All posts by Said E. Dawlabani

President & CEO of The MEMEnomics Group

HUMAN CAPITAL, The Future Economies of the Middle East Part 1: Reforming the Educational Systems

This is part one in a series of posts about Integral planning and design for the future of the Middle East that first appeared in Integral Insights Quarterly Newsletter.

Do you want to be a Doctor or an Engineer?

While growing up in Lebanon, this was the constant question that thousands of middle schoolers including myself were raised to answer. The world has come a long way since, but ironically these two professions remain the most honored careers in the Middle East today. As the Arab Spring continues to unfold all throughout the region one must wonder:  If these young men and women taking to the streets had had gainful employment would they be rebelling against their leaders?  Economic innovation has been the hallmark of peaceful advancement for First World cultures and in order for the Middle East to realize a fully diverse economy that respects all other professions as much as doctors and engineers, it must focus its next efforts on economic and educational reforms.

The development of economic and educational institutions would, for the first time establish Arab Nationalism as a collective movement that looks forward to the future of a diverse Middle East compared to one that reflects on the glory of the ancestral past while repressing the rights of many. In this part of the series, I’ll focus on the educational reforms needed as an integral part of an organic whole that will allow the Middle East to emerge into a sustainable, self reliant future. Much like what a World Bank or an IMF development program calls for, the Middle East should embark on a 10-year development program to build the region’s educational infrastructure.  It should do this with its own sovereign wealth reserves to empower it with its own sense of accountability, while at the same time incorporate best global practices in its design and implementation. This program requires the bravery for taking a great leap forward and must have the visionary leadership of a fully integrated design that plans for 100 years into the future. Exceptionally integrated thought processes have to go into all the following aspects of its design:

1.       INNOVATION AT THE MINISTERIAL LEVEL

a.       An Education Ministry in every country in the region must be directed by an independent Committee of Visionary Leaders who have full authority in setting educational policy. This committee must make Education as the number one NATIONAL PRIORITY and its declaration must be heard in every home and on every street.

b.      This Ministry must be void of any nepotism and corruption and must have an independent funding mechanism.

c.       Specific advancement and performance measures must be set by this Committee of Visionary Leaders to align the educational aspirations of Arab youth with the best educational practices in the world.

d.      A partnership with private educational institutions to offer broad-based scholarships based on merit for underprivileged students would act as an insurance policy against the generational ill effects of poverty.

e.      A newly empowered Education Ministry must work effortlessly with regional economic centers of employment in order to determine future needs of the labor force.

f.        A partnership must be created with the private sector with regional and global reach to expose students to what a work life would be like upon graduation.

2.       ARCHITECTURE OF NEW SCHOOLS AND UNIVERSITIES

a.       Designs that honor the past in some of its elements, but whose focus is on the learning environments that emphasize teachings that embrace the future.  Create labs for the newest advances in math and science that are integrated into the classroom design.

b.       Green technologies that become a part of the learning environment.

c.       Computers with internet connectivity must be available at every desk.

d.      Open space design that is conducive for expanding the mind and harnessing individuality and self-reflection.

e.      Allocating indoor and outdoor space for sports activities and encouraging all student to participate in them.

f.        Emphasis must be placed on much larger and user friendly spaces for libraries that create a continuity of learning environments outside the classroom.

g.       Universities must embrace fully integrated efforts to create the necessary habitats that foster the creation and growth of native innovation. Much like King Abdullah University for Science and Technology where the University’s quest for innovation becomes the catalyst around which a new paradigm for redefining life, culture and industry takes hold.

3.       TEACHERS AND ADMINISTRATORS

a.       Teaching must be redefined as one of the most rewarding careers based on merit,  and appropriate payscales should attract the most qualified teachers for the jobs.

b.      The teaching curriculum should be geared towards establishing solid foundations in modern math and science.

c.        Debate clubs must be fostered to encourage critical thinking and logical, rational and objective thought processes among students as early as possible.

d.      All teachers must be put through a prequalification process to insure their capacities can deliver the outcomes needed to meet the educational goals identified by the Committee of Visionary Leaders.

e.      Administrators must be constantly searching for the newest teaching innovations that are adopted into the learning environment by the most successful schools around the globe.

These are just a few recommendations that will create a starting point for the debate on educational reforms in the Arab world. A more collective view on the future of the Arab child has to be debated in order for an organically designed educational system to emerge. Without addressing the kind of educational system needed to compete in a global economy, no economic reforms of any kind would have a lasting effect. Those reforms will be addressed in the next post.

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A Brief Summary of Where Economics Meet Memetics

A Brief Summary of “Where Economics Meet Memetics.”

Below are some excerpts from an interview I gave to¬† the Adizes Graduate School Newsletter. Some of the slides included here were distributed by Don Beck at a recent conference on Conscious Capitalism with leading CEO’s like John Mackey of¬† Whole Foods and Kip Tindell of The Container Store. I’m told Mackey, who uses Spiral Dynamics in his management philosophy, was taken with my analysis of how the UNHEALTHY STRATEGIC ENTERPRISE 5th level system can make an entire economy toxic. One of the primary goals of this blog is to help businesses evolve from answering to the Stockholder who’s misguided by the Wall Street philosophy of short term profits to the stakeholder who has a long term eye on People, Profit, and Planet. That’s¬† the integral equation for the new frontier in sustainable¬† practices.

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Said E. Dawlabani on Economics

The Memetics behind the Financial Crisis

At the Spiral Dynamics seminars in Santa Barbara, Dr. Don E. Beck invites a number of guest presenters. Some of these special guests help participants view complex issues through the simplifying lens of spiral dynamics. In effect, spiral dynamics helps in understanding Why and How major global events occur. Below, Said E. Dawlabani, who presents during Level 2, provides us with the benefit of his insights and opinions regarding the financial crisis that impacts our lives and decision-making processes today:

Q: From a Spiral Dynamics perspective, what were the major causes of the financial crisis of 2008?

Spiral Dynamics is the study of cultural value systems that emerge in response to changing life conditions. I concern myself with large scale socio-economic changes and interpret the interplay between the eight known levels of human existence, or value systems, particularly in the area of economics.

In Spiral Dynamics terms, Finance, or Capitalism in general, is just one sector of the fifth level system which has a focus on ‘Strategic Enterprise’. The financial crisis was precipitated due to the changing balance between the 3rd, 4th, and 5th level value systems in the United States. In a nutshell, what caused the financial crisis was the erosion of the fourth level system, the ‘Authority Structure’ system, in two areas of regulation. This allowed third level system dynamics, the ‘Empire Driven’ dynamic, to take advantage of the lapse in controls.

The first area of regulation that was impacted was the governmental regulatory structure itself, which started to slowly disappear with the first Reagan Administration. The second was monetary policy at the Fed. From the top down, government had begun to favor laissez-faire capitalism. For almost three decades, these policies gave us the illusion of prosperity but in the long term gave rise to an unhealthy version of the Strategic Enterprise (fifth level system) practices that became very difficult to reverse. Productive output that was measured through the strength of our manufacturing sector gave way to a more service oriented output.

As the fifth level value system found itself unrestricted, it transitioned beyond a service based economy into what was considered prohibited or sacred territory – the field of ‘financial engineering’. This is where the foundation for potential systemic damage was created.

Q: You mentioned that ‘life conditions’ are an important catalyst for change in evolving value systems. How did this transition from a healthy value system to an unhealthy system manifest in real life?

Corporations and consumers alike abandoned the ethics of the fourth level structural system which made the US a great model of Capitalism – for an ethic that was engineered on Wall Street. For more than three centuries, this evolving but sustainable model for Capitalism called on consumers to build equity through hard work. The system called on corporations to pursue organic growth through product diversification and healthy competition. Instead of hard, productive work to build equity, the Wall Street model for capitalism substituted impulsive speculative borrowing – a hallmark of the ‘Empire Driven’ third level system.

Consumers shifted their focus on spending from what they earn to spending from what they could borrow. Borrowing – thanks to Wall Street – was limitless, and was no longer tied to strict formulas based on actual earnings. Corporations shifted their focus from providing shareholder value by growing their product line organically, to acquiring corporations their financial advisers lined up for them regardless of whether these acquisitions served the long term health and viability of the corporation, or their mission. Wall Street, being virtually unregulated, had no regard for the long term consequences of its actions as its brokerage houses gave out money to collect commissions and placement fees and not to promote the distribution of wealth to all corners of society.

Q: You mentioned that the area of financial engineering was sacred or prohibited. Could you elaborate more on what that means and how that created the systemic damage to our financial system?

When a value system is healthy, it supports the needs and the emergence of all other systems on the spiral. When it is unhealthy it is very destructive. Historically, money has played a very important fourth level systemic role in helping cultures emerge. Pay had a direct relationship to the number of hours worked or the level of skill attained. Financial output had a clearly defined correlation to input and there was a great sense of personal responsibility. The belief in the role of money is what built nations and what helped humanity emerge in the last eight thousand years. A healthy, innovative fifth level system arose as a result of a healthy fourth level system.

Between 2000 and 2006 all this changed. Unprecedented levels of liquidity came to Wall Street with no legitimate investment vehicles to put it in. So Wall Street created Notional or Virtual securities called ‘derivatives’ that forced the participants in the system to downshift to a betting game on how real assets will perform in the future. These models provided the illusion of legitimacy as they flooded consumers and capital markets with money. Wall Street quickly became identifiable with the unhealthy version (exploitive) of the third level value system and, like the case is always with a system that focuses on immediate rewards, it had no staying power. When it collapsed it almost took the whole world down with it.

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Role of Money in Human Emergence

For those who are searching for meaningful explanation to where our economy is, a deeper look at the nature of human behavior and the critical historic role that money plays in our emergence as humans is worthy of closer examination. This past week I gave an updated presentation on the Financial Crisis and the road ahead to the Spiral Dynamics Level II Training at the Adizes Graduate School in Santa Barbara. Below are some of the slides from that presentation that show how we got here and how the unprecedented levels of debt will choke off meaningful innovation and keep us in this prolonged recession for many years to come.

Last year I posted a piece¬† about how the flood of cheap and unregulated capital perverted the very nature¬† of capitalism (click here to read that entry). As we get deeper into “The Greatest Series of Recessions” I’ve become more¬† convinced that economics has stopped being a social science and has become the exclusive domain of¬† applied mathematics; devoid of any care for the human other than the one who’s paying for the economic research. No one in this venerated profession, before or after the financial crisis ever warned about the dangers of creating a debt-based culture worldwide. With Alan Greenspan at the helm the world ventured into the darkest period in its modern history since the current value system we’re in was first defined by the Industrial Revolution.

Money has always played the role of catalyst that enabled humans to evolve from the EGOCENTRIC/COMPULSIVE stage of existence to the ORDER/SACRIFICE-NOW-FOR-FUTURE-REWARDS stage; the all-important transition from the RED to BLUE value system (vMEME) in Spiral Dynamics. This form of  conditioning came into existence much earlier than any of the Abrahamic  religions and provided the quintessential ORDER that society based much of its evolution on. This social emergence pillar that was 8,000 years in the making came crashing down when the elite  on Wall Street opened the flood gates of money and gave it to whoever asked for it and made enormous fees for themselves in the process.

As the case always is with a culture that loses a regulatory function in its order structure, the entire Value System stack (Spiral) is effected. The most visible aspect of this is the downshift of the culture to GREED that we experienced in the last 10 years and its all on borrowed (someone else’s) money.

We are in the biggest consumer debt trap in history and the only way out is for society to realign its consumption habits with its ability to repay its debt. The consumer has just started doing that and is feeling the pain of having to SAVE instead of SPEND. If only the government,  economists and Wall Street can stop pulling the other way.

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