Economic

Opportunity in a Dynamic Environment

Strategy works best in dynamic environments. Open, unregulated, free enterprise creates most wealth for everyone, giving people more and more choices, which requires more and more use of strategy. There is no limit on what you can achieve in places like America. There is an infinite amount of space at the very top. The proof? Look at the Forbes 400:

The Collapse of Societies

Sun Tzu taught that organizations grow until their protected, internal elements are divided from their external competitive elements. In their internal region of control, planning works, creating stable hierarchies of elites. These elites gradually raise the costs of external competition so that the organization can no longer support itself. The chaotic, independent, creative action of the common people required for successful external competition is controlled out of existence and the organization fails.

Optimistic or Pessimistic?

Sun Tzu's strategy is neither pessimistic or optimistic. Rather, it is a system for controlling investments while determining whether pessimism or optimism is warranted. A recent book called Breaking Muphy's Law (review here) looks at optimism or pessimism from a scientific viewpoint. The book considers research that harkens back to Sun Tzu's basic principles. According to the review:

A Comic Book Tribute to Planning

We often say that strategy is the opposite of planning. Strategy starts by realizing that control of the environment is impossible. The mistake of planning is assuming that internal control can be extended everywhere. Even if it could, the picture isn't pretty, even in a comic book. The only addition that I would make is that during a war internal planning is necessary because of the uniting focus on the external threat. Only in a crisis of survival do everyone's desires become one.

September 11

The primary reason that I teach strategy is to help people make better decisions and to help them understand that they chart the course of their own lives. However, our freedom over our own lives is predicated on freedom. War is but a tool. People can fight to free others but they can also fight to enslave others. The economy is a beautiful alternative to war: allowing people to compete with one another in a productive rather than a destructive way.

Sun Tzu and Systems

The Art of War is a technical description about how competitive systems (literally bing-fa) work. For Sun Tzu, systems balance opposing forces to create a cycle. For example, our breathing system has two opposing set of muscles for inhaling and exhaling that create a cycle of incoming oxygen and out-going carbon dioxide. OUr circulatory system balances the pressure from the heart against the resistance of the capillaries to bring oxygen to the cells and remove waste products. Systems interact with other systems to create larger systems with more complex cycles.

Finding Resources in the Ground

Like most of my generations, I was fascinated with space exploration as a child. As I learned more about strategy, I realized that outer space would never be viable until we found resources there that could reward people for claiming the ground. The good news is that we may have done just that. The magic resources is called Helium 3. Read about the new space race here.

Losing Track of Your Core Mission

In listing his five key elements to a strategy, Sun Tzu noted that "methods" must always conform to "the way," that is, your goals. or mission. Why was this warning necesssary? Because our methods, what we call systems, tend to take on a lfe of their own, expanding and growing well beyond their original purpose. This is famously true of government operations, but it is also true of most other organizations as well. They all lose their way. Not only that, but Sun Tzu's Principle of Reversal tells us that missions can reverse themselves: what was once the goal becomes the enemy.

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