many of these innovations I did notice a phenomenon that I haven't seen commented on in other places.
The underground sale of marijuana played an important role in the creation of new businesses and marketing innovations.
I say an ‘important role’ but not a central role. It was the hippies own determination to create a ‘new world’ that was the driving force.
What I noticed is that from an early age, teens, many young people were learning the principles of trade. You buy a product where you have unique access and you resell it to a satisfied buyer for a higher price. The sale price allows you to restock your merchandise and carry on the business. That is trade.
It is my guess the tens of thousands of young people learned their trade skills from selling marijuana and a few other drugs to their friends.
I did see many people using these trade skills to start other small businesses. I also saw the money that these young people made from drug sales used as capital to finance other small businesses.
The same was also true, to a lesser extent, for the rock bands and their business managers who learned their trade skills in music and provided their friends with small business capital.
While I have seen data that shows the most rapid growth of small businesses on the planet occurred between ‘75 and ‘85 in the San Francisco Bay Area I have not seen any comparable data for the development of trade skills in the marijuana business.
The map on the right shows the high-tech geography of the United States for a recent period.
To me it is a map of the hippie distribution in the United States (I travelled to many hippy business events).
There is a connection between hippie values and the development of high-tech. The first high-tech in the 80s and 90s was computer related. Since then it has been Internet related and has moved from the San Francisco Peninsula to San Francisco.
What were the hippie values that generated high-tech?
* Hippies were intent on building a new society. They were offended by the hypocrisy of the existing society and singled out the establishment's hostility to pot as an example. An anti-pot position was inherent hypocrisy for people who drank booze every day.
It was the hippie intent on building a new society and concomitant acceptance of innovation that is the hippie foundation for high-tech. (Yes, hippies also tried the Luddite direction too.)
* Hippies had a disdain for established institutions including the police and social hierarchy. High-tech is conditional on rejecting the narrow controls and restraints of earlier technologies. Barefoot-food-nut, Steve Jobs and Steve Wozniak were hippies who saw the computer being used for industrial purposes but not for fun and experimentation. They saw better uses.
* Hippies were adamant about not having a boss and not taking the established world seriously. This led them to create co-ops that introduce new foods and vegetarian tastes. It also encouraged new business explorations in retail and manufacturing. The hippies brought about the largest small business boom in American history. Multiple small businesses also generate technical innovation.
Technical innovation owes a great deal to the hippie milieu.
I am interested in the way that a new product goes from inception to mass-market.
Probably the most interesting case I know of is tofu. Tofu is fermented soybeans in a delicious edible form.
I don't know the origins of tofu. I know the tofu I loved to eat from the early ‘70s when I first visited Japan. Much of what Japan eats came from some earlier invention in China. Tofu could be one of them.
I do remember a 1971 disagreement with Stewart Brand about a $50 million 1965 grant by the US government to turn soybeans into an edible popular food. The crap that came out of the grant was a canned tasteless mess. The grantees should've hired an anthropologist to check on soybeans around the world, instead of nutritionists.
In the mid-1970s I met Bill Shurtleff and his partner Aoyagi Akiko. They had just written a book on how to make tofu and how to use it in recipes. I gave them business advice on how to promote their book. Basically traveling around the United States to hippie grocery stores doing demonstrations and giving out samples.
I was also an advisor to a Briarpatch member, one of the earliest hippy tofu manufacturing plants in Marin County, Wildwood. Tofu manufacturing plants, which are usually local, sprung up all over the United States as hippies began to use the food. (Of course there had been Asian producers of tofu in Asian communities for a century earlier.)
Roughly a decade later the technology for producing long-lasting tofu in irradiated containers reach the market and big chain store shelves.
This is a case where hippies created a new domestic market because of their incredible willingness to experiment with food and their willingness to try new non-meat innovations.
To summarize: tofu, an Asian food, entered the mass American food market via the hippies, a book that demonstrated the use and manufacture of the new product, and sample displays throughout the uniquely hippie distribution food network, was the mechanism.
The following paragraph came from an article in the Wall Street Journal by E. Prescott and L. Ohanian. It is shocking:
“…. productivity since 2005 has declined by more than 8% relative to its long-run trend. This means that business output is nearly $1 trillion less today than what it would be had productivity continued to grow at its average rate of about 2.5% per year.
Lagging productivity growth is an enormous problem because virtually all of the increase in Americans' standard of living is made possible by rising worker productivity. In our view, an important factor contributing to declining productivity growth is the large decline in the creation of new businesses. The creation rate of new businesses, as well as new plants built by existing firms, was about 30% lower in 2011 (the most recent year of data) compared with the annual average rate for the 1980s. (The data is the Census Bureau's Business Dynamic Statistics.) The decline affected nearly all business sectors.”
The authors rightly attribute this decline in productivity to a parallel decline in the number of startup businesses.
Startup business is a field in which I am one of the rare experts. To my knowledge I have been involved, on a hands-on basis, with the start up of many thousands of small businesses; no one else on the planet can make such a claim.
In the 1970’s I founded a network of startups called the Briarpatch. We had a simple formula for all of the hippies who wanted to start a new business or who had already started one and needed help. They joined the Briarpatch Network and had access to the support of every other business both in knowledge and services. That meant they got accurate and reliable information from people who had similar problems to theirs and they could find suppliers, including insurance and legal aid as well as banking, that they knew to be honest and reliable.
At any one point the Briarpatch had more than 600 businesses as members in the San Francisco Bay Area. Over a decade there were several thousand. The Briarpatch created, through its milieu, magazines, word-of-mouth and books, tens of thousands of start up businesses in America.
This is not an exaggeration.
I was invited, with my Briarpatch team in the late 1970’s, to Sweden where I helped set up a similar network to the Briarpatch to encourage and develop small startup businesses. Sweden went from a nation with only dozens of new startups, a year, to a country with 4000 new startups in the three years after I set up the methodology.
I suspect that the economic vitality that America experienced in the 80’s and 90’s was partially the result of the start up businesses that I encouraged and promoted.
Could the same thing be done again? Could we have the kind of vitality in business that the hippies generated?
(Note: the founders of Apple were hippies and connected to the Briarpatch and the founders of Google modeled their company and its anti-advertising graphics on the principles from my Marketing Without Advertising.
The current national milieu of business hatred that the Left has created does not leave me optimistic about commercial vitality. When the Republican Party envigorated with the Tea Party enthusiasm and the Reagan perspective finally arrives in America we may have the milieu for a new start up environment.
Right now the country is in a depressed Leftie mood; they believe that everything belongs to the government (“You didn’t start that business”) and success is considered a measure of 'evil greed'. That is not the environment for startups.
In response to a question by some close friends I did some research. They wanted to know how hippies, who were so anti-government, could now be voting for the tyrannical Democrat-Union party?
I had to figure out the answer. Here is my response:
To understand how the hippies are behaving today it is important to look at my definition of who is a hippie and who was a hippie. By my calculations the hippies were a major part of the American baby boom; Americans born between 1945 and 1960. Roughly 60 million Americans. As of today baby boomers comprise 25% of our adult population.
During the hippie era (1965 to 1985), I used a “four orders of magnitude” categorization.
* There were 25,000 people who were the hippie organizers and leaders.
* The next 250,000 were the true hippies who used the language ‘pigs’, ‘ pad’ and ‘joint’; they hitchhiked, liked the smell of patchouli oil, wore old worn out hippie clothing, rarely cut their hair and came to all hippie events. The first question they asked each other was ‘What is your sign’? That question was part of their anti-hierarchical social value system. They did a wide range of drugs. They participated in the daily life of the Whole Earth Catalog and dropped out of college if they ever started.
* The next 2.5 million young people called themselves ‘hippies’, wore occasional hippie clothing, smoked pot occasionally and tried to buy food in bulk.
*The final 25 million, comprising roughly 40% of that generation, identified with the hippies in values and music.
The hippie belief system was based on a deep sense of rebellion against the society we lived in. We believed America was corrupt, tyrannical and hypocritical. Actual experiences with police were usually negative. We hippies believed we were creating a new society. Every experiment of every sort was considered a positive effort. That went for everything in food, healthcare, religion, clothing, home building, transportation and media. The most powerful ideas were the belief in universal human brotherhood and innate human goodness. Hippies believed that individual relationships were the most important relationships and that institutions, other than cooperative free associations, were undesirable. Everyone was equal and entitled to an equal voice in governance.
An offshoot of this hippie value cluster was a strong belief in starting our own businesses. Something at which the hippies excelled. They nevertheless had contempt for large businesses as part of the corrupt establishment institution.
The hippie values of the 25 million in this age cohort became assimilated. Many of the values of the 2.5 million who called themselves hippies were converted by New Age religions and Werner Ehrhardt-like symposiums into 19th century positivism.
The 250,000 genuine hippies moved out of their core cities of San Francisco, West LA, Austin, Seattle, Portland and settled in exurbia. I would guess that roughly half, I25,000 moved to exurbia and places like Hawaii. The rest, 125,000 remain in urban areas.
So how do they vote today.?
Hippies did not vote during the late 60’s, 70’s and early 80’s. They didn’t register to vote.
People tend to vote like their neighbors. Hippies have been increasingly voting since the late 1980’s but roughly half still do not register to vote, much like the rest of the population. That means that roughly 60,000 hippies live in exurban areas and vote Republican and another 60,000 live in urban areas and vote the Democrat-Union party
My best single piece of evidence is the town of Jerome on a NorthWestern hillside in Arizona. There are 440 people living there of whom 270 are over 40 years old and are pure original hippies. The rest of the town is mostly hippie. Jerome is exurban and voted 80% for Mitt Romney in 2012.
I do not claim accuracy for my description of hippie politics. I would summarize it by saying that hippies vote the way their neighbors do and they have scattered throughout the United States in ways that reflect the general population of their age cohort.
In an earlier blog about the hippies I suggested that the sexual freedom that women offered in the hippy era had to do with age demographics. I noted that women tend to choose men who are two years older than they are. But with all the leading cohorts usually of smaller size, younger women from larger cohorts were forced to offer sex to attract the older males in the smaller cohorts.
In the interval of many years since the hippy era, I have had a chance to observe the wonderful fall of the evil USSR and the magnificent emancipation of the Chinese from the tyranny of Mao.
It appears that when a society is freed from repression there is a sexual explosion.
I saw it in Japan with the fall of the USSR. Women seemed to flock to Tokyo and aggressively sought out every man available. They were horny. I know a number of couples made up of a Japanese male and an East European female from that era.
During that same period many of my male friends visited East Europe and reported the easy availability of horny young women.
The same thing happened in China. To this day men are targets of horny young Chinese women coming in from the countryside.
So I now wish to add an important additional reason to the sexual freedom of the hippies. They were reacting to the repressive social conservatism of the 1950’s decade.
To me, the power of art is its ability to shape our perceptions. Great art has a major impact on our perceptions in many dimensions; auditory, visual, intellectual, taste etc. Lesser art has a lesser effect or no effect.
In 1975, I set out in a van to record the sounds of many public objects in San Francisco. The possibility for recording objects came to my attention thanks to a member of the Briarpatch with whom I consulted, Arnie Lazarus who had developed an audio pickup call the FRAP, flat response audio pickup. It was used by every rock and roll muscian of the time.
Arnie was on the trip, along with Bess Bair the great tap dancer known as Rosie Radiator, Doug McKechnie a musician and composer and lastly Don Sach a photographer.
We played and recorded half a dozen statues, sculptures, stairwells and banisters around the city. Our last object was the Golden Gate Bridge. A few nights earlier Arnie, Doug and myself had gone to test the Golden Gate Bridge for its acoustic possibilities. We were chased off the bridge at the time.
The idea of playing the cables on the bridge, like harp strings, came from in magazine cover done by David Wills. We played the bridge strings. Doug used several heavy mallets and hammers.
David's visual imagery had become an audio and photographic image. Doug made a short musical piece which was played widely on am radio up and down the West Coast.
Since then, countless bridges have been played and the New York Philharmonic has performed a piece using local bridge sounds.
I consider that Golden Gate Bridge creation a good work of art because it has had repercussions in the visual and audio world.
T
he part that I remember most vividly is that we found one cable that had a standing wave. A standing wave is an extraordinary object. It is a wave that is in perfect harmony with the object in which it travels and the distance it travels. It moves back and forth to perpetuity. You can check it out in Wikipedia.
We found a standing wave in one cable, and because of its potential danger to the bridge, I reported it to the bridge engineer a few days later.
You can find Doug's music online in several places.
More than just an anti-statist ideology, being a hippie meant you wanted to start something on your own whether it was a commune, health-food store or another form of new business.
Hippies were fanatic friends of new business and saw the only way to change the world was through new businesses. Not a shred of Lefty love of government in them.
Again I know this personally because my book The Seven Laws of Money brought hundreds of new hippie businesses to me for advice. They also knew that I had founded MasterCard.
I created the Briarpatch network made up of more than 1000 hippie businesses at its peak in the mid-1970s. The Briarpatch network was known throughout the hippie world at the time. It symbolized the hippy love of business.
I was invited to help start similar networks in other parts of the United States and overseas. I was invited to Western England, Amsterdam, all of Sweden and France. I also spent many years developing a Briarpatch network in Japan where organic farming was extensive. Everywhere I was invited there were small businesses ready to blossom. They simply needed to hear the idea that businesses could be open, honest and loved.
The most important part of the Briarpatch was the fact that hippies loved business. Hippies found business to be their only clear and honest vehicle for bringing about change in the world …. and they were enthusiastic.
The few hippie businesses that grew large included Nolo self help press, Greens vegetarian restaurant, Body Shop, Apple Computer, Patagonia and Whole Foods. The hippies create the organic food movement, health practices from accupuncture to yoga, rock music, Eastern religions explosion, New Age shops of every kind... and countless businesses and classes that were never seen or imagined before 1970.
It was hippies anti-statist values combined with their pro-business values that together defeated the future of Leftism.
I was there, at the center of the storm, I saw it. Today I am one of the fortunate beneficiary.
This will be the first time you have ever encountered this idea.
In an earlier blog I pointed out that the peak historic point for Lefty thinking and Lefty projects was 1959. I now want to explain why the Left has been in decline from that point on.
I identify two minor reasons: the beatniks and the Civil rights movement. And the single major reason: the vast hippy generation. Over 20 million young people.
The beatniks were the young generation of the 1950s. What is interesting about them is that they did not borrow the socialist pro-state theology of their predecessors and the dominant view of the world at the time. They created a world of nihilism. It was mostly black, dirty clothing, beards, poetry and perennial wandering. I knew nearly all the prominent beatniks because they stopped at my dormitory in the mid-50s at the University of Chicago.
So here was a new generation that did not accept the previous Lefty ideology.
At the same time, the civil rights movement in the United States was beginning and spreading. It's greatest power came from black churches in the South and Jews in Northern law schools. It was a movement against local government that was unable to get support from any government. It was a non-statist local moral movement. Again it did not draw support from classic Lefty ideology. It had a few Lefty ideologues as hangers-ons. In fact one of its targets were the many Lefty racist labor unions. Nearly all labor unions were segregated, everywhere in the U.S.The greatest shock to the global lefty success of 1959 was the emergence of the hippies in roughly 1965. Here was an entire new generation that numbered in the millions, tens of millions by the 1970s, who were in complete open rebellion against everything their parents stood for. The hippies were for drugs and sex and music. They, we, believed we could create an entirely new society based on honesty, cooperation, new personal visions and pleasure.
That sure as hell had nothing to do with Lefty statist ideology dominant in the world. From that point, 1963, on the Left was doomed.
The hippies were antithetical to the Left because they believed in creating their own new world of new foods, new health, new books, new houses, new schools, a new green lifestyle, new honesty and new personal visions with the help of drugs and music. I was there as you can see from reading many of my hippie blogs. And the Whole Earth Catalog.
The hippies brought a global end to the Lefty vision that began with the French Revolution. The hippies traveled everywhere on the planet and carried an anti-state pro-individual ideology to the ends of the earth. They even had a guidebook: Lonely Planet.
The hippies killed the Left.
I will take credit for the most powerful driving force in the lives of both Steve Jobs and Steve Wozniak. Both proclaimed openly, extensively their believe that a person must orient themselves around the passion of their life. Their business views followed directly from this Phillips business teaching. It is the first law of my The Seven Laws of Money published in 1974. (co-author Salli Rasberry)
Both Steves said that every detail of their business life was driven by their passion. Both also emphasized the need for fun in business. Another point that I made many times publicly and devoted a chapter to in my Honest Business.(co-author Salli Rasberry)
What I do not take credit for is the persistent and pervasive dishonesty of Jobs. Nor do I have anything to do with his mean-spiritedness, sense of revenge, nor his litigious focus on proprietary and secret business elements. He was an immature brat.
I proclaimed openness and honesty in business as desirable attributes. Wozniak understood this and argued consistently my position against Jobs.
Both Wozniak and Jobs owe a far greater technical debt to John Capt. Crunch Draper than either acknowledges. Both Jobs and Wozniak made money, later used for their business, by making and selling blue boxes. Blue boxes were used to illegally circumvent the telephone network. Both were able to build them but their claim to have designed them is fallacious. Capt. Crunch and his cohorts were the ones who understood the phone network and provided the technical skills. It was common for hippies to use illegally generated money to start businesses (usually the money was from pot.)
Isaacson makes a big deal in his book about Jobs' veganism, love of Japan and his Zen Buddhism. These were core experiences of the inner 250,000 people in the hippie circle. I am still surrounded by the post hippie attachment to these values. Today I am in Tokyo.
One element that is central to Isaacson's book is the debate between openness and proprietary. While I was a fanatic advocate of openness and made it a requirement for businesses to join the Briarpatch, I did not explain problems with proprietary behavior until I taught hippie classes in the early 1980s and included it in the 1984 book Marketing Without Advertising.
Footnote: The photo of John Draper looks like he was the day he demonstrated his blue box for me and we listened in on an FBI conversation.
This blog is about Steve Jobs and Steve Wozniak. I just finished the Isaacson book on Jobs after being encouraged to read it by several close friends who know my connection to the events.
Both of these men are my protégés in business. In the next blog I will take credit for the good things they did and deny responsibility for Jobs’ bad behavior.
Why are they my protégés?
The definition of protégé is: ‘One .. whose career is furthered by a person of experience, prominence, or influence.’
Both of these men were hippies and I had a direct influence on the business values of the core group of hippies.
I breakdown the hippie population into three groups. First there was the group of a quarter of 1 million (250,000) people who lived fully in the hippie milieu: sex, drugs, clothes, hair and values. Both Jobs and Wozniak were in this category. The second category was 2.5 million people who used drugs and moved in and out of the complete hippie domain on weekends and other times. The third category were about 25 million who were influenced by the hippie movement and accepted most of the hippie behavior and values.
I was a dominant influence in the business values of the hippie world from 1970 for the next 20 years. I was president of the Whole Earth Catalog foundation, wrote dozens of articles for the Whole Earth magazine on business, and founded the Briarpatch Network of businesses that included well over 1000 Bay Area businesses from 1974 into the1980’s. I organized the original Greens restaurant, Steve Jobs' favorite San Francisco restaurant. I called on and gave advice at the Homebrew Computer Club where both Steves were active members. I was a friend of many of the significant influences and mentors for both men.
I also wrote prolifically, one of the few, on simple living which had a big influence on both Steves. Their formative hippie years were from 1970 to 1982.
Tomorrow's blog will deal with more specific elements of my influence.
I have written several blogs on the history of the Hippy revolution also written 'hippie'.
The hippy revolution was truly one of the great decentralized undirected human experiments. I am not finished writing about the subjects but here are several starting points:
1. The blog on my summary of the hippy contributions, focused on business and related subjects that I know better than most people.
2. The shocking blog about the fact that the political and media world of the early 1970s completely misread the peace movement. The peace movement was large because the marches were hippy parties. The hippies are not around today, in great numbers, consequently there is no American peace movement.
I said a similar thing in this blog.
3. My many blog musings on the hippy disappearance: sex and ...
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