Ke!960 Future is not free

20 May Ke!960 Future is not free

We have often addressed here the issue of hybridation: the mix up of dipolar options in a market. Now it is time to deal with the need of hybridation in the politican spectrum.

Because 2008 is elections’ time in Spain. Similar situation in other countries around the World. And you find the same pattern wherever you look at: you, the voter, have to force your mind to select either the blue or the red colour, as it there were no other options. Conservative or liberal (term as defined in the US; also known as progressive, or labour, in most of Europe), each one with its colour (although, interestingly enough, there is no universal standard as refers to those colours: red is Republican in the US but socialist in Europe, and the blue is Democrat in America, but conservative in Europe).

It looks like the low-cost, simple-to-death, economy is fostering a low-thought politics. Keep it simple is the message: a mere color is to help you choose who is going to run a country for a lot of years.

It is not my mission to become here a political “opinionator”. But it looks as if a very important idea lies behind all this color mess. And that idea is that neither the blue nor the red options are good enough for the times ahead (especially in Europe). The very needed political option for the future is one that places all the emphasis on the definition of a forward-looking society. Only a society clearly oriented towards future deserves a future. In other terms, future does not come free: you have to decide what sort of future your people would need (rather than the future they say they want). And that driver to future requires a combination of political red and blue.

In his remarkable book about the history of ideas, Peter Watson, from Cambridge University, reminds us about the quite notable revolution that took place in the XXX century, in a time where the first european universities were born. He says that “the transition from grammar and rethoric to logic as the main intellectual discipline was a major intellectual metamorphosis and marked the break from an “education system based upon the cumulative knowledge and thought patterns of the past, to one deriving its strength from a forward-looking spirit of creative inquiry” “ (Watson is quoting Alan Coblan, after his book on the study of medieval universities). So, it was at that time when “maths” started to rule over “letters”. A time when it was more important “what was coming to be” than “what already has been”. This was probably the starting time for capitalism, since isn’t the plain management of future what business is all about? So, in a very funny way, the birth of maths as queen of serious study may be also thought of as the birth of business (this is my interpretation, not Watson’s).

In another outstanding book, the “definitive” biography of Joseph Schumpeter, by Thomas McGraw, we are reminded that the very “core ethos of capitalism consists of looking constantly ahead by relying on credit when launching new ventures”. The title of that book is quite illustrative: “Prophet of innovation”, a role that Schumpeter actually performed quite remarkably. Credit is, indeed, a key word for capitalism. The word derives from the Latin “credo”, i.e. “I believe”. It is the belief of the investor on the future of the enterprises on which he invests that fuels the whole economy. Without confidence, trust, on the future, there is no capitalism able to survive. Quoting Schumpeter’s ideas, McGraw reminds us that “credit must be created out of nothing but future expectations, which is a basic reason why capitalism, of all economic systems, is so distinctively oriented towards the future”. Business is basically about managing expectations on the future: consumers and investors expectations at once.

In the Schumpeterian, à la Darwin, principle of creative destruction, most companies have to disappear for new others to thrive. And this has to happen continuously, but also at the right time, according to specific changes in market conditions (the “tempo” of the entrepreneur). Future is defined through a perpetual series of “consecutive presents”all of them made of tumultuous destructions. No wonder Schumpeter remarked that “capitalism is constant change; the history of capitalism is studded with violent bursts and catastrophes”.

It took a sharper a mind as Schumpeter’s quite a lot to understand that a viable economy, i.e. a balanced economy, would require a mix of capitalism and socialism (his “mixed economy”). A balanced economy made of private companies “leavened by the public sector’s assumption of responsibility for prosperity”. This mixed economy is based on a combination of private short term push and public long term care. That is, on the “mash up” (using current nerdy buzz words) of the spirit of free entreprise (the historical focus of the conservative, right-wing) with the idealistic vision of common progress (the focus of socialists, left-wing).

To some, this may look quite like the definition of socialdemocrats. To me, the moral goes like this: no simplistic red or blue politics alone is nowadays capable to build a future that is both good for business and for people. Too blue (conservative) and business thrives til excess. Too red and the excessive common good strangles the private push. Too short-term based a view and greed rules. Too long term, and wealth stagnates.

In an environment where innovation is the word of the day, we strongly demand an innovation in the mash up of red and blue politics. Defining new options in politics, able to accomodate short term business goals and long term public needs, probably is the most necessary innovation of all. We need political entrepreneurs that prosper by “breaking up the old, and creating new, tradition”. Entrepreneurs that change the way our futures are defined, and who by doing this share with all the joy of creating it.

So the critical issue is the need to hybridate the two conventional political dipoles in order to be competitive as a society while designing futures. Because no extreme is good enough. As Winston Churchill once said:

“the inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries”.

Although, for sure, Schumpeter highlighted just how hard such an endeavour might be: “that rara avis- an honest idealist”, he said.

That weird thing, I would add: business buying into long term policies in a common journey with government to define the future that we all deserve.

(Message 960. Series started in 1995)

Defining the future is critical. It must not come by chance. It is going to take a lot of effort. A competitive future comes at a price. Progress is not free.