Barry Carter warns of the dangers of breakpoint. This a followup to his article: American Bankruptcy: Breakpoint to a New Civilization.

Hell and The Fall Backwards

Barry Carter

We attempt to solve our social problems by focusing on the symptoms of our win/lose paradigm. We continuously debate crime, poverty and welfare. We advocate more policemen, more prisons, tougher laws, tougher penalties. We constantly judge others, promote more “eye for an eye” strategies. We call for more affirmative action, gun control, lower taxes, sex and drug education and condoms in school. We deplore teen pregnancy, gang warfare. We call for censorship in music, TV and in movies. We want more and better jobs.

The list above are all real, valid and important symptoms. They, however, are mere symptoms and a thousand years of focus on them will not yield the results we desire. We simply cannot afford to be distracted by patching symptoms. More importantly, however, by focusing on these win/lose symptoms, we reinforce our win/lose paradigm, which in turn keeps us and our thinking trapped in the win/lose paradigm.

Patching symptoms and ignoring root causes is a recipe for disaster and may destroy our civilization. These symptoms are moot issues, which will clear up when we acknowledge the shift to knowledge power and begin to see the win-win society that is being created.

The Possible Fall Backwards

If we make the leap forward, we will create a new win-win paradigm and a new reality. Though I personally believe we shall make the leap, by no means is it guaranteed. In a very real sense we, and all of humanity, could soon be in heaven or hell. We have just entered the Knowledge Era and have just enough knowledge to be dangerous. As shown in the book Infinite Wealth our win/lose world is rapidly evolving to either a win-win system or a lose/lose system. Also as shown losing individuals are being empowered with virtually unlimited power to destroy. A short but intense period of lose/lose, sparked by a few losing individual, could mean a giant step backwards to hell, possibly to a complete loss of everything. Maintaining the win/lose status quo of the past is no longer possible due to the wide decentralization of knowledge and power, to the individual, in a knowledge era.

This is not the first time that humanity has been on the verge of a move forward or a fall backwards. We have a precedence for a fall backwards. The last time humanity took a step backwards we, however, hadn’t the power to destroy ourselves. We only had the power to regress and stagnate for a thousand years.

Carl Sagan, in the book Cosmos, shows that the thousand year Dark Ages from roughly 415 AD to 1492 AD was caused by the inability to see past the paradigm of the times and move forward. Humanity had advanced enormously technically, as he demonstrates with the Library of Alexandria and the achievements it documented. It, however, failed to grasp the potential of its advancements to liberate people. This failure was due to a paradigm which was not enlightened enough to see past the reality of the time. Sagan writes:

The Greek Kings of Egypt who succeeded Alexander were serious about learning. For centuries, they supported research and maintained in the library a working environment for the best minds of the age. It contained ten large research halls, each devoted to a separate subject; foundations and colonnades; botanical gardens; a zoo; dissecting rooms; an observatory; and a great dining hall where, at leisure, was conducted the critical discussion of ideas.

The heart of the library was a collection of books. The organizers combed all cultures and languages of the world. They sent their agents abroad to buy up libraries. Commercial ships docking in Alexandria were searched by the police– not for contraband, but for books. The scrolls were borrowed, copied and returned to their owners. Accurate numbers are difficult to estimate but it seems probable that the library contained half a million volumes, each a handwritten papyrus scroll.

Alexandria was the greatest city that the Western world had ever seen. People of all nations came there to live, to trade, to learn. On any given day, its harbors were thronged with merchants, scholars and tourists. This was a city where Greeks, Egyptians, Arabs, Syrians, Hebrews, Persians, Nubians, Phoenicians, Italians, Gauls and Iberians exchanged merchandise and ideas. Here clearly were the seeds of the modern world. What prevented them from taking root and flourishing? Why instead did the West slumber through a thousand years of darkness until Columbus and Copernicus rediscovered the work done in Alexandria? I cannot give you a single answer. But I do know this: there is no record, in the entire history of the library, that any of its illustrious scientists and scholars ever seriously challenged the political, economic and religious assumptions of their society. The permanence of the stars was questioned; the justice of slavery was not. Science and learning in general were preserved for a privileged few. The vast population of the city had not the vaguest notion of the great discoveries taking place within the library. New findings were not explained or popularized. The research benefited them little. Discoveries in mechanics and steam technology were applied mainly to the perfection of weapons, the encouragement of superstitions and the amusement of kings. The scientists never grasped the potential of machines to free people. The great intellectual achievements of antiquity had few immediate practical applications. Science never captured the imagination of the multitude. There was no counter balance to stagnation, to pessimism, to the most abject surrender to mysticism. When, at last, the mob came to burn the library down, there was nobody to stop them.

Sagan explains that Hypatia, the Librarian during the time of its destruction, was the foremost advocate for learning and growth.

The Alexandria of Hypatia’s time–by then long under Roman rule–was a city under grave strain. Slavery had sapped classical civilization of its vitality. The growing Christian Church was consolidating its power and attempting to eradicate pagan influence and culture. Hypatia stood at the epicenter of these mighty social forces. Cyril, the Archbishop of Alexandria, despised her because of her close friendship with the Roman governor, and because she was a symbol of learning and science, which were largely identified by the early Church with paganism. In great personal danger, she continued to teach and publish, until, in the year 415, on her way to work she was set upon by a fanatic mob of Cyril’s parishioners. They dragged her from her chariot, tore off her clothes, and, armed with abalone shells, flayed her flesh from her bones. Her remains were burned, her works obliterated, her name forgotten. Cyril was made a saint. The glory of the Alexandria library is a dim memory. Its last remnants were destroyed soon after Hypatia’s death.

Sagan goes on to show the incalculable and staggering loss of knowledge from thousands of years of human experience, much of which can never be recovered. We then stood at a crossroad as we do today. We then chose fear over knowledge and extinguished the flicker of light which could have put us a thousand years ahead of where we stand today.

It can be argued that it was not practical for them to move forward, since there were too many pieces missing. This same argument can be made today with our void of emotional intelligence, spiritual awareness and some technical pieces. If we fail, perhaps historians will argue this in a thousand years. We, however, have no choice. We must go for it. We must see win-win. We know what awaits us if we continue to chose win/lose. As Sagan points out, we see further because we stand on 40,000 generations of other human’s shoulders.

Copyright 2000 by Barry Carter

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About Barry Carter.  

Infinite Wealth is available at the author’s website, and can be purchased in bookstores everywhere including Amazon and Barnes & Nobel.

There is also an abbreviated free online version, which has been reposed at Future Positive: 1) The Rise of a Win Win Civilization  2)  A Personal Journey of Discovery 3) Why Corporations Don’t Work 4) The Emancipation of Capitalism  5) Mass Privatization: Organizing in the Information Age  6) Decentralized Wealth Creation  7) The Infinite Wealth Potential of Liberated Humans The Mandate for Win-Win Wealth Creation  9) Breakpoint: Why You Must Act Now  10) SYNOCRACY: True Democracy Through Synergy 11) THE SHIFT: Awaking to a Win-Win World  12) The Synthesis of a Win-Win World and 13)Vision for a Synergic Transition.

Reason Wilken’s Review of Infinite Wealth

Advanced Papers by Barry Carter

Wayne Perg is a synergic scientist and economist. He is has developed a new mechanism for financing a win-win world. The following outline was used for a recent lecture he gave in Arizona. It serves as an introduction to his synergic mechanisms for a new economy.

A Different Finance for a Different World

Wayne F. Perg, Ph.D.

1. What we are experiencing is the product of the structure of our financial and economic system.

1.1. CEO’s can earn more – several times more – in one day than workers earn in a year.

1.2. Of the $150 list price of a pair of high-end Nikes, only about $1.50 goes to the workers who make the shoes.

1.3. Top management receives large bonuses for laying off workers.

1.4. Top management reaps millions from stock sales just before the company tanks, costing workers their jobs and shareholders their investment.

1.5. In this structure risk and rewards are divided – workers (and investors) take the risks and top management receives the rewards.

2. Our financial and economic system produces these results because its structure promotes and supports power-over/dominator/adversarial relationships in business.

2.1. In her seminal work The Chalice and the Blade: Our History, Our Future, Riane Eisler identified the power of the choices that we make regarding relationships to shape the world that we create.

2.1.1. To the extent that we choose power-over/dominator/adversarial relationships, we create Hell.

2.1.2. To the extent that we choose power-with/partnership/cooperative relationships, we create Heaven.

2.2. Power-over/dominator/adversarial relationships in business produce dysergy (1 + 1 = less than 2).

2.3. Dysergy (1 + 1 = less than 2) in business reduces productivity and income.

2.4. Power-over/dominator/adversarial relationships in business concentrate a large proportion of this reduced income in the hands of a small elite.

3. A different finance can create a different structure for business – a structure that promotes and supports power-with/partnership/cooperative relationships.

3.1. Power-with/partnership/cooperative relationships produce synergy (1 + 1 = more than 2).

3.2. Based on the synergy generated by living systems, synergic scientist Dr. Timothy Wilken estimates that synergy can multiply productivity in business by a factor of 10 to 1,000 (see ORTEGRITY at http://www.synearth.net/trust.html).

3.3. Because synergy is a network effect, synergy (and productivity) will increase exponentially as our network of power-with/partnership/cooperative relationships (with each other and all living things) grows.

3.4. Therefore, a different finance can be a key factor in creating a different world – a world in which every person has the opportunity to choose prosperity, joy and personal growth while living in harmony with Mother Earth.

FIGURE 1

A DIFFERENT FINANCE:

The Real-Preferred-Return Financial Structure (RPERS)

LEGAL FORM OF ORGANIZATION

RPERS Corporate

Limited-Liability-Company

Corporation

 

 

FINANCING FOR BALANCE-SHEET ASSETS

(Working Capital; Plant and Equipment)

RPERS Life of Financing Corporate

Senior RPR Units	Finite	Debt
RPR Units	Permanent	Common Stock

INSTRUMENTS FOR PROMOTING AND REWARDING HUMAN CONTRIBUTIONS

RPERS Nature of Contribution Corporate

Subordinated RPR Units	Extraordinary, Long-Lasting	Stock Options, Stock grants
Common Equity Units	Day-to-day Operations	Stock Options, Stock grants

 

4. The Real-Preferred-Return financial structure (RPERS) utilizes different financial instruments: Senior Real-Preferred-Return (RPR) Units; RPR Units; Subordinated RPR Units; and Common Equity Units.

4.1. RPERS and the different financial instruments were developed by New Market Solutions, LLC (NMS).

4.1.1. NMS is in the business of developing and patenting financial technologies.

4.1.2. One of the co-founders of NMS is an expert in facilitating – and processes for facilitating – cooperative relationships and personal growth.

4.2. These different financial instruments are designed to align the interests of all parties, thus facilitating power-with/partnership/cooperative relationships.

4.2.1. Promised rates of return and payments (for Senior RPR Units, RPR Units, and Subordinated RPR Units) are fixed in real (inflation-adjusted) terms using the Consumer Price Index (CPI).

4.2.1.1. Inflation adjustment makes possible clear agreements about returns and payments by eliminating the impact of unknown future inflation, thus facilitating partnership with investors.

4.2.1.2. Inflation adjustment shares the natural inflation protection generated by business with all investors, thus further facilitating partnership.

4.2.1.2.1. My cost is your revenue and vice versa.

4.2.2.2.2. By this identity, for the economy as a whole, the rate of inflation must equal the rate of increase in the average revenue per unit.

4.2.2. The ordering of preferences of claims on income and assets from first (Senior RPR Units) to last (Common Equity Units) protects the interests of investors regardless of whether or not they are actively participating in the operations of the enterprise.

4.2.2.1. Protecting the interests of passive (not active in the operation of the enterprise) investors makes it possible to raise more capital at a lower cost.

4.2.2.2. Investors who are active in the operations of the enterprise receive Common Equity Units (ownership interests) for their work, not their investment – passive investors receive no Common Equity Units and are not owners.

4.2.3. Covenants for the Senior RPR Units, RPR Units and Subordinated RPR Units build on the shared interest of all parties in the success of the enterprise, thus facilitating partnership with investors.

4.2.4. The risk of costly, lose-lose bankruptcy proceedings is virtually eliminated by win-win processes for handling defaults and renegotiating agreements.

4.3. Senior RPR Units can be used for financing without adopting the complete RPERS financial structure.

4.3.1. By themselves, Senior RPR Units can increase returns and reduce risk for both investors and the enterprise.

4.3.2. The initial contracts signed by NMS are for Senior RPR financing only.

5. The RPERS financial structure uses the Limited Liability Company (LLC) legal structure.

5.1. The legal structure of a corporation promotes and supports power-over/dominator/ adversarial relationships.

5.2. The legal structure of an LLC gives an enterprise great freedom in drafting its Operating Agreement.

5.2.1. The Operating Agreement can be drafted to include the agreements, processes and different financial instruments that characterize the RPERS financial structure.

5.2.2. The result is a legal structure that promotes and supports power-with/ partnership/cooperative relationships.

5.3. The LLC legal structure eliminates double taxation, increasing tax efficiency and eliminating any tax penalty for the full payout of earnings.

5.3.1. Full payout gives investors the choice of how much to reinvest, reduces their risk and increases their expected return.

5.3.2. Full payout improves the allocation of resources in the economy, thus increasing economic efficiency.

6. RPERS separates ownership (represented by Common Equity Units) from the investment of money (Senior RPR Units and RPR Units) and the investment of extraordinary human contributions (Subordinated RPR Units).

6.1. Separation of ownership and investment means that Common Equity Units are not sold for money because they are ownership units, not investment securities.

6.2. Because Common Equity Units are not purchased, they may not be sold, gifted or bequeathed – they must be returned to the enterprise when active participation in the operations of the enterprise ceases.

6.3. Common Equity Units (ownership interests) are distributed to stakeholders in return for their active participation in the operation of the enterprise.

6.3.1. All current employees receive Common Equity Units and hold them for the duration of their active participation in the operations of the enterprise.

6.3.2. Investors may or may not be employees and vice versa.

6.3.3. Other stakeholders (e.g., customers, suppliers and the community) may receive and hold Common Equity Units in return for active participation in the operations of the enterprise.

6.4. The holders of the Common Equity Units (primarily the workers) own the enterprise and divide the profits that remain after payment of the promised returns to investors.

6.5. The nature of Common Equity Units makes them unsuitable for rewarding the special efforts of founders or others who make extraordinary, long-lasting contributions to the enterprise.

6.5.1. Founders and others who make extraordinary, long-lasting contributions receive Subordinated RPR Units.

6.5.2. Subordinated RPR Units have a claim on income and assets that is prior to Common Equity Units but junior to the claims those who invest money (holders of Senior RPR Units and RPR Units).

6.5.3. Ownership of Subordinated RPR Units is independent of current active participation in the operations of the enterprise and they may be sold, gifted or bequeathed.

6.6. The RPERS financial structure is designed to meet the needs of what Dee Hock, Founder and CEO Emeritus of VISA, calls chaordic enterprises.

6.6.1. Chaordic (chaos and order) enterprises are united by a shared purpose and principles rather than ruled by authority.

6.6.2. “Given the right circumstances, from no more than dreams, determination and the liberty to try, quite ordinary people consistently do extraordinary things” (Dee Hock, Birth of the Chaordic Age, Barrett-Koehler Publishers
Inc., 1999, p. 192).

7. RPERS reduces risk and increases returns for investors.

7.1. The risk of an investment has two components:

7.1.1. The stand-alone risk of the investment; and,

7.1.2. Its impact on the risk of the investor’s total portfolio of investments.

7.2. Investment in Senior RPR and RPR Units acts to reduce the risk of the investor’s total portfolio of investments.

7.2.1. Senior RPR Units and RPR Units are, together with Treasury Inflation Protected Securities (TIPS), members of an additional asset class for investors’ portfolios.

7.2.2. The fixed real (net of inflation) returns of investments in this additional asset class are uncorrelated with the real returns of investments in other asset classes.

7.2.3. This lack of correlation means that adding this asset class to an investment portfolio reduces the variability of its returns and , therefore, its risk.

7.3. The stand-alone risk of Senior RPR Units is much lower than the stand-alone risk of their alternative – bonds.

7.3.1. Inflation and interest-rate risk are the largest components of stand-alone risk for most bond investments.

7.3.2. Over the 76 year period 1926 – 2001, inflation and interest-rate risk caused the real (net of inflation) return on intermediate and long-term government bonds to be more than 1/4 less than the generally accepted estimate of the “risk-free” real return of 3%.

7.3.3. Over the same 76 year period, inflation and interest-rate risk caused the real (net of inflation) return on corporate bonds to be more than 1/3 less than the 4% real that they “should” have earned given a 3% “risk-free” real return.

7.3.3.1. Corporate bonds, unlike government bonds, typically include a “call” option that allows them to be refinanced when interest rates fall.

7.3.3.2. This call option increases their inflation and interest-rate risk, thus explaining their lower performance relative to their “benchmark” real rate of return.

7.3.4. The fixed real (net of inflation) returns and payments of Senior RPR Units eliminate all of their inflation risk and most of their interest rate risk, thus significantly reducing their stand-alone risk.

7.3.5. The fixed real returns and payments also make it possible to structure lower payments for any given amount of financing, reducing default risk and further reducing stand-alone risk.

7.3.6. Finally, stand-alone risk is still further reduced by the virtual elimination of the risk of costly and time consuming bankruptcy proceedings that can overrule the protections contained in the original financing agreement.

7.4. The stand-alone risk of RPR Units is much lower than the stand-alone risk of their
alternative – common stocks.

7.4.1. High price volatility makes investment in common stocks risky.

7.4.2. The price volatility of common stocks is high because uncertainty regarding their future income makes them difficult to value, which leads to market booms and busts.

7.4.3. The fixed (promised) real returns of RPR Units produce relatively stable real (adjusted for inflation) cash flows.

7.4.4. Discounting these relatively stable real cash flows by stable “benchmark” real rates of return produces relatively stable, easy-to-calculate values and, therefore, relatively stable prices.

7.4.5. Relatively stable prices produce relatively low stand-alone risk.

7.4.6. Stand-alone risk is further reduced by the virtual elimination of the risk of costly, lose-lose bankruptcy proceeding.

7.5. Senior RPR Units and RPR Units increase investor returns.

7.5.1. They are priced off benchmark real (net of inflation) rates of return: the 3% “risk-free” real rate; the 7% real long-term rate of return on stocks; the 10% real return expected on smaller, less-liquid equity investments.

7.5.2. Low credit risk Senior RPR Units, priced at 150 basis point (1.5%) over the “risk-free” rate will provide investors with a fixed real (net of inflation) return more than 2/3 higher than the actual real return on corporate bonds over the 1926 – 2001 period, with significantly less risk.

7.5.3. RPR Units will typically be priced to provide the investor a (cash) real return about 1/3 greater than the long-term average real return on the stock market – with significantly less risk.

8. RPERS reduces the cost of capital, decreases risk and increases returns for the enterprise.

8.1. How can RPERS decrease the cost of capital for the enterprise and pay investors higher returns?

8.2. RPERS enables the enterprise to safely use a higher proportion of Senior, lower-cost financing, thus reducing its (weighted average) cost of capital.

8.3. Default risk is a function of the size of the payments relative to real income and the stability of real income – therefore, reducing payments reduces default risk.

8.4. Senior RPR Units significantly reduce the size of the payments relative to the amount of financing, thus allowing a significant increase in the amount of Senior, low-cost financing and a decrease in default risk.

8.4.1. Elimination of inflation risk and a large part of interest-rate risk (through a sharing of the inflation protection inherent in the operation of the enterprise) make it safe for investors to accept longer maturities, thus significantly reducing payments for any given amount of financing.

8.4.2. The fixed real (adjusted for inflation) payments of Senior RPR Units further reduce payments for any given amount of financing and any given maturity.

8.4.3. As a result, the enterprise can increase its proportion of Senior financing, thus reducing its cost of capital, while increasing its coverage ratio and reducing its default risk.

8.5. Reduced default risk means lower risk for the firm.

8.6. The virtual elimination of the risk of costly, lose-lose bankruptcy proceedings
further reduces risk for the enterprise.

8.7. Returns for enterprise are increased by:

8.7.1. The lower cost of capital; and,

8.7.2. The increased productivity produced by shifting from dysergy (1 + 1 = less than 2) to synergy (1 + 1 = more than 2).

8.8. The increased returns will be shared by the workers and other active stakeholders
holding Common Equity Units.

9. Conclusion: RPERS is a different financial structure that promotes and supports the creation of a different world – a world in which every person has the opportunity to choose prosperity, joy and personal growth while living in harmony with Mother Earth.

Copyright 2002 Wayne F. Perg, Ph.D.

Presented at the Rolling Thunder Workshop: July 27, 2002 by:

Wayne F. Perg, Ph.D., wayneperg@earthlink.net
Co-Founder, New Market Solutions, LLC
Council Member, Partnership Way Center of Tucson

More: Different Finances for a Different World

According to the Wilshire Total Market Index, the American stock market has lost $ 7 trillion (seven million million dollars) in value since March of 2000. Tax revenues are falling as more and more Americans become unemployed and as corporate profits and values fall.Our government is now proposing to spend $400 billion dollars (four hundred thousand million dollars) on national defense in 2003. Do we have a problem, Houston?

American Bankruptcy: Breakpoint to a New Civilization

Barry Carter

With the Agricultural Age to Industrial Age shift, the Revolutionary and Civil Wars were intense breakpoint bangs. Before the short intense bang there was one system and after the bang a completely different system. With social breakpoint, pressure builds for change. This change is resisted and held in check and then, with a bang, it breaks like a dam which has filled for years.

There are many ways that our society could slip into a hellish road warrior era; terrorist attacks on major cities with nuclear weapons, terrorist attacks on our information technology infrastructure, or racial division. The bankruptcy of the United States’ federal government is another candidate. In earlier chapters it was shown that bankruptcy of centralized wealth creation is almost certain unless we have fundamental change. If the United States federal government were to go bankrupt this would be the bang, not just for the United States but for the entire world. How could this happen? Let’s look at a theoretical example.

The following scenario is pure speculation. Though federal government bankruptcy is inevitable unless we drastically change direction, the likelihood that things will unfold as defined here is quite remote. The point, however, is that regardless of how it happens, a federal government bankruptcy would be our breakpoint to either the new civilization or to a hellish road warrior era.

The Scenario: The politicians have no choice, if they want to keep their jobs, they continue to pander to our wants. We say we want the budget deficit cut. However, when it is cut in our district we vote out the person and replace him with someone who will meet our needs. Our yearly deficit continues to balloon. Few people really think anything is going to happen, after all, we’re the United States of America, “the greatest country in the world”, “we’re number one,” and nothing has happened yet. The interest payment on the debt continues to grow to a point where lenders begin to tighten credit as they begin doubting the federal government’s ability to continue full payment on the debt. This causes interest rates to increase and thus, the monthly debt payment increases.

With credit tightened, the federal government begins raising taxes and cutting services in order to pay the interest on the debt, provide services and maintain credibility. After all, if we begin screwing around with the debt payment, it’s all over.

With taxes being raised and services reduced, people take a stand. “Hell no, we won’t pay more taxes and have services cut. We have real needs to meet today. We have earned our entitlements and they will not be taken away. To hell with the debt. If you won’t meet my needs I’ll vote you out and find someone else who will.” The politicians buckle and delay some of the monthly interest payments on the debt, hoping to push the problem out further into the future and allow it to fall on someone else’s reign. The politicians must continue to deliver most of the services or be voted out of office or impeached. The public will not tolerate cuts in Social Security and jobs in their area. We are to a point of no return.

With the federal government refusing to pay a portion of its interest payment, credit to the government is tightened, interest rates increase and the monthly payment gets even larger. The government now can afford even less of the payment and again reduces payment to debtors. Over time there is much uncertainty. All credit is eventually cut off to the federal government.

Nobody is willing to buy bonds or lend the government anything, since they’re not sure if they’ll get their money back. With no credit, services are cut across the board with the exception of defense. Defense is put on heightened alert in this time of vulnerability and uncertainty and FEAR. With services drastically cut, and people feeling suckered, there is a massive tax revolt with millions of people and companies refusing to pay further taxes.

The revolt snowballs. Services are cut even further. There is demand from the people for all taxes paid to go strictly for the military and defense. The federal government lays off 99.9% of its workforce. The federal government at this point has all but ceased to exist with the exception of defense.

A significant amount of cash has stopped flowing in society and the world, as the federal government ceases operation. The lack of cash flow to the companies that supply the federal government causes many companies to immediately go out of business. The confidence in our economy, which holds it together, is shattered. People stop spending and begin withdrawing their money from banks, bonds and the stock markets, putting them into some hard tangible asset, such as gold or real estate. Markets are out of whack as gold and real estate prices soar while the dollar plunges. Daily there are runs on hundreds of banks, as people panic and try to get their money out. The ripple effects are felt in every organization around the world. Many companies fail because of the slowdown in cash flowing throughout society, the shattered confidence in the economy, and, most importantly, the slowdown of spending as people start buying only the goods and services that they absolutely must have. The world sinks into a massive depression from the ripple effects.

There are now 41 million senior citizens no longer getting government checks. They are back in the workforce, along with millions more from the welfare roles, tens of millions from corporate America, tens of millions of government workers. There are, however, no jobs openings. People begin to search for ways to meet their living needs. There, however, is no lack of work to be done. Thousands of services have been dropped by the government and bankrupt companies.

Though there are no job openings, people find all kinds of niches, nooks and crannies to produce income using their wits and knowledge. Internet is humming as people connect. With an abundance of knowledge, know-how and demand for work and services and a shortage of dollars, other forms of capital begin to emerge. Computer databases are established which allow thousands of people to exchange labor for goods and services through electronic barter banks–electronic capital.

Internet explodes because people are connecting horizontally and trade work at the individual level. There is a hub of thriving decentralized information businesses which are booming, such as computer information services, micro computer hardware, software, programming and training. Growth in the entire information technology field explodes in all directions.

People have found, and are struggling to find, niches for themselves. Many of the people out of work are intelligent, well educated, knowledgeable and technically advanced. Many people finding insecure niches for themselves begin networking and partnering for strength and stability. Networking and partnering between individuals explodes overnight. The networks are able to produce extremely high levels of quality, value and service to their customers because there is real tangible ownership, with real chains of customers and real virtual enterprises.

They are flexible, agile and changeable on a dime. In addition, they realize the urgency of their customer’s needs. People are engaged and focused 110% on their customer’s needs. This is because losing a customer could mean profit or loss. Things are REAL to the individual and there are no zombie clerks.

Manufacturing equipment is dirt cheap with many companies going belly up and investors needing cash. Some of the larger networks of partners venture into manufacturing, using their network structure. These networks begin to grow extremely large and powerful, with people owning their own work. More and more people find that personal computers, information technology and networks allow them to easily link up with others to trade work and produce income. In these partnerships there is natural alignment as people come together where there is a natural fit. The entire area of information technology continues to explode with growth.

As companies reengineer and downsize to cut cost and survive tens of millions of jobs are lost. Though the employees are terrified of losing their jobs, this fear cannot be transformed into the kind of power that the private networks have. In addition, they cannot produce the quality, service, value, speed, intelligence, perspective and flexibility offered by the aligned networks. With the advent of the Mass Privatization networks and the instability of markets, traditional companies can no longer operate with employees and tens of millions more are laid-off. Many companies opt for all-at-once-change and are dissolved and all employees fired. Some of the kingpins of the old company become Structure Partners in the new organizations. Companies offer contracts to the key employees to become partners. The partners are requested to restructure to resemble the aligned private networks. They search the employee ranks and select the best business partners to continue the business operations of the company. The partners develop real visions and aligned compensation structures.

The employees which are not chosen as partners are out in the cold–no pension, no severance pay, no unemployment, no notice, no COBRA health insurance. The company’s partners are given foundations from which to meet market needs and grow and expand. As businesses begin to grow, some former employees are called on as partners by former co-workers to help complete work. Partners own their work and are allowed to expand markets in any directions seen fit in order to create wealth by meeting customer needs.

Former employees are continuously approaching partners with ideas where they can add value, without any risk to others in the enterprise. Some are added on. Some succeed and many fail. Times are hard. Many of the failed partners standing in soup lines thinking, “If I’d only started a part-time private business while I still had the income from my job, and gotten some experience.”

Aligned networks have used the new electronic banks from day one as defined in Infinite Wealth. The newly transformed companies follow this lead. Traditional companies shift much of their capital into the newly formed electronic banks. In the meantime on Wall Street, companies are collapsing right and left. With the stock market and Wall Street evaporating, company managers quickly set up databases to connect partners directly with investors. The investors holding almost worthless paper are glad to trade it for a real tangible income source by going into partnership with individual partners.

Brokers step in to help broker deals between partners and people with cash. Thousands of new decentralized stock markets form overnight through the Internet, connecting investors with capital to partners with knowledge.

As the electronic banks become more sophisticated, they continue to link up to each other. Eventually hundreds or thousands of the decentralized electronic banks are connected nationwide. Explosive growth continues in the decentralized computer industry. Information technology is now driving wealth creation and knowledge is at the center of our wealth creation system.

People in Mass Privatization networks are trying all kinds of ideas to meet customers needs. When an idea clicks it spreads through the network like wild fire because of knowledge leveraging compensation. Entire networks of tens of thousands of people turn on a dime to incorporate new ideas to better meet customer needs. They thrive off of wide and diverse variation, as opposed to the narrowing of variation which was the rule in “controlled” companies. There is no shortage of human needs to meet and no shortage of people working very hard to meet them.

The information superhighway has become our lifeline. The last thing people want to do is get disconnected from the world and lose their ability to trade. It is clearly understood by all that Toffler’s words are reality, When information flows, cash flows.” The new decentralized wealth creation economy has begun to build from the ground up.

Millionaires are being produced by the hundreds daily in the decentralized computer and knowledge industries. At the same time those ill-prepared for the shift to knowledge and Private Work are barely able to eat. With it being apparent that knowledge is the new wealth creator, all kinds of decentralized for-profit educational and knowledge institutions and systems continually spring up.

Book sales and on-line data services skyrocket. Books and “how to manuals” are being published on the Internet overnight. People are devouring information and knowledge as it drives everything. The demand for knowledge which adds value is enormous. Even people who dropped out of high school because they hated school, are now eager for knowledge because it is directly and immediately convertible to wealth, is real and is wealth itself. Many previous gang members and welfare recipients are becoming multi-millionaires as they form and join Mass Privatization networks and begin to trade.

Political parties begin to spring up overnight–right wing, left wing, religious, minorities, separatist, fascist. Most people, realizing the futility of representative government, aren’t hoodwinked by the good intentions and promises from smooth talking individuals who would represent them. “Fool me once shame on you, fool me twice shame on me.” It is now fully realized that the only person who can represent one is oneself. This is so obvious by now that, without it even being explained, most understand. All kinds of organizations spring up interconnected, overlapping and networked together to form Toffler’s mosaic democracy and Drucker’s society of organizations and beyond this to the new mass synocracy civilization. These organizations are interdependent with one another based upon partnership, as opposed to the bare tolerance and dependence of centralized wealth creation. These organizations form the Virtual Alliance, which replaces our old federal government. In fact, representative government is no longer tolerated. People refuse to be governed, managed, supervised, led or ruled–they’re empowered through alignment. People refuse to be dependent upon representation but are now interdependent with one another through networked organizations with local ownership. The symptoms and deficits from our joint mass victimization based past begins to disappear overnight, as people are empowered and emotional intelligence is increased as people are motivated to focus on meeting other people’s needs.

The institution of the United States Presidency continues, but slowly goes the way of the monarchy. Representative Mass Democracy, the Industrial Age, division of labor and the company are all dead.

Other industrialized countries are going through a similar metamorphosis to the Mass Privatization paradigm. The third world, watching what is going on, discovers that the new Mass Privatization based wealth creation is not heavily dependent upon dollar capital or natural resources. They jump on the bandwagon. All types of decentralized educational knowledge systems spring up overnight worldwide.

Again this is only speculation, and though bankruptcy is highly likely, it is highly unlikely to unfold this exact way. There are many, many twists and turns that an explosive situation of this nature could take. Above I have presented the best case. The worst case could include some of the following, starting as the government begins to cut back on services:

With welfare checks gone and no jobs in inner cities, crime skyrockets. Minorities in the cities demand what’s owed to them, by the “infinitely rich,” white society. Most blacks see this bankruptcy stuff as just a ploy and conspiracy to exterminate blacks. Fear reins, new realities are expected, thus seen and created as the natural law of quantum physics dictates. As riots break out, marshal law is declared nationwide, with tens of thousands of inner city blacks being killed. A reality out of fear has been expected, thus seen and created. The riots in most major cities are costing trillions of dollars in damage.

Other scenarios could include a military takeover the government, installing a totalitarian or fascist regime. We could also split into many factions of vigilantes, minority rioters, right wing fanatics, various religious fanatics, youth gangs, death squads, hate groups, militias and terrorists. Literally anything is possible in this fear-based reality. History has proven how insane we can become when driven by fear.

The bankruptcy of the federal government is only one possible trigger for the massive shift to mass privatization. There are many others including the potential Y2K disaster and lose/lose violence.

Conclusion

The fear which will be created from a bankruptcy of the federal government must be avoided at all costs. We must not allow things to go this far. We must prevent bankruptcy by installing the new wealth creation system with the vision, passion, drive and intensity of winning World War II. We can install enough of the new system in time to avert bankruptcy, as well as other potential trigger points. This can happen if we as individuals educate ourselves and begin a massive dialogue in all segments of society and become obsessed with aligning ourselves with the new information society. A negative trigger to breakpoint may occur.

We should not be fooled into thinking that we have plenty of time. Breakpoints occur rapidly and we can make it a positive one. As paradigm shifts reset things to zero, they usually set up the conditions ripe for an explosion. As shown in Joel Barker’s video The Business of Pardigms the Swiss lost the watch market in only a couple of years. IBM cracked in only a few years. The Southern United States went from wealth to poverty in a few years, the old Soviet Union went away overnight. Asked beforehand, most people would have concluded that the Cold War would have to be slowly eroded away over decades. The making for fast radical change in wealth creation has been building for decades. The dam has been holding back water for forty years. We must convert this into positive energy with a move to Mass Privatization through information technology, or face the explosion.

Copyright 2000 by Barry Carter

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About Barry Carter.  

Infinite Wealth is available at the author’s website, and can be purchased in bookstores everywhere including Amazon and Barnes & Nobel.

There is also an abbreviated free online version, which has been reposed at Future Positive: 1) The Rise of a Win Win Civilization  2)  A Personal Journey of Discovery 3) Why Corporations Don’t Work 4) The Emancipation of Capitalism  5) Mass Privatization: Organizing in the Information Age  6) Decentralized Wealth Creation  7) The Infinite Wealth Potential of Liberated Humans The Mandate for Win-Win Wealth Creation  9) Breakpoint: Why You Must Act Now  10) SYNOCRACY: True Democracy Through Synergy 11) THE SHIFT: Awaking to a Win-Win World  12) The Synthesis of a Win-Win World and 13)Vision for a Synergic Transition.

Reason Wilken’s Review of Infinite Wealth

Advanced Papers by Barry Carter

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Yesterday’s Do the Math! Let Free Enterprise Rid Us of Saddam, has been on the DayPop Top Forty for 24 hours. It also got a mention at CamWorld. Today, I followed it up with The Rich American Challenge: How much is your country worth?

Also see: Cameron Barret’s Why are U.S. Plans to oust Saddam being made Public ?

Working Together for Greater Intelligence

Barry Carter

As we enter a knowledge era, our organizations must be extremely intelligent. They must work like the brain since they are in the business of knowledge production. The public work hierarchy, however, works more like the human body than a brain. The hands, feet, eyes, mouth, ears, legs, etc., all carry out certain tasks that are controlled by the brain. By giving the brain total control there is maximum coordination; there is not an arm wanting to do one thing and the legs contradicting it. The brain does the thinking and the hands do the doing. Break the connection from the brain, as with back injuries, and hands, arms, legs, etc, stop working immediately. Have a company’s management go off site for a week to a retreat and performance usually improves. Work definitely does not come to a halt.

The company, with one person reporting to another, is specifically designed to provide the person or people at the top with maximum control. Public work, the company and hierarchy is not evolved for thinking at the worker level. The people at the top are the brains and those at the bottom the hands. Milliken, the textile manufacturer, like many in the South, at one point actually called its production workers “hands.” Milliken transitioned to calling people employees and later changed this and began calling their employees associates.

When we compare the body to the hierarchy, there is a major difference between the two. In the body, the hands have no separate brain. In the organization, each worker has a brain. Therefore, an organization’s Intelligence Quotient is the sum of the IQ’s of all individuals within the organization, plus the degree of communications between the individuals. We have exactly the wrong organizational structure for an intelligence based knowledge era. The IQ of the front line employees of a company of 200 front line employees (with average IQ’s of 100) is 20,000, not including any synergistic effect. Given that the controlled economy has seven very smart managers, averaging 125 IQ’s and a CEO with a 150 IQ, the collective management IQ is 1025. Including supervisors, and other specialists, the collective IQ of those doing the thinking, managing, directing and controlling is 2935. The IQ ratio between the “hands,” and the “brain,” is out of whack. The less intelligent collective IQ of 2,935 is thinking for, directing and controlling the far more intelligent collective IQ of 20,000.

It is no wonder that in controlled economy after controlled economy, one hears the same message from the employees: “How can management be so stupid?” To state it simply, the controlled economy is incredibly obtuse. If today’s company were a person, it would be declared an imbecile, based upon the capability wasted versus actual performance.

Though self-directed teams and other fad organizational changes within the controlled economy are attempting to engage the intelligence of the entire organization, a controlled hierarchy, void of real ownership, is simply not evolved for intelligence. Communications is limited by control and representation. The control needed to produce order within controlled economies limits information flow and knowledge creation and creates little motivation to engage people. The worker is intrinsically not motivated to and extrinsically prevented from producing the knowledge and information flow needed for truly intelligent organizations.

A bureaucracy based upon the management of people must be seen for what it is: a simple and primitive form of organizing work and people. If we can build space shuttles and land on the moon and clone mammals and create atomic bombs then surely we can develop more intelligent means of organizing the work of people.

Copyright 2000 by Barry Carter at Win Win World

Good Morning Future Positivists, I am working on lots of things for next week. Today will be light, but take a look at my essay at CommUnity of Minds…Do the Math! Let Free Enterprise Rid Us of Saddam