Synergistics and Economics

Buckminster Fuller’s philosophy has had a big impact on me. Like Viktor Frankl, Fuller discarded the prevailing wisdom of his day (scarcity in the case of Fuller, existential angst in the case of Frankl) and presented an answer so rational and human that we wonder why we didn’t see it ourselves.

Fuller basically proved that scarcity is a sham; a point which is increasingly less controversial. But despite the dripping excesses of western technological culture, we see that people give up their freedom by squandering future-coded time and money, and then spend most of their lives doing things they don’t want to do. And people all around the world still struggle with subsistence.

Why is this?

While the concept of personal property implies a degree of exclusivity, I’ve always felt that free market economics was compatible, and even conducive to synergistics. When two parties enter into a voluntary exchange, both parties benefit (otherwise the exchange would never happen voluntarily). In essence, any exchange creates a net increase in human happiness, ?out of thin air?. So encouraging more such connections should raise overall human utility.

But people in free markets don’t get a pass. An autoworker might spend more on his vacation that the average Indonesian makes in a lifetime, but when his income takes a hit due to layoffs, he may experience more strain in his health and relationships than that same Indonesian who is still making far less.

This is, in part, why I have such a problem with the idea that ?positive interest rates are explained by time preference?. The theory presumes that consumption patterns have something to do with necessity; and therefore, scarcity. But in reality, people’s consumption patterns are about as related to necessity as stock price was to earnings during the bubble days. The theory also depends on the idea that people are motivated to maximize consumption over a period of time; something which seems backward to me (time is the high order bit, not consumption).

On the other hand, if you claim that positive interest rates are a symptom of human’s nature to squander future time and money unwisely (i.e. ?time preference? is a code-word for ?poor judgment?), I might agree. But this, too, is incompatible with Synergistics. If scarcity is dead and getting deader, it shouldn’t matter how much you eat or when. And even in systems where scarcity is a reality, improved education and changes to the commercial regulations would theoretically encourage stable collective burn rate and buffer.

Ultimately, I come to the conclusion that the economists really don’t have a clue, and this theory is just some convenient handwaving used to keep bigger theories consistent.

But then again, I’m not an economist. Zimran Ahmed has corrected my broken thinking before, and today he takes on Peter Drucker‘s ?4 economies?. It’s eye-opening, although I wonder about the assertion that U.S. economy is only 10% import/export and most of that with Canada and Mexico. That is just shocking to me; I know it is not true for Microsoft or many other Fortune 500.

The Web Outliner for OPML?

A couple of years ago, someone e-mailed me saying that they had taken my JavaScript Outliner (sample) and built a bunch of additional features into it. I would really like to try doing more of my outlining in a web browser now, and I like the Radio UI. However, I can no longer find the pointers to this application. If anyone reading this knows where the tool is, please post in my comments section.

Book Review: Confessions of an Economic Hitman

I recently finished reading Confessions of an Economic Hitman. In this book, John Perkins writes about his career as a self-described?Economic Hitman?. Essentially, Perkins worked for a contracting company where he produced fraudulently inflated economic forecasts to justify large world bank and IMF loans to governments purchasing his company’s services. His company was the (erstwhile) MAIN, an infrastructure contracting company similar to Halliburton, Bechtel, or SAIC, where I used to work. These companies do large public works projects for governments around the world, in addition to other work.

The book starts out really strong, making you think that you’re about to read a tell-all expose of conspiracy on grand scale. In the first few pages, we read about a young John Perkins mentored by a mysterious woman who ?may or may not have worked for NSA?, and as he embarks on his first job as an ?EHM?, we expect the plot to thicken. But then, suddenly, things get boring. The rest of the book is a mildly dramatized tale of his involvement in projects over his career. No first-hand accounts of conspiracy, no direct involvement with NSA, CIA, or any other mysterious figures — just a ton of work on economic forecasting and project bids for foreign governments. Perkins doesn’t shy away from providing his own personal speculation and opinions about the events he witnesses, and cites historical examples of CIA manipulation in Central and South America. Butas an expose the book falls flat.Instead of conspiracy, he makes a more subtle argument, arguing that people like him are indirectly used as soldiers for the empire.

He even avoids the ?just following orders? arguments of the Nazis, going to great length to explain that he was never acting on orders, and that he acted mainly out of self interest. He spends a lot of time in the book arguing that he never really knew the full extent of what he was doing, and only at the end of his career realized that he had been used as a soldier. Or more accurately, he reports that he struggled with guilt, but only acknowledged his ?little Eichman? status after becoming fabuously wealthy and playing it for all it was worth.

On the other hand, the lack of direct evidence makes the book much more credible to me. He is usually careful to qualify his statements when he is speculating versus reporting facts, and the facts he reports are consistent with what you would expect from someone in his position in that line of work. In fact, from a pure factual standpoint, it is rather boring — many people in similar work probably have more colorful stories to tell, and Perkins seems sophisticated enough to stay away from direct revelations that would open him or hiscronies to any sort of prosecution. The book comes across as a rather sanitized (even boastful) account of a single man’s career, peppered liberally with political opinion.

Using anecdotes from his career, Perkins attempts to argue the following points:

  • World Bank and IMF debt help U.S. contractors and local despots more than the local populations. The debt is used as a lever to get developing nations to support U.S. political aims.
  • U.S. foreign policy is about self-interest of the empire; when debt fails as a lever, the U.S. uses coups, assassains and eventually war.
  • The people who profit from the empire are totally intertwined with the government.

From these premises, Perkins leaps to the conclusions that Americans should get used to conservation anda significantly reduced standard of living, ostensibly to mitigate the damaging effects of the global empire.

While I partially agree with his conclusions (but for a different reason), and agree that mercantilism is a driving force in western politics, I think Perkins presents a very incomplete picture.

For starters, he acts as if the U.S. is the sole power playing these games. He discusses the Middle East, South/Central America, and Indonesia, but fails to mention competitive nations’ involvement in these spheres of influence; and misses entirely other important spheres of influence. He portrays Panama’s takeback of the Panama canal as a huge victory for the people, but completely ignores the subsequent expansion of Chinese sphere of influence into this zone. If he thinks that there will ever be a time when mercantile powers don’t vie for control of spheres of influence, he’s crazy, and if he doesn’t, he’s simply arguing that the U.S. should lay down slowly and make way for a new master.

Furthermore, he waits until the very last chapter of his book to acknowledge that the U.S. is relatively vulnerable in the battles as well. While he argues that it’s the fault of the U.S. for the massive outflow of credit since WWII (as if the people borrowing the money from world bank and IMF didn’t have their own economists, or didn’t act out of self-interest), he seems to place no such blame on the lenders for the massive accumulation of debt by the U.S. in recent decades. He explains that the U.S. is in debt up to our eyeballs, and that the U.S. standard of living is pretty much dependent on the whims of foreign investors — strangely, he does not identify these foreign lenders as ?economic hitmen?. If the dollar is deposed, as he predicts, it would certainly lead to a reduction in the consumption patterns of Americans; so perhaps he’s just arguing that we cut our consumption now and pretend that it was out of altruistic motives (to protect the rainforests or something). Or maybe he’s worried that a plummet in the dollar would lead Americans to jingoism and spark WWIII, and he hopes to turn us all into birkenstock-wearing environmentalists before that happens. Or maybe he’s just worried and doesn’t know what to do.

In any case, he’s not the typical conspiracy theorist anti-globalist, and he comes across as relatively sincere and honest. So, on balance, I would recommend the book.

China Democracy?

Marginal Revolution points to a study whichattacks themyth that prosperity leads to democracy.

With respect to China, I’m increasingly puzzled that we ask the question at all. Many Chinese are convinced that they do vote for their leaders. I read about elections all the time in People’s Daily.

Of course, I’m just making a point, since I realize that American elections are conducted a little bit differently; but it’s a good point. Nobody would argue that America has a true direct democracy either. So it’s a matter of degrees.

One starts to think that the American press has a rather subjective and even fickle definition of what constitutes democracy. It seems that the definition of democracy is based far more on political attitudes in the U.S. than actual reality on the ground in the country of question. For example, we all agree that Saddam vote is not democracy, and America is. But the press seem to agree that Palestine vote is democracy, but only as long as they behave — and Lebanon will be, only given that Syria moves out. Maybe the only thing separating China from true democracy is a few tweaks to the party system and payoffs to the right U.S. senators.

Regardless, when you realize that the press-sanctioned definition of ?democracy? is so wobbly, it starts to seem pretty stupid to breathlessly speculate about ?will economic growth lead to democracy?.

Crossfader

I finally took a good look at Crossfader. This thing is HOT! How the heck did they convince DJ Spooky to do a spot for them? Eric Schmidt used to work in WebData with a number of us blog diaspora, and we bothhad a passion for good techno and spinning. He is much more talented than I, and spun at a local club. He told me once about his idea to do something web-oriented sort of like the vinyl list sharing in the pre-net days. I never imagined he would be able to doit as part of his day job at Microsoft! I’m really amazed at the scope of the site; this is a big project. Now there goes another slice of my free time…

Who Was a Rat?

[via doc] www.whosarat.com, should be called who was a rat, since it lists agents and informers who are already compromised in other sources. But it is an interesting take on the ?Committee of Gossips?. When the semantic web makes it possiblefor everyone, like Stasi,to rat on everyone else, people will fight against it and try to control the flow of information. But the answer is more information. Let everyone rat, but make the rats stand up in the sunlight too.

Will Blogging help a Realtor?

Roland Tanglao is discussing the value of blogging for a Realtor. The realtor claims that there is no gain for realtors in blogging, even with high Google rank.

When I looked at the Realtor’s site, I could see why he says that. I might go to a Star Trek convention with the guy (if I did that sort of thing), but I wouldn’t depend on him to help me buy or sell a house. Nothing personal; the guy seems like my kind of geek. He just doesn’tseem likesomeone who is passionate about becoming a kung-fu master of the real estate profession.

Just like some real-estate agents use e-mail very appropriately to stay in touch, many real estate agents benefit from a web presence, and a blog can be a good tool for this. Good real estate agents don’t need to go prospecting for clients; they get their business through word of mouth. Word of mouth referrals come from satisfied clients, and having a blog is one low-cost way to keep the relationship alive long after the sale. It’s an easy way for current clients to refer you — although the majority of clients may not be aware that you have a website, for the ones who know, sending a URL is much easier than digging up a business card.And to top it all off, you can use your blog to help as you establish a niche (much more effective that blanket cold-calls or open houses). For example, my real estate agent is especially good at finding homes for people who are relocating for work, very busy, and don’t know the neighborhoods yet. If you’re moving here from out of state, do you want some random realtor from the yellow pages, or do you want someone who knows what it’s like for employees at your company and can show you everything you need to know to ensure you settle in comfortably? Having that niche is worth a steady stream of referrals; several from me to friends already. Real estate agents should use their blogs or websites to recommend trusted contractors, too. This is how I first hired ?Larry the Circuit Detective?, another guy who understands how to market a niche. Again,I doubt that Larry gets the majority of his customers from people who find him randomly on Google, but the web site is brilliant. Imagine that Larry just helped you troubleshoot a really strange electrical problem, and gives you his business card. You see the interesting URL and decide to visit it — yeah, he isn’t just an electrician, he’s a circuit detective! Next time a co-worker starts telling you about a basic wiring job, you might not even think of Larry. But if your co-worker starts complaining about a really strange electrical problem, the first thing that pops in your mind is ?I know this circuit detective guy; let me find his site for you!?.

In short, if you’re a realtor using your blog as a way to generate leads, that’s going to be pretty weak. And, on the other hand, if your idea of having a relationship with your clients is to blog what you ate for breakfast, lunch, and dinner, pour out your soul about your kite-flying passion, and put up pictures of your cat, that’s going to be really weak too. But somewhere between those extremes, blogs can be a great tool to stay on clients’ radar and help communicate your professional image.

The War is Over (WS-* vs. POX/HTTP)

For a few years now, we have seen two camps warring over the future of the Internet. On one side, we have the people who believe that WS-* specifications such as SOAP and WS-Security will eventually dominate. And on the other, we have people who believe that HTTP with plain old XML (POX) will outlast the new contender.

I am announcing that the war is now over, whether the participants realize it yet or not. Niether side won; but they have established clear territory for themselves and will soon be giving up on taking over one another’s territory. Here is where I think they will be when the dust settles:

  • WS-*: The WS-* stack is about deep enterprise integration. It tackles problems that enterprise architects care about. It requires that integration endpoints support a common set of protocols; a requirement that becomes increasingly complex as the size of the stack being used increases. The number ofdevelopment platforms and client platforms which support SOAP is significantly smaller than the number which support XML. For each additional layer of the WS-* stack, the reach gets smaller. So the stack is best suited for scenarios where you have a high degree of control over the integration endpoints, and where you care about all of the additional CORBA-like features you get. WS-* is Biztalk, WebSphere, etc.
  • POX/HTTP: HTTP + POX is about ?reach integration?. Pretty much every developer in the world can work with XML and HTTP. Nearly every client has support. You need almost no control over a partner’s endpont to allow him to integrate with you using HTTP redirects, querystring parameters, and form fields. This is why reach scenarios, where you want to integrate with thousands of partners, use HTTP or POX over HTTP. The WS-* advocates have argued that this sort of lightweight integration is insecure, but you need only realize that sites like PayPal, BitPass, and Passport use HTTP redirect with no WS-* for reach integration scenarios, and it works fine. POX/HTTP is MSN, Google, Yahoo.

Supposing I’m right, I see a couple of obvious implications of this:

  • Complimentary: An app which exposes querystring APIs to mass end-users may use SOAP under the covers to integrate with other systems. In fact, I see a lot of this ?under the covers? use of SOAP.
  • Microsoft Can’t Ignore Either: Microsoft needs to support developers using both models. Enterprise revenue is great, but so is reach web integration. We need thousands of medium-cost integrators and millions of low-cost integrators. For example, SQL Server is definitely an ?enterprise? product, and has several ways to interact with the server using WS-*. But one of the first features out of our SQL Server’s XML team was ?XML Views?, which expose a relational database as a virtual XML document. Everything in the database becomes an accessible URL, and developers of HTTP/POX solutions can interact with the database without writing any code (beyond some JavaScript, maybe). Enterprises who buy SQL Server can count on good support for depth integration, but they also have a pretty simple way to extend their investment to ?reach? partners when necessary. It would have been a huge mistake to de-emphasize either model in preference of the other.
  • Tools Support: One of the recurring themes of Hailstorm was that ?mom n pop? would be able to use VB to integrate their website with services such as an authentication system, payment gateway, directory, or content download metering service. However, we were aiming too low on usability. You can integrate with PayPal or BitPass by cutting and pasting some JavaScript — installing and running Visual Studio is much harder. Look at del.icio.us and flickr bookmarklets, and ask yourself if it would be easier for mom-n-pop to use Visual Studio instead. Jon Udell has created a virtual bestiary of evidence that you can do amazingly simple integration of web services using HTTP and POX without needing Visual Studio or WS-*. Furthermore, if I am correct that WS-* is best for depth integration, then you don’t need cut-n-paste simplicity for WS-*. You need tools that target enterprise architects (and mort), not mom-n-pop. In fact, what you really need to be worrying about is making it easy for the Visual Studio developer to create apps that mom-n-pop can integrate with. If I write a big chunk of code and you tell me that only other enterprise architects can integrate with it, I might ask why. I might ask, ?why is it so easy to integrate with Flickr; what development suite did they use??

Corporate Blogging

Last week, Shel Israel interviewed me for the book that he and Scoble are writing, code named ?The Red Couch?. He wanted to talk about my being the first corporate blogger at Microsoft, and the impact of blogging both internal and external to the company.

First, while I think that we had to overcome some initial roadblocks, we didn’t have to change anything fundamental about the company to enable employees to blog freely. I never would have started my blog (or I would have worked elsewehere)if I didn’t believe that blogging was compatible with the company culture and would inevitably become common. Microsoft might be more open than some companies in this respect, but I also think that companies who try to choke off information flow are the exception rather than the rule. So I believe that most companies would be similar — initially hesitant, but ultimately receptive to blogging. One of Shel’s themes was blogging in smaller companies, and we both agreed that blogging is probably more important to smaller companies than for larger companies.

Next we talked about how blogging has changed Microsoft internally and external perceptions. Blogging has had a number of benefits already cited by people like Scoble; better hires, better feedback, information dissemination, etc. I also think blogging has contributed significantly to softening Microsoft’s image, but primarily among people who follow technology blogs. There are certainy many other things Microsoft has done, cooperating with former rivals, tweaking business practices, etc. which contributed more on a broad scope.

~

Recently we’ve been having internal discussions about ROI and ?metrics? for blogging, and I’m seeing that people have divergent opinions about what constitutes blogging. As corporate blogging becomes more mainstream, many traditional community outreach activities such as newsgroups, e-mail newsletters, and event communiques are appropriating blog technologies. But I don’t think of these as being ?blogs? — these are newsletters delivered via RSS, or in the case of ?group blogs?, simply a portal which aggregates other blogs. Portals and newsletters are just portals and newsletters, regardless of whether or not they use RSS. Metrics and ROI for these things are well understood. To me, a ?blog? is a personal, unedited, and authentic journal of a single individual who you come to know over time. Hosting a blog is like having dinner with some people you meet at a conference, frineds, neighbors, or whoever. While we encourage employees to be active in their communities and interact as much as possible with peers, customers, and so on — and we selectively hire for such engaged people — it’s difficult to put a metric on ?played golf with some customers?. To me, blogs in the truest sense of the word are just like that.