Designed Growth Movement and Designing New Financial Instruments

“Our current financial system, with its high dynamic and detail complexity is sensitive to manipulation and prone to herd-behavior. The outcome is often creative destruction, leading to the poorly tolerated periodic bubbles and bursts. Increased understanding of behavioral economics, the study of the irrational context dependent decisions we all make daily, has taught us that the rational human self-interest model is wrong. For over two hundred years, we have increasingly used this flawed and dangerous model to plan our societies. Now that pure Capitalism or Socialism has been shown to fail miserably...”

Throughout this article, several questions are brought up and elaborated by a solution centric design approach, from balancing growth with sharing, to the sustainable progress based on creative opportunities. The world is indeed, in need for new financial instruments to be designed. Yet, the most triggering part of the article is the functionality that all human behaviors are based on.

“All human behavior and interaction is based on trust and humans are designed and optimized to function in tribes, not in societies that consist of millions of individuals. When groups grow beyond 50,000 individuals, it becomes too large to know and reliably judge the trustworthiness of everyone else. It is at this point, that it becomes necessary to enact democratic government institutions with effective financial systems and enforceable agreements. Often, the originally designed solutions are the root cause of future problems. For example, institutions have an inherent tendency to grow beyond their effectiveness while centralizing decision-making in an attempt to stay in control. Organizations are not human and they do not have any emotions with regards to human beings. The system will simply continue to expend capital without thought of human misery, eventually collapsing under its own weight and this disregard of human nature is the root cause of our society's inherent and continued financial disasters.”

The tribal behavior functionality of humans meets with the Lebanese context in its perfect shape. The platform of the Lebanese society and economic system is based on competitiveness, effectiveness, pseudo-trust and reliability, but most of all, on “tribe-based” (struggling not to fall into “herds”) system of values driving cultural trends and energizing the consumerism. Conceptually these reasons are partially why Lebanon stayed in the shade from the global economic crisis. The Lebanese society and business relies mostly on trust and connections that drive even the biggest corporations. Having that said, solid business thinking in its professional form goes on a parallel line to maintain these connections and this trust. These two strong foundations, which the heavy weight economic climate in Lebanon bank upon, fall under human and cultural behavioral systems of the society. The gap here, upon what we called “tribe-based” system of value, is that the dynamics of such mechanism and its development process does not follow an ascending curve not even an orderly one, due to the elaboration of the trust factor out of the connection buildups. This, in fact, affects the progress ratio of productivity and mostly the initiatives in a creative climate.

Should the next economic model be designed, optimized and adapted for each and every country, or should the model be created to one, and exported to the whole world?

“Pink is the navy blue of India”. Diana Vreeland 

The European Union issues do not spring open from one particular country. It is as simple as that, capitalism does not work with the EU model, and the cherry on top is the fact that each and every country has its priorities. The thing is that they are totally right! Yet this is due to the practice of their economic systems which abide by the capitalism principles. What is true and undeniable is that we cannot replace any existing economic model by a new one built from scratch; this will be similar to creating a fast feasible self destruction. The concept at hand is to design a new model optimized from the existing ones, taking into consideration the balance between growth and sharing, and keeping in mind the sustainable progress through creative opportunities and the integration of humanized technological innovation.

A multi-cultural globalization should be worked out, since there’s no escape from the globalization. Conforming globalization into cultural and individual centric framework will lead to equity in the world economic systems and therefore a better lifestyle for all human beings. This can be done by bringing the existing economic models and optimizing them to fit individual centric solutions based on human behavioral principals rather than number behaviors and systems. While individual-centric approach, instead of the community mindset, can act as an under-performing factor in any economic situation, and knowing that big scale organizations and corporations are the vital exigencies of incremental development, everyone should bear in mind how sustainable are they?The solution we are pin pointing is a “designed growth movement” and “designing new financial instruments”.

Special thanks to Dr. Soren Petersen for his added value in this collaborative article.