Pro Commerce

The happiest era

I was eight years old at the end of World War II.  I have lived in the happiest era in human history. My life has been bountiful.  I’ve travelled the world for seven decades in the modern world of global airlines and lived many years abroad. The whole planetary adventure was at a cost of one or two earlier transAtlantic steamship trips.

I’ve owned homes, raised successful and happy children who have raised spectacular children of their own.  We have all had medical confrontations that would have maimed or killed us in the era before I was born. Our health has thrived.

I’ve lived fully in the era and enjoyed telecommunications, computers, private airplanes, a wide range of technologies, the abundance of food and the most exquisite culinary joys ever known to mankind.

I have created many new businesses, including creating Mastercard the basis for the first global currency. Which I used to travel from the old villages of Indian untouchables to open markets with European goods in the most remote inner towns of Cameroon.

I lived in San Francisco, the capital of the hippie world, as a healthy male, during the twenty year sexual freedom experiment.

I uniquely enjoyed the prosperous world around me.  I got to wallow in the abundance. I earned my own living from age 17.   My only financial inheritance was under $40,000 when I was 37 years old. I supported my parents in their old age.  For most of my life I was self employed and did what I wanted everyday and every hour. I had many hundreds of beloved friends (and still have many) and an abundance of fascinating lovers.

Nothing I did has been secret.  I’ve written more than a dozen books based on my experiences and over five thousand blogs.

This has been possible for only one reason: I have lived in America during the most successful commercial period in world history.  The Cold War kept the Marxist anti-American Left out of power in America during those decades.

I believe anyone, with an adventurous nature, born during my lifetime could have enjoyed what I have. My last book was an homage to the sources of America’s commercial triumph. The Most Important Book in Human History.  It explains for all who are willing to listen; the sources of American innovation and greatness. Our meritocracy.

Blessed is he who appreciates what we have, understands it’s exceptional nature, its fragility and fights to protect it for our children.

The caravan and decent commerce

This is the beginning of November and a horde of more than 10,000 people are travelling from Central America to the U.S.

Some people have suggested that these people should turn around, overthrow their own governments and create their own decent economic society like ours.

This is where my analysis in The Most Important Book in Human History comes into play.  Few people understand why this horde can not go back and re-create the U.S. The U.S. was an anomaly.

A modern commercial society requires widespread meritocracy.  All Latin American countries have extensive hereditary elites that blocks meritocracy.  I have seen this in Guatemala where the elite all live in one neighborhood.  Nobody knows how to get rid of an hereditary elite. Communists in
Russia, China, Cuba and Cambodia have tried by murdering them.  That seems to have failed.

America was an accident of a large continent and  World War II that promoted meritocracy. England had the far reaches of an empire, where the meritocratic sons were sent to be administrators.  Israel has a unique military that is hi-tech and needs meritocracy.

We have no answers.  Chile may be an example of open commercial markets bringing jobs and modernity to an otherwise traditional ‘patron’ society. Chileans get modernity but no innovation.

No one has an answer, that I know of.

What worries me and why start-ups won’t in Paris.

The real problem in the world is that modernity was an accident.  

We don’t appreciate that.  So comments like ‘the arc of justice bends towards…’ reflects all the forces of government, tribalism, hereditary status and status quo that kept the modern world from happening for the past 2,000 years.

Tribalism and hereditary elites have been and still are the powerful forces in the world that have maintained the status quo all this time.  Science and its real driver, technology, will not change the world enough to create or maintain the atmosphere of modernity and modern commerce.

Note that a brilliant computer was built by the Greeks nearly 2500 years ago (antikythera) and that didn’t bring about modernity or modern commerce.  The same is true for moveable type, paper, gunpower, number theory, decimal fractions, modern math, diabetes treatment, modern geology and astronomy that date back hundreds and thousands of years in China with no sign of modernity or modern commerce.

Science and technology don’t have their own momentum in a society that is tribal like most of the human groups on the planet.  It certainly has no chance in well developed societies with hereditary elites like most of the rest of the world; where the elites maintain the status quo like Paris.

It requires that humans be free from tribalism and hereditary elites.

England provided the first escape with the management of their commercial empire which sent talented men outside of the hereditary elite off to faraway places where their talent emerged.  Then America did the same with its rebellion and the great freedom of moving Westward to an open continent. Hereditary elites were thwarted and modernity had a chance to thrive.   None of that can be duplicated again.  America, the stepchild of England, and its commercial empire, will not happen again.  It can not happen in a settled static world.

Israel is the closest modern similarity to America and It may have a problem escaping an hereditary elite in such a small territory. Israeli's coming to America's West Coast may be a source of survival.

Nowhere in the world can you create a start-up culture like America. Nowhere like the San Francisco Bay area, the West, where there is no hereditary elite, where the Westward escaping hippies brought optimism and a love of commerce and innovation.

The 'arc of history' is filled with (1) the death culture of Marxism (tribalism converted to government tyranny), government regulation and (2) social climbing that is almost biological and perpetuates hereditary elites.

The accident of America can be destroyed by government regulation which the ancient forces of tribalism and the modern Left seem to carry in their genes.  Modern commerce can come to an end.  The human desire for status quo can do it.  Envy helps too.

I’ve done business consulting with several thousands business, many start-ups.  Every day businesses struggle with government regulation and entrepreneurs typically quit from exhaustion.  Not from new technology and new competition but from the exhaustion of coping with endlessly stifling government regulation.

Donald Trump the first real businessman to become president explained the black death of government regulation in his speech in Poland in 2017. 

That is why I worry about the survival of modern commerce.  The greatest and most beneficent accident to befall the human species.

Poverty

One of the standard complaints about modern commerce is that it creates large differences in the living conditions of the ‘haves and have not's.  Between the successful middle class nearly everywhere and the persistent poor found in  almost all prosperous nations.

This is a serious confusion of two separate and independent factors.

Modern commerce rewards some disproportionately more than others.  The distribution of wealth and income is a steep curve with a tiny percent of any nation's people at the top and the majority at the bottom.  Much like the natural world where there are billions, maybe trillions of insects and only millions of  creatures larger than humans.  Where there are billions of dandelions and only millions of large trees.

But this observation leads to confusion.  What modern commerce creates is the divergent distribution of wealth and income, it is government that determines the number of any nation’s population that lives in poverty.    The best example is Singapore, an island like nation, with five and a half million citizens in a super-successful modern commercial world with no poverty. No poverty because the government decrees that there is to be ‘no poverty’.

Some Scandinavian countries have little measurable poverty and virtually no visible poverty while being successful modern commercial nations.

Poverty is the responsibility of government, not modern commerce which generates abundance but does not determine its final distribution.

Evolution of business

I have explained that the modern world is the by-product of modern commerce.  Not science, technology, medicine, economic growth, government, capital or religion…. It is only the by-product of  modern commerce.

I have shown that modern commerce is made up of three distinct types of business; trade, clientry and industry.  Only industry has created and been an integral part of modernity.

The distinct attributes of modernity and the sources of vigor for modern commerce are meritocracy, diversity and openness.  These developed in nations with institutions of law and finance that made trust pervasively available with their structural openness (courts and banks). That modernity was able to thrive in the world of aggressive colonial trade and the expansion of the American West where the meritocratic sons of fortune could escape their hereditary elite families.  Lastly, the mixture of institutions that favored openness among strangers (Free Masonry) that promoted meritocratic values and generated life in truly diverse urban communities were the fertilizer for the thriving of modern commerce.

All of this is new to most people.  It is also fairly obvious to most people when they reflect on it.

There is a less visible reason that modern commerce is a stunningly successful human creation which has brought us such extraordinary benefits in such a short time (two hundred years). That reason is that modern commerce is driven by evolution of the Darwinian type.

Darwinian evolution is composed of two elements: change in the existing conditions and selection of the desirable changes.  That is a perfect description of modern commerce. Business is constantly in flux and constantly moving in the direction that favors individual needs, tastes and desires.

Everything in modern commerce evolves.  The 1,000 square foot local food outlet in 1860 with barrels of goods and a proprietor has evolved into a vast chain of supermarkets with hundreds of thousands of square feet each, tens of thousands of packaged goods and hundreds of thousands of employees.  The airplane has evolved from a one person kite using a one cylinder gasoline engine with wing and tail controls to a 400 person behemoth that flies thousands of miles at hundreds of miles per hour in all weather as part of a global corporation transporting millions of strangers every month.

Businesses evolve.  They are born in the flux of market changes, sometimes infinitely small like a river changing its course.  They grow then they appeal to customers and they die when they become part of a bigger consumer driven corporation or they shut their door.  In the United States at the beginning of the 21st Century there were over half a million new businesses started and only one-third of them survived ten years. Evolution gives new life to the world of commerce and continually improves the lives of its beneficiaries.

Commerce in the modern world thrives on evolution and creates a wonderful variety of products, services and livelihoods.  Just as evolution creates a nearly infinite variety of species in the natural world from which we all enjoy the benefits and some distresses; it does the same in the modern commercial world.

Pro commerce history

There were many elements that went into the first successful trading nation.  Holland in the 1600’s was the first major global trading nation.  Trading posts had been developed on sea lanes by the Phoenicians, the Vikings, the Chinese, the Viennese and specifically in the North Sea region by the Frisians (the main source of the English language).  Bookkeeping, a vital element came from Milan.

Holland, focused on Amsterdam, in the 1600’s was the source of government bonds markets, international shipping insurance, the stock market and other open bidding markets and importantly salaried tax collectors (source of trustworthy tax collection).  The Dutch were a unique people on the planet.  They had created a representative democracy with elections of many offices; the Dutch Republic united the Netherlands with seven provinces.  It was founded in 1581.  

The Dutch were noted by all visitors in the 1600’s as the most egalitarian people on the planet.  They were also the most tolerant.  They had absorbed the Jewish exiles of the Spanish Inquisition of Spain and Portugal.  Amsterdam in the 1600’s was the center of technology, the center of the Enlightenment and the center of publishing in all of Europe.  (See Jonathan I Israel's, The Dutch Republic) 

The Dutch military conquered England in 1688 and transferred all the major financial institutions to England where the Dutch Head of State, William of Orange and his wife, became the King and Queen of England, William III and Mary.  With the English Parliament that welcomed them, they create the Bill of Rights of 1689 the major source of modern English law.

Holland was prosperous in the 1600’s as was its settlement in the American colonies, New Amsterdam later New York.  New York became the source of most American financial institutions and with the creation of the United States and the American Constitution it became a central financial force.  New York’s representative Alexander Hamilton played a major role in building modern financial ideas into the structure of the united 13 colonies.

England with a much larger population, with the Dutch financial tools, became the largest global trading nation from 1700 until 1945.

In the history of commerce these two giant international commonwealth’s, England and Holland, generated an entire future generation of entrepreneurs and giant trading businesses.  The Dutch and British colonies were gigantic new markets and training stations for homeland officials.  The colonies created entrepots were the second and third sons of the hereditary elites could find important positions of power.  The beginnings of meritocracy.  The colonial cities also provided great ‘diversity’ in the commercial meaning of that term.  Colonial networks were the origins of modern commerce.  Colonies created markets for Dutch, British and other local goods and the navies to transport them.

England is considered the original home of the Industrial Revolution as water power and steam power were introduced to accelerate wool, cotton and ceramic production lines. The revolution soon moved to the rapidly expanding United States in the 1850’s with the expansion of the West that allowed the meritocratic offspring of the Colonial States hereditary elites to open the vast new reaches of America along with the commercial settlements created by the soaring number of immigrants from the entire world.

Three other ingredients played a role in this historic development of industry.   

The original Free Mason Grand Lodge was founded in London about 1720 and spread around the world by the end of the 1700’s.  Free Masonary became the home of diverse men who could trust each other.  It became the backbone of trust and finance for the Industrial Revolution and its expansion in the 1800’s provided finance for the American frontier.  

The second was the application of the new technologies of animal husbandry and horticulture to farming in the mid-to-late 1700’s in England and Holland which increased production dramatically creating free labor to supply the emerging Industrial Revolution factories.

Third and last was the widespread publication of Adam Smith’s Wealth of Nations which helped leaders and thinkers understand the nature of the explosion of industrial production and trade that surrounded them.

The industrial revolution, in retrospect was the convergence of many small but critical elements to the three major elements I have identified.  Meritocracy had to emerge from within societies ruled by hereditary elites.  The Dutch and British colonial system made this possible.  In America, the vast Western expansion made this possible even more so.

The diversity necessary for commercial creativity and technological innovation was also a by-product of this international mingling of people and cultures in the many urban cities of the colonies.

Lastly, the emergence of safe spaces for open and tolerant men of diverse backgrounds and the institutions of modern commerce that they fostered  was essential.  Democracy was vital as were the Free Masons and similar institutions that the Dutch, English and Americans promoted.

Modern commerce needs openness.

A synonym for openness is honesty.  I have always preferred to talk in terms of openness because ‘honesty’ is the absence of deceit.   Openness is a condition where deceit can not even take root.  A small difference but I prefer the open environment to one that depends on ‘honest’ people being honest all the time.

Why would modern commerce need and promote openness?

The true underlying requirement for modern commerce is trust.  Openness is the way to create trust over a broad array of circumstances.  Commerce is carried out over vast distances and between untrusting people.  

The original form of trade appears to have been one tribe putting its goods on a river bank and another tribe putting its goods on the opposite river bank.  No trust was needed.  The buyers on each side of the river were allowed to return to their side when the trade was considered acceptable by both sides.

Currency was a way to make trade easier by exchanging a universal coin, gold, for the goods and services.  Little trust was needed.  Stories about drug gangs selling merchandise for money then keeping both the drugs and the money are common fare in the world of fiction.  Mostly fiction. Currency works fine,  for most transactions, in lieu of trust, but more complex transactions such as shipping require more.

This is why some tribes with strong internal trust were able to carry on trade over long distances for several millennium.  Phoenicians, Jews, Chinese families and the West African Fulani tribe became long distance intermediaries. A tribal member was present at each end of the transaction to verify the transaction.  

More complex transactions over time required legal documents and courts.  Both these elements required openness.  The lawyers had to follow established published legal standards and the court records had to be public as well.  The same became true of insurance contracts, stock exchanges and entire legal systems.  All of these institutions required openness to be the basis for trust in commercial transactions.

The early days of modern commerce were built on all these open institutions, bond markets, stock markets, legal systems, contracts and trade treaties. As corporations emerged in commerce in the 1850’s laws and public filings became the form of openness.  Today, openness in securities filings and banking transactions are vital for the survival and expansion of modern commerce.

It is hard for us to remember that every commercial institution plays a role in keeping the level of trust high for modern commerce.  Banks guarantee the safety of their checks, credit cards and bank accounts.  So does everyone else we give credit cards and checks to.   These businesses are subject to openness at some level of audit, government examination and reputation.

The most important role of openness is inside of businesses.  No one could run a business if they can’t fully trust every other person in the business, and expect openness about all management relations.  If a manager gives directions to a peer or subordinate who fails to carry out the directions or report back accurately, then that person is forced out of the business and/or are other people who fail to report the breach.  New people are not hired in the first place if the aura of deceptive behavior hangs over them.

Openness is a core value that is generated in modern commercial markets and is necessary inside modern commercial business.

I am the person who made international currency possible with the development of multi-bank issued credit cards that allow modern people to travel the world and buy and sell goods and services.  That whole system is based on the long history of interbank trust which in turn is built on interbank openness.  For the first few decades of bank credit cards, they all used an 'Interbank' symbol.

Trust is the core value of modern commerce that allows a tribes-woman in the back woods of Cameroon to sell her goods in Charleston South Carolina.  Trust is based on a vast series of institutions that rely on openness.

Inaugural speech

A number of people have asked me to comment on President Trump’s inaugural address.  It has a great deal to do with modern commerce in America.  Everything to do with the future of modern commerce in the world.

The picture on the right comes from my wonderful friend Ann who gestured like this while watching the Trump inaugural: “this man has balls this big.”

He began with “We, the citizens of America, are now joined in a great national effort to rebuild our country and to restore its promise for all of our people.

"Together, we will determine the course of America and the world for years to come.”

He is serious having said this every day for a year during the election campaign.  

Of course he put himself in the tradition of Andrew Jackson with his bold attack on the dias: “today we are not merely transferring power from one administration to another, or from one party to another -- but we are transferring power from Washington, D.C. and giving it back to you, the American People.”

What is true about this inaugural is that the core of America and modern commerce is the desire and ability to get things done.  We are a building, strong and determined people.  At least half of us are.

A true American, Trump, is unique in his ability to say: “America will start winning again, winning like never before.

"We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams.

"We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation.”

Nothing is more American, the land of modern commerce, than the determination to dream, build and act.  The Golden Gate Bridge, 2 miles long, took less than 3 years to build in 1938.  The newly built Eastern span of the Bay Bridge is also 2 miles long and took 11 years to build in 2013.  

America has lost its dreams, perverted its competence, disappeared in a quagmire of hopeless Climate Armageddon.  We have become a nation of wimps, cowards, environmental reviews and pathetic pussys.

In his inaugural address, President Trump has called for a renewal of the America that created world prosperity and he offers our way of life as a light that will “shine as an example for everyone to follow.”

Great speech, and Donald Trump clearly wrote it himself like Lincoln at a similar time when American values were nearly lost.

Never run out of jobs

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.

What you can see for yourself about commerce

I have made very little progress in teaching the world that modern commerce is the only source of wealth, health and prosperity.

So now I am looking around me to try and teach simple lessons about modern commerce.

Lesson 1.  Modern commerce is the superior human mechanism for social improvement.  It is built on the fundamentals of Darwinian evolution.  There is constant change underway and the best survival traits are the ones that survive. Businesses that serve your needs survive.

Walk down the street with your eyes open.  You will notice many retail storefronts ‘for rent’, a few new businesses being built and remodelled and a few storefronts converted to other uses such as apartments or garages.

What you are seeing is small sample of the constant and vast churning of new business being formed and businesses failing and going out of business.  Now consider the fact that the retail businesses you are seeing comprise about 4 million out of 8 million businesses. Every year half a million of these are started and half a million go out of business.  That is Darwinian evolution.  Survival of the ones that serve customers the best.

Lesson 2.  No government operations ever go out of business.  They just grow like cancer.  

In 1941 there was 1 government employee for every 30 Americans.  That includes Federal, State and Local.  Now there are 2 government employee for every 30 Americans.  Nearly double the number of government employees per person. (excludes military).

Summary: modern commerce is evolutionary, constantly adapting to the environment. Government is cancerous, malignant with unstoppable growth.

How to teach pro commerce issues

I have been trying to teach the core issues of modern commerce for nearly 20 years.  I have to think back about what I’ve learned.

I have seen some movement in the intellectual world in the direction I want.  So I can offer a few minor observations.

Nobody understands the necessity for using the phrase ‘modern commerce’ or ‘pro commerce’ so we have to be patient with the misnomers capitalism, business and the free market.

The two ideas that are getting through to the understanding of modern commerce are the connection between individual freedom and meritocracy.  That is an important step that has taken 20 years.

Fortunately these are both positive values for Americans.  Americans consider their personal freedom to be a unique and desirable quality of living.  It has many meanings which need to be fleshed out.

Individual freedom should slowly grow to be understood as living with the ability to lead a complex, multifaceted life that is self organized.  That really doesn’t exist for most of the world, nor does it have meaning for the many Americans who see life as a job or a career with the freedom existing on weekends and in retirement.

The notion of an authentic person is also a growing concept but it hasn’t been connected to the idea of a self organized life. And the need for modern commerce in a society with individual freedom.

I am delighted to see the concept of meritocracy emerging among thinkers, recently.  It is probably the strongest value that Americans can connect with that is a core part of modern commerce.

Most people have no idea how narrow the world of meritocracy is.  It simply doesn’t exist anywhere that tribal or family cohesion is paramount.  That includes all of Africa, Islam, India, China and in the hereditary elites in the rest of the world.  It is good to connect meritocracy to modern commerce but it may be impossible to get people to understand that it is limited to very few societies.

Lastly, the idea of modern commerce as a Darwinian form of evolution is still limited to the phrase ‘creative destruction’ without any sense that thousands of businesses are merging, failing and expanding every day.  The dynamics are not visible. Only one or two of the top 100 companies of 1960 even exists today and only a handful are still in the top 100.

Hopefully, progress in understanding more about modern commerce is underway.

Definitely no SETI

SETI is the extravagant science project to search the heavens for signs of intelligent life elsewhere in the universe.

Imagine the arrogance of a human being able to say that there are not and never will be signals from ‘intelligent life’.  I am that arrogant that I can say for certain there are not now and never will be another species capable of sending signals out into the universe.

How can I be so certain?  Because I am one of the few living people who understand how we came to be.

• We modern humans, who can send signals to each other over great distances are the byproduct of modern commerce which barely exists on this planet and is very fragile.

• Among the trillions of species on earth for several billion years there are only 7 billion humans alive today.  The total is 100 trillion species years. And we are the only ones with the potential for technology.

• Of that 7 billion, since the beginning of modern commerce in 1800 there have been less than a few billion such humans in only a few million square miles who have participated in modern commerce with sufficient competence to read, write, do numbers and create technology necessary for long distance communication.  Maybe one billion.

• Of that billion, only a tiny fraction had the social attributes necessary to generate technology and operate it.  That fraction needed to operate in
• a meritocracy
• with a non-tribal group of peers,
• in an environment that supports individual initiative
• supports free markets
• operate in a nation with a weak, free individual oriented government
• and in a large collection of friendly cooperative members of the species.

Even today that number of people of our species may be under 100 million.  And we have been at this level of technology and functioning for only about 100 years.  

Since only a few people, maybe 100, understand what created this extraordinary time in modern commerce and hundreds of millions of people (Lefties worldwide) are trying to destroy it, I don’t think we can expect this miracle to occur anywhere else in the universe.

I can say with certainty that it hasn’t and it won’t.

Pro commerce issues

There are an increasing number of people writing about the wonders of pro commerce.  All of them recognize the profound importance to society and the awesome power of commerce for good.  Some recognize the individual benefits that I have singled out.

Because my pro commerce stance does not come from intellectual meandering, it looks different.  My pro commerce stance comes from experience; it comes from actual operating businesses; several thousand of them.

I have found two elements of commerce than others have not found.  First is the tripartite nature of commerce and second is the good-values direction of commerce.

There are three categories of commerce.  

• The most ancient is ‘trade’.  A stand alone business is usually involved in trade.  A flower shop.  Each transaction is the end goal; it must have enough margin of surplus revenue to keep the seller in business and renew the inventory.
• Another ancient one is ‘clientry’.  A doctor or engineer are practicing clientry. Their goal is to provide the best service appropriate to the client for the lifetime of the client.
• The newest and most potent is ‘industry’. This form of commerce is based on reducing costs.  Cost reduction is achieved by increased scale; large scale of production, large scale of marketing, technological improvements and managerial competence.  It is found in every chain store operation and factory.

Commerce actually thrives when it incorporates four values: meritocracy, diversity, openness and preference for markets.

• Meritocracy means employing the most qualified person for the job or function.  This is not the case where tribalism prevails or nepotism dominates.
• Diversity of human resources results in the greatest productive output of any business.  Diversity refers to different skills and viewpoints and has nothing to do with gender or skin color.  Diversity is what cities have to offer and why commerce has always thrived in urban areas.
• Openness is vital to any commercial operation.  People who work together must be open with each other.  Secrecy between workers and hostility are counterproductive.  The same is true for all relations with suppliers, advisers and consultants.  Openness is vital for learning, shared competence and innovation.
• Lastly modern commerce thrives on markets.  Markets allow for survival of the superior and are an excellent form of communication and education.

The greatest sum total benefit of modern commerce is that it allows each individual human to grow and develop to their greatest potential.  In pre-commercial societies there are less than 100 occupations and labor practices.  In modern commerce there are an infinite number of livelihoods and ways of life. Room for every talent and genius.

The gig economy

A word from the future.  

I have lived in the ‘gig economy’ for the past forty years.  I often had a supplementary salary.  Nearly all my real income came from clients, speeches and royalties.  For me, it has been a gig economy.  It has given me vast freedom to do what I want with my time and my passions.

Of course that is what the troglodytes in the Democrat Party don’t want people to have.   I listen to Robert Reich and Hillary Clinton rail against the gig economy.  People who are so scared of life and still think we are in the 18th Century with precarious daily sustenance.... that only a salary can protect us from the monsters of daily life.

The reality of the gig economy is the extraordinary freedom ordinary people can have if they choose.  We can work when we want, doing what we want, and working for and with people we want to work with.  What a refreshing change from office politics and working with all the boring schmucks who people the world of salary life.  

We giggers improve our skills, develop new talents and understand self management.  Things not possible in the world of salaries and offices.  We don’t have bosses running our lives and determining our destiny.  We work for ourselves and our lives are in our hands.  

We vacation when we want.  We act like the richest of the rich with a deep sense of security that is never found in retirees on a fixed income.

If you can’t handle freedom, and most people can’t, don’t be in the gig economy.  But for god’s sake don’t try to close off that option for the rest of us.  Please don't use the political tyranny that is the basis for the Leftist view of the world to lock us into the archaic world of salaries and retirement pensions.

Merry old England

I’m constantly asking myself how much abuse can commerce in America take before it stops working or is so degraded as to be minimal?

I am first looking at Britain after WWII.  Led brilliantly by Winston Churchill during the war, the nation immediately elected a pure socialist government led by Clement Attlee and Aneurin Bevan in 1945.

England immediately bought all the large industry with government bonds, socialized medicine and created a communist five year plan.  Every functioning private industry was nationalized from steel and autos to transportation and telecom. Most of coal was nationalized.  

England remained a highly stratified hereditary class society, so most of the hereditary elite remained in their top management positions.  The creaky old industrial world just got more creaky and unable to innovate.

This communist model lasted until Churchill was returned to power in 1951. Because the election was close and the government coalition only lasted until 1955, Churchill was unable to undo much of  the socialization that had been completed.  Britain remained a socialist backwater until Margaret Thatcher in the 1980’s made an effort to reverse the damage of socialism.

England was a major auto, coal, steel, clothing and pharmaceutical powerhouse before WWII.  After the war it was insignificant and has remained so since then.  It lost its empire as a source of exports but gained the wealth of the commonwealth as the natives moved to London and made it a wealthy and vibrant center.  Only London.

In summary, England is evidence that a vital commercial society can be reduced to economic ruble for nearly a century after sufficient socialization of industry.  England is not a pure case because WWII did a great deal of damage to the capital of the country. Much of that was offset by the U.S. Marshall Plan aid.  The second problem with a pure case example is that the hereditary elite remained in control of the society and that makes commerce ineffective under any circumstances.

In any case, a valid conclusion can be drawn: a sufficiently powerful central government can destroy commerce, especially if meritocracy has never had a chance.  England today is coasting along. As is most of the rest of the world, on the driving  power of the United States which continues to generate innovation and vigorous global commerce.

P.S. A powerful sign of modern commercial failure is found in England: half the resident Jews have left since 1990.

Internet skills and Tokyo

I’m really not comfortable with people telling me how the Internet is changing lives when there is no measurable observation.

I have some good measurements. For over 25 years I have had guests visiting me in Tokyo and staying in my home. Tokyo has no straight lines or corners to the streets (except in one dense business area). The rest of the city is as chaotic as a Moroccan suk or Mumbai.

Except that it has an infinitely complex subway system and impossible bus system that makes London look like a 3 year old’s puzzle. It is all high-tech with glitz and trains that run 2 minutes apart on tight published schedules.

For 25 years I have had to give the 80+ guests a folder of maps, travel brochures and guidebooks for everything. So they can get around Tokyo and find things they want to do.

It usually took 3 or 4 days before my friends were confident enough to find their way home. Some never got that confidence in a week.

Starting two years ago, that was over. Now all the guests arrive with their smart phones and can figure Tokyo out right away. My three granddaughters arrived late on a Sunday night, and Monday night they walked home on two different routes that were complex. With their phones and websites they planned every day by themselves with no help. The same with the next guest who did it all by himself. Every day.

Now that is what the Internet can really do. Make a truly complex and inaccessible problem in the real world… totally accessible. Quickly.

Business is the next big thing

Some techie has started a blog with the title ‘business is the next big thing’. Meaning to me, that this is a good time to correct the record. This dude wants business to be more socially responsible and sustainable. I can’t respond to the sustainable part. The word has no meaning unless one prefers life without steel, airplanes, cargo ships, bananas and restaurants. Paleo, real paleo is sustainable.

It is hard or impossible to understand the nature of business unless one has worked with dozens of small businesses and extracted the core operating rules. I’ve overdone it with over two thousand businesses of all sizes. And an open mind.

The core principles are in the upper panel of this blog. Meritocracy, diversity and openness.

A modern business will fail if it hires a brother, a sister-in-law or uncle to do serious work. Meritocracy only thrives in modern commerce (and the modern American and Israeli military). Since it is the only way people become fully developed as humans, it is clearly the only socially responsible and decent form of human organization.

Diversity is what is never appreciated about modern business. Not diversity of skin color or genitals which is not diversity but absurdity. Diversity of viewpoint and experience are what make businesses vital and successful. Modern commerce brings unique humans together and promotes vigorous interaction and development. A Muslim Pakistani can work with an atheist Texan. Again, a unique quality of modern commerce not found in any other institution.

Lastly, openness. An analog for honesty. Commerce is often seen only in terms of competition between businesses and based on trade secrets. Non-sense. Everyday business is based on trust and openness. Orders are shipped, advisors advise seriously, people work together amicably, internal theft is negligible, businesses help each other everyday, receivables are received and trade organizations work for their common interests.

Commerce is 95% cooperation and camaraderie and 5% competition of the kind that is found in sports. Where else do people behave that way? Nowhere.

Business is not the next big thing. It is the only big thing and has been for 200 years.

Pounds per mile per dollar

I owe a debt to Michael Adams who responded to an earlier blog about the central role America has played in the explosion of modern global commerce.  Mr. Adams sent me to a book by Jane Jacobs called Systems of Survival.  I have always loved Jacobs' writings, she is still an influential mind.

In her Survival book, Jacobs does an excellent job of distinguishing the ethics of commerce from that of government.  Everything she writes is clear and explicit.  However it applies to the period before 1800, maybe because she worked in Canada which is not part of the modern industrial explosion (Canada is nearly all extractive).  When we get to the modern commercial world we need to add the other element of my blog headline: meritocracy.  The replacement of tribes and families and hereditary hierarchy are central to our modern prosperity and technology.

In my mind my addition of meritocracy to Jacob’s list of commercial elements was still not sufficient to explain our global prosperity.  I finally had to add another element to my list to distinguish the world of 1800 from the world of 1900.  Speed and cost in moving heavy loads. 

This video of downtown San Francisco in 1905 is what stimulated my thinking.  Nearly everything is at the speed of a fast walking person.  When I was a child, cable cars only stopped at a few locations, otherwise men jumped on and off the moving car at about 9 miles per hour. That was the speed of everything downtown.  Today it is still about the same speed except for the underground rail line.

When did the world outside of downtown change?  It came with the steam driven railroads dating from 1850.  Speed picked-up with autos, ships and trucks in about 1910. Then again with airplanes in the 1950s at the same time freeways came into regular use.  The final uptick in speed and weight came with 18 wheel trucks, cargo containers and the complete FedEx and UPS systems in the 1980s.  

I see this increase in speed as a function of weight and cost.   A man can carry 60 pounds for 4 miles in an hour at $12 current dollars. That is 1.25 pounds per mile per $1 per hour.

A horse pulling a wagon is 1,000 pounds for 6 miles in an hour at the price of one man at $12 and one horse at $1.40 per hour.  That is 167 pounds per mile at $13.40 per hour, or 12.5 pounds per mile per $1 per hour.  The horse and wagon are about 10 times more efficient.

Rail freight costs about 80 pounds per mile at $1 per hour. A rail car goes about 30 miles in an hour. The rail is faster and costs one 6th the amount of a cart and horse.

It is this considerable decrease in transport cost from 12.5 pounds per mile per $1 per hour for a cart and horse to 80 pounds per mile at $1 per hour.

In 150 years we have reduced the costs of cargo by a factor of 6.4.  It now costs less than 16% of what it did then.  That steady reduction in the cost of goods dramatically increased the size of markets, reducing the costs of production too.  Transport costs declined and increased market size and that in turn reduced the costs of production.  Our modern commercial bounty owes much to this specific transport technology.

Air freight express is 3 pounds per mile at $1 per hour.   Air freight goes about 350 miles in an hour.  While air freight is only a little more efficient per mile per $1 than a man walking with a back pack, we wouldn't be eating strawberries from Chile if we waited 15 months for men to carry them to us.

I must now add transport efficiency to the panoply of factors giving us the modern world.

Also a note.  Our dense urban areas have not benefited much from the transport efficiency factor.  I can run across San Francisco in about twice the time it takes to go by car.  

How important is the American lesson?

I spend a lot of time thinking about modern commerce, both currently and in terms of its history.

Since I start out with a different perspective I am generating a different origin.  As can be seen from the title of this blog page I find no comfort in the words 'capitalism' or 'free market'.  To me the former is Marxist haberdashery and the second is ideology.

Modern commerce has three components: trade, industry and clientry.  Each with a different history. Industry began roughly two hundred years ago.  Trade and clientry are as old as cities. Though both have evolved to suit the modern industrial world.

Modern industrial commerce requires four sub-systems to work effectively: meritocracy, diversity, openness and a preference for markets.

It is on these observations that I look back at history and see a different story than most others.  

While I have focused, in the past, on the institutions that came out of 17th Century Holland and migrated to England for the 18th Century, I have moved on.  All the institutions created in Holland were vital.  Holland gave us Amsterdam, with a Protestant optimism,  with a high level of meritocracy, a great sense of egalitarianism,  an extraordinarily high level of diversity with Jews from Spain and traders from everywhere in Europe,especially the liberal Hanseatic lands, a high level of honesty in trade dealings and many original open markets for goods of all kinds including financial goods.

I also recognize the importance of the Masonic order and the innovations in food and husbandry in England.

Nevertheless, it is the three outrageous lessons of America that I look to as the source of modern industrial vitality.  First in the 19th Century then again in the 20th Century.  America and only America brought us this vast treasure of modernity.

• First meritocracy needed a fertile ground.  America and the English colonies  provided that. America and the colonies are where the dissidents and children who didn’t gain from primogenitor moved. They were heavily meritocratic.
• During the 19th and 20th Century they have come from every land on the globe to America.  The meritocratic escaped the feudal, static and tribal societies that constitute most of the earth.
• By 1960, America had dissolved the hereditary elite.  They and their ‘blue books’ were replaced at the tops of corporate America by the meritocratic men who rose to the top in the WWII military.

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• Second, meritocratic families enjoyed the vast open frontiers of America.  They could leave the hereditary elites behind in Boston and New York and move to Seattle, San Francisco, Salt Lake City….everywhere in the West.  There they found the greatest freedom on the planet.  No government, just opportunity.  They slowly created government, democratic government, from the ground up.  Unlike the kingdoms of the world, the grass roots of American democracy favored meritocracy and commerce.
• This happened again in the 1970’s with the confluence of expanded immigration, reduced tariff barriers and the outlaw world of hippies who loved commerce and openness.

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• Lastly, from the earliest days of the 13 States to the great Western expansion, government in America has been weak and grass roots in nature.  This was true in the hippy home of San Francisco too.  This has always been true in America and it allows for incipient new businesses to emerge.

• We can see from the treatment of Uber and Airbnb around the world that government is hostile to modern commerce.  Weak government is an important ingredient in the prosperity of commerce.

God bless America.  She is the fountainhead of modern commerce and global wealth.  Not one iota of the American ‘grace’ was planned.  It was mostly good fortune.

Matt Ridley again

Matt Ridley has published a second great book.  The Evolution of Everything: How New Ideas Emerge.

I’ve recommended Ridley twice before and summarized his material on commerce in his first book here and in a speech he gave here.

Ridley is a brilliant pro commerce author, maybe the only other one.  He gives credit to Deirdre McCloskey for her comparable genius on this pro commerce issue.

Evolution is a long book.  The greatness about the book is that Ridley shows us that both the free market mechanism and Darwinism are the same evolutionary mechanism.

Neither require a god, a direction, a meaning or a designer.  Both are the same mechanism: survival applied to variation.  

Ridley does a wonderful job of reminding us that evolution is what happens not just with biology but also with nearly everything in the human world.  He goes into detail with free market evolution that creates languages, weapons, cities and businesses that we can all see.  He shows that it also includes morals (look at how arranged marriage has evolved into cohabitation and gay marriage), as well as money, education and most importantly: technology.

The book has done one important thing: made me think about the broad scope of human subject matter that evolves.

Unfortunately, Ridley is not a good writer.  He mixes all his personal prejudices, most of which I agree with, into this broad subject.  That is distracting and weakens his argument.

It is now time to think much more broadly about evolution and especially the limits of evolution.  

Governments, bureaucracies and states don’t seem to evolve, because they survive despite their inept and incompetent and inappropriate functions.  They always fail but they survive despite that fact.  What can we say about that?

Politics and commerce

Both politics and the ‘trade’ part of commerce are very old.  These institutions have survived for one reason: they fit perfectly in a zero sum society.

Politics is the allocation of zero sum resources, mostly political power.  It exists wherever humans convene.  Tribes use their complex and intimate networks to constantly re-allocate resources.  (He lost a leg hunting for all of us, we will provide his widow with food.) It can escalate to warfare as it has throughout most of history; particularly when zero sum becomes negative sum. (In drought years the Zuni raided their Pueblo neighbors.)  

The trade component of commerce is almost as old.  It is an effort to allocate zero sum resources to improve resource allocation to get more mutual satisfaction, voluntarily.  (The Zuni traded corn for clay pottery with neighbors.  The Zuni were good at irrigation, others had good mines for clay.)

Thanks to commerce, which uses many unnatural and non tribal elements, such as meritocracy, diversity, technology and open markets, most of us now live in a positive sum world.

Politics and modern commerce constantly come into conflict because one is dealing with the older zero sum world and commerce IS the modern positive sum world.

 

Communist medicine

It is clear to me that the revolutions in medicine and surgery in the past century are entirely the by-product of commerce.  Demonstrating this is a different matter.

Therefore I ask the question: in a century of communism, has any communist country ever developed a significant medical or surgical innovation?  

The Russian communist revolution was nearly 100 years ago.  Over a billion people have lived in communist countries in that 100 years.  Yet no significant medical or surgical innovation has been developed.  

The first life saving innovation was the X-ray.  X-ray equipment was developed in Britain, Germany and the United States.  X-ray machines created General Electric.

From that point, until the end of WWII those three countries were the source of all medical, dental and surgical innovation.  After WWII the locus of such innovation moved almost entirely to the U.S.

The communist countries were always parasites, using innovation that originated in the commercial countries.  Cuba and North Vietnam are still 50 years behind the rest of the medical world.

With the advent of socialized medicine in post WWII Europe, innovation stagnated and nearly all medical and surgical innovation moved to the United States.  The most radical innovation began with the Salk polio vaccine.  Radical emergency medicine was developed on the American battlefield in the Vietnam War. Tamoxifen, the first successful pill treatment for breast cancer came from Britain. One of the great surgical innovations is the catheter lab; developed slowly mostly in the U.S. in the post WWII era.

Commerce and positive mortality and morbidity correlate perfectly.  Commerce is the source of modern health.

 

Today's America is an anti-commerce disgrace

Commerce is fundamentally about meritocracy and diversity. Meritocracy is about individuals. No one can do a particular job better because they are a member of a 'protected victim class'. That goes for teaching black history or being a professional football player. Merit goes only to individuals not to tribes, families or class.

That is even more true of diversity. Diversity is about individual uniqueness not about being a member of a 'protected victim class'. A good group of fashion designers will be made up of people with a wide range of talents including differing esthetic tastes, not different sexual appetites.

The same is true of an engineering team where diversity means different training and a variety of experience. Bell Labs was the greatest research institution on the planet because of the wide range of geniuses that came from every society on the planet. Certainly not based on melanin level or sexual preferences or gender.

Today in America, the Left has adopted a very totalitarian anti-commerce value of arranging society to reflect 'protected victim classes' differences in all institutions ranging from CEO's, boards of directors, employment to home ownership and educational outcomes.

Everything except sports such as football and basketball where the stupidity of this idea is obvious.

This idea of 'protected victim class' is a fairly new one. The idea of equal outcomes for all 'protected victim classes' is even newer.

We have always had hated outside groups: Chinamen, Irish, Jews. The idea of 'victim groups' was first promoted by the American Communist Party in the 1930's trying to divide Americans and gain membership. It gained currency on the Left in the early 1960's as civil rights became a source of political power for 'civil rights victims'. The Left learned that treating all blacks as a class of victims gave the Left power.

That led to the increased fracturing of society with the rise of the women's movement as a 'protected victim class' in the late 1960's. Academia took the lead in expanding the 'false authenticity idea' with black studies departments in the 1970's. The idea has continued to expand ever since then.

The evil of this idea is most visible in the election of an unskilled, untrained, incompetent man as president, and his re-election based on his skin color. The evil was most visible when he asked the black members of Congress to boycott one of the greatest leaders of a democracy to address Congress, and most black Congress-members did boycott PM Netanyahu. Solely based on their own skin color.

It is a sad day in America when a woman who has high melanin becomes 'black' and a 'woman' only when she changes her political party affiliation to Democrat. I'm thinking of Condoleezza Rice a Republican who is not considered either 'black' or a 'woman'.

On the other hand, only Republicans are real people. Democrats are members of 'protected victim classes' with no real personal attributes.

We went wrong when the Left adopted the American Communist Party definition of human group differences: victim classes.

Does commerce need democracy?

There are two parts of this blog. One is on commerce and democracy the other deals with current democracy politics.

What is the relationship of commerce and democracy? I have no final answer. It is historically too early to tell. We have seen an explosion of democracy in my lifetime. From four dozen democracies before WWII, to four score today. A democracy has regular elections and the government involves more than one party. Power is moved to new people based on popular vote.

Some clearly new democracies are Taiwan, So. Korea, most of East Europe, Chile and Mexico. A few that aren't include Russia, China, India and Singapore.

The thriving commercial centers of the world are all democracies, deep democracies, non-extractive economies, like the U.S., Holland, Israel, Germany and Japan.

The problem examples are China, India, Singapore and Turkey. India is problematic because it has a few cities that are thriving commercially with third world socialist infra-structure. China is problematic because it is a thriving commercial society with no democracy. Singapore, where the brilliant Lee Quan Yew, founder, just died, is a thriving commercial center with a socialist infra-structure and very little democracy. Turkey is doing well economically but has gone from a democracy to an Islamic tyranny.

A few healthy commercial societies are socialist, like Canada, Sweden and Denmark. These are very white societies without an indolent black population.

In my lifetime it is possible to say that successful commerce thrives in democracies, but can also do well in other unique situations. A stronger statement isn't possible at this time.

Now politics. The American president Obama, has done something unique in world history. He is the first leader of a great democracy to publicly criticize another democracy. Obama has virulently criticized Israel for 5 years and after the most recent election in Israel has viciously criticized Israel and its re-elected leader.

This act is significant for one reason other than its historic first. An American president clearly shows he dislikes 'democracy'. A democracy is the creation of its people. To criticize a democracy for the results of its election is to say in the clearest possible language that the people of that democracy are not competent to create and run a government.

Further proof that this American president dislikes 'democracy' is his reaction to the 2014 mid-term election where the president's Democrat party was routed at every level of government in the most decisive overthrow election in a century. He promptly signed executive actions to override the new legislators and announced a refusal to work with the newly elected officials.

We have a stunning anomaly: the elected leader of democracy who publicly dislikes 'democracy'.

Modernity

My son recently suggested that most people confuse modernity with commerce. I am trying to create an original connection between commerce and authenticity. 'Modernity' is confusing the issue.

I think the confusion is real. But commerce is substantive and has distinct attributes. Modernity is a vague conception with no stable attributes. At best we can say that modernity is opposition to tradition or rejection of tradition with an overlay of anti-traditional religion.

The reason for the confusion between modernity and commerce is the historic emergence of both at roughly the same time. This emergence was caused by commerce that brought us mass produced elegant dinner ware and stationary steam engines for power supplies. Both are none traditional. Both replace traditional ways of life.

Commerce sprouted a new world of health, abundance, vigor, pragmatism, novelty, technology and the opening for personal authenticity because it is a meritocratic world.

Modernity is merely a commentary on the new commercial world in the form of the arts, architecture and secular consumption values.

To summarize: two hundred years ago commerce brought to the world a new day, a new way of living. It was called 'modern'. Since then the term 'modernity' has been applied as a commentary on commerce. But 'modernity' is neither meritocratic, since it flows from the mouths of anyone, nor is it tied to technology since it is often approved of by Luddites.

Modernity is a rejection of tradition.

Commerce is just commerce moving in its pragmatic way; lowering costs and expanding markets.

Heidegger

Don't worry. I'm not going to write a Germanic philosophic piece to ruin your day.

I had a period where I loved Hannah Arendt's work and that period has passed. That is the only time I paid attention to Heidegger. I always knew there was a deep connection of his work to Nazism. There would have to be. Politics is a subset of worldview.

Recently I read a commentary on Heidegger in Foreign Affairs by Christian Madsbjerg that helped me to realize that Heidegger is an important philosopher of the anti-commerce world. My intellectual nemesis.

Heidegger is a champion of the Germanic 'blood and soil'. You are 100% the by-product of your cultural and historic traditions and proper living is an acceptance of that. This is a perfect statement of anti-commerce and anti-Jew.

Jewish tradition also believes in the power of rational thought and the power of social institutions to accommodate individual character. As a consequence, Jews fit well in a commercial society.

Heidegger is a champion of the tribal world with its intense and deeply intertwined personal relations.

Commerce is a pragmatic world where individual relations are autonomic, ad hoc and open. We commercial people sell to everyone, buy from anyone; we work with the most competent people regardless of their family and we use technology where it works best. Pro commerce and anti-Heidegger.

We find authenticity in following our lives to where they lead us in a multi-complex world of commerce.

Innovations

I'm still focused on the Jan-Feb issue of Foreign Affairs that discussed 'entrepreneurs'. It just missed so much about reality

When using examples of global innovations in technology, that changed lives, their examples seem to focus on Apple products, Google, and Facebook. That is just blindness

I focus on three innovations that don't support the normative values of academia and the notions of popular culture. ( I started to use the term 'mundane' which is a terrible perversion of the word. See tomorrow's blog. )

My three are: Craigslist, Task Rabbit and Google (again for different reasons)

Craigslist is the biggest innovation of our time. It created a gigantic garage sale. Allowing people to buy and sell a spectacular variety of goods, never before possible. I would guess that its reduction in personal expenses and increase in personal product satisfaction has reached 10% of GDP by now. It wiped out newspapers by replacing their 'classifieds'. Print on paper now has half its earlier circulation as the press founders on their death beds.

Most of all, worst of all, Craigslist is and was a hippie operation. Driven by love and joy, determined to do the best job possible. That never makes it into academic or popular writings

Next is Task Rabbit. Just getting started but truly radical. I go to Task Rabbit for small jobs around the house, or for parties or business projects that are short term. People bid on my jobs and list their skills

That is from my perspective. From the workers perspective, they are self employed, no invoices to collect on, infinite variety of work and a chance to work in countless environments and find out what you love doing.

It, like Craigslist is changing the way people run their lives

Lastly, Google. Google started with no advertising. That wiped out all competitors, because the public really prefers life without ads. It became a corporation worth $billions by selling 'listings'. To understand the 'no advertising/business runs on listings' idea you must go to my 1984 book Marketing Without Advertising. Google's innovation was wiping out the world of advertising, about $150 billion worldwide. Like Craigslist it helped ruin the world of print on paper and gave us a direct way to find what we are looking for: Listing

See the world through my eyes; and you see how commerce changes the way people lead their lives. That is where innovation occurs

Lastly I forgot to mention that Apple would be 2% of anything to this day, except that they became open source when they introduced iTunes and let a million people design and sell programs to the public. It fits everything I've said so far about innovation. But doesn't fit the academic/popular models so widely discussed.

Real entrepreneurs aren't

I was just reading the January-February edition of Foreign Affairs magazine which was focused on entrepreneurs and the national climate that encourages them.

In general the articles were reliable and somewhat accurate within the domain of popular ideas.

But my experience suggests it was off the mark because the entire subject is off the mark.

Who am I to talk? I am the founder of the Briarpatch Network, the hippie network of small businesses. I worked as a consultant with more than 1,000 start-up hippie businesses in the San Francisco Bay Area over a decade. That probably makes me the leading authority on this subject now and for a century into the future.

I don't recognize the term 'entrepreneur'. Its bull. Everyone who starts a business is in the same category: a person who starts a business. From this group there is a subset of people whose businesses survive. These are 'small business people'. Among these there is another subset, those who want their business to grow and it does. Those are the people mistakenly called 'entrepreneurs'.

One element that is often omitted in describing people who found innovative businesses. They invariably start in poor neighborhoods (in poor suburbs, these are started in garages). Because neighbors don't call the cops and 'strange goings on' are strange. The tofu business started in just such a neighborhood, so did several electronic companies and many manufacturing plants from wind generators to pot pipes.

The two elements that are always overlooked on the subject of start-up businesses: up-beat and outlaw.

Everyone who starts a business is up-beat and they are usually in an up-beat environment. You have to be up-beat to face the daunting task of facing the odds against succeeding. I never see that stated clearly and blatantly. I suspect that when the national mood is down-beat, not many businesses get started. The hippies started more new businesses than any group on earth, or anytime in history. They were astoundingly up-beat and intended to create a new world. A new world with new food, clothes, technology, new governance, religions and everything else.

The hippies were also outlaws. Not just because of drug usage but in their outlook on the surrounding society. Nearly every start-up business I dealt with began without a license, without paying taxes or any of the legal fees including withholding taxes or workers compensation. After they got going and knew they would survive they became legal.

It is the outlaw quality that is usually overlooked. People who risk their lives in starting a business are not conformists who could get a salaried job. They are defiant. A quality that makes for an innovator.

That's my experience.

Several of my start-ups became global corporations. Their stories are varied. Body Shop is just one example. Three women started a cosmetics business called Body Shop based on their hippie ideas of safe and healthy ingredients. They had good design skills. A British woman copied every detail of their business and grew it to a global scale. She then went back and paid the three founders a reasonable lump sum settlement.

Another global business example is the modern bicycle... I'll save that story for another time.

Next time you hear the word 'entrepreneur' question the term and note that the user has ignored the requisite up-beat qualities needed to start a successful business and the outlaw origins of most innovative businesses.

Real productivity and the smartphone

My good friend Alex asked me to comment on the role of the Internet in producing greater efficiency. He points out that  products we used to order took two weeks to be delivered, even across national boundaries; they now arrive in two or three days.

We don't have any adequate measures of productivity. The productivity measure you see in the newspapers is a residual of dividing revenue of industries by the number of workers in those industries. As these numbers diverge we have greater productivity reported to us.

You can see the problem with this. It is crude. It is gross and it is often years after the introduction of the productive elements in that industry. This measure makes it impossible to identify specific sources of increased productivity.

My experience of working inside individual businesses is that there were two extraordinary increases in productivity that occurred in the early 1980s. One was in telecom due to the fax machine and the telephone answering machine which allowed commerce to proceed on a global 24-hour schedule. The second was the introduction of delivery services that were truly rapid, such as FedEx, UPS and DHL.

I watched as people worked longer hours, worked much faster and much harder simply to keep up with the flow of material and paper that was moving faster around them.

It is from this experience that I conclude that anything that shortens delivery time between information from individual to individual and material passed from individual to individual or business to business is inevitably going to increase productivity.

The first people I saw buy portable phones, called car phones at the time, were the most productive people at high ranks in corporations and self-employed people who frequently worked in their cars.

From all of this. I conclude that increased speed in communications and materials results in increased productive output.

I know there are restrictions and limitations to this statement.  People have a limited number of hours to work as opposed to sleep and people have a finite amount of energy. But I have certainly seen productivity gains in communication and supplies translated into exhaustion of available work hours and energy. I have also seen some nonproductive uses made of these new tools.

I think improvements in communication and supply are of great productive significance.

Our better world

I am particularly grateful to Steven Pinker, a professor at Harvard, who is continually publishing material showing that homicide, murder and death from military action has been in a steady decline for centuries.

Our individual worlds have not only gotten safer from other humans. At the same time our world has gotten safer from our long-term enemies: the microbes.

This article that appeared in Slate makes the point that there are several long-term improvements in addition to Pinker's specialty of intra-human attacks.  Good.

I would like to point out that in the past 200 years we have also conquered most microbes, many hereditary physical deformities and we have wiped out hunger and famine in 98% of the world.

While Pinker won't say it and neither will the rest of the Lefty world, all of these improvements in our lives are attributable to the rise of industrial commerce.

If we take a pro-commerce stance we will witness even more rapid improvements in the human condition, domestically and worldwide.

Source of modernity

There has been recent discussion in France about the origins of modernity. There seems to be a great effort on the part of the French to give this honor to the Greeks. The main locus of their idea centers on the Greek polis, the Greek City, and how it was run, with diversity and focus on individuals.

Pshaw. (That seems to be a word that has fallen out of use. Too weak.)

The Greeks had the diversity found in cities. Found in nearly all cities worldwide where there is international commerce. They were still tribal and hierarchical based on family and heredity. I see no evidence of meritocracy except in athletics. Again, a near planetary universal.

No folks. Modernity comes from one thing and one thing alone: industrial commerce. Industrial commerce brings meritocracy to the diversity already found in cities. In the case of the United States, in its middle stages (1960's), meritocracy combined with industrial commerce destroyed the hereditary class.

Full blown modernity has still not arrived. We have Leftist parties all over the world and Islam, fighting it. We have unions staunchly opposing it. Modernity is the world of miracles. Abundant food, extraordinary pleasures, unique individual genius triumphant, the end to nearly all illness and disability and a daily vitally that is still unimaginable.

The Greeks made a modest contribution but the primary contributor has been the United States and more recently Japan and Israel.