Economic

The Origins of Civilization and Your Personal Freedom

In TCS Daily, I ran into this post about Iraq's "Natural State." This led me to this longer article by North, Wallace, and Weingast (referred to as NWW from here on) on their theory about the natural development of civilization from a limited-access state (elite controlled) to open-access (free) societies. In this second article, NWW propose that a limited-access state can only change into a free society under certain conditions. These conditions come down to the elites, in their own self-interest, creating the basis for freedom because of the requirements of industrialization of the 18th and 19th centuruies. The problem with NWW's theory is it mistates the historical basis for human freedom in civilized countries, which goes back much further in time, even before Sun Tzu's period. In the following post, I offer a less myopic view of the "natural state" and the role of freedom. If you want to preserve your freedom, you should correctly understand history. You will find that your freedom itself is very closely connected to the emergence of Sun Tzu's strategy.

Predicting Your Future: The Ground and the Climate

This post examines two predictions of future catastrophes. The first is Global Warming. The second is the collapse of Social Security. One of these catastrophes is completely predictable and avoidable and yet largely ignored by the media and government, which refuses to take action to avoid it. The other is completely unpredictable and, if true, just as completely unavoidable, and yet it is discussed everyday in the media any by members of the government who insist that actions must be taken. This post examines why one is predictable, that other not, why they are treated so differently, and why understanding what is predictable and controllable and what is not is so important to your personal success.

Position and Good Buying Decision

Strategic thinking requires the deliberate consideration of two important long-term issues: 1) the effect of any action upon your position and 2) the potential responses by other people to counter your actions. Sun Tzu teaches that most people are much less successful than they might be because they make decisions emotionally, based upon the immediate gratification of desires. A recent brain study published in Neuron magazine supports Sun Tzu's view of most people's defective decisions-making processes.

Publishing Plans For 2007

We are finalizing our publishing plans for 2007, since we need to tell our U.S. distributor what books we are coming out with in the Fall (the main publishing season) by the middle of this January. Last year we came out with five new books (three entirely new titles and two new editions of past works). That turned out to be much too aggressive of a schedule. We honored our commitments by getting the works out and we are proud of them all, but the publishing schedule left us little time to promote the books and do the publicity that we had planned.

Classical Strategic Mistake in Business

GM announced that they will "fight for every sale" in competing against the rise of Toyota. As a recent car buyer who just bought a new Toyota product (a Lexus RX350 to replace our RX300), it is crystal clear that GM doesn't understand the basic elements of strategic positioning. We were open to buying any SUV of similar size and luxury, but, if GM has such a vehicle, we simply had no idea where to look for it.

Freedom, Creativity, and the Fear Mongers

As we mourn the death of one of the great champions of freedom, Milton Friedman, (a great article by Thomas Sowell here, a summary of many of his ideas on freedom here) we should recognize that champions of strategy must also be champions of freedom. I thought of Friedman while I read about a new process for inexpensively processing oil shale. This process could lower the price of a barrel of oil to as little as $17. How would such a breakthrough benefit the economies of the world? How would it undermine state tyrannies based on the control of oil? More importantly, what role does freedom play in these innovations and how does regulation prevent them?

The Non-Competitive World of American Politics

Why is politics so frustrating for the average American? I believe it is not because politics is so competitive but because too many politicians come into power too well insulated from competitive forces. In every area of society where there is serious competition (sports and business, for example) all contestants are forced to get better. However, in areas where there is little competitive choice (government services and local utilities, for example), the people and institutions involved become indifferent to the needs of their customers. Democracy was designed to introduce choice and competition into government, but the politician in America have worked for two centuries to create their own version of a local monopoly. The result is a system that fails even when it works.

Iraq and Military Strategy

Another reader would like to hear my comments on this article, called Doubling Down in Iraq, which says (in an unfair summarization) that millitarily when your past investment isn't working, you want to put in more resources rather than give up. However, while I sympathize with the feeling behind the article, I see very little in it that has anything to do with our warrior's rules.

Dynamic Environments, Strategy, and the Nobel Prize

We have made the point many times on this blog (including just a couple of posts ago) that the difference between strategy and planning is that strategy is designed for dynamic, unpredictable environments while planning is designed for controlled, predictable environments. This article by the new Nobel prize winning in economics, EDMUND S. PHELPS, makes exactly that point, contrasting the dynamic approach of the US free enterprise system contrasted with the planned, controlled approach of the European "corporatist" system.

Dynamic versus Static World View

Strategy views the world as a process. Sun Tzu's strategy is never about what a situation, person, or group is, but what that situation, person, or group is in the process of becoming. This dynamic view combats our natural tendency to see things incorrectly as absolutes. To capture this strategic view, you can substitute the phrase "are in the process of becoming" in any place you might normally use the word "is." Strategically, it is not completely accurate to say you are a man or a woman.

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