Covid-19 and economic tipping points.

"Global economies are not made to standstill" Trump told. Why? I bring an untold perspective and a way to get trust back.

We should threaten economies with care, just like we should treat our environment with care.

Many people do not study or understand economies and dynamics. Exactly like understanding climate is not easy. Economies are complex living organic systems. Don't kill them. After a 3 month freeze, we may end up with 10% left. Life expectancy is known directly related to wealth. The cure is worse than the problem. The cure could be far away.

The Russian or Chinese revolution learned us that killing economies is bad.

History proved. A century ago communism rolled over the world. Of course, the revolution was made to seed fear and destroy to take power. Afterward, it was not a wise way to change. Even the most convinced communist doesn't like to look back at the death and destruction their revolution caused. This mistake is hidden. There were no official 1917-2017 revolution parties. The revolution is brute and doesn't pay off. Chinese do understand change better. Ying and yang and the dragon are a symbol of that. China did bend back far better from half a century of communism than Russia is worth mentioning.

If Covid-19 was a Chinese intended then it could be the perfect third revolution mentioned in Mr. Xi his book "the third revolution". It's not time to blame. The Covid standstill we do 100% to ourselves. The western world voluntarily entered the "Black Death mode" where all freeze. Unnecessary, because there are other strategies I write here.

How Standstill or change works is not well understood.

Our institutes and way of governing does NOT have a proper mechanism to change/adapt or grow. An analogy:

Life has DNA. No life without DNA.

“It is not the strongest of the species that survives, not the most intelligent. It’s the one that is the best able to change and adapt that wins”. Charles Darwin

Most institutes and organizations are not designed to change at all.

Most institutes have statutes or constitutions made to shield against change. All made during French and other revolutions and the last thing men wanted in those days was change. Before we lived in times of standstill. The king was the king. The peasant the peasant. The castle the castle. All forever. Imagine living in a time where progress is an unknown and unwanted thing by your leadership. Leaders still do not like change, they are on the throne.

How to grow & adapt in our new digital world is a key concern of all CEOs.

Modern free-market leaders get a bonus for growth. The solution for organizations to grow and adapt organically. Growing organic goes beyond growing sustainable. Both the shareholders' value as the bonus culture has a short term focus. Full organic grows extends the life cycle. Continuity is the purpose of any company in textbooks. A quick win is always on human minds. Later I explain that the unique transparency and traceability of the blockchain can help us out to trace this greed. Compliance will then raise the shareholders' value.

This graph is WRONG because there is a tipping point situation.

Behavior can break down. People just freak out. Systems and institutes have poor feelings for people. They are designed to maintain their order and goals and being nice and sensitive is build in.

As academic I spend years on research building agent-based computer simulation models to predict corporate behavior in distress. Seeking the tipping points....

Why does a group/organization fall apart? When why & How is part of a complex mechanism based upon trigger points. The right graph looks like this.

?Chaos looks like this. Scary, because there is no end. Trigger points are unique in each situation. Like the buttery theory we know from El Ni?o. Climate change knows NO way back too.

When do stakeholders loosse trust? When do we start to stop a company? The same mechanism also explained when the spark of an innovative startup catches fire. We mistily both the start and the end of corporations far more than needed. However, starts and stops cannot be ordered like our governments now do.

In the free world, there is a moment where owners and entrepreneurs throw the towel in the ring. Why should an owner restart a lifework? Move on or rebuild a burned down house is on some of their minds. Why restart if my new house will be burned down again soon. Trust is essential. Our global market system where we all build upon appears to be quite experimental. What's next will the entrepreneur ask himself? Buying gold or bonds would have been a better investment over the average over the last 2 decades. Now in hindsight. Maybe it's a trend.

We need to get to the bottom the get trust again to go on.

Is the American dream limited? Let's take a look at the key components of the system that manages our changes. Why did we miss a curve?

Are the core change mechanisms for changing and steering in our global economy good enough to steer in heavy weather?

The western world has democracy for political change and the price mechanism for economic change.

First, take a look at markets and prices.

Market and prices. The price mechanism is our change mechanism. Markets have gone mad. The fear index almost broke down. In a normal situation, we use complex models to trade and predict. These models do not work under extreme conditions and in change. Try to understand. Under normal conditions, the world transaction value is 5000 billion (that's 5000 000 000 000 000 euro) each day. No one. No bank, no institute and certainly not a few men do understand what they do if their tools do not work anymore. They go for worst-case. What would you do? How much zero's can you deal with? A few million causes a lot of headaches and stupid decisions. Inventors start to throw the towel in the ring. In hindsight, it was better to buy god and bonds instead of investing over the last 20 years. Investors avoid risk by nature. Why invest at all?

The circuit breakers of our stock exchanges tilt daily. Yes, there are people with an unlimited belief in the market mechanism. Circuit breakers are there to give you time to think. A quarantine too))

Pricing mechanisms are not perfect. Still, they are a central part of the global social-economic organic system in use. We are just testing driving the global economy for a few decades.

The scale of the global economy is a big evolutionary experiment.

Democracy.

Quote Churchill "Democracy not so good, but the best there is". Let's go beyond that. First of all, Modern democracy is outdated. All the institutes we have done have a major overhaul for the last 200 years, except democracy. There we have a problem.

Modern democracy itself didn't change the last 200 years.

We still do have the same parliamentary systems and they are not that good. In Europe, almost 30 parliamentary democracies watched and stood by when 2 World wars started! Don't point fingers to the great dictators now. In hindsight, there was time to avoid the onslaught. Are we handling COVID-19 just as bad?

A good decision or strategy you can recognize.

There is a phase of preparation. There is a plan B. Different scenarios like min/max. Models. Proper handbook, stocks and many nice dialogs. All is missing and we are in the fear mode.

Fear directly kills our creativity that is needed to avoid the worst and make the best out of it. We get into our instinct mode. It's like a train is coming at you and you just freeze, although there is time enough to step aside.

Our fear instinct mode is particularly bad for democratic decision making.

Democracy is all about the dialog. The vote is merely signaling the end of the public discussion. In the Greek classical world, the wise people were all exchanging arguments on the forum for days and then raised their hands after asking "did we talk enough?" Dow we all agree to take this direction?". In modern democracies, it's all about the vote and the dialog is weak. In the case of Covid-19 it's just "Shut-up" and we put the emergency rule. "Sapere aude" or dare to think! Wake up. Please like FWD my posts.

The solution: Building proper mechanisms.

It's essential to know that there is a way out. That gives hope and trust to go on.

The mechanism to change and adapt, let's call it steering.

I explain How to grow and adapt organizations in an organic way using the latest blockchain technology. How to change/adapt or grow. Life has DNA. No life without DNA. I told them before. We need a digital version of such a mechanism for our institutes and companies.

Institutes are based on statutes or constitutions not made to change. Dr. Mihaela Ulieru (pres. of Impact) wrote a nice post on her 1917 (WW1) versus 2019 feeling. We cannot change because:

to enable change we first need to make the mechanism that enables us to do

The mechanism to trace our mistakes.

The blockchain math is so great because it enables us to trace mistakes in a way that cannot be tempered. Transparency and accountability will get easy. Kafka solved!

The blockchain brought us already transparency and traceability to a level new for modern mankind.

Imagine: you can trace errors, fraud, and theft always to its origin using The blockchain. You always can trace the mistake. Deterministic full compliance we call it. Similar to traceability blockchain like math & logic can solve the issue of change too.

Our universal blockchain language brings such a mechanism to nonprogrammers. Build in the Language Layer needed on top of the blockchain to program a sustainable way.

Please read more & endorse. Help to do good and find some good people before the bad guys exploit this tech.

“The blockchain language compiler is where all goes through. Beware you are about to lose your IP & business just like you lost privacy last decade”

The systems and institutes that rule us have more shortages. This error explains discrimination. The blockchain based system lens theory that solves discrimination. Another build in system error. We need to get rid of discrimination too! Please read, like it and standup. We need to discuss to get get it done.

? March 2019 Arnoud Berghuis

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