29 November 2011

Edison's Most Important Invention, or Time to Sponsor Social Invention

It's hard to choose which of Edison's inventions was most impressive. He had 1,093 US patents for products as varied as the light bulb (which became a symbol of innovation), phonograph, radio, and even something akin to a motion picture projector. 

I think that his biggest invention, though, was something completely different. As it turns out, Edison did not "invent" all these things. His really big invention was the first industrial Research & Development lab. Edison did not share credit with his employees and lived in a time when people were more ready to attribute inventions to a single genius than a group of cooperative scientists and engineers. What we think of as Edison's inventions were sometimes his own and sometimes his employees.

The R&D lab was a social invention that allowed a plethora of technological inventions. And Edison's lab became a model for in-house R&D labs that sprung up within modern corporations and universities that were themselves social inventions. With the R&D lab, we institutionalized technological innovation.

Technological invention is a novel design that allows parts to do jointly what they could not do on their own.
A social invention is a novel design that allows people to do jointly what they could not do on their own.

Both social (banks and stock markets) and technological inventions (steam engines and trains) have the potential to enable. 

Edison's lab was not the first social invention that spawned so many technological inventions, though. In 1623, England passed a law that granted monopoly powers to technological inventors, what we now call patent law. Within a century, in 1699, the steam engine had been invented and the industrial revolution began. 

The result of the industrial revolution? The first per capita increase in income in about 6,000 years. Social invention is as important to progress as technological invention.

Edison's lab marked a huge shift, from merely encouraging invention (with patent law) to actually sponsoring invention (with R&D labs that made invention normal work). 

In the West, we no longer violently resist social invention, as we did with the invention of new forms of church and government during the Protestant Revolution and democratic revolutions. We encourage social invention in the business world, encourage and reward entrepreneurs. What we don't do, though, is sponsor it. That is, in terms of social invention we are closer to the conditions for technological invention prior to Edison's R&D lab. 

Given how much social invention can change and improve lives, perhaps it is time that we moved from merely tolerating or encouraging it to actually sponsoring it. And maybe the big social invention that could help with this is getting serious about turning our corporations into business incubators and changing the role of employee to something more akin to entrepreneur.

And yes, this is one of the big ideas behind The Fourth Economy: Inventing Western Civilization. 

27 November 2011


Suddenly, everyone realized that they had all the stuff they needed and had heard all the stories before.

But after a couple of weeks, bored and unsure what else to do, they one by one turned their TVs back on and returned to the malls.

21 November 2011

No Super Heroes on this Super Committee

There are only two questions Congress should consider: how do we create jobs and how do we raise living standards.

It is absurd to take on the question of how to reduce the deficit. With unemployment at 9%, it's stupid to raise taxes or cut spending. And given that unemployment is unlikely to drop to 6 to 8% before this Congress has finished its term, they can't make any progress towards deficit reduction anyway. Today's Congress cannot commitment a future Congress (if they could, the pre-Civil War Congress could have committed all future legislatures to uphold slavery).

Deficit reduction is a problem for tomorrow's Congress to solve. Job creation and GDP growth is a problem for today's Congress to solve.

The Super Committee failed to reach an agreement that would solve the deficit. So what. It would have all been promises that only future Congresses could have kept - and you can guarantee that those future Congresses won't be coming to Washington just to implement someone else's plan.

That deficit reduction during a recession has become such a huge issue is reminiscent of the push to invade Iraq. Austerity economics during a recession is an inane idea and yet we've somehow found ourselves unable to talk about anything but.

20 November 2011

Business or Politics - Which Makes the Biggest Difference?

Want to know one reason that daily papers face diminished readership? They focus on what the average person knows to be issues of diminishing returns.

Imagine someone making $40,000 a year.

In one scenario, they get a new president who lowers their taxes by 2 percentage points.

In another scenario, they get a new CEO who raises their salary by 2%.

The impact on after-tax income in the first scenario is about $100. The impact in the second is nearly $700.

And this does not even delve into the myriad policies changes having to do with issues like leave time, opportunity for advancement, equity sharing, and the ability to influence the (positive or negative) impact on the community.

Throughout the West, changes in management and policy at the level of employer will make a bigger difference than changes at the government level. And this belief about the diminishing returns to a focus on government policy vs. the advances that could accrue from a focus on corporate policy is one of the reasons that I wrote The Fourth Economy.

18 November 2011

Heisenberg's Political Uncertainty Principle

Heisenberg's uncertainty principle adapted to politics:
You can make sense to people or you can make sense of the world. The more that you capture and explain the complexity of reality, the less you make sense to the electorate; the more that you make sense to the electorate, the less accurately you explain reality.
Thus, the tension between successful policy and successful politics.

16 November 2011

Bachmann's Brilliant Idea on Iraqi Reparations

The GOP gaffes come so quickly that something that may have garnered attention in a normal year gets completely overlooked. For instance, in last Saturday's debate the sometimes lucid, sometimes inane Michele Bachmann indignantly demanded that Iraq compensate us for the expenses we incurred invading and occupying Iraq.

To put this in perspective, Iraq's annual GDP has risen to about $80 billion, still about $20 billion short of what we spend each year in the Iraqi occupation. So she not only thinks they should pay us back for all the bombs we dropped on them but she thinks that they could?

Not just a terrible idea but an untenable one. And perhaps that should be the motto of so many of these GOP candidates: our ideas shouldn't threaten you because there is no way they will even work.

15 November 2011

Arthur Rubinstein on Life After Attempted Suicide

Sounds similar to the wonderful Buckminster Fuller.
And then I find this wonderful quote:
"In the midst of winter, I found there was, within me, an invincible summer." -Camus
(Thanks @vanillabean45 )

14 November 2011

Jimmy Kimmel Takes Candy from Babies. And that's hilarious. Seriously. So stop your crying.

10 million hits for Jimmy Kimmel's video  in which little kids were told by their parents that they'd eaten all their candy. Hilarious. I can hardly wait for the one next week in which people are told that their spouse has cheated on them. And then people at the doctor are told that they have cancer. Could be a whole series. Should be a riot.

Socrates, Buddha, Jesus, & Muhammad Never Wrote a Word

Bernard had been drinking. His eyes were watery and his grin sloppy. He was preparing for Thanksgiving with family. I was his designated driver. When he is drunk, Bernard seems to be in one of two states - giddy or quiet. He'd been quiet long enough that I thought I'd risk his becoming giddy by asking a question. As it turns out, no topic is sober enough to counter a drunken Bernard.

"Have you noticed one thing that Socrates, the Buddha, and Jesus have in common?" I asked.
Bernard began to chortle. "No! But I do know what John the Baptist and Winnie the Pooh have in common," and then he dissolved into laughter.
"What," I groaned.
"Same middle name!" he doubled up in laughter, nearly hitting his head on the table.
I was trying to feign tolerance but in fact I had to laugh. "No," I shook my head. "Although I guess this is true of Winnie and John as well. Have you ever noticed that Socrates, Buddha and Jesus never wrote anything?"
"No," Bernard confessed.
"At least, as far as we know. They just wandered around and taught people. And yet look at how long their teachings have lasted," I said. "Look at how much impact they have had on people's thinking for thousands of years."
“Same with Muhammed,” he called out from the backseat.
Muhammed didn’t write anything down,” Bernard said. “Add him to your list of great, unpublished teachers.”
“Wow,” I nodded. “Socrates, Buddha, Jesus, and Muhammed.”

"Oh, Ron," Bernard giggled, "did you hear about Buddha's lost teachings?"
"No," I replied.
"Everyone knows that the Buddha taught that want is at the root of unhappiness," and Bernard began to giggle some more. "Did you know what he taught is at the root of happiness?"
"No," I repeated.
"Wanton!" And Bernard giggled at his wit. "Want makes you unhappy, and wanton makes you happy! Get it?" And again he laughed. Bernard is, to his credit, a cheery drunk.

"That's very witty for a man who slurs his words, Bernard. But seriously, doesn't this call into question the whole model of writing as a way to change people's thinking. I mean, doesn't this seem to you like some kind of indictment of writing?"
"Maybe," Bernard bobbed his head while wrinkling up his bottom lip. "Or maybe it just proves that you can't focus on getting published and changing the world at the same time." And again he laughed.

Then Bernard sounded very sober. “Well think of this. Three major religions – Jews, Christians, and Muslims – call Abraham their father and yet he didn’t write a thing.”
“Abraham is another I didn’t think of.”
“And think of this,” Bernard said. “All three groups have given birth to religious people who are considered ‘people of the book.’ That is, people who define a great deal of their religion by reading scripture. And yet given none of it would have been written in Abraham’s time, he couldn’t have defined his religion that way. Maybe all three religions have killed religion by putting it into books.” And then he giggled, throwing what I thought was a good insight into doubt.

"I guess," I said, actually considering the possibility that he was serious in spite of his giddiness.
"Or it might just prove that if you write things down you make your message harder for future generations to co-opt and call their own. Precision makes popularity less probable," he said with amazing precision for one so bleary eyed. "If you want to be happy, be wanton with your words Wonald," he laughed again. "And if you want to have an impact, don't write anything down. Leave other people creative freedom to change your words so that lots of people take ownership of them."

"Too late," I said shaking my head. "I've written hundreds of blog postings."
"Ha!" Bernard snorted. "You call that writing?." And then Bernard tilted his head back and laughed loudly.

(revised and updated from Nov 2009)

10 November 2011

Name Confusion

An old friend was born in Norway and is named Sveinung – but he goes by Sven. He shared this the other day:

So I says, “Hello Marvin, I’m Sven.”
Marvin says, “Swen?”
Me, "Sven."
“Oh, Vance?” questions Marvin.
“No. It’s Sven,” I say.
Marvin shakes his head and mutters, “Tell my wife, bad ear …”
His wife says, “I’m Judy.
I say “I’m Sven.”
Judy says, “Hi Stan,” and mutters, "that wasn't so hard"

Markets and Irrigation

It's worth knowing where the rain falls and rivers run. But that needn't be the final word on the distribution of water. Irrigation was one of the first inventions to allow what we know as modern civilization.

Markets distribute profits and income. That's good to know, but it needn't be the final word on its distribution. Distribution of income may, in fact, be one of the things that first made civilization civilized.

07 November 2011

The Simple, but Sweeping, Answer to the Question of How to Create More Jobs

We can continue to try repairing the old economy or we can create a new one.

Financial crises, stagnant wages, persistently high unemployment, protests, and growing government deficits coinciding with a loss of government jobs are all legitimate problems in their own right, but they are more likely symptoms of something deeper. We’re living into one of the four biggest economic transitions since the Dark Ages.

Since about 1300 CE. a pattern of social invention and revolution has created three economies:  an agricultural, an industrial, and an information economy. And that pattern is now repeating to create a fourth, entrepreneurial economy.

These changes we’re experiencing are different from normal business cycles. This is bigger.

The last shift in the West – beginning around 1900 - took us from an economy led by advances in capital to one led by advances in knowledge work, a transition from an industrial to an information economy.

Progress from about 1700 to 1900 came from dramatic increases in capital: steam engines, factories, stock and bond markets, and banks were invented or recreated and the communities that increased capital the most advanced the most.

Progress from about 1900 to the present followed from the rise of knowledge workers: inventions like the modern university and corporation, and radical advances in information technology helped to create an information economy in which companies making virtual products often became more valuable than those making “real stuff.” Communities that ignored the question of how to create more knowledge workers and make them more productive, and just focused instead on capital, were left behind. When the limit shifts so must the focus.

The emergence of each new economy has forced a revolution in the dominant institution. This is no small thing. The power of elites over the institution is dispersed outwards. People once used as tools by the institution begin to use the institution, instead, as a tool. “We are all priests!” Martin Luther declared, overturning the notion that religion was something to be defined by the pope. The first economy, from about 1300 to 1700, was catalyst to the Protestant Revolution. The second economy, from about 1700 to 1900, brought us democratic revolutions. The third economy, from about 1900 to 2000, democratized finance as knowledge workers’ pension funds and 401(k) funds came to define investment markets.

This new fourth economy will likely transform the corporation – today’s dominant institution - in similar ways. Most obviously, the role of the employee will become more like that of an entrepreneur.

The simple, but sweeping, answer to the question of how to create more jobs is that we need to become more entrepreneurial. The question of how we become more entrepreneurial will first be answered within the corporation. 

Depending on how one measures it, corporations make up between one third to two thirds of the 100 largest economies in the world, yet very few of them encourage entrepreneurship.

Developed countries are considered lands of opportunities where people can expect to make more than heads of state. (About 6 million Americans make more than Obama.) By contrast, corporate employees are about as likely to make more than the CEO as past citizens of Iraq, Libya, or 17th century France were to earn more than Saddam, Kaddafi, or Louis XIV. Such restraints to opportunity and autonomy suggest huge gains could follow from democratizing corporations and creating more entrepreneurial opportunities for the employees within them.

Our media and attention is fixated on political – and sometimes financial – changes we could make to create jobs, but it may turn out that such changes are merely incidental to the scope of the changes needed within corporations.

Despite initial appearances, we’re living in a time of incredible opportunity. Shifting our focus to overcoming the limit of entrepreneurship will mean advances as dramatic – and at times as disorienting – as those of the last three economies. (And if you’re a student of history, you realize how very dramatic that is.) An entrepreneurial economy is ready to emerge. Millions of new jobs depend on today’s communities redefining the corporation as dramatically as past communities redefined church, state, and bank. The fourth economy is ready to emerge but it’s not something we’ll see as long as we stay focused on trying to repair the third economy.

Ron Davison has consulted to some of the world’s largest corporations and is author of The Fourth Economy: Inventing Western Civilization, available on amazon.com. 

05 November 2011

Montaigne on Trusting the Simple Man

This man I had was a simple, crude fellow - a character fit to bear true witness; for clever people observe more things and more curiously, but they interpret them; and to lend weight and conviction to their interpretation, they cannot help altering history a little. They never show you things as they are, but bend and disguise them according to the way they have seen them; and to give credence to their judgment and attract you to it, they are prone to add something to their matter, to stretch it out and amplify it. We need a man either very honest or so simple that he has not the stuff to build up false inventions and give them plausibility; and wedded to no theory. Such was my man; and besides this, he at various times brought sailors and merchants, whom he had known on that trip, to see me. So I content myself with his information, without inquiring what the cosmographers say about it.
- From The Complete Works by Michel de Montaigne, translated by Donald M. Frame.

04 November 2011

At the Life Counter

"Yes," he says, rather tentatively. "I'd like mine with more honesty, meaning, and love, please."
The guy at the counter - who strangely kept changing appearance almost like a shape in water, looking old and then young, blue skinned and then grey haired - just stared at him.
"Did you hear me," he finally asks.
The man  - suddenly snapped into focus and looking like one of those apron wearing guys from 50s- style diners - laughed.
"You want more of this and less of that? Is that what you want?"
He could have sworn he heard a strong Brooklyn accent, which made this seem all the more surreal. "Well yes. Specifically, I'd like more honesty, meaning ..."
The guy at the counter interrupted with a wave of the hand. "I heard ya. I heard ya." And then he laughed.
"What? What's so funny."
"You think you're the first to want to change your order?"
He just stared. And then the man leaned across the counter and said, "You got two choices: either you choose life or you don't. The rest of it? You don't got that much choice about."
He stood there silent, now uncertain about what to do.
"So, what'll it be?"

01 November 2011

Tweeting Through Oct 2011

How Greece could pay down their debt: sue all modern countries for patent infringement on ideas of democracy, science, philosophy ..

Offering simple and natural for Halloween this year - just dropping a tablespoon of unrefined sugar into each kid's bag.

Now those are some last words. Even if you don't read the whole of Steve Jobs' sister's eulogy, scroll to the botttom.http://nyti.ms/vBfEx9

This year I'm going as Herman Cain so I can tell trick and treaters, "If you don't have candy it's your own fault. Go get your own candy."

A relief pitcher was brought in just to intentionally walk a batter. So happy to know there's a pro athlete job for which I'm qualified.

Either my day was far too long yesterday or I'm suffering from an acute bout of lackadaisical tolerance.

Why name a section of a modern jet "coach?" That suggests they modeled it after primitive, 19th century transportation. Oh wait.

Now I know why in science fiction those identical coveralls are popular. No need to pack luggage that might delay you.

Idea 4 website named gargle to offer cognitive cleanse (think brainwash not mouthwash) AND pick up poor typists trying for google.

If it was up to us Americans, the one change we'd make to Canada would be to warm it up some. Oh wait. We are.

“The trouble with quotes on the internet is that it’s difficult to determine whether or not they are genuine.” - Abraham Lincoln

His personal goal was to hit the 101st percentile. RT @tnr Where do you fall on the @WSJ #income calculator? http://ow.ly/77N3P #OWS

Forget it and lose a century: markets untamed by democracies or democracies untamed by markets are just different forms of tyranny.

I wonder if in some parallel universe gravity on planets varies like climate here. "Nobody lives there. It's too heavy."

Scare people? Occupy Halloween: announce at door that you're not there for a handout but will camp out in their living room indefinitely.

Angry at the bankers? You would be too. Somehow they claim they know NOTHING about my share of the $21 million from Nigeria.

At work designing my new fashion line. I'm calling it Arab Spring and will base it on Gaddafi's wardrobe. http://bit.ly/o791HM

Wonder if Jobs would have received so much praise if someone had invented a device making iPods as easy to pirate as, say, music.

Planning a novel in which characters debate whether life's defined by free will or a novelist. If it writes itself, we'll know who is right.

RT @ebertchicago: Handy WashPost chart showing how Cain's 9-9-9 plan would affect the rich,poor and in between.http://wapo.st/ozSdps

File under, more downsizing. Due to budget cutbacks, the GOP's frontrunner has changed from McCain to Cain.

RT @drgrist: Word of the day: ignostic. An ignostic is someone who purposefully remains too ignorant of a problem to have a position on it.

Actually just got a phone call that caller ID labeled, "phone scam."

#CNNDebate Favorite line of the night: Romney: "Instead of blaming like this president does ..."

#CNNDebate Once 14th amend is mentioned, GOP candidates oppose constitution? So judgment does matter as much as constitution? So confused.

#CNNDebate Also love that Perry is so hip to the jive that he twice addressed Herman Cain as "brother."

#CNNDebate One reason to admire Rick Perry - he actually just tried to deregulate the debate, trying to confiscate Romney's time.

#CNNDebate Question for candidates: Boxers or .... professional wrestlers?

Another GOP debate tonight. I wonder if they have secret backroom poker games to determine who will emerge as front runner each week.

Idea for Classical Idol reality show with historical composers judged by modern pop stars. "Mozart, you need a melodic hook."

Fascinating RT @tnr: 2. Excellent animation of the 2012 Republican campaign as a (literal) horse race, by @Slate http://ow.ly/6YKXE

Baffled his "w/ Jesus in my heart & Buddha in my belly, all I do is sing Allah-la-la-la" t-shirt offended rather than united all religions.

I Ching. You, however, Clang.

Spreading like online trading, occupy wall st. is now in 207 locations.http://bit.ly/pQfh3o

The avant garde composer John Cage wrote a song 4' 33 - 4 mins and 33 seconds of silence. A guy just told me, "I have that." Don't we all?

I'm rebranding The 4th Economy. I'm going to call it Economy 4S.

As an apparent concession to critics who've called him clumsy, Rick Perry is now wearing a hard hat during speeches.http://read.bi/mQKvYj

Post-game analysis presumes to tell you why someone won whereas post-debate analysis presumes to tell you who won.

If only he'd used his super powers for good and not evil. Apparently, even before he was president, Obama started a global recession.

How long before we have a fact check app for text we read online? To this decade what spell check was to 80s.

RT @TIME: "Employers aren't looking for is someone who can do the job but someone who can reinvent the job." - Thomas Friedman at #CIW11

From someecards - Let's celebrate Columbus Day by walking into someone's house and telling them we live there now.

Bankers were going to occupy the inner city this weekend to protest poverty but couldn't find any good hotels.

The Fourth Economy is now available in France athttp://amzn.to/mYqD66 The words entrepreneur and millionaire are already translated.

Nobel Prize winning poet Transtromer is already featured in a video starring Shia LaBeouf. Nice. Hollywood is not all senseless violence.

Curiously, capitalist models explain the recent surge in demand for socialist models.

Whoa. Just had a little carrot wine. Really should pay closer attention to those expiration dates.

10th anniversary of invasion of Afghanistan and still we confuse war and occupation, nation-building and setting up a government.

Just because your mind is simple doesn't mean the world is.

GUI before they were born, Pixar in childhood, iPod in adolescence. No 1 structured consciousness of 20-somethings more than Jobs.

Jobs obsoleted the notion that good design and good engineering were somehow different.

RT @DanielPink: RT @WareMalcombCMO: "Your time is limited, so don't waste it living someone else's life." Steve Jobs

We have lower class, middle class, upper class, upper middle class, lower middle class. Is there a lower upper class or upper lower class?

RT @fivethirtyeight: Cain, Perry, Bachmann, Trump, Giuliani, Romney, Palin, Gingrich, Huckabee, Christie all led 1 or more polls this year.

This coffee shop advertises an "Extreme Happy Hour." Not sure how that would, in practice, differ from "Hysterical Hour."

#OccupyWallStreet is everywhere. Protestors popped up when I checked my portfolio. Now marching across monitor with itty bitty signs.

"Defy aging" the ad says. Apparently it doesn't actually halt aging but does give it the finger.

Caller ID has really taken the fun out of making crank phone calls.

Why Republicans Are So Fickle About Their Front Runners

I've got a couple of theories about why no Republican front runner lasts for long. 

Cain, Perry, Bachmann, Trump, Giuliani, Romney, Palin, Gingrich, Huckabee, Christie all led one or more polls this year. Presumably the list would be longer but the election is still one year off. 

It's fun to speculate about why the Republicans are so quickly churning through front runners. My two theories have to do with the inherent contradictions of being a Republican.

One, Republicans are contemptuous of government, convinced that there is almost nothing that government can do as well as the private sector – from pre-school education to funding retirement. Given this, they have even more contempt for politicians than the average person. How does this work when it comes to the rise and fall of political candidates? Well, a fresh face – particularly from the business sector – looks promising for the simple fact that this is not a political face. So, poll numbers go up and very quickly, this candidate looks like a politician. Suddenly, Republican voters remember that they don’t like politicians and the poll numbers for this poor candidate drop as quickly as they rose. Republicans dislike voting for politicians which means, they don't much care to vote for people who run for office. That makes it tough. 

Two, Republicans hold at least two contradictory goals. Like those of us who love the idea of six-pack abs and dessert after a cheese burger, Republicans haven’t quite reconciled their love of tax cuts with their contempt for deficits. Even now – with tax cuts at their lowest level in the 50+ years that Obama has been alive – Republicans want lower taxes. And they want the deficit reduced to zero. Anyone who does the math on this quickly realizes how untenable this position is. How does this translate into the rise and fall of political candidates? Well, a candidate who promises tax cuts is embraced …. until he is forced to clarify that he’ll eliminate social security or will ignore deficits or will cut defense spending. Given that no candidate can tell voters how he or she will do the impossible, no candidate has a chance of holding favor.

Republicans have got to feel like the guy who has had a mad crush on that one gorgeous girl all of high school and then – when she finally walks up to him to chat – can’t form a coherent thought or say anything intelligible. The economy continues to stagnate and Obama is terribly vulnerable right now. But the Republicans? They have what has to be their least inspiring and least credible candidates since the party was formed. It wouldn't take much for them to change this: just a willingness to subordinate their ideology to math and necessity (in this case, the necessity of having a government, one inevitably run by politicians). 

The Virtual Halloween

How about a virtual Halloween? 

Go to a website where you get to see video snippets and still photos of every kind of costume - from cute to clever and everything in between. Much higher quality and much more rapid than waiting for the door bell to ring. Lots could be done with this. (Thumbs up or thumbs down gradually tailors pictures offered.) 

Then, periodically, you have to hit a "donate" button that puts money into a fund for impoverished kids. Your equivalent of handing out candy, but in this case it'd be a mix of carbs, protein, and fats to needy kids.