Paradigm Shifts, The New and The Old

(First published in The Huffigton Post March 11, 2014)

I assert in my book MEMEnomics that we are in a middle of an economic paradigm shift that started in 2005-06. Sometimes a dying economic system breathes life into its own values and metrics sending its most visible champions into a righteous frenzy. A dead cat’s bounce, so to speak that tries to convince fewer and fewer people that everything with the old system is fine. When it comes to our economy, the symptoms of the old system are disguised in rosy financial reports, record stock prices and home values hitting new highs. The pathologies are so deep we often confuse the narrow-mindedness of what financial reporters, CEOs, and CFOs tell us with real economic news. The type of news that matters most to Main Street which is experiencing record levels of poverty and a majority of a population that is one paycheck away from financial ruin. The old system has little empathy to the majority of Americans who have grown helpless and hopeless in their struggles against the current system. Wall Street and the world of finance have decoupled from Main Street and real productive output long ago, creating two vastly different Americas.

On the other hand, the emerging system is one that cares about the plight of the less fortunate. It disdains the pathologies of greed and resource manipulation and seeks to level the playing field in a more equitable and natural way. But, like the current system that took years to be defined and become the dominant narrative for American values, the new system will spend years in its embryonic phase before it reaches that critical tipping point. We are living in precarious times that will define our future for decades to come. Small changes to the current system no longer move our economy forward. As proven by the financial bailout, our government only extended the pathology of the current system.

We are in need for systemic change that requires deep structural reform to all of our institutions and it is not happening fast enough. This is the primary reason why the division in our country is so great. This battle between new and old will get uglier before it gets better.  These have historically been the patterns of paradigm shifts and without the pain and division culture seizes to be an open system.  Only open systems have the capacity to raise cultures to higher values.


While the new paradigm continues to be defined, the old paradigm continues to be a system of vacuous economic intuitions that are in crisis and becoming less relevant with every passing day. So while we wonder why the economic recovery has been so one-sided, here’s a reminder from Thomas Kuhn, the Harvard educated philosopher who originally coined the phrase Paradigm Shift:

The transition from a paradigm in crisis to a new one from which a new tradition of normal science can emerge is far from a cumulative process, one achieved by an articulation or extension of the old paradigm. Rather, it is a reconstruction that changes some of the field’s most elementary theoretical generalizations as well as many of its paradigm methods and applications. During the transition period, there will be a large but never complete overlap between the problems that can be solved by the old and by the new paradigm. But there will also be a decisive difference in the modes of solution. When the transition is complete, the profession would have changed its views of the field, its methods and its goals. 

So, without the dynamic tension and the highly charged debates between old and new, open systems like scientific research, democracy and human emergence, will surely collapse and become closed systems ruled by elites, oligarchs, and dictators where very few voices of descent are ever heard. Sadly, even with the most open of systems, no one can expedite the onset of a new paradigm, but we can all be witnesses to the damage the old one leaves behind.



The Memetics of Money & the Future of Digital Currency

In my book MEMEnomics, I dedicate an entire chapter to studying the role of money in human emergence which sets the stage for the premise of the book that money has to be tied to human productive output. This is  a measure of the accountable fourth (Blue) system of values.  For over 8,000 years this catalyst for upward mobility has served that critical function in the fourth level value system, but our misguided monetary policies sought to change that history in the last 40 years.

The unhealthy expression of the Orange fifth level system (strategic manipulation) has had its run at it and has corrupted it. The result was the 2008 financial crisis and its aftermath that I, along with a few economists call the Great Contraction. European governments have used money  as an agent of the Green value system (Egalitarian and Humanitarian values)  to bring on equality, and of course, we’ve seen the results of that; a deeper and longer lasting economic contraction.

Because of the fourth level functional nature of money, measures have to be constantly put  in place to safeguard against it corruption. Money, regardless of the expression it takes (digital, paper, gold etc..), without having a visible regulator to deter the predatory nature of the 3rd (Red) and Fifth (unhealthy Orange) systems, will always be exploited. Pure and simple. No Utopian Green thinking will ever change that.

bitcoins2There was no exception to this assertion  even with money’s recent incarnation as a digital currency. For years I have warned about the many vulnerabilities inherent in Bitcoins.  The recent bankruptcy filing of Mt. Gox, the largest Bitcoin exchange  in the world proves that point.  Money has to always be safeguarded by a constantly evolving fourth level system (SmartBlue) in order to protect it as one of the oldest social contracts known to the human race; the safest store of value.

To read more about my views on the future of digital currency, Click here for an article I wrote to the Huffington Post about the subject. The piece was written just a few hours before Mt. Gox filed for a half-billion dollar bankruptcy protection from creditors.