It’s Complicated

I’m going to mention up front that this write up will attempt to paint a picture or map of the current state of socio-economic and human issues that will include a brief history as well as a path forward.

First of all, considering how we prefer to communicate today, I need to warn the reader that it’s complicated. It’s a multivariate problem within a multivariate problem. Therefore, don’t expect any memes to help you along the way. Ironically, that’s a big player on the map we’re drawing today.

Some Assumptions

In order for this to work the reader and I have to agree on the following assumptions.

1. Nothing is constant
   • Everything in this world is fluid. Nothing stays the same, even our most coveted symbols take on new meaning and the necessity for bedrock institutions wanes over time.
2. Power revolves around the most basic commodities required by every individual in order to survive in the current system in which they operate.
   • Commodities are things like food, water, and oil which are basic necessities for an individual or a community to survive. Those who control the commodities ultimately have all the power.
3. The powerful are not always interested in directly controlling individuals or communities, only the commodity itself.
   • Often what the majority of humanity believes to be the source of power or their interface for interacting with it is just a proxy for others who are actually in control.
4. Like bullet #1 the commodities that are most important often change and those who control it as well.
   • Once the majority of humanity determines a new commodity is an absolute necessity, many will enter the struggle to control it. Control could be absolute or divided and contentious or harmonious, but it is always temporary until a competitor arises or the priorities of commodities shift again.
5. Most systems evolve.
   • Systems created for any particular purpose are more likely to evolve and adapt than be replaced by another.
6. When looking at a problem at scale, we must observe in generalities.
   • The universe is a complex and diverse place beyond what most can imagine. In order to attempt to understand it to a point, some stereotypes and generalities must be used. An example is that everyone who lives in a particular region belongs to and subscribes to the ruling government of that region. This is a fairly safe generality, but we are also aware that people move and at any point of time there will be foreigners who take up residence and don’t necessarily agree with the local government, support, or participate in it’s operations. Their impact on our analysis at the point we make the assumption, is immaterial.
7. This is a ‘Western’ perspective.
   • This analysis only considers the historical perspective of the west. Everything that happens east of modern day Europe doesn’t play a role until much later. It is, however, more and more important as time goes forward.

A Brief History at a High Level

In the beginning we lived in tribes. The world was chaotic and dark. We worked together to get through the long cold night and depended on our elders to show us the way. They understood the changing of the seasons and the movement of the herds better than anyone and this knowledge was the most coveted commodity of the time.

It can be argued that it still is today, but we’ll get there.

They passed their knowledge down to the youth orally and used stories to transmit their message. These stories were useful in not only providing a basic understanding of the world around us, but a consumable explanation of chaos so that we could live in confidence and minimize fear.

Eventually we learned agriculture and animal husbandry. We understood the basics that allowed us to settle in our preferred area and grow wealth. This wealth came in the form of food, shelter, and ultimately safety.

As we evolved, not everyone rose at the same rate or held similar priorities. Armies were required to prevent other tribes from taking advantage of those who had what they needed to survive. Why hunt and gather when you can regularly take from others?

As things evolved, human’s still had the same basic needs; food, water, shelter, ect. However, the method to acquiring those basics were changing and the gatekeepers of those methods became powerful.

By this point it was the military. The west had often evolved to a point, only to be raided and brought low by a threatening empire from the east. Rulers were the generals of their armies and in Rome, still held the senate at the point of a sword.

Eventually one military general was able to control most of the known world at that time, but his kingdom wasn’t united. Constantine the Great recognized that the majority of inner conflict was due to individuals within his empire subscribing to various religions. His attempt to unite them eventually created the Catholic Church years later which ruled through the Pope as a living god for centuries to come.

At this point in our history, security was still the most coveted commodity around. Kings provided this commodity to their people, but ultimately were chosen and blessed by the Catholic Church via the Pope. Therefore the ultimate commodity was the Church’s blessing as it not only guaranteed a better life after this one, but allowed the Kings to operate outside of their borders.

Therefore, the way for a King to provide security for his people was to receive a blessing from the Pope. This is one example of the majority of people being ruled via proxy. The people were acutely aware that they were required to swear fealty to their king and obey all orders, but well understood the difference between a blessed king and one who might be acting outside of God’s favor.

Feudalism

We’re going to take a break here for a minute to discuss what life was like during these times as it will be important to understand later.

Feudalism is a well known, historic form of government where a class of nobility owned lands and infrastructure from the King and in return provided military service when demanded. Vassals were servants of the nobility and everyone else was known as serfs. In the end, the idea of ‘rights’ did not exist, but depending on your class you had more opportunities and freedoms within the system by which humanity was organizing itself.

Serfs mostly had no rights. Some have argued they were no better than slaves, however generally speaking they were free to move about the land and attempt to rise through the social ranks. However, movement up the social ladder was almost impossible due to the requirements to create value for one’s self.

One particular reason why this was so difficult is because humanity became dependent upon collective agriculture and animal husbandry to survive. Mills were essentially platforms by which anyone could come and leverage it’s services as long as they paid the tax required by the King in the form of milled grain or otherwise. The same analogy could apply to housing and education in most cases.

Peasants, whether serfs or otherwise, were also often required to use the fee-based services provided by the lord’s manor. For example, many manors had grain mills that could be used by the peasants to grind their grain products into flour, but these mills also usually required fees or surrender of some part of the flour produced. In a way, these mills represent a sort of local monopoly, in which the only options available to the peasantry were to use the lord’s mill and pay its fees or to use no mill at all. The latter “option”, although notionally possible in some circumstances, would be functionally impossible because flour was one of the few easily stored calorie sources.

Zach Scott, Digital Feudalism. How the data ecosystem is becoming medieval

A Power Shift

At this point the Pope ruled the western world through his proxy kings via blessings. Eventually this song and dance began to break down as the people became more and more exposed to the inner-workings of this relationship.

Niccolo Machiavelli, who infamously wrote about the political strategy of these times, coached Italian nobles on how this relationship worked.

With the security provided by the Kings, technology began to advance. Warring technologies saw rapid improvement during this time thanks to advancements in blacksmithing and other popular trade skills. For a King and his Nobility, life on earth was becoming quite comfortable.

On top of that, the Pope of Rome was mired in almost constant scandal. The ‘Holiness’ of the Pope and it’s Church was often called into question. It didn’t help that the Vatican City was struggling to feed it’s people. This was especially highlighted during the reign of Pope Alexander the VI, demonstrating to the world that a Pope is merely human and the church itself subject to the whim of France’s modern military.

Chaos began to creep back into the western world as Italian nobility went to war, France and Spain were at each other’s throats, and central control over the Blessings of the Church began to splinter.

Ultimately skilled labor, merchants, and those who facilitated trade became the ones who avoided most of the impacts of the new chaos. Eventually they began to organize and become a ruling class of their own.

Merchant Guilds were founded initially to educate and train new tradesmen in the various crafts needed to maintain infrastructure. Blacksmiths, carpenters, scribes, all kinds of guilds came and went, but the new demand was for the knowledge and experience generated by the guilds and their craftsmen. They controlled this knowledge through approved apprenticeships and seals that verified their work. The quality generated was coveted by Kings and Kingdoms that needed stability in their own infrastructure in order to continue to operate, but ultimately the Guilds were not as loyal to any particular King as they would like.

Merchant Guilds really shook things up for the majority of people as well. All of a sudden, there was a new path for serfs to rise in the ranks of society and carve out their own wealth and freedom. Having a Guild located within your Kingdom or on your lands provided an attraction for increasing your population.

The Guilds themselves provided an additional demand for traders and their goods from all over the world as it improved their craft and allowed them to compete with other Guilds.

Traders began to move across the land and as wealth grew and the influence of older powers waned, some major events took place which cemented the new order.

Amsterdam, a city founded mostly by foreigners attempting to escape from the rule of the Kings, dependent upon their own resourcefulness and trade relations, became the target of the King of Spain (Louis XIV) and went to war in the late 1600’s.

During this time the Netherlands was quickly becoming the center of the world. The people of the Netherlands held very liberal ideals for the time and welcomed foreigners from all walks of life to their city as long as they contributed in some way, shape, or form. Advancements in shipbuilding in the area lead to the Dutch East Indies Trading Company, which is arguably the oldest and most powerful corporation the world has ever seen. The first stock market was created in order to fund and incentivize men to dedicate years of their life to a single journey upon a ship that may or may not return at all. The women at home did most of the trading in the beginning.

This system required a new form of government or a modernized version of what the Greeks attempted before. Amsterdam became, arguably, the first global world power and Democracy. The Kings eventually lost their influence over the nobility who were tired of being stuck in modern feudalism.

The end of these times were also marked by the French Revolution and the rise of the United States of America which began as a colony of both British and French Kingdoms.

The fruits of global trade and democratic relations was no longer deniable and the general public demanded it.

Trade as a Commodity & World Wars

Trade at this point was global but still very unstable and risky. Pirates and poor technology often took their toll. As individuals and communities began to depend on goods from outside of their own nation, it was still very expensive and risky to provide.

People with the money to finance these operations and net new ones took huge risks and if they failed, often more than just their life was on the line.

In response people began to study economics. Adam Smith wrote ‘The Wealth of Nations’ and people began to focus on trade itself and the ability to finance it as a commodity. Financial ‘instruments’ were created to leverage what they had and mitigate risk. Central banks were created to attempt to control it, and stock markets went global.

Those who understood economics and controlled the flow of trade became the most powerful individuals and organizations the world had ever seen.

The Industrial Revolution

Eventually technology began to catch up with the economists and trade began to speed up.

At this point the world was still ruled by the financial organizations that governed it’s lifeblood (money), but via the proxy government. In order to facilitate this relationship clear lines were drawn as to the roles of corporations compared to governments. These definitions are still defended today however it only serves the majority who must work within the system and doesn’t necessarily apply to the corporations that fund it.

Permit me to issue and control the money of a nation, and I care not who makes its laws!

Mayer Amschel Rothschild

This disparity began to unravel when certain populations or countries became discounted by those who funded the system. Also, initially the definition of the role of government provided corporations the freedom to ignore their impacts on what are known today as Stakeholders (Employees, communities, environment, NOT Shareholders).

The economic system the majority of the west subscribed to (Capitalism) was studied by prominent individuals like Karl Marx and discovered to be potentially painful to the majority of people within it. At this point, general opinion over the role of government and corporations began to shift and other popular ideas began to take shape around the globe (Socialism, Communism).

On top of that the ability to trade became more and more dependent upon the industries created with our newfound technologies (Railroads, Ships with steam engines, Radio, ect).

The orderly world began to devolve again as the ability to conduct trade was determined by Industry and certain nations were better situated to solve their economic problems than others. In addition to the rift in economic theory, the problems created by financial institutions alienated a large populations of people who were living in worse conditions than ever before.

Germany was uniquely positioned at this time as arguably the center of trade. Being the largest, most central country in Europe, they indirectly controlled most of Europe’s trade and therefore a large portion of the world’s. They quickly took advantage of this by creating incredibly effective railroad systems that connected all their major and minor borders.

Leveraging the philosophical differences between capitalism, socialism, and communism, Germany jumped at the opportunity to dictate global trade with the greatest Industry the world has ever seen. They went to war.

Again, at this time, although they acted mostly independently, governments were essentially controlled by their ability to trade and therefore their corporations and financial institutions. When the world wars began, everyone was impacted. Trade was minimized, individuals received rations and governments battled for the favorable opinions of their people to push on in terrible factories for the victory of their Nation and ideology.

In the end multinational corporations had to play both sides to survive. Trade feeds, clothes, and provides shelter for the majority so it must go on. In fact, governments were so dependent on corporations that an entire defense industry and market was created. It’s arguable that some conflict after this time is related to corporations propping up their own supply and demand.

The Rise of International Institutions

After two world wars and over 100 million deaths the leaders of the remaining countries came together and decided an ulterior agent was needed to maintain peace in a world of global trade among differing ideologies.

The United Nations, World Trade Organization, and International Court of Justice eventually came to exist as global governments that would rule over those countries that subscribed to the charters put forth. These charters were written by the nations that won the previous war and it is argued that they intentionally left-out nations that weren’t necessarily viewed favorably by Democracies and Capitalists. Russia is one of those nations and the result of this plunged the world into what is known as the “Cold War”.

The most coveted commodity on the planet was still trade via industry, but after recognizing the role they played and ultimate indifference to the destiny of any particular nation, the new International Institutions established directly, in their own charters that corporations are not allowed representation.

This was a setback to those (mostly corporations) who would seek to control trade via industry. Now, their proxy governments could dictate how they conducted trade globally without the interests of the corporations at heart. This essentially democratized trade internationally and corporations were forced to adhere to the laws as they were dictated to them.

What is Trade?

Let’s take another minute and break this down because it’s important to understand the multivariate issue that is trade in order to understand what happens next.

Trade is essentially the flow of goods and services between individuals, corporations, communities, and governments.

In order to conduct trade you need investment. That is where the financial institutions and corporations that control investment come in.

In order to receive investment, a financial institution or corporation need to believe in your success. This can be achieved a number of different ways, but in reality there must be some form of Supply and Demand in this economic system.

Now, as much as we’d like to believe supply and demand to be naturally created things in a perfect economic model, it rarely is. Supply can be artificially limited or inflated which can have an artificial impact on Demand as well. Demand can be created where it never existed before through marketing. A lot of advancements in technology solve problems most people never knew they had. In order to create demand in this situation, individuals need to be enlightened to the problem before a Demand for the solution or Supply exists.

In this case one could use their investment to improve their products & services, or market to the people who need them, but ultimately with enough investment, this can be created where it doesn’t exist. Therefore the corporations that trade at the highest volumes become the most powerful as they receive more and more investment and can predict where the economy is heading in terms of Supply and Demand.

This becomes a feedback loop as corporations that control some of our most basic commodities like food, water, and oil are the ones that end up investing in the rest of the world. Financial institutions depend on them for returns and insights into whats happening in the economy so they can make smart decisions with their money and the resources of a nation’s worth of savings.

This idea was cemented in 2008 when America’s largest banks were ‘bailed out’ through investment from the government and it’s central bank when their financial ‘instruments’ failed them. The common defense for this solution was that these banks were ‘too big to fail’ in a market where Capitalism was supposed to be the guiding ideology.

The Current World Order

Okay, so at this point international institutions are dictating trade to the best of their ability via a democracy of appointed officials from their own local governments, ruling by a vote without allowing corporations representation.

This is a problem for corporations, mainly finance corporations that are unable to operate or invest where they please without a previous blessing by the World Trade Organization.

It’s only natural that instead, they attempt to influence the WTO via their ability to fund their own politicians.

Enter Political Action Committees. These are organizations that support the infrastructure required to run for any office in a modern government. The rules and regulations surrounding them differ depending on the country you’re in, but nonetheless corporations use them as instruments to ensure their interests will be highly represented in their local governments and abroad. The most interesting aspect of these committees and their counterparts is that the source and amount of funding is often unknown. This leaves the public, who ultimately chooses the politician, in the dark.

However, even among financial corporations and those who control the majorities of commodities, there is competition.

In order to create a more unified front internationally the largest corporations in the world got together and established the World Economic Forum where executives from other corporations are given titles such as ‘Governor’.

Established in 1971, the mission reads;

“committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”

WEC

Once again the most coveted commodities on the planet fall under centralized control. However, like before, there is no need to directly rule over people as government provides an effective tool.

The Rise of The East

After WWII the west continued to rule the world with it’s corporations and free trade, capable of placing a McDonalds anywhere in the world within a few months and enlisting additional countries as willing participants of our modern economy. The wealth generated by this system was impossible to deny. Even the most resistant to western ideologies gave in.

However, one nation still refuses to adopt it holistically to this day; China.

In the East, Hong Kong is the capital of Finance. When the British ended it’s rule due to colonial agreements in 1997 China promised to allow to operate and rule itself as it had up until then. The phrase was ‘One Country, Two Systems’ and one of the poorest populations on the planet finally began to benefit from free trade.

Chinese culture, however, did not change that much.

In the west, corporations are essentially independent individuals that can choose to operate almost as their own sovereigns complete with all the rights of a free individual within their country. In China, it’s well understood that corporations absolutely cannot exist outside of the government or free of it’s influence. For experts, it’s often very, very difficult to understand where the government ends and the corporation begins.

This creates a very unique situation where international trade is concerned. While western corporations govern themselves through a democratic World Economic Forum, Chinese corporations operate and act in a very communist manner.

Often corporations that wish to conduct business in China, must also conduct themselves within a communist system in order to succeed. This often puts them ideologically in dissonance with the west whose values are inherently different.

More often than not, corporations opt to establish a Chinese corporation and then feed it trade secrets and intellectual property in order to survive, essentially putting all other nations around the world in a precarious situation. Especially, when those trade secrets and intellectual property can become liabilities to national security.

However, as more and more Chinese are raised out of poverty thanks to investment from the west and a focused vision by the government, the potential for them to become the ruler of global trade and usurp the World Economic Forum is growing. The fear is that this will lead to China enforcing standards and values that are at odds with western values over the entire globe.

The World Economic Forum is reacting to this threat on many fronts as their influence is great.

The Rise of Tech Corporations

By the late 1980’s a new form of communication was created and began taking off. The Internet, or the World Wide Web, became something that everyone could imagine as a part of their daily life. People raced to invest and the result was the dot-com bubble of the late 1990’s.

People lost millions, but the genie was out of the bottle. Like the Industrial Revolution before it, the way people worked was changed forever. Computers showed up on everyone’s desk at work and home and people began dreaming of a futuristic world of hope and abundance in ways never imagined before.

As the technology began to infiltrate our lives, all forms of communication required updating in order to compete. Corporations that once ruled via artificial supply and demand were usurped by corporations that could transact faster and more transparently than before. Technology corporations showed up everywhere. Finance, Food, Transportation, and even the Military was impacted.

There was a new commodity on the block, and that commodity was data. With data corporations could know more about themselves, their competition, economic trends and investment opportunities faster than ever before. They could outpace their competition with enough data and the right analysis. They could make smarter decisions and more accurate risk analysis. Corporations could target their market better and had more power to influence buyers based on the results of their analysis.

Ultimately corporations could make smarter trades and investments and like the feedback loop from before, invested more and more into technology companies above all others.

Unfortunately for corporations, the skills required to leverage the latest technology were in low supply. At the time, a great understanding of mathematics and engineering were required and the western world was more infatuated with liberal arts over the sciences.

In order to keep up with demand, Tech Companies began employing individuals from the East, leveraging mostly China and India as their source of labor. Often providing Visas to those workers to move west. We’ll come back to this.

For some reason the text stops here. I don’t remember where this was going, but didn’t want to lose the effort.

@mpoletiek