Tag Archives: financial crisis

The Memetic Meaning of Dubai’s Collapse

For over 1 ½ years I’ve been warning about the imminent collapse of Dubai’s real estate market and inevitably the bursting of the bubble of its Dubai World Sovereign Wealth Fund; the richest of its kind in the world. Close to ½ Trillion USD worth of real estate projects have been canceled since last fall’s Cityscape exhibit in Dubai. The world has never seen anything as blatantly speculative as this Exhibit in its claims to have the demands to build whole new cities. One’s better judgment is clouded by the impression that in the Middle East, oil money doesn’t follow the same metrics as hard-earned money of yester years…. And who are we, the Western World on steroid to give the Sheikh prudent advice on HOW to bring Western modernity (ORDER – ENTERPRISE value system)) that’s hundreds of years in the making to a primarily tribal place of existence (Heavy TRIBAL-FEUDAL vMEME).

Well, the place is collapsing and the Sheikh’s government is scrambling to find and prosecute the people responsible. Apparently, Western businessmen cannot leave the Emirate permanently if they owe money (Dubai’s own interpretation on Islamic Banking). So Dubai’s airport garage fills up every day with hi end automobiles whose owners show their parking receipt and round trip ticket to the policeman at the gate, and leave with millions in debt never to return.

Here’s where Economics Meets Memetics; below is an analysis I made to the Spiral Dynamics Integral community in a heated debate about Dubai’s transformation in July 2008. There’s some reference to the color-coded value systems that are the hallmark of the Spiral Dynamics theory. Wherer appropriate, the descriptive theme of each value system is summed in one word. For a detailed description of the emerging science of value systems, please refer to earlier posts pertaining to the Spiral Dynamics theory and its use and applications


July 2008

[SD-Integral] RE: Dubai transformation

Here’s my abbreviated Memetic perspective on Dubai:

Dubai is a rare experiment indeed in that it will force all the Spiral wizards to rethink the traditional evolutionary path of a culture. After all, the very idea of taking a nomadic (BEIGE-PURPLE) culture, put it in a time machine, and have it looking ORANGE in one decade is a mad scientist’s dream come true.

Traditional movement up the spiral took hundreds if not thousands of years, and only along the true and tried road did it pick up complexity. Absent BLUE, western ORANGE has downshifted to RED in Dubai. It is this downshift to RED that’s making it OK to condone slavery-like practices and destroy the environment and be clever enough (ORANGE cover/paint) to call it all by different names.

The lip service that developers and the Dubai government are paying to Green Building practices is a tiny drop of GREEN (EGALITARIAN vMEME)in a sea of RED (FEUDAL vMEME) that only waves a banner to those looking at the surface. The LEED certifications and sustainable design of individual buildings will have no effect on the environment unless “sustainable practices” are imbedded in a sustainable urban design scheme (YELLOW: SYSTEMIC vMEME)) that integrates cutting edge urban western design concepts such as the “New Urbanism”, “Design with Nature”, “Neighborhood Continuity” and many other concepts working in an “Integral Design” fashion to assure sustainability.  Massive solar farms in a massive desert called the “Empty Quarter” will be good example of the “Design with Nature” concept.

As far as the foreign labor issue, the question is not whether Dubai is providing better wages for laborers, it’s clear that it is. The real question is as people from a higher level of complexity who are building this city-state, do we have any responsibility to pass on the essential elements of healthy BLUE (ORDER vMEME)and ORANGE (ENTERPRISE vMEME) that has symbolized western human struggles and triumphs for the last 1,000 years, or continue our exploitation and let them deal with the collapse when the other shoe drops (The rest of the Middle East is watching and waiting, to say “I told you so”)

Many Westerners who do business with Dubai are not privy to any of the social ills that must be addressed because they do business in an ORANGE bubble. Even the article about sustainability by Ghanem Nuseibeh barely touches on the “cultural” aspects of what ails Dubai. It is very clear to me that Dubai’s RED/Orange considers any BLUE a nuisance, and will continue to do so as long as financial opportunities remain insatiable. The collapse of the Dubai real estate market is inevitable, and this will be the wake-up call that ORANGE needs. When the Sheikh orders a builder to “add another 15 stories” to a structure under construction, who do the owners sue when the supports cave in on the inhabitants of the building? With all the expatriates buying over-inflated real estate, who will they sue when the market collapses? Which institutions, in what court system, and which historic legal precedent will be used for them to make their cases? Can they obtain legal judgments against developers, banks, regulators, the sheikh?  Would their legal visa status be rescinded if developments go bankrupt, and if so what happens to their ownership rights?

In brief, this brave experiment is reluctantly allowing BLUE in through the back door, and only when this RED/Orange, through necessity, has to downshift to deal with its own damage control would BLUE truly surface. If its introduced swiftly and prudently it won’t take the rest of the Middle East down with it and we can all point at it and say it’s in a slightly better place than it was before the start of this experiment.  And we’ll all be glad for it as the rest of the Middle East learns what not to do in its movement away from tribal PURPLE/RED.


The Most Comprehensive Summary of the Economic Crisis

This past weekend I gave a presentation that offered a (Memetic) value-systems analysis approach to the financial crisis to an integrally-informed crowd of about 60 at Boulder Integral in Boulder, CO. This was part of Dr. Don E. Beck’s Spiral Dynamics in Action training series. (Until we have a full description of the color-coded value systems of Spiral Dynamics on this blog, please click here for a quick description  (hover your mouse over Interactive Spiral).

After my presentation many audience members came to me expressing their shock and disbelief about the ominous threat that the shadowy global banking system of financial derivatives presents to the very survival of Western culture.

Many requested additional information  and I promised to have that available through this blog. Although my presentation was a result of comprehensive research I’ve done since the beginning of the crisis, I was able to find an article on the web that puts the crisis in proper chronology and identifies the major players in it. Since the publishing of that article in late January the derivatives market has grown from $600 Trillion  to $685 Trillion today. Click here to read the article.

Since this blog is about where Economics meets Memetics, most articles on the web, TV and in print fail to take into consideration the cultural impact that cheap and unregulated money (the removal of  BLUE (ORDER value system vMEME) in the Money/Commerce Spiral) (or lack of oversight in a free markets system) had on accelerating the demise of UNHEALTHY ORANGE (ENTERPRISE vMEME); or best described as Wall Street on Steroids. The events that broke the weakest BLUE link were the attacks of 9/11 that turned this into “the perfect storm”. I compare Bush’s economic team’s reaction to 9/11 to when a truck hits your house, and you turn around and give the keys to the liquor cabinet to the kids (completely unrelated cause and effect). This is precisely what happened when the Fed dramatically lowered interest rates and the rallying call every where turned to: spend, spend, spend or the terrorists win. We had no complex capacities at the monetary or fiscal policy levels to interpret terrorism.   Sophisticated and highly complex economic policies are often made for the long-term and are never designed to turn on a dime.  Bush’s team saw everything as it relates to an unplanned war (short-term, reactive and lacking in insight) and all other policies emanating from his administration followed suit. (A dangerous downshift from a heavy, long-term REGULATOR/ORDER  BLUE value system to a reactive and systemic fighter FEUDAL RED value system).

The unregulated derivatives market wouldn’t have grown to the size that it is without the flood of cheap and unregulated capital that enabled both, diabolical ORANGE at the highest levels to package these financial weapons of mass destruction, as Warren Buffet calls them and sell them as securities (insured by AIG and rated AAA by S&P (corrupt REGULATOR/ORDER BLUE vMEME)). At the retail level, cheap capital allowed for a  PONZI ECONOMY with a RED consumer (spend NOW with NO GUILT) who just borrowed and spend without ever being held accountable by a lender. That same lender made more money from that consumer by finding him a new and bigger credit card, a new and bigger mortgage and sold all of it to an UNHEALTHY ENTERPRISE ORANGE value system of Wall Street again, and they in turn put it into a derivative and sold it back to a wider institutional market all over the world.

Because of the depth and breadth of the damage done to the entire Western financial system by a few but very destructive, highly sophisticated and rarely understood financial engineers (Wall Street UNHEALTHY ENTERPRISE ORANGE value system), we will witness the damage they caused over a prolonged period of time. The Great Depression was a catalyst that propelled most of the US labor force into the industrial age, this atrophy of financial engineering will also act as a new catalyst as it ushers in a new and complete shift in paradigm and value systems.  Unlike the Great Depression however  the horizon for new discoveries  and a shift away from the function of MONEY  will take much much longer to crystallize


New Blog Title; appropriate coverage for the times

I apologize to the many readers of my previous blog who couldn’t gain access to my posts from the link on my company’s website. I will occasionally re-post some of the old writings if and when they relate to events happening in the marketplace. As the current financial crisis continues to shake the faith of many around the world in the free markets system, I will continue to bring awareness to a developmental approach to capitalism which gave me the title for this new blog. Sustainability’s New Frontier goes beyond green practices that everyone thinks will get us out of the economic malaise we’re in. The focus of this new blog will be a “Stratified Development” approach that will examine appropriate economic policies commensurate with the value systems of people and the life conditions in communities, regions, and countries they’re in.
This is our Mission Statement from our ABOUT page:

Western economic models designed to end poverty and to usher in an era of peace and prosperity have placed the world on an increasingly unsustainable path. Efforts to stamp out underdevelopment have created many failed states and the rift between the first world, the emerging world and the third world grows by the day. The Anglo-Saxon model for development has proven to have many shortcomings the biggest of which is to make every inhabitant of the planet a consumer of goods. This blog attempts to examine the failures of economic integration through the lenses of value systems and attempts to offer culturally-fit economic solutions that work. Through the emerging science of value-systems we will attempt to demonstrate how economic policies that are commensurate with the cultural value systems of a specific country are a far more accurate measure of sustainability than most current economic models offer. This is the New Frontier for sustainable economic development. This is where “Economics meets Memetics.”

As we’re witnessing this historic collapse of financial systems around the world, the focus of the blog will be on the value-systems that got us here, how to make sense of it all, and engage in debate on how to design for the future through the lenses of value systems science. Please stay posted