In the beginning was the Word.
Civilization is based on four primary codebases: physics, biology, story and number. We see them as emergent properties of One Sacred Code, and view the concept of stewardship as the guiding principle of our relationship with it. Insights from each branch inform the conscious balanced, loving evolution of our world.
We are problem solvers. On the Planet Earth of today, inherent flaws in the story of civilization have been encoded into the numerical pattern language of finance, resulting in conflict between human enterprise and biophysical reality. This phenomenon – told as the story of War, Pollution, Climate Change, and the Limits to Growth – emerges from defects in the code in the same way that a mutant organism emerges from a damaged embryo.
The Special Case of Finance
In our career in finance, policy, and culture we observe the powerful hold of various assumptions on the direction of human endeavor. Perhaps the most damaging core assumptions of all, binding the verbal and numerate control systems together in a death grip, are the various myths of “fiduciary obligation.” Although groundbreaking work to upgrade fiduciary understandings has been done with the UN, and the debate is moving forward vigorously, a brief analysis of fiduciary obligation in the context of our code metaphor will be useful.
The commonly accepted legal interpretation of fiduciary obligation is that investors must focus on short term profits before and when necessary to the exclusion of all other considerations. Here we see how the story affects the numbers. What is much more infrequently discussed, is that emerging causally from this disastrous narrative are all kinds of mutant civilizations, deformed by their inability to envision or plan for a future which they actually want. Our world is like a bird egg whose genetics required it to think only about how to hatch and eat, providing it with a beak and stomach, but no wings.
The investment business is perhaps the only business on Earth where arguments are made that it is unethical to think about what the effects of your actions will be in the future real world, and to plan for an outcome that is consistent with one’s cultural, institutional and personal aspirations. In the investment world, it is considered more ethical to identify pathways to profit, the consequences in the real world are treated as collateral damage.
In the investment world, aesthetic considerations are considered unethical and improper. Art, beauty, formal balance, relationship to nature, vision, heart, these primary considerations of every great civilization past, present and future are bullied off the stage, shamed with allegations of impracticality and unprofitability.
We respond to this problem in two ways. The first is to challenge the story at its root. We believe that the core cultural value of the investment community should be long-term stewardship and qualitative benefit to humankind in sympathy with our host planet, Mother Earth. We believe that such a story, internalized in law, will return creativity to the world of finance, and enable women and men of vision and talent to engage artistically with the palette of numbers, currencies and investments. We recognize that a vestige of wisdom remains in fiduciary obligation, and that planning for the future necessarily requires recognition of today’s needs. But like the husk of yesterday’s corn, legacy fiduciary obligation assumptions that no longer serve humanity need to be released to compost.
Primary research by our colleague Jessie Henshaw indicates that even the core assumption of investment, that success is a function of adding your earnings to your principal, is inconsistent with biology and physics at a maturity of scale and development. The principals of the investment world must recognize that at some point our primary obligation is to give back, not to reinvest, but to spend or to give. It is in this way that the circulation of resources within the societal organism remains biological and healthy. Backed up investment earnings, redeployed to consistently earn short term returns can be imagined as an oversized head on an obese body racked with congestive heart failure. At some point, the service message within the term financial services must prevail, else its social utility drops to zero and its adherents can expect to disappear either through the natural disasters or societal upheavals they cause.
Our second response to the problem of fiduciary obligation is to challenge today’s practitioners using their own assumptions. Perhaps the best formal development of this story is called the Universal Owner Theory, which holds that in any portfolio, but particularly large global ones, the externalities (damage to society and nature) of one investment have materially adverse impacts upon the others. The classic example is an investor who had holdings in BP and Louisiana fishing fleets, or Tepco and Japanese real estate. Any improved “performance” in BP or Tepco stock as a result of focus on quarterly earnings reports was wiped out, both in the collapse of the specific stock value, as well as the damage to the other affected investments by the “externalities” of the BP / Tepco business model.
So now that we have shown that the story of fiduciary obligation – the essence of finance – is flawed both a priori as well as with respect to its own logic, what are the options?
Back to the drawing board, or better yet, the canvas.
What Kind of a World Do We Want?
The core question we start with is what kind of a world do we want. For now, we will sketch out some core principles. First of all, we want a world which balances the masculine and feminine, the technological and natural, the scientific and the indigenous, the ancient and the modern. We want a world which adheres to the law of Seven Generations or more of stewardship planning, one that evaluates the impact of decisions beyond the momentary returns. And we want a world which meets human needs without interfering with the needs of other species or damaging the ecosystem upon which we all depend.
What part do financial services playing in achieving that goal? Let’s think about it.
We find it instructive to use ideas like Maslow’s hierarchy of needs as a template for an investment portfolio. We extend the concept of the healthy human to the healthy civilization, where investment in physiological support systems (food, water, energy, housing, clothing, healthcare, environmental services) are primary, followed by investments in culture and self-actualization (media, education, arts). We also understand an investment portfolio to operate optimally if the pieces are connected and synergistic, much like a well – designed village or permaculture installation.
Perhaps guiding all other considerations is land use and viewshed. The impact of the visual design of our civilization is massive. The concrete glass and steel megacities stare down upon us impersonally and cold. The beautiful natural materials architecture of old Europe and indigenous communities emerge organically from their environments, signalling belonging and sympathetic relationship. Our strategy takes a great deal from the work of Mark Lakeman at City Repair. The evolution of land use patterns reveals the transition from naturally integrated, commons based, concentric circular, walkable villages to grid and road based imperial designs optimized for military controllability. Naturally, we invest in the former.
Life is like a hologram with feelings, feelings which help us to understand which quantum evolutionary step is in accord with our loving nature, and which errors to correct. But the hologram metaphor is inadequate when contemplating the devastating consequences of failure to manifest civilization in alignment with Nature. Healing takes much more effort than rebooting a computer.
The advance of technology, humankind’s ultimate tool, evermore reduces the distance from concept to reality. This power has also made the flaws in the code ever more visible, as the artifacts of our civilization grow in size, complexity and impact.
The code of life is open source. But the code of civilization has largely been privatized. Efforts have been made to monopolize the key codebases of Law (story) and Finance (number). For some, stewardship is not the guiding principle, but rather power to control others. We open source these codes, breaking down the stories and mathematics of monopolistic focus on maximizing financial return (power to control Earth) into its component parts, separating the wheat from the chaff, measuring the intentions and the outcomes, designing the future, with love and in balance.
Without vision, the people perish – Proverbs