There is a role for structure; however, it is a far cry from the one in practice today. There is no freedom of expression, no creativity, without structure. Take the grammar out of language and what you have would be an idiotic stream of words that might be meaningful to the speaker, but would communicate nothing to the listeners (many would argue that this is precisely where we are headed these days). Therefore we need some form of structure, to serve as kind of vessel used to convey meaning to others. When we are novices in a language, we experience this structure as confusing, distracting and inhibiting – restricting our ability to express ourselves freely. However, once we have mastered it, it is placed in the back of our minds; while we focus our attention on conveying the precise tone and meaning we wish to communicate.

Similarly, when we see Tai Chi being practiced by a throng of elders in a public park in China, all are meticulously following the same precise sequence of movements, performed at the same tempo, executed in exactly the same way. The impression is one of precise clockwork.

Now, if you are fortunate enough to see a master forming the same form by himself in a park, you would recognize the same form, however it would be somehow different. The movements would not be as distinct, they would bleed together, it would have a quality that might be described soupy, or cloudy. They would have a quality that the others lacked – a certain smoothness, strength, depth, and energy that while subtle, was immediately apparent. If you were to then see another master performing the same form on his own, the movements would yet again vary according to his particular style, while retaining the same core structure, depth of feeling, etc.

Now if you were to witness either of these masters accosted by a hooligan you would likely witness a rapid sequence of indistinct movements that culminated in the hooligan being on the ground. Very likely you would not be able to recognize the specific movement in the form which was implemented by the master. This is formless form in practice.

Structure is meant to elevate us, to free us, not to confine us. In our world is be been subverted and become the yoke to lock not just our bodies in place, but our minds and souls as well. The Player Culture promotes a robotic mindset in which all are just going through the motions, their minds parked elsewhere.

The problem arises when they have to deal with new and changing conditions, something that takes place on a day to day basis these days. They simply cannot cope! Having done their jobs mechanically for so long, the situation varies, the employee simply has no idea of how to accommodate the new conditions. Over the years occupations have become progressively more specialized. Instead of integrating and synthesizing information from several areas, these days many people’s mental functioning is more akin to data processing. The result is that their ability to respond to the unforeseen is severely restricted, their response being confined to a limited range of pre-programmed strategies. This makes for employees who may be highly efficient, in the classical sense, but are not particularly effective. In the past, the focus was upon producing more, now it must be on producing intelligently.

Mastery is one of the cornerstones of this alternative approach. Mastery is something that has come to be completely devalued over the last century. The road to mastery is long and tedious, demanding endless hours of tedious repetition. the distinction between this repetition, and that practiced by the assembly line worker, is that for the artisan it is a milestone on the way to a deeper understanding, while for the assembly line worker there is no payoff whatsoever. Therefore for the line worker it has no meaning. the motivation for the artisan in enduring this monotony is the freedom, the self respect, the sense of accomplishment that mastery provides. Meanwhile, for the assembly line worker, where the accounting clerk, there is no prize, no glory, no payoff whatsoever.

In the idealized town of Volterra, or the Antwerp diamond market, the hidden a structure that allows the system to function in such a fluent, seamless fashion is that all know that everyone else in the choreography is able to play their part perfectly. Each individual’s commitment to excellence is not just for their own sense of self worth, but is also for the benefit of those around them, so as to not let down the others in their community. Unlike the pressurized conditions produced by the traditional model, this is the most natural condition. It would’ve existed in the early stages of our tribal development, and we see it among those, such as soldiers and firemen, who depend on each other’s confidence and support for their own survival.

Over the last month two events have dominated the economic news: the Gulf oil spill caused by the mechanical failure on a British Petroleum offshore drilling rig, and the insolvency of the Greek Federal government. It seems on both sides of the Atlantic we’re beset with scandal and crisis.

Starting with the oil spill – the drill was operating in extremely deep water which places enormous pressure on equipment which in turn greatly increases risk. A further complication is that should anything go awry remedial action is difficult and uncertain. Under such conditions one would anticipate that the equipment would be over- engineered by a safe margin, in order to compensate for the risk.

No such luck! Instead, it turns out we have quite the opposite. A critical piece of equipment specifically designed to prevent such disasters, which is required by regulation in other parts of the globe, is not mandatory in American waters. Next we find out that should there be a calamity, according to some other government regulation, British Petroleum is only on the hook for $75 million.

This is all particularly confusing in light of the statements made by the young CEO on TV (presented in open collar and rolled up sleeves in a general office setting as the background), earnestly assuring us that despite the fact that the accident was not their fault, they intend to foot the bill.

Turning to the Greek situation – on television we see graphic pictures of rioting in the streets in response to the austerity measures demanded by the European Union. This was to be its penance for defaulting on their debt. In return they were promised $1trillion in additional financing. The editorial message to the world conveyed being that the Greek populace has been living well beyond their means, and is now behaving badly when called to task.

The news presents this as a crisis unfairly thrown in the laps of the financial mandarins in Europe. However, it is certainly no secret that living a relatively comfortable existence, and avoiding paying taxes has become something of a social contract in Greece. In light of this, the so called crisis was nothing short of inevitable. Also, the crowd’s reaction came as a surprise to no one, in the same way that the ultimate conclusion of the crisis – after much debate, wringing of hands, and gnashing of teeth, the Greeks got their money – was equally predictable.

All over the world financial markets react to the news about these two events by shooting up and down with each sound byte that comes over the news-wire. This distracts us from the underlying reality- that our systems are completely permeated, subsumed in fact, by corruption. Words such as ‘sustainability’, a big part of British Petroleum’s PR over the last decade, and ‘austerity measures’, a favorite of the EU Bankers, have become nothing more than meaningless verbiage.

In the meantime, the pressure keeps building and building. British Petroleum’s spill continues to gush out toxic crude, the Greeks carry on with their lifestyle till the new money runs out, and in the end nothing will change. Sooner or later the public will lose interest in these calamities, only to be titillated by the next one that comes along. It would seem that all of us are so preoccupied with just surviving today; we don’t have the psychological capacity to even engage with the singularity towards which we are accelerating.

In the former communist regime in Hungary, a favourite term for describing the ills of the socialist system was contra-selection. The best and the brightest were removed from the top, or denied entry to the inner circles of power, and the resulting vacuum filled with outwardly compliant, but inwardly self-serving apparatchiks. Skilled at stroking their superiors, and ensuring that those below them towed the party line, they served the system very well. Unfortunately, this preoccupation with the communist variation of the Game left them with little time or energy to invest in actually doing the job.

The other issue was competency. The apparatchiks are much like incompetent pilots flying a plane. They can bluff it well enough in clear sky, but take-off and landing are beyond their pay grade. Staying within this metaphor, to the extent that the apparatus of state could stay in the air, there was enough money to keep the country going, the apparatchiks were fine. But when the weather was rough, or a change of course was required, because the old ways were simply too outdated to be effective any longer, they were simply not up to the task.

When, we examine the traits that best ensured success in the communist system they included knowing the right people, deflecting blame, stealing credit for other’s work, a flexible spine, and a strong constitution. To many this will sound like heresy, however from my experience these same traits are the major contributors to success in the corporate world.

During my time as crisis manager, and acting CEO, of a formerly state owned food processing company in southern Hungary I was immediately struck by how fluent the senior management was in terms such as debt-equity swaps, market share, competitive advantage, etc. This was truly extraordinary considering the fact that they were all apparatchiks of the old school, and that the socialist system had fallen less than two years before. The point being that doublespeak is doublespeak: be it ‘for the good of the cause’, or the ‘maximization of the benefit to shareholders’, each is but a script easily learned by the skilled Player, who is a natural actor.

One can see ample evidence of this juggernaut approach in North American corporations and banks where executives almost wilfully ignored feedback from the market and emphatically refused to change course. Examples are IBM’s blunder of getting in too late to the PC market which created the opening for Microsoft to fill. Another example is the big three in Detroit, particularly GM, where the executive class seemed to exist in a bubble. They felt themselves so powerful that they sincerely believed that they could ignore consumer needs and preferences. They believed they could dictate tastes and preference of the consumers and therefore did not need to concern themselves with the competition. We all know how that story ended.

Somewhere between a third and at half of all of the mortgages in the U.S. today are on properties with negative equity. This means that the mortgages are greater in value than the home itself. Despite the fact that the liability to the homeowner is limited to the home, and on a pure cost benefit basis there is no reason to keep servicing the mortgage each month, the vast majority of people continue to pay. The question is why?

The first reason is simple habit. People are used to paying their mortgages, and paying their debts in general. Breaking a habit is never easy. To the extent that we can avoid it, put it off somehow, we will. It is easier for us to just mechanically make our payments each month than to stop and think about whether this is really the best strategy. Typically, the monthly payment is deducted from our accounts automatically each month, making it still easier for us to put off the decision.

The second is stigma. There is a stigma associated with being foreclosed upon. The concept of losing one’s home is associated with bankruptcy, failure, being the ultimate loser. Most of us will do just about anything to avoid looking like a loser.

Thirdly, is naked fear. The bankers tell the homeowners that if they do not pay, especially when it’s proven that they could (how they would do this is anyone’s guess), their credit ratings will be destroyed for years. Here the bankers are playing upon our innate fear of authority. Most of us are afraid of the power of large faceless institutions. We’re inclined to believe (not without reason), the law will always come down on their side and our attempts to resist this natural order will only cause greater problems for ourselves and our families.

In the meantime, the banks resolutely refuse to negotiate with debtors on terms. This is justified on a moral basis, in that negotiating with one creditor, would set a bad example, and be unfair to the rest who are obediently fulfilling their obligations.

The irony of this line of reasoning is that should the debtor be a large corporation, the scenario would play out completely differently. Acting in the best interests of their shareholders, the officers of the company would not hesitate to walk away from a negative equity situation. Similarly, the banks would not be inclined to take nearly such a hard line, and would readily re-negotiate terms. Recently the Supreme Court determined that corporations enjoy equivalent rights to individuals within the law, so it seems ironic that this distinction should continue to be made. Should the homeowners wake up one day and see himself as having the same status of a large corporation, then the Lawmakers may have to revisit this ruling.

At the same time that all of this is taking place, the number of homeowners walking away from their obligations is steadily climbing, gradually approaching a tipping point. Once we see enough of our friends and neighbours walking away from their homes, and appearing to get away with it, we will follow suit not wishing to be the fools who are left behind. In this light the intransigence of the banks would appear to be particularly ill advised. Before we reach the tipping point it is impossible to predict when we will hit it. However, once passed there will be no way to stem the tide of defaults that will ensue.

This rigid autocratic response, which seems incomprehensible, from a practical point of view is a clear indication of what I refer to as to circle within a square structure that lies within the banking industry. This is a hidden power structure wherein a small elite circle, creates a rigid control structure to support itself. Even when the structure ceases to be efficient, or responsive to changes in the outer environment, it still remains in place because of the fact that it is the key support for this inner circle.

Nicolai walked into the café. Up till now we had only communicated over the phone, the conversations often extending for hours. The topics either centered around my model, or his algorithm; peppered with political and philosophical commentary. I recognized him immediately – the unkempt hair, the discordant arrangement of clothing that looked as if they had been pulled out of a cupboard in the dark, the distracted, yet intense expression on his face – all gave him away.

I stood up and waved. His face lit up, a smile twinkled in his eyes, suddenly softening his weathered Slavic features, giving them a child-like expression. At first, the conversation was a bit stilted as each of us got our bearings. After the halting start, the exchange took wing. Someone watching from another table would have seen two middle aged men, excitedly gesticulating, passionately pressing their points, trying to make the other really ‘get’ the essence that lay behind their thoughts. Each ready with their response before the other had a chance to finish their diatribe.

Nikolai is an Anti-player! In the world of Players with their smooth, even delivery, careful selection of topics, designer clothes, and impeccable grooming, he finds himself completely lost. Small talk is simply beyond the capacity of the Anti-player. The clever banter, name dropping, references to the last golf game you had or restaurant you tried, makes no sense to him. When Nicolai speaks, it is to convey a point. When he finds your arguments compelling, he will happily say so. If he does not, which is the more likely case; Nicolai will let you know- bluntly! The weather may change, fashions may change, the times may change, but Nikolai remains steadfastly the same!

One of the great hidden costs of the Player Culture, with its obsession with impressions and perceptions, is the brain-drain it creates. The Nicolai’s of this world – brilliant, original, and authentic – are among its first casualties. They are the Mozart’s who the Salieri’s must discredit and marginalize, lest their own mediocrity and perfidy be brought to light.

In the short term this does not pose much of a problem. The Anti-player is easily replaced by someone else, far less brilliant, marginally competent, but infinitely more compliant. The problem arises when there is a crisis, or a major shift in the business playing field. In these cases it is not enough to follow prescribed practice as stated in the company manual, splice a few sound bytes together to make a strategy, or bamboozle the market with a few marketing tricks. In such times, real substantive thinking is required, something of which the Players, and those in their entourage, are simply incapable.

Such periods were the exception in the past, today they are the rule. Now when we need them the most, the thinkers are nowhere to be found, having been removed from the playing field long ago.

“Greed is good!” This is the proclamation of Gordon Gecko, the character loosely based on Ivan Boesky, in the film “Wall Street”. It is the bastardization of Adam Smith’s concept of ‘enlightened selfishness’ which was the guiding ethos for industrialization in the early 19th century. Without accepting, or rejecting, this premise it is worth taking a closer look at what lies behind it.

The theory we all learned in school is that capital fosters technological advance, which increase profits through enhanced efficiency, and this is then reinvested in the productive process, which further increases efficiency, etc. This then creates greater abundance for all.

During the initial phases of development this may hold true to some extent, but once this honeymoon period of win-win is over, it becomes more of a zero sum game. Sooner or later, this enlightened selfishness reveals itself for what it truly is – a narcissistic derive to have more, to win, to dominate. This drive always existed, and no doubt in its proper context helped us to survive at an earlier point in our development. However, under Capitalism this drive is allowed to run amok.

This goes a long way to explaining something that leaves the rest of the world simply dumbfounded: Why the Americans seem to have such a visceral resistance to any institutional attempts to lend a helping hand to the underdog.

It only stands to reason that if it is morally righteous to desire to have more than our brethren; the poor, those who cannot sustain themselves, must then be morally lacking. After all, God is good; God is just, so why would He punish the virtuous? The two positions, go hand in hand, and are inextricably linked. We cannot accept one, without accepting the other.

This may sound nonsensical, or something right out of a Dickens novel, but it represents the core underlying beliefs of those comprising the upper ranks of the Capitalist variation of the Game. Beneath their thin veneer of Christian altruism, they actually loathe those who have less, look different, or deviate from them and their views in any way. They are very careful not to reveal this in any public forum, but amongst themselves, there is a shared belief that there is a natural order to this world that has their caste as its undisputed masters.

These days the reactionary element, represented by the Republicans, finds themselves besieged. Watching the downfall of Communism two decades before, they felt that the Capitalist system was validated as God’s natural order of things, the way things have to be. Now it is capitalism’s turn to be exposed as being yet another artificially fabricated system, nothing more. This begs the question: With socialism being eliminated as a viable option, should Capitalism prove inadequate for the challenges we face today, where are we to turn next?

Those on the Left hail the passing of the Healthcare bill as a great victory for the middle class. Meanwhile, across the aisle, those on the Right are labelling it as the first step on the slippery slope toward state control and socialism.

We can argue the ideological implications of this decision long into the night, but all this exercise does is distract us from the fact that the compromise solution is an unmitigated disaster that has been doomed from the get-go.

Early on in the debate the full public option (socialized medicine) was removed from the table. From that point onwards, the discussion has drifted from one variation of a hybrid of socialized and private medicine, to another. This is like trying to combine an elephant and a donkey – whatever the outcome, it can only be ugly.

This compromise is destined for failure for a number of reasons:

1. It places the government in competition with existing firms in providing health care to the public. The government has limitless reserves to draw upon in relation to any competitor, thereby giving it an unfair advantage. Also, there are no guidelines as to what this will look like in practice.

2. There is no precedent for such a hybrid solution, therefore there are bound to be a whole slew of secondary and tertiary consequences that have yet to be considered. The level of overhaul being proposed is an immense administrative challenge. The fractious atmosphere in Washington, and the lack of consensus of public opinion, means that the administration has nowhere near the leverage to effectively implement such sweeping changes.

3. The existing Medical System is a model of corruption and incompetence. Expanding such a system without first doing a thorough housecleaning, is only throwing good money after bad. Even well functioning systems can only sustain a limited rate of expansion. In this case, a defective system is supposed to multiply in size, practically overnight. Under such circumstances the risk of creating complete chaos, is almost a certainty.

4. The notion that this legislation will not add to cost is reminiscent of Stockton’s Voodoo economics – the plan to increase military spending while balancing the budget during the Regan presidency. (Of course that seemed to be far less offensive to the Republicans then Health Care is today.) These specious arguments typically are based upon estimates of inefficiency within the system, and then mathematically extrapolating what such systems would yield if all the inefficiencies were eradicated. For anyone knowledgeable about systems, this is nothing more than a cynical attempt a blind the public with science.
5. The federal government is effectively bankrupt. Where is the additional funding supposed to come from?

The greatest tragedy in all this is that a great opportunity to reconnect Washington with the man in the street was squandered. The concept of socialized medicine itself was not the problem. If the government could have negotiated better terms with the pharmaceuticals, net savings could have largely offset the additional administrative expense of expanding the system. The problem lies with an unrealistic appraisal of the likelihood of such legislation making it through the system.

It took over two centuries for Washington to descend into its present state; a leviathan of cynically motivated Players, so concerned with their own narrow self interest, that the thought of addressing the real issue at hand, never seems to cross their mind. How then, can anyone expect all those in power to suddenly have an epiphany, and put bipartisan biases, and special interests behind them, and work together for a better, somehow saner tomorrow.

Theory posits that competition motivates performance and in the process optimizes efficiency, innovativeness, and resourcefulness. The problem is that this can only hold true when there is perfect transparency- one can always objectively assess performance and clearly identify accountability.

The problem is that in life there is never true transparency, therefore those skilled in the management of impression and perception can always gain the edge.

Also, as the market matures and an increasing number of competitors participate in the market, the amount of effort required to gain the edge on the others, either through improved efficiency, good administration, or creative financing diminishes. At this point the incentive to not play by the rules, to make false assertions about either your products strengths or your competitors’ weaknesses increases. Also, when there is not enough to go around, the likelihood of creating artificial barriers to entry which effectively restrict competition, increases as well.

Where all this is leading is that the capitalist free-market competitive model, left to find its own equilibrium, actually leads to a sub-optimal result. It leads to corruption, collusion and nepotism. Once corruption reaches a certain critical mass within the system there is no way out and everyone becomes complicit.

An example from personal experience was when I was engaged as the crisis manager to run a meat processing company in southern Hungary. The regular production flow was to purchase the meat from a local slaughterhouse, process it and then export it to the German market. Because of anomalies in the meat prices caused by subsidization in the EEC, it was significantly less expensive to purchase Danish beef then it was to buy the local produce. The margin on the meat conserves was very small, and the price difference made a huge difference in the profit margin, making the locally sourced conserves uncompetitive on the export market. The catch was that the regulations prohibited it and there were regular veterinary inspections to enforce compliance. Any company wishing to purchase the Danish beef in larger volumes was certain to get caught, and fined severely. The only way around this was to pay off the local inspectors.

As the manager I was faced with one of two choices. Buy locally, in which case my potential markets and margins where severely reduced, in some cases completely eliminated, or to bribe the inspectors.

As a foreign consultant I could hardly entertain the option of bribing the inspectors. However, had I been a locally sourced executive, I would have had little option but to play the game and pay the “unofficial market tax”, if I wished to retain my position.

The point is that as an industry matures it reaches a point where corruption, nepotism and collusion simply become a part of doing business. Ironically, there is a kind of “the lady doth protest too much” attitude that develops among those in the inner circle privy to what is really going on, that this reality is simply not mentioned. Here in the West, we even go to great pains to cover it up with laws and codes of conduct. In the end the only people taken in by this subterfuge are those in the upper and middle ranks of the company- the players and the drones. Everyone else takes it as almost self evident that those in charge are lying and have something to hide. It remind me of a former girlfriend’s cat who, despite being a full grown cat, used to try to hide behind a chair leg.

By nature, we are predisposed to believe everything and anything that is said to us. Life experience, however, teaches us that what is said is not necessarily true. In fact in today’s world, lying is so prevalent that for just about anyone in the business world the implied assumption is quite the opposite – that there is a hidden agenda behind what ever is being said.

However, even though our survival instinct leads us to be sceptical, our need to believe remains in no way diminished. This creates an internal tension inside us. On the one hand we need to believe, while on the other we cannot allow ourselves to trust those around us. This creates an untenable situation for us psychologically, a psychic paralysis which is not sustainable over time.

Therefore, in order to resolve this dilemma at some point we must place our scepticism in abeyance, placing our trust in someone or something. So then in whom do place our trust? Is it in the most trustworthy individual who we have taken time to vet, or the one who’s most skilled at penetrating our psychological defenses? Obviously it is the latter, as the former is simply too cumbersome. This then leads to an end result which is counter intuitive. The more ‘sophisticated’ we become the more easily we are fooled. As the players and the environment become more and more skilled at deception, and we become more sceptical, it becomes more and more likely that it is only the skilled manipulator will be the one who wins our trust.

Then when we are misled and taken advantage of once again, we become more cynical, more suspicious. Our critical factor becomes stronger and thicker, our loneliness intensifies, and our mental stability becomes more tenuous. This then only makes us increasingly vulnerable to being manipulated. This then explains why we as a society never seem to wake up, and fall ourselves time and time again for different variations of the same cons. Be it Junk Bonds, Enron, Mortgage-backed securities, or Medicare, the packaging changes, but underneath, the Game is the same!

The debate over Medicare has raged on, with varying degrees of intensity, for so long that finally none of the bystanders are quite sure of where the chips are likely to fall when the dust clears. The New Deal of medicine is confronted with a number of challenges – a bankrupt government, strong vested interests, and a poorly functioning existing system, just to name a few. One element that seems to have been consistently overlooked in the discussions thus far, is how the front line troopers, the doctors, are likely to respond to this new set-up.

The medical profession in the United States has a uniquely entrepreneurial approach to their profession. Whereas in most western democratic nation’s doctors enjoy a relatively comfortable standard of living, and preferred status, the American doctor stands alone among their peers in having the very real potential to become a millionaire.

So, for decades now the American medical practitioners have been placed in a unique dilemma. On the one hand they as doctors have sworn to abide by the Hippocratic Oath, to put the patients best interests above all else. On the other they are confronted with the ethos of the upper middle class in North America, the libertarian philosophy of Adam Smith, which preaches the gospel of ‘enlightened selfishness’. The easiest way to solve this conundrum is to medicate the client. With each passing year the pharmaceutical industry obliges the doctors by creating newer and better drugs. This creates a win for all the parties involved. Doctors have more arrows in their quivers with which to help alleviate their patients’ suffering; the pharmaceutical companies profits increase; and patients comes away from their visits to their doctors with a ready solution to their problems in hand.

Even though clever sophists may argue to the contrary, it is self evident that this unique situation is hardly likely to benefit the public at large. As their income increases, the opportunity cost for doctors in taking the extra time to fully engage with a patient, create rapport, and really get to know them, rises steeply.

With the passing of successive generations, those desiring to be doctors, are doing so increasingly because of the promise of wealth, rather than to heal the sick. Medicine is no longer a calling, but a career, not unlike accountancy or banking. This will predictably skew the selection of candidates towards those who are hard driving, and ambitious, and away from those who are more nurturing and caring in nature.

Now comes the coup de grace – after having spent the first half of their productive lives working day and night, all the while dreaming of the good life they will enjoy when they’ve done their time, they now find themselves as the butt of a bad joke. No one has ironed out the wrinkles of what this New Deal entails, but it is almost certain to hurt the doctors financially. It would seem then, that the doctors have been chosen to be the sacrificial lambs for the greater good, in making adequate medical care a basic right of every citizen of the United States.

In light of the above, how is the typical medical practitioner likely to deal with those referred to them through Medicare? Already, as it stands today, statistics show that minors with behavioral issues are four times as likely to be prescribed anti-psychotic drugs under Medicare, than under private plans. With the enormous expansion of the Medicare program soon to take place; we can only expect this trend to intensify in the future. Of course this is not likely to hurt the pharmaceutical industry, but the long-term implications of a severely over-medicated population for America are far reaching. In the long run they can only be catastrophic!