Economic

Seeing the Connections: The Illusion of Avoiding Foreign Entanglements

In studying Sun Tzu's strategy, we seek to see the necessary connections between things than make up the hidden gears and pulleys that drive our world. George Washington famously warned about avoiding "foreign entanglements" in his farewell address, but we forget that in his era, the US was a lonely island of freedom and democracy in a sea of tyranny and monarchy. The spread of freedom and democracy around the world provide the best measure of America's success and the best contributor not only American but the entire world's wealth.

Understanding the Tradeoffs: Choosing the Value that You Prefer

Sun Tzu's strategy teaches us to look for advantageous trade-offs. There is no such thing as a free lunch, but we can buy what we value more using a currency that we value less. Free societies are more prosperous simply because they allow people more of these types of choices. The more control we give to government, the more "value" is determine by central authority and the fewer choices we are free to make.

Key Strategic Mistakes: the Presidential Race Thus Far

This would be a good time to look at the presidential race thus far in terms of strategy. The race could be a landslide either way in November but remains close because both candidates keep making simple strategic errors. The top three strategic flaw for each candidate are: Obama: 1) Slow to recognized and correct judgment errors, i.e. Rev. Wright and Iraq surge, 2) Failure to see climate differences between big cities and most of America, 3) Seems more interested in winning praise than winning the election.

Fighting to Lose: How Politicians Get in Wrong

Sun Tzu teaches that attacking others is the poorest way to make progress. In most situations, we hurt ourselves more than we hurt our opponents. This problem is illustrated by the recent ban on new fast-food restaurants in LA. While the politicians think they are attacking fast-food, they are actually rewarding them and actually giving them a pile of profits to promote their product.

Strategic Perspective: Food for Thought

Foolish ideas seem logical if they are repeated often enough. Sun Tzu's strategy teaches the use of analogies to support logic. For example, do the arguments about energy policy make sense in terms of food policy? Current food technology does a thousand times more ecological damage than any other human activity including using oil. Farming cuts down trees, plows up the land, depletes limited water resources, spreads dangerous chemicals, and intentionally poisons natural plants and animals. Using ecologically unsound food is destroying the planet.

Leveraging Expectations: Prediction Confirmed

In this earlier post on the third of this month, I explained how Sun Tzu's strategy uses subjective perceptions to leverage changes in objective positions. I predicted that if politicians would just start taking actions that would change people's expectations about the FUTURE of oil availability, the price would drop immediately not years ahead when the oil actually becomes available.

Adapting to Change: Part 23,453

A student who is a union member wrote to describe how the management of his railroad is decommissioning new assets despite their efficiency. This is a good example of how organizations fail to understand how methods must adjust to climate. Railroads have a rare opportunity right now. Fuel price rises are hitting their main competitors, the truckers, hard. Asset utilization is not a bad focus for a capital intensive business like railroads, but to improve utilization, what is better: removing assets or increase sales?

New Business War College Site

We have just created a new site, called the Business War College, where we bring together a number of our materials under a little different label. Of the years of working in the book store market, I became shy about marketing "war" especially since Sun Tzu teaches winning while avoiding conflict. However, since the business world really is increasingly the focus of the world's competitive between ideas, which is a very good thing, it seems appropriate to acknowledge the fact, especially since business people are our main customers.

Natural Systems: Stopping Change

Like most classical scientists, Sun Tzu sought to understand nature. Though he studied was human competition, he saw competition natural not a human artifact. Though human institutions are artificial because we create them, we do not create and cannot change the nature of competition itself. Whether we applaud it or hate it, one of the things that cannot stop is change. In watching this very entertaining video by Drew Carey ON Free Trade and

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