As I walked past my TV on the way to work, I saw our President addressing the White House Job Summit:

“…if there are things that we’re doing here in Washington that are inhibiting you, then we want to know about it.”

It is in the air! Not just our inability to create jobs! Not only the limits on our technological innovation! Not only the attenuation of our artificially-inflated Gross Domestic Product!

All of these problems are related to the relationship between economic freedom and entrepreneurial enterprise! Here is how it works:

Under conditions of elevated economic freedom, entrepreneurs and their companies generate the technological innovation that requires job creation and contributes to escalating levels of prosperity.

Noticeably absent from all explorations of “The Prosperity Problem” were representatives of the historic role of entrepreneurial enterprise in the generation of all prosperity. Here is how the economy and the entrepreneur work synergistically together:

The more economic freedom we give the entrepreneurs, the more they contribute to technological innovation, new job creation and, ultimately, Gross Domestic Product (GDP).

Under conditions of elevated economic freedom, then:

• Entrepreneurial enterprise generates as much as 80% of the scientific breakthroughs and technological innovations.
• Entrepreneurial enterprise generates as much as 80% of the new jobs in implementing the follow-throughs on the technological innovations.

Indeed, the strongest case can be made for entrepreneurial enterprise as the driving engine of the American economy. Under conditions of elevated economic freedom, then:

• Entrepreneurial enterprise generates as much as 50% of America’s GDP.

To be sure, an overwhelming case can be made for the prepotency of entrepreneurial enterprise over all other sources of economic growth:

• Entrepreneurial enterprise dwarfs the contributions of all governmental sources, including the presidency, congress, and the federal sector that they manage.

Yet these entrepreneurial businesses are exploited by the multinational corporations which track them and trap them, “making them offers they can’t refuse.”

Moreover, the entrepreneurs are passed over by the bureaucratic czars of the public sector who favor “sole-source contracts” with “soul-less contacts, giving orders they can’t follow.”

To be sure, not all entrepreneurs are generative, capable of creating scientific “break-throughs” and innovative technologies. By our estimates, no more than one in 100 entrepreneurs are currently generative; therefore somewhere around 50,000 people out of five million small businesses qualify as “generative entrepreneurs.” In business, they may be labeled as “process engineers,” capable of designing themselves and others out of their jobs. In government, they may be characterized as “social engineers,” capable of defining spaces and empowering people to fill them.

The point is this: the other 99 of us live, learn, and work in the “draft” of their sciences, empowered by the tools of their technologies, prospering through their intelligence, their perspectives, and their good will.

RRC
January 2010
McLean, Virginia

• No Breakthroughs!
• No Innovation of the Breakthroughs!
• No Commercialization of the Innovations!!

The Generator creates the variability by generating the changeability. Without the Generator, there is only the increasingly restricted variability of the unfree. Ultimately, there is only Totalitarianism!

With Generativity, there is change! The deck gets reshuffled and marginal peoples get new opportunities. Perhaps that is why everyone else is afraid!

In transition, things change! Some people do, too! By way of illustration, I had occasion to teach at various universities and centers in Rome where I delivered to priests my book on “The Age of the New Capitalism.” In so doing, I gave instructions for the Vatican priests to hand-deliver the work to Pope John Paul and his staff. Eighteen months later, the Pope issued an Encyclical on “The New Capitalism.”

Alone among the leaders of the world, Pope John Paul II has addressed vigorously the issues of Freedom Versus Totalitarianism in his Centesimus Annus. He concluded that the wealth of nations is not so much “in the ground,” and therefore deserving of equitable distribution (translate socialism), as in the “Human Mind” that is infinite in its potential.

The Pope’s remaining questions for the future were simply what kind of “Free Economy,” based upon what kind of understanding of the “Acting Person.

The marginal high performing cultures that have been both recipients and influencers of The Freedom Functions are numerous. The cultural Jews of 20th century America have demonstrated leadership—culturally, economically, governmentally—by being incorporated by the moving and growing Freedom Systems.

Beginning as outcasts of Totalitarian Societies, they have become the leading contributors to Cultural Relating. Indeed, Jewish leadership among the Freudians and the Neo-Freudians generated the first Human Relations systems in the world. To this day, they continue to have leadership roles in the Helping and Human Relations professions.

Eliminated by the “genocidal holocaust” of the German tyranny, the Jews brought their own idealized version of participative governance from the Weimar Republic to “The Great Democracy of the West.” In so doing, they became leaders in the Civil Rights and now the Human Rights movements. What better way for a once-marginal, now-leading culture to protect the future contribution of all high-performing, marginal peoples?!

Disenfranchised by the “Pogroms” of the Control Economies of the East, the Jewish leaders gained financial skills in surviving among varied quarreling economies. They brought these skills to America to be incorporated by the Free Enterprise system. Some are now working initiatively to expand The Old Capitalism to incorporate The New Capital Development ingredients of generating wealth.

Altogether, the Jews of America have been significantly over-represented on all indices of constructive functioning—social, scientific, artistic and the same Per Capita GDP with which we measure the Prosperity of nations. Moreover, they are significantly under-represented on all indices of dysfunctionality—psychopathology, criminality, welfare dependency.

In a very real sense, as exemplars for marginality transformed into originality, the American Jews have been both the product and the model for The American Experience.

Historically, they were the products of The Freedom Func¬tions. Existentially, they model them: Collaborative Relating, Capitalistic Enterprise, Representative Governance.

Futuristically, they may serve among agents for elevating the American performance to actualize the freedom functions: Interdependent Relating, Entrepreneurial Free Enterprise, Enlightened Democratic Governance.

The once-marginal Jews say it best with their vision of “Tikúnalam“—The betterment of the world through the betterment of the person:”

• Cultural Relating,
• Participative Governance,
• Free Enterprise Economics.

During the second stage of The Construct System, the main body of variance begins to Approach the successful marginal people. The curve begins to be skewed in the direction of the marginal people as the society seeks to incorporate their healthful potency.

In the third stage, the society begins to Incorporate the successful marginal people. In the process of being skewed fully in the direction of the marginal people, there is a tendency for the tail in the other, less functional direction to diminish in size. Thus, people at the less functional end of the continuum are mobilized to move toward the main body of variance.

In the fourth stage, the society begins to Embody the successful marginal people. In a sense, it has mainstreamed the successful attributes and made them the mode rather than the deviation. At the same time, it is eliminating more of the variance from the less functional end of the continuum.

Finally, in the last stage, the society actually seeks to Enhance the attributes of the successful marginal people. It models and, thus, represents what was once deviant. Also, whether inadvertently or not, it sets the stage for the new variations off the now “mainstreamed theme.” Thus, by representing the attributes of the once-marginal person, society creates the conditions for the development of newly marginal people who will serve to move society still further in the direction of effectiveness.

Figure 2. The Movement Toward Increasing Variability in Free Societies

In summary, The Construct System produces people who are more variable in a relative sense and more healthy in an absolute sense. A society dominated by such a system is always skewed toward the fully-functioning. person. Such a society is always creating variability by its expanding tolerance limits and its evolutionary growth disposition. Such a society is always moving toward effectiveness and, thus, toward health.

The Construct System is a Changeability System. Rather than to replace one restricted source of variance with another as in a revolutionary system, it adds variance in an evolutionary manner. It works effectively when there are healthy aspects of the system to be incorporated and these healthy aspects, in turn, evolve in a free society. It grows by minimizing intervention or control and maximizing variance. It maximizes existing sources of variance by adding incrementally without fundamental alterations.

In the beginning, people are in trouble because they have too few responses available to them. Along the way, fewer people are in difficulty because more people have larger repertoires of responses. In the end, such a system has extensive variability among people functioning at high levels of whatever index is employed.

Such a system is consistent with the laws of science and nature. It is organic in terms of utilizing its own resources as the sources of its own power. It is dynamic in terms of evolving con¬stantly in more and more efficacious forms. It conserves energy in minimizing its investment and maximizing its return. It allows evolution to work at a maximum rate in maximizing the contribu¬tion of humans to humans.

The key to the development of a relatively more variable and absolutely more healthy society is the variability of fully functioning peoples or exemplars. Fully functioning people are, by definition, more variable on certain specialty dimensions than the society in which they exist. (Indeed, Free Individuals are infinitely more variable than All Other Totalitarian Societies Summed Together!) It is precisely this variability that makes it attractive for society to move toward fully functioning people to incorporate them. It is also this same variability that distinguishes fully func¬tioning people from other marginal peoples who are dysfunctional but with whom totalitarian societies tend to confuse the fully functioning person.

In turn, the key to the fully functioning peoples’ variability is their marginality—the ability to see things from a unique perspective; to see the subtle nuances of old dimensions; to develop the full richness of new dimensions. It is this marginality that enables the fully functioning people to actualize their potential and to give society the opportunity to actualize its potential.

For example, all of the movements with “Human” adjectives began in America with approaches to successful, marginal peoples: Human Relations, Human Resources, Human Capital, Human Rights, Human Sciences. This is seen in the Great American Civil Rights Movement that moved from Physical Slavery and Intellectual Servitude through Ethical and Legal Mandates toward Fully-Functional, if not Morally Operational, Human Rights. It has left the “segregationists” behind to expire at the tail of the moving curve only to encounter the “elitists” and the “classists” and the “other-ists.” So what else is new? The movement continues toward the healthy people.

Another illustration is Globalization. As the nations move from Dependency and Reactivity through Independence and Protectionism, to Interdependence and Reciprocity, they encounter the same experiences: Movement to incorporate the marginal peoples or the high performers. Healthy civilizations require this movement, whatever the protestations of “The Luddites.”

In conclusion, the healthiest societies are moving in the direction of the Actualizers—the once marginal peoples whom other societies sought to eliminate. Actualizers are the sources of creativity and productivity whom constructive societies seek to cultivate. Such societies are moving in the direction of their own self-actualization. Such a society is within our grasp.

“I have eight cows and my neighbor has 16. I’d like you to kill eight of his.”

Historically, culture has been viewed as groupings of people by racial, ethnic and national characteristics. Assumedly, without an understanding of cultural heritage, the economic and social endeavors of these people might not be understood. In this context, then, culture extends to give meaning to the economic, social, and political as well as the esthetic and intellectual character of peoples.

Inherent in the assumptions of culture is the principle that culture is defined by past traditions. In point of fact, no matter how beautiful the music, art and literature, culture is defined by conditioned responding systems appropriate to the requirements of the conditions under the Totalitarian Systems of their times.

Somewhere at the end of the 20th century, a new definition of culture evolved. In this definition, culture is defined futuristically by the evolving requirements of The Global Village and Its Marketplace. This is the Generative Definition of Culture. This definition does not exclude traditional values. Rather, like the enlightened individual making a critical decision, the person employs The Freedom Matrix to relate values to requirements in an attempt to maximize both.

The Freedom Wars began with the emergence of America and its evolving Freedom Systems:

• States that related collaboratively and peacefully,
• States that generated extraordinary wealth,
• States that were governed by their policy-making citizens.

Together, these states converged to generate the most free and collaboratively relating, enterprising and governing system in the history of humankind, the U.S.A. In so doing, the U.S. defined The Freedom Systems in the futuristic terms of Cultural Relating, Free Enterprise and Participative Governance.

Simultaneously, the Totalitarian Cultures of the world have risen up to attack and, now, terrorize the Freedom Systems. Having flunked The 20th Century Tests of Totalitarianism, leaving 150 million dead behind their empty promises and deathly weaponry, these Totalitarian Cultures now seek to slow-down, weigh-down, batter-down the Freedom System in The 21st Century.

Universally, these Totalitarian peoples and nations seek to hold on to their Dysfunctional Cultures. Uniformly, they have agreed upon one common solution:

Steal the “Secrets” of Freedom while maintaining the Totalitarianism of their cultures!

They do not comprehend that the “Secrets” of Freedom are not at all secrets. They do not understand that the “Public Principles of Freedom” are antithetical to everything their Totalitarian Cultures dictate and tolerate.

We can understand the evolution of cultures best with a comparison of the Destruct System of Totalitarianism with the Construct System of Freedom:

The central tendency in an Unfree Society becomes institutionalized (see Figure 1). The first stage of The Destruct System may be conceived of as an Ignorance Stage, and ignorance is always intentional. As can be seen, the logical goal of facilitating peoples’ or culture’s development toward a higher level of functioning is ignored. This situation occurs when those in the mainstream treat high functioning people just as they treat low functioning people. It is just too much work for the comfortable people to become productive people. At most, they need energy to adapt to their circumstances; they are caught up in an incentive system that demands very little and rewards them handsomely; they care not about the people around them; they get away with vague concepts of efforts at work; they involve themselves only in the minimum learning necessary to insure their comfort; they are con¬cerned only with being critics, diagnosing others from an external frame of reference. They seek to institutionalize these characteristics and make people over in their images. That way they will always be comfortable and never be vulnerable—even as they die, physically, emo¬tionally, intellectually and spiritually.

What happens during the second stage of The Destruct System, a Stage of Restriction, is that the variability becomes more and more restricted. This is accomplished by channeling the extremes on any index into the mainstream. Thus, the highs and the lows become fewer and less prominent and the central tendency is accentuated.

This restrictiveness is carried to an extreme of “Leptokurticism” during the third Stage of Elimination. During this stage, those marginal peoples—high and low—who were not “mainstreamed” for one reason or another are eliminated. Thus, the central tendency is further exaggerated as the peoples come increasingly to look like each other.

The fourth stage may be conceived of as a Destructive Stage, although the process has been destructive throughout. Finally, all variance is destroyed and encompassed within one single dimension on any one index. We see this most clearly in advanced stages of all authoritarian societies. The people are made over in the image of their leader or leaders.

Figure 1. The Movement Toward Restricted Variability of Unfree

The fifth Stage of Institutionalization may also be considered the Disappearing Stage. Since all peoples appear as one, they can be represented as one. Indeed, the one can be reduced until it has disappeared. The culmina¬tion of the institutionalization of humankind is the disap¬pearance of humanity. We see this most clearly in the advanced stages of all totalitarian societies. The people are made over in the image or their leader or leaders. And their leaders are one-dimensional people with one princi¬ple of operating—either you are controlled or you are eliminated. In the end, such a system self-destructs.

Even when such a system is overthrown, as in a revo¬lution from within or without, the stages are usually repeated: One source of restrictive variance is replaced with another. Surely, there is utility in doing this when a system is diseased. However, such a program kills or cures. It does not grow, because it maximizes intervention and control and abandons or eliminates sources of variance.

In this context, we have once again placed Americans back in the leadership role:

• The American learners with expansive acquisition of knowledge and skills;
• The American workers with elevating levels of applications in producing products and delivering services;
• The American entrepreneurs with escalating levels of transfer to generating wealth;
• The American citizens with accelerating levels of enlightenment in governance and politics;
• The American leaders with potentially infinite levels of generativity in all.

In other terms, we will have a Fulfillment of Human Generativity, Reinvigoration of The New Capitalism, and a Renaissance of Civilization.

Just as the corporate leaders on Main Street need to learn the ingredients of corporate growth, so do the national leaders in America need to learn the ingredients of socioeconomic growth.

Just as the underclass people marginalized by “The Cycle of Social Failure” need to learn how to become productive individually, so do those marginalized by “The Cycle of Financial Failure” need to learn to perform profitably in our times.

Rather than to pit Main Street versus Wall Street, we must all learn to become generative in entrepreneurial ways where each grows so that all have the opportunity to grow.

In transition, The Generativity Solution empowers us to solve all human crises. “The Generativity Solution” is “The Human Solution.”

Figure 12. The GPS™ Requirements—Capacities Matrix

In GPS™, the customer may select from potentially an infinite array, those products that are (1) most closely tailored to meet the customer’s values, and (2) for which the customers are empowered by tailored capacities to meet the product’s requirements for managing.

For example, the customer may view electronic representations on Computer-Assisted Designs all kinds of products—homes, cars, equipment. The customers may then select and “tailor” those products to meet their needs.

The generative marketplace of the future will be driven by The Generativity Solution—the generativity of breakthrough initiatives and architectural designs (see Figure 13). Anything of value that can be conceived can be achieved in Generativity Positioning Systems™ of New Capital Development.

• MCD or Continuous Marketplace Positioning for Comparative Advantage.
• OCD or Continuous Organization Alignment with Marketplace Positioning;
• HCD or Generative Human Processing to implement Organizational Alignment;
• ICD or Schematic Information Modeling to reflect Generative Human Processing;
• mCD or Operational Mechanical Tooling to implement Schematic Information Modeling.

The actual design and assembly of the products will be “farmed out” to MOHIMs for the highest levels of New Capital Development just as OEMs or Original Equipment Manufacturers currently organize their production efforts.

Figure 13. New Capital Development Systems

First of all, we must analyze the assumptions involved:

• Leaders wrongfully assumed that finances generate wealth.
• Financial services mistakenly set out to become the market-driver and, in so doing, to displace Manufacturing.

Secondly, we must analyze the implications of their superstitious reasoning:

• Finances are merely ways of measuring the outcomes of wealth-generating activities.
• Financial Services mistakenly have driven Manufacturing down to 12% of GDP while building their own contribution up to 21%.

In so doing, Financial Services have already failed several times in the last two decades to establish their powerful leadership in the marketplace. They have failed because they have “over-reached” the power of their critical contribution—as a “catalytic agents”—to be invested in wealth-building activities.

The real contribution of Financial Services is as an integral part of the Organizational Resource Integration Component: the support systems that implement the Marketing Component’s Initiatives. In other words, Financial Services must get into the business of supporting others’ efforts to produce substantive wealth-generating products and services. As a member of the Resource Integration Team, Financial Services may contribute to projecting and enabling the costs and benefits over the life of the products.

One of the tangible benefits of the Global Financial Crises is the clarification of roles and functions. Another more powerful generative contribution is the evaluation of marketplace initiatives to marketplace positioning.

The prepotent breakthrough model is the Generativity Positioning System™ or GPS™ (see Figure 11). As may be noted, GPS™ implements Generative–Innovator Positioning in the Marketplace at the highest levels as follows:

Generative Positioning Functions are accomplished by
Policy-Making Components empowered by
Leadership Processes.

Figure 11. The Generative Positioning System in the Marketplace

Figure 9. Innovative–Commercializer Positioning

The advantage of this position is that it usually settles in running in the “draft” of the market leaders and, thus, minimizes the expenditures of leadership. Unfortunately, since America dropped out of Research and Development leadership, there is no nation for America to follow.

Nevertheless, American companies must once again consider its historical 20th century positioning of Generative – Innovative leadership (see Figure 10). Of course, this requires an upgrading of E & T as well as R & D: Education and Training as well as Research and Development.

Figure 10. Generative–Innovative Positioning

• Generating or stimulating markets;
• Innovating or initiating markets;
• Commercializing or making markets;
• Commoditizing or draining markets;
• Attenuating or breaking markets.

For our purposes, we label the acronym for these market phases GICCA. They have profound implications for their corporate cultures and their people and products.

Figure 7. Multi-Modal

Indeed, elevated requirements have been determined for the processing systems generated by the multi-modal curves (see Figure 16). As may be viewed, the requirements for corporate-community processing capacities align directly with the GICCA phases:

In other words, at the highest levels, the multi-model processing systems require advanced generative processing systems: S–P–R, S–OP–R, S–MP–R. We are not free to generate if we are not empowered to think!

Figure 8. Multi-Modal Processing Requirements

• Relate to images of phenomena;
• Represent images of phenomena;
• Reason with images of phenomena.

These are the effective ingredients of thinking generatively.

In reverse order, we cannot think generatively before we have represented the phenomena ideationally. Similarly, we cannot represent ideationally before we have related to images interpersonally.

The probabilities scientists have given us normal curves: nice, linear, idealized symmetrical distributions around central tendencies such as means or averages. The curves tell us something about where people and products stand in relation to this central tendency. The work of the 20th century has been based upon these probabilistic assumptions. The mission of the 20th century has been to move toward reducing our deviation from this idealized central tendency: in other words, to look more and more like the middle of the curve.

Figure 5. The Normal Curve

The normal curves also attempt to tell us how people and products move through the phases of the curve. For example, the normal curve has been adopted by the marketplace to reflect the movement of products and people through market phases: opinion leaders, early adopters, middle adopters, late adopters, laggards or non-adopters (see Figure 6). While this approach has produced an extraordinary array of products and services, it has simultaneously generated apparently finite images of people who look and act and think alike.

Figure 6. The Market Curve