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We're Living Through a Rare Economic Transformation

Those who understand its post-capitalist rules will prosper
Thursday, April 4, 2013, 8:47 AM

In 1993, management guru Peter Drucker published a short book entitled Post-Capitalist Society.  Despite the fact that the Internet was still in its pre-browser infancy, Drucker identified that developed-world economies were entering a new knowledge-based eraas opposed to the preceding industrial-based era, which represented just as big a leap from the agrarian-based one it had superseded.

Drucker used the term post-capitalist not to suggest the emergence of a new “ism” beyond the free market, but to describe a new economic order that was no longer defined by the adversarial classes of labor and the owners of capital. Now that knowledge has trumped financial capital and labor alike, the new classes are knowledge workers and service workers.

As for the role of capital, Drucker wryly points out that by Marx’s definition of socialist paradise that the workers owned the means of production (in the 19th century, that meant mines, factories and tools) America is a workers’ paradise, because a significant percentage of stocks and bonds were owned by pension funds indirectly owned by the workers.

In the two decades since 1993, privately owned and managed 401K retirement funds have added to the pool of worker-owned financial capital.

Drucker’s main point is that the role of finance and capital is not the same in a knowledge economy as it was in a capital-intensive industrial economy that needed massive sums of bank credit to expand production.

How much bank financing did Apple, Oracle, Microsoft, or Google require to expand?  Investment banks reaped huge profits in taking these fast-growing knowledge companies public, but these tech companies’ need for financial capital was met with relatively modest venture-capital investments raised from pools of individuals.

That the dominant knowledge-based corporations had little need for bank capital illustrates the diminished role for finance capital in a knowledge economy.  (This also explains the explosive rise in the 1990s and 2000s of financialization; i.e., excessive debt, risk, leverage, and moral hazard.  Commercial and investment banks needed new profit sources to exploit, as traditional commercial lending was no longer profitable enough.)

In a knowledge economy, the primary asset knowledgeis “owned” by the worker and cannot be taken from him/her.  Knowledge is a form of mobile human capital.

In Drucker’s view, knowledge, not industry or finance, is now the dominant basis of wealth creation, and this transformation requires new social structures.  The old industrial-era worldview of “labor versus capital” no longer describes the key social relations or realities of the knowledge economy.

The transition from the industrial economy to the knowledge economy is the modern-day equivalent of the Industrial Revolution, which transformed an agrarian social order to an industrial one of factories, workers, and large-scale concentrations of capital and wealth.  These major transitions are disruptive and unpredictable, as the existing social and financial orders are replaced by new, rapidly evolving arrangements.  As Drucker put it, the person coming of age at the end of the transitional period cannot imagine the life led by his/her grandparents the dominant social organizations that everyone previously took for granted have changed.

Following in the footsteps of historian Fernand Braudel, Drucker identifies four key transitions in the global economy:  in the 1300s, from a feudal, agrarian economy to modern capitalism and the nation-state; in the late 1700s and 1800s, the Industrial Revolution of steam power and factories; in the 20th century, a Productivity Revolution as management of work and processes boosted the productivity of labor, transforming the proletariat class into the middle class; and since the 1990s, the emergence of the Knowledge Economy.

In Drucker’s analysis, these fast-spreading economic revolutions trigger equally profound political and social dynamics. The dominant social structures that we take for granted labor and capital, and the nation-state are not immutable; rather, they are the modern-day equivalent of the late-1200s feudal society that seemed permanent to those who had known nothing else but that was already being dismantled and replaced by the Renaissance-era development of modern capitalism.

From this perspective, the nation-state is no longer indispensable to the knowledge economy, and as a result, Drucker foresaw the emergence of new social structures would arise and co-exist with the nation-state.

Drucker summed up the difference between what many term a post-industrial economy and what he calls a knowledge economy this way: “That knowledge has become the resource rather than a resource is what makes our society 'post-capitalist.’  This fact changes fundamentally the structure of society.  The means of production is and will be knowledge.”

Knowledge and Management

As we might expect from an author who spent his career studying management, Drucker sees the Management Revolution that began around 1950 as a key dynamic in the knowledge economy.  The lessons in management learned from the unprecedented expansion of U.S. production in World War II were codified and applied to post-war industry, most famously in Japan.

This is the third phase of knowledge being applied to production.  In the Industrial Revolution, knowledge was applied to tools and products.  In the second phase, knowledge was applied to work flow and processes, enabling the Productivity Revolution that greatly boosted workers’ productivity and wages.  The third phase is the application of knowledge to knowledge itself, or what Drucker terms the Management Revolution, which has seen the emergence and dominance of a professional managerial class, not just in the private sector but in the non-profit and government sectors.

The nature of knowledge has changed, in Drucker’s analysis, from a luxury that afforded the Elite opportunities for self-development, to applied knowledge.  In the present era, the conventional liberal-arts university education produces generalists; i.e., a class of educated people.  In terms of generating results in the world outside the person, knowledge must be effectively organized into specialized disciplines that incorporate methodologies that can be taught and applied across a spectrum of people and tasks.

Drucker characterizes this as the movement from knowledge (generalized) to knowledges (applied, specialized).  Organizations can then focus this methodical knowledge on accomplishing a specific, defined task or mission.

Though it may seem incredulous to us, Drucker observes that the current meaning of “organization” was not listed in the authoritative Oxford dictionary of 1950. While social groups and organizations have existed for as long as humanity itself, Drucker distinguishes between the traditional “conserving institutions” of family, community, and society, and the destabilizing post-capitalist “society of organizations” that is adapted for constant change.

Organizations require management, and in the knowledge economy, that means managing change and helping the organization learn how to innovate.  Innovation can no longer be left to chance; it must be organized as a systematic process.

Without a systematic process of constant innovation, organizations will become obsolete.

Drucker takes this process of innovation one step further and concludes that this requires decentralization, as this is the only means to reach decisions quickly based on performance, and proximity to markets, technology, and the environment.

Though he doesn’t state it directly, this means that the highly centralized sectors of the economy, from finance to government, will be disrupted by a rapidly evolving, decentralized “society of organizations.”

What Work Will Be In Demand (and What Won't) in the Future?

So if this is the nature of the new economy, what type of worker will be most in demand?

Will your current industry, job, or skill set be as relevant? Are there steps you can start taking now to defend or increase your future market value?

In Part II: Positioning Yourself to Prosper in the Post-Capitalist Economy, we examine what impact these transformational forces will have on us as individuals, households, and communities, and how we can best prepare for the fast-evolving knowledge economy.

The global economy has only experienced three major transformations in the past 1,000 years, and arguably, we are living through the fourth. Those who understand the nature of this transition and position themselves intelligently will be disproportionately better off a topic covered fully in my earlier report on The Future of Work.

Click here to read Part II of this report (free executive summary; enrollment required for full access).

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64 Comments

Macs's picture
Macs
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Hmmmm, not convinced....

Drucker seems totally unaware of ENERGY, which, regardless of the level of complexity of a given society is THE resource. The apparent prominence of knowledge is a marker of our energy-subsidised complexity; it's an artefact not a driver.

As is said: "Without energy, technology is just wierd-looking scultpure." Without energy, what is knowledge? I'd hazard 'arcane and unactionable' as a starting point. It doesn't matter what you know if you lack the energy to make it happen.

An aside: Equating 401ks to 'workers owning the means of production' is just fatuous - holding a flimsy title is far removed from the original concept of ownership enabling control. Your 401k doesn't give you any influence over the board of Exxon - Drucker may be fooled, Marx wouldn't.

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charleshughsmith
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knowledge and energy

Hi Macs: Good points. One dynamic is that technical and social knowledge could (if properly applied) greatly reduce energy consumption.

Agreed, Druckers' faith in 401Ks is looking naive in a world where financial assets are being grabbed as "wealth taxes" or bail-ins. However, we shouldn't overlook the qualitative difference between the old industrial model where the company provided a pension and the worker was powerless over the whole thing (so when the company raided the pension fund or went bankrupt, the worker was out of luck) and today, where the savvy worker at least has the option of opening self-directed retirement plans that enable direct ownership of precious metals, real estate etc.

FreeNL's picture
FreeNL
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Completely disagree!

We arent turning into a knowledge based economy. Weve always been a knowledge based economy, which has always been parasitized by wealthy capatilists. Tesla and Westinghouse/JPMorgan is an ancient example.

Knowledge has always been preyed upon by "capitalists" simply because the people that want to improve the world dont expend all their energy trying to profit from it. Likewise those who spend all their time trying to profit rarely improve the world. Usually its a game of exploited knowledge and always has been.

The simple truth that no one wants to hear is that the reason why they say that "service" and "financial" sectors are the main economy is because its completely gutted and theyve moved on and left it for dead. All financial products are basically legal fraud manipulations, and service sectors rely on old money that was built up when manufacturing existed.

the poster was right about something though, there is a change coming, and as one of the posters above mentioned it has everything to do with energy, which is the true backbone of our society.

The only thing holding back this world is money and if people think there done with farming, ive got news for you. Without cheap oil, well all be farmers. You can "knowledge based" all you want, and while knowledge is power, that power isnt measured in Watts or KVA and cant heat your home.

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AKGrannyWGrit
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Transformation

One of my favorite episodes of Star Trek was about how the Enterprise came across a planet that had beautiful cities, architecture, art, culture but no people.  Of course Enterprise had to investigate.  What they found was "Drones".  These drones were programmed to kill the enemy and they were smart, could adapt and learn and become more effective as they learned.  Unfortunately, the drones learned, adapted and ultimately killed not just the "enemy" but absolutely everyone.

Perhaps it's irrelevant how knowledgable we become if we don't have wisdom.

AK Granny

FreeNL's picture
FreeNL
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AkGrannyWGrit wrote: One of

AkGrannyWGrit wrote:

One of my favorite episodes of Star Trek was about how the Enterprise came across a planet that had beautiful cities, architecture, art, culture but no people.  Of course Enterprise had to investigate.  What they found was "Drones".  These drones were programmed to kill the enemy and they were smart, could adapt and learn and become more effective as they learned.  Unfortunately, the drones learned, adapted and ultimately killed not just the "enemy" but absolutely everyone.

Perhaps it's irrelevant how knowledgable we become if we don't have wisdom.

AK Granny

i believe we killed off wisdom a very long time ago and replaced it with greed. The last time wisdom was used it was before the white man arrived to North America. They shared and respected the land, they only took what they needed, and look what happened to them.

Theyll beam down to detroit in that dark future but there wont be any drones. It will still be such a shithole that not even killer drones will inhabit it.

ao's picture
ao
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a persisting myth

FreeNL wrote:

The last time wisdom was used it was before the white man arrived to North America. They shared and respected the land, they only took what they needed, and look what happened to them.

No, wisdom wasn't used much then either.  This Disney Pocahontas version of a Native American utopia pre-white man needs to die.  No such society existed.  Native American tribes killed, tortured, kidnapped, and enslaved one another on a regular basis and certain tribes even practiced cannibalism.  There were territorial and other disputes galore.  As far as respecting the land, they were easy on the land but only because they didn't have the technology to do much more.

Jim H's picture
Jim H
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AO

Oh gosh.. don't remind me of the scalping I have taken recently on my mining stocks.. ouch!

John Lemieux's picture
John Lemieux
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Exactly, No Technology

I agree that the silly and romantic Hollywood version of North American Native Peoples never existed. And of course they we not Saints. And they lived what we would consider to be a barbaric existance. But the fact is if the Europeans never came to North America, they would almost certainly still be living here much the same way that thay had been for thousands of years.

But since our arrival such a short time ago (in the blink of an eye), we have used our technology to alter and plunder the natural environment to the point that we are causing our own near extinction. So whether the Native Peoples were cruel and violent, or whether they would have done the same thing given the opportunity is beside the point.

The fact remains that they did live in harmony with the natural world. And their way of life was sustainable. Our modern way of life is dissconnected from the Natural World. And it is not sustainable.

But I don't believe that Native Peoples are superior. But it seems to me that we have lost our wisdom. And certainly our connection to and appreciation for the Natural World.

But I don't for a moment believe that can return to some kind of primative way of life. And as always Mother Nature will ultimately correct the problem of environmental overshoot.

Wendy S. Delmater's picture
Wendy S. Delmater
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Let's not hijack this thread

Charles Hugh Smith is talking about something near and dear to my heart: Peter Drucker and his theories on a knowledge-based economy. We are in the middle of a paradigm shift to knowledge workers. Those that can get trained in something the new economy actually needs will do well; otheres will be stuck in service jobs and low wages. I really wonder how much of the split between the haves and the have-nots is caused by the (a) dislocation of people in buggy-whip industries and (b) the disparity in pay between knowledge workers and service workers.

Drucker's analysis that we went from an agrarian-based economy to an industrial one to a knowledge-based one is one of the insights that formed my mid-life career, when I had to reenter the workplace after being abandoned with small children. What career path would not become obsolete within 10, 20, or 30 years? The conclusion I came to was that I needed to find work that was not going to be taken over by a mechanical or software robot, or become technologically obsolete. And it would require training. I got a license in my field before I got a degree. Licenses are the new degrees: they require CEC (continuing education credits) to prove that you know what is happening in the rapidly changing NOW, as opposed to knowing your field when you got your degree, however many years ago.

Why people go for overpriced degrees in overstocked vocations is beyond me. And is no one looking at the industries they are entering with an eye to the future? The misappropriation of training funds to get people into overstaffed fields is a terrible use of resources. Just how many lawyers does the world need?

Technologically, jobs that have recently fallen by the wayside would be anything related to non-digital film, pay phones,  and middle management jobs (largely taken over by admin positons with software like Exel or SAP). Traditional publishing is falling, the same way record companies fell. I wonder of Lasik will kill optometry (sorry, Robbie). And I worry about too many teachers and college professors in an age of online learning and soon-to-be reduced education funding and loans - whether student loans or local school taxes.

Everyone in my family looked for a field that had a shortage. My husband chose fire alarm and suppression system repairs; he has a very rare NICET certification and can get a job anywhere in the US and some other parts of the world with it. My brother has all sorts of Microsoft certifications and makes more than many degreed people as a Solutions Architect. My son is going into diesel technology, a field where there are HUGE shortages. At the time I reentered the workplace (1990) I chose construction safety since a reduction in that industry's hefty worker's comp premiums makes the job a money-saver for construction firms. (I'd not chose it now, but my career made sense at the time, and I still consult in semi-retirement, making good money.)  My degree in safety management and my NYC Site Safety license, my husband's NICET certification, my brother's Microsoft certifications, my son's ASE certifications and things like that are all portable. They are attached to a skilled person. They are indications of marketable knowledge.

They also provide a small measure of security in changing times.  We do not depend on an employer or the state for our livelihood; we depend on our skills and experience.

robie robinson's picture
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Wendy

you ruined it for those waiting for fireworks. I was sure someone would break out a Darwinian based value on creeds,cultures and ethnicities.

"God made man in His image, man has been returning the favor ever since" Pascal

gillbilly's picture
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Thank God for Women...

All the obvious opinions of white men being expressed are finally interrupted by the wise woman. Thanks Wendy, you are proof wisdom is alive and well. smiley

S Anthony's picture
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Buggy Whips

Life is short, art long, opportunity fleeting, experience deceptive, judgment difficult.

Sirocco's picture
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Is the market for knowledge-based labor already saturated?

Having spent the last 20 years working in the IT industry (as a programmer, application developer, project manager, database administrator, and enterprise architect), I’m of the opinion that the field, in terms of employment, has reached its peak and has begun its downslide. Software companies (Microsoft, Oracle, etc) have evolved their development tools to the point where many of the tasks that used to be the domain of highly trained and highly paid IT workers can now be done by your average Joe. Application programming, for example, is moving from a code based endeavor to a graphic interface, where the “programmer” simply connects boxes (representing objects such as a file or a database table) to diamonds (representing actions such as copy or move), and the software writes the underlying code for you. Last year I taught a number of non-IT folks how to write their own applications via the graphical interface (thereby reducing the need for my higher paid job, by the way).  Database administration these days is largely accomplished in exactly the same way, by much less skilled people than your tradition DBAs.

My crystal ball (which is just as murky as most everyone else’s) tells me that the future of employment in the knowledge-based industries will resemble the rest of the employment market. There will be a very high demand for a “small” number of very specific and highly skilled jobs; many typical jobs will be simplified so that lower paid people can do them or will be automated altogether; the field will generally be swamped with far too many college graduates of average talent trying to secure a shrinking number of jobs; and only the exceptionally talented individuals will land and keep top paying jobs.

As energy becomes scarcer, and more and more people struggle just to put food on their table – who will have money to waste on “shiny new toys/technology”? I think the traditional IT field is already saturated, employment-wise. Wendy made some really good points about doing your research before investing in a new career – look before you leap.  

Wendy S. Delmater's picture
Wendy S. Delmater
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Sorry, robbie

Here are you fireworks.  I would not want you to do without them.

We now return you to your regularly scheduled thread.

Doug's picture
Doug
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One last hijack

I went to a meeting last night with some Native Americans on a local res where they are doing a number of projects to encourage people to grow their own food mostly with traditional crops of native species.  It's pretty cool idea and one I'm excited to have been asked to help with.  It turns out that despite the variety of social ills that plague modern reservations, there is beneath those ills a solid community the likes of which we hope to recreate in the towns and villages that the descendants of European settlers live in today.

Some of the people who I have met are steeped in traditional foods and medicines and are trying to bring back many of those traditions, as well as the spiritual and hereditary aspects of their culture.  One lady who has been practicing those traditions for some time gave us an example of how their ancestors thought about such things.  She said that people have stopped asking her how to make white corn soup, a traditional and ceremonial food, because when they ask, she starts with how to prepare the soil for planting and then goes through all the steps necessary to make corn soup next spring.  Most say never mind long before she finishes.

There is still much to learn from them.

Carry on.

Doug

treebeard's picture
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Theories

about a knowledge based economy have been around for a long time, unfortunately they get reduced to sound bites in the mass media so they become practically useless.  I have to admit not being familiar with Druckers work, so can not weigh in on his theories in much depth based on the short article above (but that certainly will not stop me!).

“That knowledge has become the resource rather than a resource is what makes our society 'post-capitalist.’  This fact changes – fundamentally – the structure of society.  The means of production is and will be knowledge.”

The forgoing statement is seems a bit obtuse and nonsensical, I can only presume he is trying to make some kind metaphorical point, though I am not entirely sure what it is.  Knowledge is not and cannot be a resource, you can only have knowledge of something, but the description in our heads is not the thing described, obviously enought.
 
I would presume that he implies that we have been blundering about this planet so semiconsciouly and ineffectively, that we have had to have been rescued to date by the generosity of abundant natural systems.  Now that our level of knowledge has reached such a point of refinement that the efficiencies reaped by the application of this "new?" knowledge will be so dramatic, that knowledge will appear to have become a resource?  If this is his point than this is straight line mechanistic thinking parading as innovation IMHO.
 
I would agree with his belief in decentralization but his idea of being "effectively organized into specialized disciplines" to me flies in the face of where we are headed.  It is our fragmented and specialized world view that has created both the much of progress we now enjoy, but it is also the shadow side of that kind of thinking that now threatens our survival as a species.  It is the transformation away form this kind of mind set that paves the way to a brighter future.
 
How can "Innovation can no longer be left to chance; it must be organized as a systematic process." Systemization and innovation are antithetical to each other. This is mechanistic thinking at its worst, the promise of the benefits of risk taking without any of the risk?  The known trying to get its dead cold calmy hands around the throat of the unknown.  Innovation comes from stepping into the unknown and can not be "systematized".  And we are certainly on the doorstep of the unkown and fear abounds.
 
Perhaps I am misunderstanding where he is coming from, I would agree we are in a knowledge revolution, but it is not the mining of it like gold or copper that will save us, it is the transformation of what we believe knowledge to be and most importantly its transformation of us where our hope lies. Embacing alternative perspectives of reality are what allow us to evolve into deeper beings and increases the probability of our ongoing evolution.
 
I would agree that native peoples perspective is valuable in this transformative time.  Whether they were better than us, worse than us, more violent than us is so completely irrelavant.  It that it drags us away from any salient discussion of the value of their world view which is so alien to the western world view.  And please lets not insult anybodies intellegnce by bringing up Hollywood!
 
When western ranchers moved into the southwest they went about killing off the prairie dogs because they were concerned about the cattle breaking their ankles in the burrow holes.  The local native peoples went to warn the ranchers when they saw what was going on saying, "if you kill the prairie dogs, who will cry for the rain?"  This was of course written off as primitive nonsense.  Well droughts did ensue.  As it turns out the extensive burrow systems did release enough moisture into the air to have an impact on rainfall, but the native americans through generations of experience expressed this fact poetically.
 
This world view is rich and alive in a way that our world is dead.  There are many limitation in this way of thinking as well but there are lessons to be learned here as well even if they were a horribly violent people, though I would disagree with that assessment.  It is our ability to learn, listen, debate with reason respect that will pull us through.
 
 
FreeNL's picture
FreeNL
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I think a critical assumption

I think a critical assumption is missing. When you have unlimited energy and resources, yes, knowledge is then viable as the means of production.

I dont think were there yet, and i really think that we will struggle with the energy problem "post capatilist" before we will be able to move up another rung of the ladder.

We were put up the ladder to early with oil, and that will have its consequences.  

As far as careers go that will be useful, somehow i just cant past electrician.

ao's picture
ao
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practical application of knowledge

Doug wrote:

I went to a meeting last night with some Native Americans on a local res where they are doing a number of projects to encourage people to grow their own food mostly with traditional crops of native species.  It's pretty cool idea and one I'm excited to have been asked to help with.  It turns out that despite the variety of social ills that plague modern reservations, there is beneath those ills a solid community the likes of which we hope to recreate in the towns and villages that the descendants of European settlers live in today.

Some of the people who I have met are steeped in traditional foods and medicines and are trying to bring back many of those traditions, as well as the spiritual and hereditary aspects of their culture.  One lady who has been practicing those traditions for some time gave us an example of how their ancestors thought about such things.  She said that people have stopped asking her how to make white corn soup, a traditional and ceremonial food, because when they ask, she starts with how to prepare the soil for planting and then goes through all the steps necessary to make corn soup next spring.  Most say never mind long before she finishes.

There is still much to learn from them.

Carry on.

Doug

Doug,

You'll find this interesting.  There's a Native American professor at Northern Michigan University who has been running a study on Native American people consuming indigenous traditional Native American foods.  As one might expect, they become progressively healthier, the longer they are on the diet and the stricter they are about maintaining it.  Hooda thunk one could resolve many degenerative diseases simply through diet <sarcasm>.

And for the vegans here, it wasn't a vegan diet.  With their metabolic type and in a cold northern climate, trying to survive and thrive on a vegan diet would be challenging, to say the least.

This is knowledge that has practical application.  One of the problems I see with a knowledge based economy is that it has leaned more towards knowledge and less on the day-to-day practical application of such knowledge.   

ao's picture
ao
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treebeard wrote: I would

treebeard wrote:
I would agree that native peoples perspective is valuable in this transformative time.  Whether they were better than us, worse than us, more violent than us is so completely irrelavant.  It that it drags us away from any salient discussion of the value of their world view which is so alien to the western world view.  And please lets not insult anybodies intellegnce by bringing up Hollywood!
 
When western ranchers moved into the southwest they went about killing off the prairie dogs because they were concerned about the cattle breaking their ankles in the burrow holes.  The local native peoples went to warn the ranchers when they saw what was going on saying, "if you kill the prairie dogs, who will cry for the rain?"  This was of course written off as primitive nonsense.  Well droughts did ensue.  As it turns out the extensive burrow systems did release enough moisture into the air to have an impact on rainfall, but the native americans through generations of experience expressed this fact poetically.
 
This world view is rich and alive in a way that our world is dead.  There are many limitation in this way of thinking as well but there are lessons to be learned here as well even if they were a horribly violent people, though I would disagree with that assessment.  It is our ability to learn, listen, debate with reason respect that will pull us through.
 
 

It's interesting how folks have projected what they think was said onto what was actually said.  I for one, never said that Native Americans were superior or inferior to any other group.  In fact, my post pretty much said the opposite of that.  The purpose of the post, to reiterate, was to dispel a persistent myth.  Furthermore, no statement was made that they were more or less violent than anyone else.  They were violent just as almost every other group of humans have demonstrated violence, often horrific violence, at one time or another.  And at other times they were peaceful ... just like every other group.  All men are the same red ... on the inside.  And all men have something to offer and something to teach, both by what they do right and what they do wrong.  But no one group has a monopoly on native wisdom, violence, or any other characteristic discussed here.  To try and take the high ground when there is no high ground to take is disingenuous, especially when making statements like "This world view is rich and alive in a way that our world is dead."  This very statement returns to the very same viewpoint that becomes divisive and that I think all of us here are trying to eschew. 

treebeard's picture
treebeard
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The uniformity of nihilism

ao,

The point is as you suggested is that all men have something to teach is true.  But we cannot descend into the unifromity of nihilism either. Our culture has taken a certain path that has lead to certain kinds relationships that are very unhealthy (not all of them of course). There are cultures that have preserved those particular relationships in a healthier fashion (and not others). As one man can learn from another, so to can one culture learn from another. I was not implying that either culture to be better than another.

We have developed great material power, but at a terrible cost.  There are cultures that have preserved that part of ourselves that we must now recover and reintegrate in order to move to a better place. That is the part of our world that has died and needs to come back to life.  As we all have a role to play, I believe native peoples have that role to play in our lives.

They are of course not the only souce of the part of wisdom that we have neglected and let wither, but they are a reminder of values that we all have within ourselves that need to be awakened again.

FreeNL's picture
FreeNL
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One thing is for certain we

One thing is for certain we are coming to the end of a "dirty" era, and are moving into a "clean" era, and i think that should underly choices for the future.

I think knowledge will give way to adaptability, so the most important skills will be problem solving and critical thinking, and not just profit from being in the right place at the right time with the right skillset.

i firmly believe that people will have no choice but to take at least some responsibility for manufacturing their own food, food storage, electricity generation, and do all this in a earth friendly manner.

perhaps we are at or beyond peak "prosperity", but we are not even close to peak "wisdom", and lets face it, we all get the chance to learn from our mistakes.  

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treebeard wrote: ao, The

treebeard wrote:

ao,

The point is as you suggested is that all men have something to teach is true.  But we cannot descend into the unifromity of nihilism either. Our culture has taken a certain path that has lead to certain kinds relationships that are very unhealthy (not all of them of course). There are cultures that have preserved those particular relationships in a healthier fashion (and not others). As one man can learn from another, so to can one culture learn from another. I was not implying that either culture to be better than another.

We have developed great material power, but at a terrible cost.  There are cultures that have preserved that part of ourselves that we must now recover and reintegrate in order to move to a better place. That is the part of our world that has died and needs to come back to life.  As we all have a role to play, I believe native peoples have that role to play in our lives.

They are of course not the only souce of the part of wisdom that we have neglected and let wither, but they are a reminder of values that we all have within ourselves that need to be awakened again.

Agreed for the most part but again, labelling statements made as nihilism slides towards fundamental attribution error.

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knowledge products.

I think what the above article is referring to as knowledge products can be things like software, or high-tech/low energy knowledge products (maker bots, high tech ceramics, solar leaves that mimic photosynthesis on a nanoscale...) I have no hope that technology will stave off either a  crash or a slo-mo, stairstep long emergency. We are headed into into a lower-energy future; however, it will be one that still has technology.

Technology will to some extent persist into our low energy future.  Godbye, petroluem/fossil fuels. Hello hybrid old plus new.

We are not headed into "the old ways" of "living in harmony with nature" like some on this thread have suggested. Will it be a future where we are closer to nature and have learned from the distant past?  I don't see any way to avoid that, so hopefully post crash (after the mass die off projected) humanity will live a way of life less able to damage the environmnent through pollution, etc. But we will still have technology. We are not headed for the past, but rather a mix of past and what we've learned since then. Whatever it will be can only be, to some extent, new. And I thtink it's pure hubris to try and guess what that mix of old and new will be.

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Organizations/Innovation

CHS - Organizations require management, and in the knowledge economy, that means managing change and helping the organization learn how to innovate.  Innovation can no longer be left to chance; it must be organized as a systematic process.

Without a systematic process of constant innovation, organizations will become obsolete.

Treebeard, I was struck by this statement as well. Galbraith says the same thing when describing the technostructure of the corporation. Management was/is central to neocapitalism, I'm not sure it has to be essential in a more decentralized society, but the past can't be ignored, so systemization will most likely be inevitable. Seeing nature as an eco(system), again, inherently separates us from it, although "system theory" views us as a part of the larger global system (the earth being one big self-regulating organism). I struggle with this contradiction...if our perception of system separates us from nature how can we reconcile our being a part of the larger system? At first it seems as if it's perfectly logical, but when I think deeply about it I go around in circles. I feel like I'm stuck in a strange-loop pressing up against Godel's theorem of incompleteness.

I'm also not sure if the last sentence "Without a systematic process of constant innovation, organizations will become obsolete" is an absolute. Constant innovation? I have to give that more thought.

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Prosperity is a state of mind

Hi FreeNL,

In addition to your thoughts that problem solving and critical thinking will be the most important skills, I would add to that change management skills, as gillbilly touched upon. This is a crucial skill needed now, not just in a scarce energy future. The ability to adapt to change is one of the deciding factors in survival, whether as corporations, communities or individuals. It goes to reason then that those who have the strongest change management skills, which is a "knowledge skill", will do the best.

I am wondering about your statement below about being at or beyond peak prosperity.

perhaps we are at or beyond peak "prosperity", but we are not even close to peak "isdom", and lets face it, we all get the chance to learn from our mistakes. 

If one were to measure "prosperity" on the basis of the current financial and consumerist paradigms then perhaps your statement makes sense. But prosperity means different things to differerent people, and many of us do not equate prosperity with monetary wealth. This ties in with the discussion re the natives and what we here in Canada call First Nations people. Many view their historic way of living as primitive, yet it is entirely possible that they thought of themselves as prosperous on the basis of their seemingly infinite access to land, water, and food. I have to say if I had that kind of freedom right now I would feel like the richest woman in the world, far, far more prosperous than anyone living in a gazillion dollar house.

Prosperity is a state of mind, therefore I do not think we can have "peak prosperity", and the same goes for wisdom or knowledge. Those are intangibles that cannot be measured. People never stop learning, so there will never be "peak wisdom". There is, however, a peak to those finite resources that many erroneously view as key to their particular brand of prosperity. This is where we err in our so called wisdom, and perhaps what Drucker was trying to get at in his theory.

We most certainly do get the chance to learn from our mistakes. The problem is, it is not an inherent trait, and it is not diligently applied on a regular basis, largely because humans seem to have this knack of being unable to admit they have made a mistake. The ongoing financial mess is a classic example of humans not learning from history.

If we were more astute at learning from our mistakes and actually taking action to change behaviours accordingly, I would like to think that the cumulative problems we as a species are facing would not be nearly so dire.

Our "problem" is getting TPTB and the decision makers to admit they have made mistakes, and to put in place corrective action before it is too late. We are almost at "too late". Will they wise up with time enough to change? Somehow I doubt it, if their track record is anything to go by. That is why there are ever increasing movements to resiliency and self-sufficiency. In the absence of leadership, we will make our own prosperity.

Jan

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thank you for the many interesting comments

Thanks to everyone who took the time to post.

The various topics here reminded me that part of what we're discussing is appropriate technology and knolwedge, as opposed to technology/knowledge that "makes sense" because of subsidies, tax breaks, financialization, etc.  We can presume these artificial incentives will likely have less staying power compared to market forces over the long run.

If Gregor is correct about coal in N.America being a primary energy source for quite some time, it seems the 2% of electricity production we spend on operating the Internet will continue to be an affordable leverage point to distribute innovation and knowledge.

Innovation is always unwelcome to those whose lives are disrupted, and to vested interests in the old way of doing things. We ultimately prosper by cooperation, and perhaps the social innovations the Internet enables will be more powerful than technological innovation per se.

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Going Down?

A catholic knowledge base is too huge for any modern person to master. It has to be left to the machines.

How many of you have blacksmithing skills, let alone being able to refine iron ore? Both of these essential methods were mastered a long time ago. By specialists.

Specialists must be supported by a surplus in what ever economy emerges, therefore if it is a given that if we are uncompromising in our demand to remain Human (or even better, Post Human) we have to produce a surplus.

The way foward is not backwards.

This crisis is an opportunity to overhaul our arrangements. Money must serve humans, Corporations must serve Humans, Machines and knowledge must be thrown into our service.

Are we going to press the Up button or the Down button on the elevator?

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Small is beautiful:

Economics as if people mattered.  This discussion makes me want to reread EF Schmachers classic book that I read some 20 years ago, but if it didn't fall apart first, I must have given it to somebody a long time ago.

“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage to move in the opposite direction.” 

― E.F. Schumacher

Gillbilly, I see Eco(systems) as living conscious "systems" that interact creatively and dynamically because there is no division or fragmentation between the "parts" as we would label them.  We have had a more difficult time navigating the apparent contradiction between individuation and the whole.  The description is not the thing desribed, our rational projections onto natural systems do not alter the nature of their reality.  I did not follow what your sense of contradiction was.

We currently seem to accept only one mode of knowing, that of the "rational mind" whose only mode of operations is fragmentation.  It is not capable of any other activity. This activity by itself necessarily creates contradictions when applied in isolation. When the division between the "object" preceived and preceptor is eliminated actions become unique and "inovative" necessarily by their nature. We shift into the elusive creative mode of the "artist". As intensely as we claw at this problem with the wrong mind, the problem remains unsolvalbe.  The systems approach will just create more divisions, confusion and fragmentation.

Everyone has experienced the clarity and insight that comes from the creative mind, where insight comes in a flash, where things become suddenly clear and the apparent contradictions melt away.  The understanding of this mind exists in the esoteric side of all religious traditions and in some cultures as a matter of course in their world view. If we need any kind of "system", lets learn to cultivate that side of ourselves that "systems" think tends to destroy.  We could start by bringing the arts back into our educational "systems".

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I also completely disagree

"knowledge" is cheap, virtually cost free and comes from the internet, not from some special brain possessing "knowledge worker"

The conclusion : "In a knowledge economy, the primary asset knowledgeis “owned” by the worker and cannot be taken from him/her.  Knowledge is a form of mobile human capital." is COMPLETELY WRONG 

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knowledge workers

Look, Motts, all I have is annecdotal evidence, but bear with me. I am not saying we will have an exclusively knowledge-based economy, but we may end up where the majority of good-paying jobs are in that sector.  I am not saying other types of work will no longer exist, but they may become less common. Just as we still have farms only now they are 3% of our economy (at the height of the pertoleum-fueled agrarrian revolution. Note: I hope to see the concept of mass-customization hit farming like it's hitting manufacturing with Makerbots.) We will still have manufacturing, although much fewer jobs in mfg. And we will see the rise of the knowledge worker, especially as regards to tech.

It's not just my brother the Solutions Architect with no degree and all of his Microsoft certificates that he earned online. It's not just me with a laptop and engineering knowledge, conducting a business via the internet and making money at home writing custom safety programs. My girlfriend Bonnie writes smartphone apps for a living. No specialized training in college; she learned this off the net all by herself.

KNowledge work is on the rise. The biggest TV network is actually Machinima, a gamer network that puts the numbers of traditional broadcasting to shame. People are making it as musicians and artists online, doing YouTube work for a living. Writers are sef-publishing and cutting out the industrial publishers - and making between 5 and 7 times more. Musicians are cutting out record labels, putting their music and liner notes out on the intenet, and making their money on live tours.

I am not saying this is for everyone, but when traditional jobs dissapear people will make their own opportunities, and many of those jobs will be knowledge workers.

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Mots

Mots is moving in the right direction, we are in a knowledge revolution, but it is not the commodifcation and ownership of knowledge by a "worker" or any entity that the economic "rational" mind perceives. It is the universal availability of knowledge that the creative mind is producing through such things as the open software project.

"knowledge" is cheap, virtually cost free and comes from the internet

Cheap is misused in this context IMHO, because it is an economic term. The knowledge availabe was and is being paid for by a lot of hard work and dedication of a lot of people who have transcended small minded rational economic capitalist tit for tat thinking.

The rational mind engenders fear through division and fragmentation and tries to create ownership and job security to allay the fear it creates. The creative mind thinks big picture, transcends fears, and makes knowledge universally available.  The ability of any individual to access information and change their lives is the revolution that is transforming the world beneath all the doom and gloom that we hear.

Lets stop putting new wine in old skins.  We must be made new through and through if we are going to transcend these dark times.

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Art and Rationalism

Thank you Treebeard, you solved my contradiction/problem:

We currently seem to accept only one mode of knowing, that of the "rational mind" whose only mode of operations is fragmentation.  It is not capable of any other activity. This activity by itself necessarily creates contradictions when applied in isolation. When the division between the "object" preceived and preceptor is eliminated actions become unique and "inovative" necessarily by their nature. We shift into the elusive creative mode of the "artist". As intensely as we claw at this problem with the wrong mind, the problem remains unsolvalbe.  The systems approach will just create more divisions, confusion and fragmentation.

As a jazz musician, I can relate to this statement. Improvisation is experiential and in the moment, and I'm all too aware when I perform that I slip into a transcendent state when I'm "in the zone." Trying to wrap my mind around the problem was the problem, it creates the contradiction.  I am in a state of complete fulfillment when I'm in the zone. It's probably the reason I left finance so long ago to pursue the arts. The rational mind too often denies or completely rejects the power of the symbolic.

The rational mind engenders fear through division and fragmentation and tries to create ownership and job security to allay the fear it creates. The creative mind thinks big picture, transcends fears, and makes knowledge universally available.  The ability of any individual to access information and change their lives is the revolution that is transforming the world beneath all the doom and gloom that we hear.

Beautifully stated! Both fulfill a role, and as Arthur likes to point out we need make the collective shift back to right brain.

I would like to recommend again Jaron Lanier's book "You Are Not A Gadget," which gives a critique of open-source/web 2.0. He thinks we shouldn't become too enamored with it. When he was involved in creating it, his wish was for the internet to become more individualistic in its appearance and expression, and just the opposite has happened. Most websites look alike or fall into predictable templates, and those who are making the most of internet commerce are those organizations that control the infrastructure. He believes the Google/Wiki paradigm is something that leaves a lot to be desired...good for some things, awful for others.

Wendy, thank you for your post! You always have such valuable things to add. I would disagree a little with what you say though. You wrote about musicians bypassing the record company and making money off youtube and tours, but the reality is that the number of musicians who can actually make a living off these revenue streams is extremely small.  Open source, at least in the short run, has devastated the music industry (I'm not shedding tears for the larger labels) and most musicians' livelihood (I am sympathetic). In the long run it may be what is needed to shake off the exploitive nature of the big labels, so I remain open minded that this may be the beginning of something more fruitful for the arts in general. One of the contradictions I see is that the arts are the ultimate expression of culture, but much of our cultural expression throughout the world is being homogonized through the open source medium, leaving a monoculture. In addition to music, writers, visual artists, film-makers, are all facing the same dilemma. Mashups are becoming the norm which leaves authorship nebulous. Have you experienced any of this in your own business, and how do you navigate around it?

We could start by bringing the arts back into our educational "systems".

Amen, I've spent the past 20 years fighting this fight. A more holistic approach is needed in education. Students of all ages are starved for "meaning." I believe this is born out of their experience with adults starving for the same thing. The push for more math and science above all else puts this into context. The push for these subjects ultimately comes out of fear. Fear we won't be able to compete, fear we'll be left behind. My question is always... left behind what? Facts and truths are very different things, but too often they are looked upon as the same. Students are too often looking at their grades as a reflection of who they are. GREs, LSATs, SATs, factual cognitive recall is all that matters. The arts, humanities, religion, culture, all these are put in the "leisure section" of our lives, something to ponder on Sunday...like I'm doing right now.

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information or knowledge

Mots wrote:

"knowledge" is cheap, virtually cost free and comes from the internet, not from some special brain possessing "knowledge worker"

The conclusion : "In a knowledge economy, the primary asset knowledgeis “owned” by the worker and cannot be taken from him/her.  Knowledge is a form of mobile human capital." is COMPLETELY WRONG 

Sorry but I have to strongly disagree with your statement about knowledge coming from the Internet.  "Information" comes from the Internet.  Knowledge involves knowing what information is valid, what information is invalid, what information may be questionable, how important some information is relative to other information or how information should be comparatively weighted, how to coordinate and integrate information, how to apply information, how to be discerning about information, having the experience and wisdom to know how to most effectively utilize information, etc., etc.  Every day I work with folks who get information off the Internet and are misdirected or run into trouble because of a lack of knowledge and wisdom about what they've learned.  Also, I'm an autodidact but I still often rely on a "knowledge worker" to fill in gaps or otherwise complete, refine, enhance, modify, or correct what I've learned.  AI is improving day by day but bouncing ideas off another highly knowledgeable human is still one of the best ways that I know of acquiring accurate and comprehensive knowledge on a particular subject or issue.    

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grades do not equal knowledge

gillbilly,

Your quote below, reminds me of a great article I read many years ago re conducting and participating in job interviews. The title and author escape me, but what resonated and stayed with me was his methodology to overcome that which you are speaking about. To get around the endless parade of canned answers and responses, he would simply ask the interviewee "who are you?" He went on to say that this constantly tripped people up, with most being unable to step outside of the traditional "these are my qualifications" box, to actually articulate anything about themselves.

Students are too often looking at their grades as a reflection of who they are. GREs, LSATs, SATs, factual cognitive recall is all that matters.

To me this is reflective of an educational system that does not focus on what is truly important. Educational ideals were long ago highjacked to the point the system became just one more assembly line, pumping out workers whose only focus was joining the materialistic, capitalistic model. It further reflects a culture that does not place any value on deep thinking or self-analysis. My observations are that few people allow themselves to have quiet time to ponder and reflect. Intangibles like introspection are not seen as adding value. Is it any wonder then that many don't even know who they are?

Jan

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information or knowledge

perhaps, much of what you term "knowledge" I would call "wisdom"
Still, "information" is what comes over the internet, of course.  Yet virtually every problem encountered and solved exists as such information on the internet.  Even asking the problem TO the internet is amplified, boosted, electronically facilitated by algorithms and usually requires surprisingly little thinking.  And understanding how to follow the instructions provided on the internet seem to require much less "thinking."

Virtually all complex tasks such as building something and even much if not most of what used to be termed "legal work" can be done by computer and other machines.  Thus, I really dont agree with your accessment.  The earlier article on this blog about robots and a transformation (profound loss of "knowledge" jobs from robotic revolution) is spot on.

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Thanks Jan

To me this is reflective of an educational system that does not focus on what is truly important. Educational ideals were long ago highjacked to the point the system became just one more assembly line, pumping out workers whose only focus was joining the materialistic, capitalistic model. It further reflects a culture that does not place any value on deep thinking or self-analysis. My observations are that few people allow themselves to have quiet time to ponder and reflect. Intangibles like introspection are not seen as adding value. Is it any wonder then that many don't even know who they are?

It is troubling, I'm not sure hijacked is the right word, but I agree with your sentiment. I think the educational system does reflect, and is born out of, a culture that has put constant organization and reorganization above the symbolic/human values that we crave. Administrators have become the dictators and authority of education putting the teacher in a subserviant role, all for the sake of preserving the "organization/institution." It wasn't always like that, but as administrators over time were gradually paid more and more (since they were on 12 mos contracts, with teachers often being 9 mos,) that "more pay" elevated them to the status of "more important." This is born out of our society...in general, we tend to perceive those who make more as more important. Thus the organization became more important than the education.

Teachers are forced into teaching to the test because their jobs depend on it. If they don't teach to the test, test scores drop which threatens the institution's credibility and reputation (survival). Teachers really are just teaching what the society is asking them to teach. Until people stand up and start demanding something different, it will continue.  Parents are often too busy to get involved or find outside ways of provide the "alternative/special" education (think community arts and afterschool programs).

I agree with you that we should be asking students who they are, but too much emphasis is put on test scores and the students know this. I think we should be asking our parents, administrators, and admissions offices is what do these tests tell us about who these students are. How do these test scores reflect the students ability to cooperate, reflect, sympathize, empathize, think deeply about life, live life fully, etc.? Where are these characteristics reflected in these standardized tests? Why have we factored all of those qualities out of tests? When we ask thoses questions, it squarely points the finger at all of us adults.

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teaching to the test

Quote:
Teachers are forced into teaching to the test because their jobs depend on it. If they don't teach to the test, test scores drop which threatens the institution's credibility and reputation (survival). Teachers really are just teaching what the society is asking them to teach. Until people stand up and start demanding something different, it will continue.  Parents are often too busy to get involved or find outside ways of provide the "alternative/special" education (think community arts and afterschool programs).

I've always had a problem with the furor over teaching to the test.  I asked a friend, who is an education expert, if a test actually measures what we want the kids to learn, what's wrong with teaching to it?  He agreed with me that there is nothing wrong with testing what we want kids to learn.  He also said that he thinks our state's standardized tests (NY) actually do a pretty job of that.

The obvious problem is that many of the standardized tests don't measure what we care about.  And, the question is, how do we decide what we want the kids to learn beyond the 3 Rs?

Doug

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I believe kids these days are

I believe kids these days are so enslaved and addicted to "stuff" that we might very well need a global collapse to get them off of it. As far as im concerned their teaching all the wrong stuff in school.

Perhaps it might be prudent to start teaching the following courses for grades 1-4

Cooperation is good 101, 102, 103, 104

Be Good, Not Evil  201, 202, 203, 204

Greed is bad 301, 302, 303, 304

Respect Everything! 401, 402, 403, 404

Lies hurt people  501, 502, 503, 504

Be Creative 601, 602, 603, 604

Everything in Moderation 701, 702, 703, 704

4 full years of this from the getgo, and we might be able to turn this thing around. Doesnt seem like anyone is learning this shit nowadays. Perhaps we need to teach wisdom first and knowledge last, rather than it occuring naturally the other way around, over many years.

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Testing

Doug,

Thanks for your reply. My first question would be what is the criteria that makes an education "expert?"  I don't think tests are bad and I give them all the time to assess students and to assess how I'm doing as a teacher.  But they are one of many types of assessment. How much a student has read and knows on paper about farming does not make them a good farmer.  Standardized tests are a very narrow form of assessment, but too often these tests become the first and sometimes only assessment used to "rank" students. That ranking number then becomes the way the student compares herself/himself with others as being better or worse (and I do mean a better or worse person, just ask a student). Even worse, now college and graduate school admissions offices are relaying the message to high schools and undergrad colleges that if the student grades of the school don't relatively match the scores on these standardized tests then the school needs to review their grading assessment criteria. The absurdity of this is too long of a subject to get into on a thread. If you think I'm exaggerating, go ask an admissions officer about disparity between grades and standardized test scores and see what they say.

Doug wrote: The obvious problem is that many of the standardized tests don't measure what we care about.  And, the question is, how do we decide what we want the kids to learn beyond the 3 Rs?

That is a great question!!... bringing it back to knowledge, what knowledge do we value? To begin to answer that question will help us define what kind of value we are seeking. CHS thinks that a lot of non-essential stuff will disappear with the constraints of energy. This will change the "value creation" in our societies, and we will go back to valuing quality, experience, wisdom, locality, cooperation, and culture. I hope he's right!

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Kindergarden

FreeNL,

Your post reminds of a book I read a while ago, " All I need to know I learned in kidergarten" by Robert Fulghum.  His basic points were the same (Its a short book, could read it in a day if I recall correctly):

  • Share everything.
  • Play fair.
  • Don't hit people.
  • Put things back where you found them.
  • Clean up your own mess.
  • Don't take things that aren't yours.
  • Say you're sorry when you hurt somebody.
  • Wash your hands before you eat.
  • Flush.
  • Warm cookies and cold milk are good for you.
  • Live a balanced life - learn some and think some and draw and paint and sing and dance and play and work every day some.
  • Take a nap every afternoon.
  • When you go out in the world, watch out for traffic, hold hands and stick together.
  • Be aware of wonder. Remember the little seed in the Styrofoam cup: the roots go down and the plant goes up and nobody really knows how or why, but we are all like that.
  • Goldfish and hamsters and white mice and even the little seed in the Styrofoam cup - they all die. So do we.
  • And then remember the Dick-and-Jane books and the first word you learned - the biggest word of all - LOOK.
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Not your Father's capitalism

Regarding the excellent post by CHS and the equally good book by Drucker, I find in the 20 years since I read “Post Capitalist Society” to have changed my outlook on its relevance.

In 1993 I was engaged in growing a business that was primarily knowledge based (and still is today) and I was electrified to read Drucker’s words which seemed to validate my very own senses at the time. He pointed to a bold future where knowledge provided significant leverage over competition, and for the first time, integrated concepts like knowledge based “barriers to entry” and the substitution of knowledge for capital. He also (perhaps unwittingly) advanced the concept of the proto-typical technocrat, those that could confer power and authority using nothing more than the withholding of technical knowledge.

It seemed to be a prescient message of triumph for the long maligned technical underclass- who had endured for decades the witness of realtors and mortgage brokers with nothing more than a high school education marshalling enormous commissioned incomes replete with all the social power that came with it.

But it was not to be.

Fast forward 20 years, and we have witnessed the ascendancy of a bloated financial overclass, while although decidedly white collar, is quite far from providing any semblance of knowledge based labor value into our society. Instead, they are experts and prognosticators of “fictitious capital”, the practice of which, I would argue, does not satisfy the tenements for knowledge based labor value.

Over the years, there have been many writers advancing concepts which lay claim to obsolescence of Marx’s critical theories. Some of the more popular are:

- Marx neglected to consider the emergence of the middle class, and thus, had an invalid framework of context for social relations. (Marx considered two classes, the proletariat, and the capitalist or bourgeoisie- the worker was exploited, the capitalist did the exploiting, a “middle class” is just a worker with slightly less exploitation- and a marginally higher standard of living).

-  Marx neglected to consider the inevitability (and effectiveness) of government intervention to prop up capitalism’s inherent antagonisms, and as such his predictions of collapse were and are erroneous. (at least partially true)

- Marx’s Labor theory of Value contains irreconcilable contradictions (mostly centered on the “transformation problem” and these arguments must be abandoned when generally accepted time conditions are imposed on the purchase price of input commodities, this problem resolves in support of Marx)

There are more, but suffice to say the debate still rages, with no clear cut (despite claims to the contrary) competing theories that can hold up.

To that end, I put Ducker’s thesis into the same camp, claiming a breakthrough, but are things really any different? To answer this, we have to go back to basics and remember that Marx’s theory only applies to commodity production. If you are involved in R&D, prototyping, or any other form of non-capitalist production then we have to recognize that these theories do not apply, and not try to stretch them into a regime that they were never intended to fulfill.

So with regard to knowledge workers, we might then propose two categories: a. knowledge workers that are involved in commodity production, and b. knowledge workers not involved in commodity production.

To the first category, I would argue that the knowledge worker is essentially mis-identified, they contain no advantage over a traditional worker in the sense that they are identically exchanging (selling) their labor power for a wage income.

Let’s assign some job titles to help illustrate, let’s compare an auto worker who’s job it is to screw lug nuts on Chevrolet Vegas, and a software developer. Both can withhold their labor at will (tempered by the necessity to exchange labor for sustenance income). Although both use knowledge to comprise their work product, the knowledge is useless without the coupling of physical labor on the part of the worker, e.g., the auto worker has to be trained to screw on the lug nuts, and the software developer has to study computer science. 

Irrespective of the receipt of information to advance these skills (training) this information is again worthless until activated by the worker by adding physical labor. The difference then reduces to the barrier to entry, which is to say how long is the training, and how expensive is it. To replace the software worker would be more difficult than to replace the auto worker, as the training component is longer, so in this sense the developer may hold a temporal advantage.

But this advantage is really one of supply and demand, not of one worker having knowledge and the other not. It is just that one form of knowledge is more difficult to obtain, and there are also no doubt aptitude issues. The capitalist means of production response to aptitude issues is by discretization of labor content, i.e. breaking down complex tasks into tiny, bite sized operations transferrable to larger sets of less skilled labor. Knowledge workers are not exempt from this tendency.

As to supply and demand, here the issue stalls. In free market systems, price does seek equilibrium. If the market signals that more software developers are needed by pricing wage labor at high values relative to auto workers, then more people will study software developing and the wage prices will drop, trending toward the same threshold as the auto worker. The trouble (and subsequent opportunity) comes in when there are time lags between the market signals and labor realization of these signals. Remember, market signals are always looking backward to inform labor of current conditions.

So let’s summarize the issues that are the same for knowledge workers in capitalist production:

1.)  Either worker can withhold labor at will.

2.)  Both wage scales are subject to social effects, in other words, society determines the relative value of their respective labor power through market signals- not technological content.

3.)  Both are exploited by the capitalist.

4.)  Both are required to exchange labor power for money in their respective fields to provide for the purchase of sustenance commodities.

5.)  Both are impacted by capitalist initiative to atomize their labor efforts, reducing their skill sets to ever smaller packets that can be redistributed to larger, lower skilled, and less expensive labor sets.

6.)  Both types of workers are subject to supply and demand market signals, equilibrium will tend to redistribute wage levels to a common denominator, so any technocratic gain is likely to be temporal.

7.)  In a measure of ownership of stocks, bonds, and similar investments, even considering 401k participation, the vast majority of these holdings are owned by an extremely small percentage of the population, effectively debunking the notion that there is egalitarian distribution of the means of production. On the contrary, it is highly concentrated in the hands of a few.

So what have we really gained here, and are not the similarities greater than Drucker’s vaunted differences?

If we look at the second category, wherein the knowledge worker is not participating in the production of commodities, we have a different picture.

Here we can make a case that a knowledge worker can start a business, for example, with reduced needs for fixed capital. But let’s review, if he wants to “free lance”, or work for himself, then he is not in any way associated with the capitalist class, so further comparison is not useful. If he wishes to start a larger company, that then hires other knowledge workers, he then is part of the capitalist class, and we can continue. But a detailed analysis of the fundamentals reveals again that not much has really changed. The basic building blocks of a capitalist enterprise are still there, the pieces are; fixed capital (buildings, machines, etc), money capital (cash for operations, sustenance of the principals, and any raw materials needed), and variable capital (employee wages),

You can argue that the knowledge worker needs less fixed capital than a start up car company for example, but the best you can really do is argue the proportions change, not the fundamental process. You still have the M-C-M’ circuit flow of capital-knowledge worker or not.

Then property ownership (intellectual property) dynamics comes into play here as well. Knowledge workers do tend to be more heavily interested in IP (patent) protection, as their work product is often easily copied. Software is a great example of this. In fact, one of the characteristics of the knowledge worker culture is the notion of monopoly, without State protected monopoly status most of these enterprises would be in real trouble, as so many of these types of products are extremely easy to copy. If a commodity can be copied at virtually zero labor cost, Marx would say that commodity has virtually zero value.

So we see a situation where increased State protection of a knowledge worker’s work product becomes essential to realizing any value, without this, there would be no value whatsoever. It is an open question as to whether society is better off with these types of State protections or whether “open source” types of product profiles are better for society as a whole.

But to close on the issue of knowledge workers not participating in commodity production, I would have to agree that there may be more opportunities to increase your wage labor status pursuing technical, knowledge based careers, and there may be a different proportion of fixed capital to variable capital requirements for a start up but ultimately given time, both supposed exemptions are not really differences at all.

Sirocco's picture
Sirocco
Status: Bronze Member (Offline)
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Posts: 31
Shifting paradigms and careers

If I understand CHS correctly, he is suggesting that we are experiencing a societal shift (akin to the shift from agrarian to industrial societies) from industrial to knowledge-based labor that is so fundamental that it “to describe a new economic order that was no longer defined by the adversarial classes of labor and the owners of capital. Now that knowledge has trumped financial capital and labor alike, the new classes are knowledge workers and service workers.”

I just don’t see this new paradigm, one of two new social classes, playing out in the real world. My experience is that most knowledge workers ARE service workers; working in service to the organization that employs them. Some portion, I’m guessing a rather small portion, of knowledge workers are self-employed – in that case, they work in service to their clients. And all of us work in service to the government (via taxes). The “knowledge revolution” or the “information age” doesn’t feel like a revolution to me – just another round of some new niche or resource to be exploited to make a few people very, very rich; keep some portion of the population employed; and provide shiny new toys to consumers.  I’m not a sociologist, so maybe I’m missing the fine points – but seriously, I don’t see any earth-shattering social paradigm shift surrounding the information age…

I believe we will see a fundamental social paradigm shift, and that shift will be related to the issues of coping with declining resources, overpopulation, environmental degradation, and culture shock as cultural norms the world over crumble. Plotting a course through those changes as we move forward, in terms of finding and keeping a living wage job will be quite tricky, perhaps impossible. I suspect factors influencing general employment will more or less continuously change, rapidly and with little or no warning.  

As to the skills and abilities that will be in demand in the coming 5 – 10 years, I would say that critical thinking, creativity, innovation, passion for learning, flexibility, communication, leadership, persistence, and self-motivation are skills/characteristics that will always be in demand regardless of the line of work. I also believe that integrity, compassion, ethics, and self-reliance are sorely needed. As a mentor in my field, I can teach someone my trade – but it’s much harder to teach them the above skills. Were I looking to hire, I’d much rather have someone with the above characteristics and no IT knowledge than someone with many years of school and none of the above qualities

MarkBahner's picture
MarkBahner
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Joined: May 24 2012
Posts: 67
Artificial intelligence will be even bigger

Hi,

The transformation to knowledge workers is child's play compared to the coming revolution of artificial workers. Within about 10 years, a computer capable of performing the same number of operations per second as a human mind will cost $1000.

Here are some implications of computer-driven vehicles:

1) No more big-box stores...no Walmart, no Target, no Kroger, Food Lion, Best Buy, etc. No malls. Virtually all goods will be delivered to homes by delivery vehicles. The goods will be stored in unlighted and unheated warehouses, in incredibly cramped conditions, accessible only by robots.

2) No parking lots, no home garages.

3) No automobile ownership. New vehicle sales will be down by 80+ percent (possibly even 90+ percent).

http://markbahner.typepad.com/random_thoughts/2013/01/the-future-of-transportation.html

treebeard's picture
treebeard
Status: Platinum Member (Offline)
Joined: Apr 18 2010
Posts: 568
Techno phantasy

Thanks for the long and thoughtful piece darbikrash, I think you have taken the time to put into words what a lot of others have been suggesting. I would agree that the same old paradigm is still at play, to a large extent.  There have always been the "professional classes" from time immemorial, though to a lesser extent when society first developed some level of specializtion.  The priest, warrior and prophet have been replaced with more complex and sophisticted versions of professionals, but I would argue that the fundamental structure to have been very much the same.   As society has increased in complexity the size of the professional classes have certainly increased, but the nature and function remains the same.  So too has the relationship between this class and wealth and power.

Isn't the idea of the knowledge worker based on the technophantasy verion of the future that we were all spoon fed in the fifties and sixties?  You know, energy to cheap to meter, robots cutting our lawns, so much free time that boredom would be our biggest challenge?  We would all be machine minders and programers, money would be obsolete.  You know, knowledge workers.  Things have not worked out that way for a complex set of reasons, why not?  Instead we are facing a future quite antithetical to that.

I know that everyone must be sick of hearing me beat this drum, but a more complex view of the evolution knowlegde than the linear extrapolation of techological progress, as some have suggested, is the difference between knowledge and wisdom, what I have been calling the rational and creative mind.  Purely technological solutions always have (and I would say necessarily) a series of unintended consequences, which to my mind is playing out most clearly where technological systems are most directly in contact with natural ones in argicultural. "Round up ready" corn and soybean fields are now being invaded resistant "weeds".  What is new technoligal solution to that problem?  Erosion, loss of  topsoil, destruction of biological diversity, loss of soil fertilty, susceptibillity to drought, dependence on irrigation, dependence on nonrenewable fuel and other inputs, decreasing crop nutritional value, soil salinization to name a few are all the results of technological "solutions" that now beg for new and more complex solutions.

It is our understanding knowledge, the reintroduction of wisdom, and the transformation of the way we think of technology that is changing.  Technological research is currently being driven by power and control centric system thinking.  More appropriately scaled and intergrated technologies are emerging that empower the individual and democratize wealth and power.  The dispersion of information through participatory systems like the internet are making this transformation possible.  We are perhaps all becoming "information workers" in a sense, but it will be integrated in a diffuse and smaller scale systems where it will be up to us as individuals to take responsibility for our own transformations.  The mind, heart and hand integrated into a meaningful productive ways of creating livellihoods.

Bit Coin, permaculture, opensource software are just some of the pieces of the new paradigm that are emerging out of the old and collapsing one. Sure there will be some dead ends, but each of these new fields are rapidly evolving precisely because they are diffuse, democratic and organic in nature without a topdown control system power centric structure. These new systems will not be controlled on contained because there is no central controlling power.  Reminds me of the of state infiltrators of the occupy movement who kept walking around asking who was in power, and refrain they kept hearing was we all are.  Well, we all are.

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Dark Desire.

Hi Treebeard.

There are darker fantasies than techno.

Prof Josephson asked for a dialogue with The New York Times about alternative energy sources  The result? A graveyard silence. We wont even look at a possible salvation.

We have entered a dark time of wilful ignorance. We want things to go very, very bad.  As further evidence of this lethal desire I re-offer for your delight the very popular  Podomatic discussion with the erodite KMO on Zombies.

But look on the bright side. This can only be good for the genepool. It has happened before.

It sates itself on the life-blood
of fated men,
paints red the powers' homes
with crimson gore.
Black become the sun's beams
in the summers that follow,
weathers all treacherous.
Do you still seek to know? And what?
 
The Ragnarok.
FreeNL's picture
FreeNL
Status: Silver Member (Offline)
Joined: Mar 27 2013
Posts: 112
Arthur Robey wrote: Hi

Arthur Robey wrote:

Hi Treebeard.

There are darker fantasies than techno.

Prof Josephson asked for a dialogue with The New York Times about alternative energy sources  The result? A graveyard silence. We wont even look at a possible salvation.

We have entered a dark time of wilful ignorance. We want things to go very, very bad.  As further evidence of this lethal desire I re-offer for your delight the very popular  Podomatic discussion with the erodite KMO on Zombies.

But look on the bright side. This can only be good for the genepool. It has happened before.

It sates itself on the life-blood
of fated men,
paints red the powers' homes
with crimson gore.
Black become the sun's beams
in the summers that follow,
weathers all treacherous.
Do you still seek to know? And what?
 
The Ragnarok.

I would argue that the super rich and super elite in this world already consider us as zombies. Except we dont shamble around looking for blood (at least not yet), we shamble around looking for money. They carry out all manner of atrocities against us and no one really notices. George Carlin noticed. Ive noticed and i would imagine most on this site have noticed, but most continue to shamble about searching for shinies.

Is it possible that we have stagnated and NEED a complete collapse as horrible as that would be? Nature has a way of correcting things.

As far as the robot delivery army, i see that going nowhere, since you have to power those things and the transportation chain is completely oil based and has little hope for change at this point. I suppose they could power it by starving us of corn.

probabally a good time to immigrate to iceland, ha. Lots of geothermal power, high self sufficiency and jailed banksters.

Calm47's picture
Calm47
Status: Member (Offline)
Joined: Mar 5 2013
Posts: 10
Peter Drucker rights, the

Peter Drucker rights, the world really is changing. And me, even more than he had expected. It is now in the initial stage of transition to a new economic system. Capitalism has not exhausted its possibilities, he has not used the full potential of globalization. But this is his last essential tool ( http://crisismir.com ). Elements of the new system of production while developing within the existing system. The function of the global crisis - "clear platform" for building an intelligent system of production 

treebeard's picture
treebeard
Status: Platinum Member (Offline)
Joined: Apr 18 2010
Posts: 568
I'm all for fantasy

Fantasies are benign enough if they stay fantasies.  Problems arise when they are confused with reality.  Technology will trundle along and continue to give us the benefits that it can, and there is nothing wrong with that.  It is unfortunate that "technology" has developed this other worldly aura, that word has been stretched to cover vast panoply of things, really beyond any rational measure, it often takes on religious overtones.  It's most ardent supporters are typically those less scientifically inclined.

I like Jean-Luc Picard as much as the next nerd, but when we expect to stride up to a box in the wall with the command "Earl Grey, Hot" on our lips and expect it to appear out of a energy field, it's time to head for the exits.  Modern science has taken the place of wonder and hope in our society, and to point out the limitations is almost sacrilegious.  I still believe in wonder and awe.

 Zombies and black beams of sunlight be damned,  full speed ahead.

gillbilly's picture
gillbilly
Status: Gold Member (Offline)
Joined: Oct 22 2012
Posts: 423
The New Magic

It has been said technology is our new magic. I would argue we live in a technological age (still), not a knowledge age (if we want to label our age at all). Technology comes from technikum, or technique. All our organizations/systems are technology...science, economics, education, government, religion, (add your favorite here). They are all techniques of organization (organization being a technique) that have to be continually reorganized and fixed, which then create new problems/predicaments that need to be reorganized and fixed, infinitum. Somehow we have redefined technology as gadgets, machines, etc. and have forgotten the original meaning. A technique was supposed to be a means to an end, and under our control. Now the means is the end...printing money, consumerism, constant flow of updates (software, products, etc.) that never ends. This is how the masses live their/our lives. The question is how do we return it to its proper place of being under our control. Being a cog in the wheel is the analogy.

By taking steps to increase your resillience, both mentally and physically, I think you begin to put yourself in the position (Buddha) of being aware of your presence within the wheel and outside of it. I will continue to strive for this in every moment. 

My deep thought for the morning...

therooster's picture
therooster
Status: Member (Offline)
Joined: Oct 3 2011
Posts: 20
We're definitely in a

We're definitely in a paradigm shift. It may be simpler than most think once they take note that our economic disfunction is based on using debt as currency. All else seems to be symptomatic. The good news is now that precious metals float in real-time (liquidity is weight x trade value) , we can now monetize precious metals by way of the market and use debt-free store of value that is instantly liquid on a global basis. It you have any doubts, then you may also want to ask yourself how it can be that private gold based payment systems such as freelakotabank.com , pecunix.com and goldmoney.com are doing so well ? The other notion that must be considered is that because this is a movement into a real-time monetary metal paradigm (floating) , the health and the transition rate of the USD is of paramount importance. This is why the approach cannot be top-down in the awareness and the marketing. The support must be grass roots, organic and market driven. You cannot pour new wine into old wineskins. We must be as wise as serpents.

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