When connection matters, when community matters, economics fundamentally changes.
Investing in community - for profit as well as a lifestyle choice is possible.
In this paper, I’m talking about community. But a particular definition of community. Those communities that are lifelong connections groups of 150 people or less where there is reciprocal exchange. We take care of each other because we know that our futures are bound together. It is a natural or organic form of organization of humans. It happens wherever there are humans. In a group size of less than 150 people we are self organizing. We don’t need a bureaucratic central governing system to get 150 people working together. We self organize at that scale.
The small group which is less than 15 people. Is also self organizing. A big difference between the small group and the connected community is that we move in and out of small groups frequently, we will be in small groups within the connected community. Small groups are often more task, focused or themed. The lifespan of a small group is whatever they’re trying to do. The lifespan of a community is the duration of that identity around which they gather. The lifespan of a region, which is the organic organization of humans bigger than 150 people and geographically gathered - what we might call a metro area and which survives arcross generations. The lifespan of that might be the length of human civilization. The region both outlives communities and generates them.
These are the three hierarchical levels of organic ordering of humans. The small group, the connected community, and the region.
Those three levels organically occur across the globe and can thrive without any external bureaucratic control.
Particularly in this paper, I’m talking about how the connected community exchange goods and services and manages resources. In the connected community. There is no need for currency. There are no markets. It’s just people being good to people they know. Currency becomes appropriate and beneficial at the region.
Traditional economics does not recognize these different levels of organic human organization. Traditional economics is based on the belief that all exchange is currency. Is self motivated. Seeks to maximize profit or consumption. Is logical and fully informed. Traditional economic thought is trash. It’s a bad science. Like belief in the four humors. It’s a science founded and a bad paradigm.
Our challenge when considering connected community and how to engage with people to whom we are connected and have a shared sense of enduring well-being. Our challenge is to work out the beliefs of the economic science because it’s so wrong.
I go back-and-forth in this paper from explaining the connected community and how it manages resources and exchanges goods and services and contrasting that with traditional economic thought which would explain to us that community does not exist. In 1987 when Margaret Thatcher claimed “who is society? There is no such thing!” And she was wrong. Her economic advisors in the Mont Pillier Society are still considered thought leaders in mainstream economics. So in this paper, my goal is to help you to see the Connected Community. But in order to do that I also have to help you to see the mainstream economic paradigm that is restricting your thought.
First, Lets talk about Paradigms
The defining paradigms of economics are flawed. These paradigms must first be recognized, then corrected for economics to live up to the potential of a science.
I am asking you to entertain ideas that contradict existing economic common sense. Most of you probably don’t think about economic theory that often - yet it is embedded in the language and assumptions that we all live with. Economics is the “mother tongue” of public policy. So you if pay any attention to politics or the news you are hearing conversation that is framed by economic thought. We, each of us, all of us, have a set of paradigms - or restrictions to our thoughts on every topic.
As an example the existence of paradigms is what makes the show ancient aliens so much fun. That show visits historical events, geographical sights, religious teachings, and mythology with the paradigm - what if it was aliens. The show is a thought experiment - where they view anything put before them with a single paradigm - What if it was aliens. And because we know to expect that paradigm. We are not surprised that the answer to any question on that show is always Aliens.
So too are our political conversations, and our conversations about human nature framed by paradigms. Though none of the economic paradigms are as fun as - what if aliens?
I am asking you - for the period of this paper to let down your paradigmatic guards - and hear some things that may contradict your existing beliefs. You’re a polite people - you’ll probably say - OK jesse sure. We’ll listen. I do want to warn you. Grappling with ideas that don’t have an existing frame in our minds can be hard.
From the book The structure of Scientific revolutions by Thomas Kuhn.
“In a psychological experiment that deserves to be far better known outside the trade, Bruner and Postman asked experimental subjects to identify on short and controlled exposure a series of playing cards. Many of the cards were normal, but some were made anomalous, e.g., a red six of spades and a black four of hearts. Each experimental run was constituted by the display of a single card to a single subject in a series of gradually increased exposures. After each exposure the subject was asked what he had seen, and the run was terminated by two successive correct identifications. Even on the shortest exposures many subjects identified most of the cards, and after a small increase all the subjects identified them all. For the normal cards these identifications were usually correct, but the anomalous cards were almost always identified, without apparent hesitation or puzzlement, as normal. The black four of hearts might, for example, be indentified as the four of wither spades or hearts. Without any awareness of trouble, it was immediately fitted to one of the conceptual categories prepared by prior experience. One would not even like to say that the subjects had seen something different from what they identified. WIth further increase of exposure to the anomalous cards, subjects did begin to hesitate and to display awareness of anomaly. Exposed, for example, to the red six of spades, some would say: That’s the six of spades, but there’s something wrong with it – the black has a red border. Further increase of exposure resulted in still more hesitation. Moreover, after doing this with two or three of the anomalous cards, they would have little further difficulty with the others. A few subjects however were never able to make the requisite adjustment of their categories. Even at forty times the average exposure required to recognize normal cards for what they were, more than 10 percent of the anomalous cards were not correctly identified. And the subjects who then failed often experienced acute personal distress. One of them exclaimed: “I can’t make the suit out, whatever it is. It didn’t even look like a card that time. I don't know what color it is now. Or whether it is a spade or a heart. I’m not even sure now what a spade looks like. My God!”
I don’t expect or want that sort of crisis for you.
But I would like you to be able to leave this conversation and ask yourself in the variety of different circumstances - What if Connected Community?
How would this situation be different if I were part of a healthy and capable connected community?
Or What in your life would be different if your connected community were more developed?
Or Apply this model of connected community to whatever other economic context you encounter throughout your days.
That’s the paradigm that I would like you to apply when you leave this evening “What if Connected Community?”
So - What is Connected Community?
The connected community is one level of hierarchical self organization that humans organically engage in. The connected community is between 20 and 150 people and have recurring social connection. The connected community is self organizing and does not need central organizing or currency to effectively exchange goods and services or manage resources.
Connected Community is one of several self organizations that humans do.
Humans naturally gather in groups of 150. This is our tribe size. Or the size of groups that we would create if we were still un-urbanized. We do still see this number present often. Once you know to look for it - you start seeing it. . .
From Tipping Point by Malcom Gladwell.
“Humans socialize in the largest groups of all primates because we are the only animals with brains large enough to handle the complexities of that social arrangement. Dunbar has actually developed an equation, which works for most primates, in which he plugs in what he calls the neocortex ratio of a particular species – the size of the neocortex relative to the size of the brain – and the equation spits out the expected maximum group size of the animal. If you plug in the neocortex ratio for Homo sapiens, you get a group estimate of 147.8 – or roughly 150. “The figure 150 seems to represent the maximum number of individuals with whom we can have a genuinely social relationship, the kind of relationship that goes with knowing who they are and how they relate to us. Putting it another way, it's the number of people you would not feel embarrassed about joining uninvited for a drink if you happened to bump into them in a bar.”Dunbar has combed thought the anthropological literature and found that the number 150 pops up again and again. FOor example, he looks at 21 different hunter-gatherer societies for which we have solid historical evidence, from the Walbiri of Australia to the Tauade of New Guinea to Ammassalik of greenland to the Ona of Tierra del Fuego and found that the average number of people in their villages was w148.4. The same pattern holds true for military organizations. “Over the years military plannes have arrived at a rule of thumb which dictats that functional figthin units annot be substantially larger than 200 men,” Dunbar writes. “This, I suspect, is not simply a matter of how the generals in the reat exercise control and coordination, because companies have remained obduratley stuck at this size despite all the advances in communication technology since the first world wat. Rather, it is as though the planners have discovered, by trial and error over the centuraties that it is hard to get more than this number of men sufficiently familiar with each other so that they can work together a a functional unit.” It is still possible, of course, to run an army with larger groups. But at a bigger size you have to impose complcated hiuerarchies and rules and regulations and formal measures to try to command loyalty and cohesion. But below 150 Dunbar argues, it is possible to achieve these same goals informally: “At this size order can be implemented and unruly behavior controlled on the basis of personal loyalties and direct man to man contacts. With larger groups this becomes impossible.”
“With larger groups this becomes impossible.” That last phrase denotes the shift from organic self organizing humans to bureaucracy. Administrative, rule oriented, control systems. Below that number humans don’t need a central organization to thrive and develop. We self organize.
The books goes on to identify one fortune 500 company that is run with this same model - keeping offices and manufactories with less than 150 people per building. Allowing a multi-billion dollar company to self-organize AND thrive.
OK - 150 people in a group - at max allows for self organizing.
Freemasonry used to exist as a form of self organizing in the west - particularly in early America where social structures had not yet been well established.
Now I don’t have literature for this - if you do - please let me know after. My understanding is that lodges used to serve more functions in the lives of the lodge members. In addition to a fraternal gathering - we also served as burial societies. When you died. We did the funeral and addressed your remains. We would adopt the orphaned children of other masons. That’s in our oaths. Lodges were the social structure that individuals went to when encountering an issue larger than their own capacities. However many of the services that connected community used to perform have been commercialized or formalized into government services. Burial societies have been replaced with insurance programs. And there are different government protocols for orphaned children. The formalizing of these social needs into commercial products and government programs has stripped, unwittingly stripped community of function. While at the same time created unsustainable financial and beaucratic burdens.
The cost and structure of primary and secondary education would look different if we managed education in connected communities.
The cost and structure of long term care for our elders would look different if we planned for it in connected communities.
Economic down turns and Economic growth would both look different if we had financially stable connected communities.
And these things did look different before commercialization and government programs crowded out Connected community.
From David Bollier - host of the podcast “Frontiers of commoning” and director of the commons program at the Schumacher School for a New economics
"ROLAs [Rotational Organized Labor Associations) are an ancient mutual service practice by which households in a community provide help to each other through reciprocal exchange without any currency involved. So when people need help in harvesting annual crops, building houses, or teaching their children, they help each other and then informally keep track of who owes some reciprocal help to whom.William Ruddick (A guest on David Bollier’s podcast) encountered more than 42 different tribal names for these practices, suggesting that mutual aid without money is indeed a spontaneously occurring social phenomenon. Some Indigenous groups practice Mwerya, their name for ancient mutual service traditions -- a term that also functioned as a collective noun for people. The Kikuyu in central Kenya call it Gobato. The Luo tribe near Lake Victoria call it Nyoluoro."Surprisingly, if you look through anthropology research," said Ruddick, "this social practice is almost undocumented even though it seems to have been nearly everywhere." He adds that ROLA-behaviors petered out around the time of colonialism, when colonial and national currencies were introduced. A local saying held that "those who would lose their traditions become slaves" -- an apt description of what happens when traditions of mutual aid are supplanted by the wage system using the colonial currency."
For me - This idea has a lot of warm fuzzies involved. The thought that my community could come together to address some of the larger challenges that I cannot address on my own is a beautiful thought. I would love to be connected to my community in a way that supports me and supports the long term well being of my people.
It is critical first that we be able to see that the connected community is a naturally occurring human organization. That ROLAs spring up spontaneously - without any central planning OR currency. That, in fact, central planning and currency have been detrimental to the natural ordering of organic human activity.
The point of this part of the paper is to show you something outside of your existing paradigm. I am pointing to traditions and evidence and saying - Hey Look! This things exists. What if Aliens? - But for us. What if Connected Community?I want you to be able to imagine that big parts of our lives could be different. If we had space and allowed for the natural condition of human groups to re-emerge.
Economic Engineering Tools
Three examples of economic development models that can be replicated in connected community
Now let’s get into the Alchemy of the paper. How do we take this paradigm of connected community and turn it into tangible value!
The natural progression of scientific thought is from Philosophy - then bound by restrictive paradigms and we have a science. With the development of instruments and a depth of knowledge science transforms again into engineering. Not only do we understand the nature of the topic - but further - we can control and manage with such certainty that we are able to reliably create products or services using this knowledge. Engineering is the phase of thought after Science. This is why economics is a trash science. It cannot engineer. As the complexity of the economic science increases - the accuracy of the science decreases. The likelihood that you could use mainstream economic science for engineering is laughable - if you can find poverty funny. . .
Mainstream economic science lacks the framework to apply these organic levels of self organization and work at the scale of the connected community. Just because economists are incapable of it does not mean it isn’t being done. It’s just not being done by economists.
Here I highlight three case studies where economic work is being done at the scale of Connected community.
Zingerman’s is a family of Businesses in Ann Arbor Michigan. Beginning as a Deli and finding success the owners of the business chose a unique path of growth. The traditional path of growth would be to open more deli’s and replicate the business model that has already proven successful. The owners of Zingerman’s instead chose a path to develop the people of the deli and open a series of complementary businesses. Deli’s sell meat - so they strategically opened a bakehouse - selling products that naturally accompany the products of a deli because when you buy meat - you’ll also buy bread- then they strategically opened a cafe in the the same space as the deli and bake house strategically selling products produced in the deli and the bakehouse. To launch each of these businesses the original founders partnered with existing employees. They partnered with members of the community to grow with the people that wanted to grow with them. Zingermans is now a family of six or more businesses including a consultancy that trains people in the Zingerman way.
This is economic engineering. And of course it came from outside the mainstream science - these are practitioners - none are economists - because economics is a trash science.
Peace Circles or Restorative Justice circles are a method for bringing people together. Sitting in a circle and sharing from your heart. There is one circle keeper that leads the event. In this process people experience all sorts of benefits which if sought in the traditional individual focused economy are hard to achieve and expensive. Peace circles achieve comparable results to therapy, often avoid or circumvent the need for adversarial lawyers, and can provide education and insight that would otherwise require deep and lengthy study. People leave peace circles with a sense of well-being and connection. How do you measure a sense of well-being and connection? Well therapists charge between $100 and $500 per hour - to help you talk about how you feel like you lack connection. Again - economists would not acknowledge that a Peace circle is an economic tool. The practitioners of peace circles would be equally aghast if I told them what they were doing is primarily an economic activity. Its connection. Is that a service? Is that a product? It certainly has benefits. It is a format for sharing resources. Is that economics? What if… Connected community?
The third tool that I want to highlight is the Wealth Curriculum. With four rental units I do not evict, I do not charge late fees and I do not raise rents as a matter of course. I have collected 95%+ of rents over the last two years managing my properties this way. I have zero vacancy. Making that 5% of missed rents to have paid for itself by avoiding costly turnovers and vacancies. To stay connected with my tenants I’ve created a course on personal economic development. I use this course with my tenants and other people in my community to have a robust conversation about their unique wealth life. By having a shared language of our wealth lives we are able to talk about money in a connected, rather than adversarial or mercenary way and focus on how we move together as a community rather than transactionally like a traditional landlord tenant relationship.
These three case studies are not how the economy currently works.
These three case studies are how the economy could work.
These three case studies show the potential for reliable and accessible economic development engineering.
What if? What if Connected Community?
Strategy and Markets
How to use strategy with economic development tools and how it is different from traditional economic thought
The organic level of self organization above the connected community is the region. The region is defined by geographical co-location. Not a specific number of people but larger than the connected community. St. Paul Minneapolis is one cluster of people. It’s a region. Your region is important because that’s where markets exist. There are no markets in the connected community. The connected community self organizes to allocate goods and services.
Members of a community could leverage the human capital of the connected community, the assets of the connected community, and the shared intellect of the connected community in order to access the markets of the region. To skillfully muster the resources, the connections, the assets, the intellectual power, of the community to thrive in the markets of the region. This is strategy in economics.
Let me first introduce what strategy is.
From Napolean’s Glance by William Duggan
“As Napolean’s ragtag army crossed the border into Italy, the coalition forces divided in two. The itallians spread out in an arc to defend the city of Turin. The Austrians spead out to defend Milan. But instead of heading for one or the other, Napolean went between them.
This confused the enemy to no end. Where was Napoleon going?
The Italians sent out troops to find him. Napolean picked them off in a series of quick battles near the towns of Monenotte, Millesimo, Dego, and Mondovi. These locations had no importance at all except that they happened to be where Napoleon saw a chance to meet the enemy and win.
In shock and dismay, the Italians gave up. The Austrians fell back, closer to defend Milan, but again Napoleon surprised them. He kept going and bypassed Milan completely.
The Austrians panicked. They feared he was on his way to invade Austria, so they left their defenses and rushed off after him. When they moved close to the adda river, Napoleon saw they would have to cross at the town of lodi. So he quickly set up his artillery facing the bridge in the middle of town. Sure enough, the enemy appeared. Napoleon's artillery opened fire.
Over the next twenty years, Napoleon repeated the same formula from his first campaign, in fifty-five battles across Europe. His victories made him the ruler of France in 1799 and then Emperor of Europe in 1804. His enemies scrambled to study his methods, to learn his secrets and defeat him. They founded military colleges and drew arrows on maps. Bookshelves filled with volumes of theory, principles, and detailed descriptions of the Little Corporal’s every move.
And so was born a new science: Strategy."
Strategy in economic thought is NOT. Strategy is just not considered in mainstream economics. Consider David Ricardo’s theory of Comparative advantage - One of the foundational beliefs of mainstream economic thought.
From Wikipedia
David Ricardo developed the classical theory of comparative advantage in 1817 to explain why countries engage in international trade even when one country's workers are more efficient at producing every single good than workers in other countries. He demonstrated [mathematiccaly] that if two countries capable of producing two commodities engage in the free market, then each country will increase its overall consumption by exporting the good for which it has a comparative advantage while importing the other good, provided that there exist differences in labor productivity between both countries.[4][5] Widely regarded as one of the most powerful[6] yet counter-intuitive[7] insights in economics, Ricardo's theory implies that comparative advantage rather than absolute advantage is responsible for much of international trade.
Rather than focus on a single comparative advantage to achieve more consumption as Ricardo’s theory suggests - as though maximizing consumption is an inherent good. Development in Connected Community is about individuals in the community being able to leverage the robust and varied resources of the community.
Lets take a moment and note one of the paradigms in Ricardo’s work. The assumption of “increasing consumption” as a driving motivation. That unstated yet powerful restriction is a mainstream economic paradigm.
Maximizing consumption becomes the default goal when you lack any other sort of values, or any ability to even determine values.
So one of the core activities of investing in community is to understand the values of the community or to establish and inculcate values - the community itself is an entity with its own value creation mechanisms. While some members of the community may want to maximize their consumption – there is no need to invest in community to maximize consumption. That is an activity better done independently rather than Interdependently.
Economic Strategy in Connected community would focus on being prepared to take advantage of regional markets in a way that compliments the values and assets of the community. This is Strategy in economic development. Understanding strategy is critical in order to create economic development tools.