Pessimism, skepticism, optimism, something new is needed to breakout of the present circumstances. Robert J. Samuelson rings the alarm bell again in his WP article on the economy. The economic signs are not good and in fact, there is one potential calamity after another aligned like dominoes.
He writes:
“The real obstacles to a vigorous recovery are compounded by this shrunken confidence in the power of economics. The dangers — resumed recession or deflation (declining prices) — arise from their interaction. Low confidence will subvert recovery; an aborted recovery will subvert confidence. Whoever wins in November will face this cycle. His challenge will be to break it.”
To break the cycle requires creativity and that means changing the game. I believe that President Obama has been on the track and that the resistance he faces are from people who accurately read his intentions. If you are vested in capitalism as we know it, President Obama is likely to want to change that.
The whole world is now searching for sustainable economics. Capitalism has run its course and on its own theoretical basis, it has run out of places to put all of the people and to care for them. The environment can’t stand the course we’re on and that demands change.
In several articles at Examiner.com and from different perspectives, I have laid out the foundation for the “Optimized Sustainment Model” that Dr. James Rodger and I are advocating as a a replacement for capitalism.
Before we drown in pessimism, I am sharing what can become a game-changer if we can get people here in Washington to start thinking outside the beltway.
Synthesis: Optimized Sustainment Model
Combining the favorable attributes of capitalism and “progressive utilization” theories in the operational context of Gaia theory, Dr. James Rodger and I propose integration to produce the “Optimized Sustainment” economic model or OSM.
Context
First, it is important to note that one nation on this planet cannot design an economy independent of the world and its trading partners. What we observe are people from around the world who have been actively engaged in the discussion about sustainable economics. Americans have been participants yet we do not see political leadership actively involved in engineering a sustainable economy as an alternative to capitalism or as a modification on capitalism.
We have initiated an effort to discuss the topic for sharing in both the international community and among our domestic audience to exact active consideration for producing a new economic model for which advocates may be found among trading partner nations and political leadership.
The American system of government and political system allows for such free thinking. Governments have the primary purpose to optimize return on national resources. They have certain instruments at their disposal to accomplish this among different “brands” of governance.
America has embraced individualism and free enterprise along with the value for self-determination and private property ownership. These values may be preserved in many different forms. In our approach, we intend to preserve the best attributes and qualities of free-enterprise and market-driven regulation while addressing systemic weaknesses inherent in capitalism.
Process
Researchers like us operate in a vacuum until our ideas are shared and subjected to critique and review among peers. That is a starting position. Doing this on our own initiative, we are constrained by time and resources to conduct the level of diligence required and needed to complete the effort.
Therefore, we are sharing an example for how to think about the process that we think deserves leadership mind share and action. Here we have integrated some things learned from the subject theories and sources to produce the Optimized Sustainment Model (OSM).
According to Missouri Professor Emeritus, John Ikerd, “social and ethical values must be reintegrated into the capitalist economies,” and sustainability must be restored by relying on renewable energy. The nation through its economy mechanism must rebuild stocks of human capital for the benefit of future generations and doing that requires investment.
Private property ownership, the concept of persons being able to earn wages and to become self-sufficient and to purchase material things including property is something that is desirable as in capitalism. That concept must be preserved, although expanded.
The concept of acquiring capital and making investments with certain risks is desirable too.
The issues and concerns with capitalism lie with people assuming responsibility or failing thereto, and ensuring morality in the system that is akin to honesty and integrity.
Furthermore, there must be more attention to equitable rewards in society for all persons based upon their work contribution that begins with self-reliance and self-sustainment and extends to generating value adding creation of jobs and preparing others for their personal and professional development.
Inventors of new products and new business enterprises for instance, create opportunities for many others as a multiplier to the return on resources. The system of reward must consider this aspect.
The economic model and operational system must provide more equitable reward for the value-added beyond simple small business ownership and professional practices. Broader consideration should be given to all vocations. Such need not be administered by government as by free-market dynamics, where policies are in place to emphasize and encourage equitable reward.
Such reward and balance of consequences may be the product of public and private partnership under governance of the people. Ikerd refers to that as worker-driven.
Government need not be in the business of wealth redistribution as it does in creating a system that ensures broad inclusion and participation in fair rewards based on merit.
Optimized Sustainment Model begins with societies (people/citizens) participating in the definition of outcomes expected from collaboration among persons, government enterprise, and private enterprise. The American system of government must embrace outcomes as a performance requirement that aggregate to the highest order of shared responsibility by persons and government and private enterprise and that is to optimize return on national resources.
Governments create the environment for accomplishing this through policies, laws, and regulations. As Ikerd identified, renewable energy strategy is paramount. When a nation state implements renewable energy strategy with proper attention to environmental impact, meaning without damage, then all things are possible.
Now consider the primary tasks required by enterprises and persons to optimize return on national resources. Begin at the top of an economy with government or private enterprise, or begin at the bottom with individual persons, it doesn’t matter, the common process is the same six tasks needed to optimize return on resources.
- Define outcomes
- Define controls
- Account for capital and material inputs
- Design and improve processes
- Attribute mechanisms with people and technology
- Operate and evaluate
These six tasks are from Smart Data, Enterprise Performance Optimization Strategy © 2010 Wiley Publishing.
Defining outcomes
Every individual must define the outcomes that they are pursuing at a point in time. They do this in context of the Optimized Sustainment Model that aggregates individual outcomes through voter expressions and participation in communities that are social, political and business as in the
Forum for the Future model
“Universal and continuous access for current and future generations to the resources and opportunities to live well”
In America citizens are in pursuit of a good life for all and are wrestling with the definition for a good life. What is the minimum necessary to pursue self-reliance? What is a fair start? What to do with an unfair advantage?
People begin conceptually equal and materialistically unequal.
Defining controls
Persons are controlled by laws and regulations in their governmental operating environment. They are controlled by family and community. They are controlled by their own plans and ideas or self-guided destiny. In business, they are controlled by business rules. All of these things act as constraints on performance and behavior that are created with positive intentions.
In America, the political system engages persons as citizens to participate in creating their controls.
As a collaborator in the global environment and economy, controls are shared and inherited and customized as contingent claim contracts. Then, there is the question of international justice and oversight.
Capital and material inputs
Persons operate in the confines of human life cycles. There is a point at which individuals assume responsibility for themselves. The operating environment is intended to provide opportunities. People are expected to prepare themselves and to continuously improve to engage a spectrum of opportunities.
Opportunities are provided by government and private enterprise collaboration and may be initiated by personal invention and creativity.
People may inherit capital or may borrow it. Access should be equal as is responsibility for taking risks and assuming the burden of responsibility.
Design and improve processes
Processes describe in detail how work is done to produce desired outcomes. Persons participate in existing processes provided by businesses and government as they also invent and adapt their own.
A person is an individual brand of performance based upon acquiring skill, knowledge, experience, and proficiency based from applying and exploiting individual abilities.
Persons respond to a balance of consequences that include rewards and punishment that are reflected in “controls” and “inputs.”
Attribute mechanisms with people and technology
Processes define how work is done, through people using tools (technology) are the mechanisms for doing work. Work produces outcomes that include performance results, products, asset creation, as well as expenses and sometimes noise.
Using capital and materials, people transform these things under constraints (controls) into producing high yield outcomes. Associated with that are performance metrics: value added, products, assets, cost and time.
In the Optimized Sustainment model and economy, people subscribe the the values expressed in PROUT and Forum of the Future models for instance. Whatever they do locally is assessed by its impact on and contribution to the environment and to humanity both in the near term and the long run.
Operate and evaluate
Optimized Sustainment is an open system and one that responds to feedback to initiate continuous improvement. In a sense it is market-driven and market-responsive and therefore, self-regulating.
“Behind the economic pessimism
By Robert J. Samuelson, Published: July 29
It is an index of fear. Last week, interest rates on 10-year U.S. Treasury bonds fell to 1.4 percent.
This was the lowest on record and less than present or expected inflation (generally 2 percent to 3 percent). On 30-year Treasuries, rates have tumbled to 2.5 percent. The investors piling into Treasuries and driving rates down aren’t buying risky stocks or using their cash to expand businesses. They’re protecting themselves against unknowns. The question is whether the resulting plunge of rates signals something more ominous: renewed recession, deflation or both.
Granted, there are always the standard unknowns of business cycles, new technologies, competitive pressures and shifting government policies. But today’s seem on a scale unprecedented since World War II. Does Europe — one-fifth the world economy — face stagnation or collapse because debt-ridden countries cannot defend the euro? What happens to the weak U.S. recovery if it drops off the “fiscal cliff”: the $500 billion of spending cuts and tax increases (as estimated by the Committee for a Responsible Federal Budget) scheduled for early 2013?
To these daunting uncertainties must be added at least one other that, though less recognized, is perhaps more powerful. It is an intellectual breakdown. There is a loss of faith in economic ideas — and government policies based on them — driven by most economists’ failure to anticipate the financial crisis and many subsequent events.
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