Does ill-gotten gain produce wealth?

We know our eyes don't show us everything. The world around us is filled with WiFi radio waves, cosmic rays, infrared rays, all sorts of things we cannot see. We only perceive a very narrow part of the spectrum.

So, for the rest, we need to figure out how to tell what's there, and how to tell whether we are right or not. It's easy to make mistakes when you can't see what you're doing.

If "things" are hard to see and get right, "events" are even harder, and "causation" is harder still.

For "causation" we have to not only see two different things correctly, but also see the relationship between them correctly.

Now, we run into a second limit of human sight -- we can see most clearly when things are near us, and less clearly when things are farther away.

In fact, as the same "thing" gets farther away from us, it appears to get "smaller" to our eyes, in many senses. And, worse, the number of things at that distance just keeps on going up.

So, maybe there are 3 things going on right here, close up, highly visible. There may be 10 things going on over the space of a week with our friends or the stock market, somewhat farther away, and less visible. There may be 6 billion people on this planet, 6 billion lives and God knows how many relationships, farther away yet and so invisible we tend to forget about them. All that distant stuff becomes a big blur.

This kind of perception is great when the problems we face tend to be local as well, such as a snake on the ground or some berries that may be good to eat. But some important things are not local, and, as a species, in general, humans are pretty bad at managing those. "Out of sight, out of mind" is a good summary. First, they are far away, and we're dying close up, so they can be put off -- we figure, if we don't survive the short run, the long-run doesn't matter -- which is true.

Second, perversely, we tend to ignore distant events because there are so many of them. Our little brains get quickly overwhelmed, which is locally fatal. We miss the snake, or drive off the road while worrying about next year.

Still, when planning, we need to consider both local and distant events, because, in the long run, many things that seem far off now have a habit of suddenly being upon us. Suddenly, the final exam is here, or the term paper is due, or our mortgage payment is out of our "grace period" and is going to go up by $500/month. Suddenly the kids are grown and gone.

So, we need some basic simple rules to use here and now that will protect us in the long run, because trying to think about the long-run hurts and isn't easy to do and is often wrong anyway.

Many rules like that were distilled into the Book of Proverbs in the Christian Bible Old Testament, any many of those came from Egypt before that. They are worth reading and considering. This is a case where "the olds" may be more interesting than "the news."

As with all wisdom, some days the same words make more sense than other days, so we need to revisit them frequently and ask - "Now, from here, today, can I see something here that can help me?"

Here's one, from the Book of Proverbs, Chapter 10, verse 2, from a website BibleBrowser.com that has 20 other translations, including the Hebrew. This is part of the Judaic, Christian, and Islamic writings as well.

Ill-gotten gains do not profit, But righteousness delivers from death. (Proverbs 10:2)

For now, let's just look at the first part of that: "Ill-gotten gains do not profit."

This verse says something that is pretty important, if it's true -- First it says that there are two kinds of "gain", those that are well-gotten and those that are ill-gotten. By gain I believe this would include financial return, as well as outcomes of political maneuvers, military maneuvers, office politics, treatment of your neighbors, treatment on a larger scale of other countries, etc.

The verse asserts that the benefit of such "gains" depends on how they are obtained. It asserts that, even if the events that got you this "gain" is far away from here and now, it is still connected and still affects the benefit of having such a "gain."

Is that true?

Well, it certainly flies in the face of what we usually assume today. Let's simply look at cash, money. We assume a dollar is a dollar, and there is no difference between a dollar that was obtained by fraud or a dollar that was earned honestly. We assume that the origin of us having this dollar "goes away", and , being far away, no longer matters.

The verse in Proverbs I quoted differs, and says that assumption is wrong. It says that "blood money", money we got through bad actions such as theft or fraud, will turn out not to profit us after all, even though it "looks the same" as good money and is counted the same by our bank or phone company, that accept it as payment.

Besides, the form of this "gain" has been laundered, changed, altered many times, and it has passed through many hands, so even if the original dollar, say, was contaminated and "had the cooties", the electronic figure in our on-line checking account has surely separated us from such contamination, right?

Well, the verse says no, wrong. The verse doesn't say that changing the format of the "gain" makes this effect go away. It says that bad gains will result in bad things happening to you, and isn't worth doing, or worse, is actually a net loss to you.

Hmm. Well, first, things can't stay "connected" over a long distance, can they? Actually, they can. Physics tells us that a pair of particles can be "quantum entangled" so that, even if they are taken to opposite ends of the universe, they are still "connected" and if you change one by measuring it, say, that it instantly changes the other. So, there's at least one instance where distance in space is not a barrier to connection.

Well, still - we don't have to believe something just because some old book says it, do we? No, we don -- but we might consider thinking about believing it if someone had more current, solid, reliable data and evidence that such a principle is true.

Generally, physics doesn't suggest "physical laws" that relate physical things to human actions or intentions. That doesn't mean there can't be such laws, only that this isn't the sort of thing a physicist would ever be able to get a grant to study. This isn't "physics" but is something else, akin to both physics and commerce.

So, reflecting on this question, is there any other evidence that piling up fraudulent profits ends up being a bad idea? Maybe, rephrased, "Does crime pay, or not?"

It is clear that "ill" actions, can yield "gain", often immense "gain": ranging from theft to fraud to pillaging whole countries to making billions as merchants of death ( tobacco, heroin, etc.)

The question on the table, suggested but not proven by this old text, is whether such "gain" behaves differently over time than "gain" resulting from some more honest, socially beneficial wealth-building activity.

Are fortunes made through criminal activity less "stable", or less "valuable" to their possessors than fortunes made through hard honest work? Or not only less valuable, but of zero value, or, worse, of negative value?

Should we envy those those who pull off amazing con-jobs and sell drugs and "get rich"? Obviously, some get very rich. The question is, do they simultaneously get poor in some other way, so that, overall, net, it was a lousy life-choice and a poor business decision?

Given that many people and corporations and even nations are attempting to amass fortunes in this way, by ripping off other people, this is a big question. If nothing else, maybe we want to avoid owning stock in such companies, or not stand too near such people, waiting for lightning to strike or something? Hmm.

Oh, notice by the way that this verse I'm thinking about doesn't say money is bad, or wealth is bad, or profit is bad, or commerce is bad. It implies that profit is good, actually, and is a warning that someone long ago put there, trying to share what they saw as hard-won wisdom, telling us who seek profit that we should stay away from "ill-gotten gain", which , by implication, may look very attractive but turn out not to be in the end.

Reasoning about "impact on your soul" or "Heaven or Hell" is not very popular today, so we'll skip that line of thought. So, it comes down to this question:

Aside from such things that cannot be measured by science or commerce, are there things that can be measured by science or commerce that tell us "ill gotten gains " behave differently than "well-gotten gains?'

What exactly would we look for?

Here I want to bring in a board game called "Go", although the same thing is true for other games such as chess. At one time I was the organizer of the Cornell Go Club, which had several hundred members, about 30 very active, who played this game, and I learned a lot about it. Go was required knowledge of all Samuai soldiers in ancient Japan, and I actually advocated that Cornell's Johnson School of Management, where I was teaching, should include it as part of their MBA training. (That's a Go board from Wikipedia pictured at the top of this post.)

The game is one important way to gain insight into thinking and strategy that we can expect Asians, particularly Japanese and Chinese to use to compete with the US. There aren't very many such ways, so this is important.

One thing I found is that it was essentially always possible to defeat MBA students with a very simple strategy -- keep on trading them visible material short-run gain for longer-term much more valuable "position on the board." So, the MBA's would happily capture army after army, winning battle after battle, until suddenly they realized that they had lost the war. This seemed to be bait that such fish would always take.

The game Go teaches one patience and a long-range strategy. The aim of a good player is to "win by one point". Trying to win by more is overly-adventuresome, and requires taking risks that are not warranted. A balance is required between short-range, short-term tactics and long-range, long-term strategy -- but in the end, assuming one survives the middle, it is only the long-term value of each move, seen in hindsight from there, that matters.

So that may be an example where "foolishly-gotten short-range gain that you had to trade position for doesn't profit you in the end."

This is still not yet "ill-gotten gain", the topic of this post, but is getting closer, and the reflection on the proverb is uncovering some useful wisdom, whether the proverb is "right" or not.

So, let's remove that component and try to be more explicit and narrow in the hypothesis we're trying to test. Rephrased, we have two quesitons:

• Is there something hidden set into motion by socially-destructive gain that comes back to haunt the person or company that carried out that destructive action?
• If so, is it something that would also haunt other people downstream who got paid this money for goods or services or as a stock dividend?

There's no point in looking at the second part of that if the first isn't true, so let's focus on the first part. It seems safe to assume that such an effect was considered "hidden" by the writer of the proverb, because if it was obvious, they wouldn't need to go out of their way to write it down for their children to learn, nor preserve the thought over 3000 years.

Well, we know human vision is flimsy and has trouble seeing hidden connections between things, so we can't rule this out just because it is hidden and not obvious. Doesn't prove it, just doesn't rule it out.

And questions of "mechanisms" in my book can come later. First, blind to mechanisms, we can look and see if there is some effect. Then we can spend the energy to worry about mechanisms or pathways, and before then it's not justified. This seems scientifically valid to me. Besides, "That can't be true because I can't think of how it could happen!" has been used against every breakthrough in science, and doesn't prove anything.

First, we need careful, empirical, observational field-work to simply go see what is out there that needs explaining. In Toyota's "Lean" lexicon, this is Genchi Genbutsu -- actually going down and seeing for oneself instead of assuming you can see well from the executive suite or analyst's windowless cubicle.

I guess this comes down to the core question of theology and of this post:

Do your socially-destructive actions have bad consequences for you, even if you pull off a "clean getaway" and no one sees what you did?

People today seem think that, since the "God did it" mechanism is "dead" that all the social phenomena that mechanism explained can also be thrown away. "Allie Allie in-free!" as the child's game goes.

Two notes - first, I'm looking, as always, at "scale-invariant" rules , so the "you" in that question could be a person, or any larger entity that has "intent" such as a corporation or nation. Maybe this is relevant for cells and atoms, but that's a little obscure from here. (And I'm assuming intent matters, not just inadvertent (oopsie!) accidental, incidental, or "collateral damage", although that's not proven either.)

Do destructive actions have hidden bad consequences that make the visible benefits of them irrelevant or misleading?

OK, how would we test that hypothesis? Well, even though we have to look for cases that disprove it, we can start by asking if there's any case that comes to mind that agrees with it -- or else we should abandon this effort right here. The writer had something in mind, probably a lot of somethings distilled into this advice, so we should be able to think of something.

(to be continued...)

Public Health, business, jobs, and profit

All of my theoretical models lead to the same conclusion - the field of "public health" cannot really do their job well until the needs and interests and realities of multi-human meta-organisms are included as well.

In English, that means that we ARE what we are PART OF, which is increasingly clear in public health studies of the impact of social connectivity on physical and mental health.

But it also means that the internal life of corporations, cultures, and nations, as well as the entity called "the public", are all very real systems that behave as if they were separate biological goal-seeking, energy-consuming, adaptive, reactive, self-protective organisms.

It also means that it just doesn't make any sense to evaluate the impact of different interventions in the health of people without, at the same time, evaluating the impact on jobs, employment, and the health of corporations and business and the business community.

The physical health of people in a community or nation is very directly influenced by the "health" of the community or national economy. If the economy or businesses crash, it will show up "under the skin" very rapidly.

The failure of many in public health to have a wholistic approach that includes BOTH people AND corporations reduces the credibility of public health. If there is one lesson "systems thinking" teaches, it is that the word "OR" is vastly over-used. We shouldn't be thinking that EITHER we can serve people OR the public - we need to lead the way in serving BOTH. And, similarly, we need to get corporations realizing that they can't survive if the workforce they draw on, and customer base they need in this country collapse. We need each other. We are each other, in some very real ways, and our respective "health" depends on each other in a feedback loop, either for better or worse.

Similarly, it makes no sense to me that "Republicans" should be fighting for the interests of "business" and "Democrats" for the interests of the "people" - because there is only one, multi-leveled complex life-form on this planet, which includes "cells", "people", "corporations", "cultures", and "nations."

We are all in the same lifeboat. At this point if the people all die off, so do the corporations. If the corporations all died off, so would almost all the people. Get over it.

If we're upset that corporate or national planners don't include "human factors" in their planning, we shoudn't also assume it's because they refuse to -- it is, in my experience, more that they are clueless as to how to do that.

If public health wants to change that equation and interaction, great, pick up that heavy burden and figure out how to include humans in the equations and not make them indescribably difficult to solve. If corporations can get better bottom-line performance by doing better planning including more of reality in the plans, they'll do it, but someone has to show them how that would work and make a convincing case that it does work.

That gets down to that messy problem of "profit." As the Ross School of Business here in Michigan says "Non-profit is a tax strategy, not a business strategy."

Or, as one sister from Trinity Health Care's catholic leadership put it, "No margin, no mission."

Health is intimately tied to growth and life which are intimately tied to "wealth."
That component sub-systems decay and die is a given; what's up for grabs is whether there's a balancing source of regeneration and growth, which requires that actions result, ultimately, in absorbing more energy than is spent in getting there.

In other words, in the larger accounting scheme of life, public health interventions have to "pay off" or they will simply "die off." This is a schitzohrenia that both clinical health and public health seem to have - the idea that making money is intrinsically bad or a dirty concept.

Yes, obsession with short-range, stupid strategies to make money at the expense of life, health, and stability are indeed stupid. On the other hand, there is no such thing as a long-range strategy of losing money each year.

The most important distinction is that wealth, and health, are not zero sum, and are based heavily on interactions across levels of the MAWBA beastie.

Health can, in fact, be created out of thin air.
Wealth can, in fact, be created out of thin air.
BOTH of these, health and wealth, cross-support each other.
Being "rich" and "dead" is not a winning strategy.
Some balance is required.

Public health has an opportunity to teach the principles of SUSTAINABLE GROWTH, which means sustainable rates of return on investment. Business owners hate that venture capital firms and stockholders expect them to operate to maximize profit this quarter, at over 27% a year annual rate, but to keep operating in the long run.
Those are incompatible goals. With the exception of discovering gold or the equivalent, healthy businesses probably grow at 10% or less, maybe as low as 2% per year. If public health would show CEO's how to keep stockholders from jumping ship if the companies invested more internally in people and showed such "small" profits, the CEO's would love public health. Everyone knows this is an absurd demand that's killing off healthy, stable business as "not up to par."

These problems cause each other. People are stressed out because the businesses they work for are stressed out. Businesses are stressed out because they don't know how to tap the healthy creative power of people at a sustainable rate. They are different views of the very same, multi-level, MAWBA problem.

If 30% of the humans died or were seriously put out of commission for 2 months by something like avian flu, at least 30% of the corporations would crash and burn as well, because they are riding very close to the line on being as short-staffed as they can be right now. The crash would cascade, as suppliers of key components failed. The interests of public health and "big business" align when it comes to stopping global pandemics.

This fact is maybe less visible because of the invisiblity of the details of the roles of people on "the bottom" in keeping corporations operating. My guess is, after the last round of layoffs, that more than half the large corporations in the US are vulnerable to crashing and burning if 30% of their Information Technology staff were to abruptly be incapacitated on the same day. All meta-life involves a constant battle between natural collapse and regenerative efforts, which may "look like" nothing is going on and all is "well." Remove those people who are holding everything together, and it will suddenly become apparent that maybe they were doing something after all.

Other areas of "infrastructure" are similar. We have huge reliance on armies of people doing low-visibility or invisible jobs, without which the wheels of commerce would cease turning in a cross-cascade, house-of-cards type collapse.

It is a mistake to think that pulling out the "safety net" has "worked." It hasn't been tested on a full-scale pandemic yet. The effect of having almost 50 million people in the US without health coverage will have the same effect as having a basement filled with gasoline-soaked rags would have on a small house fire. These are things you really do NOT want to give a running start on you.
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(This was originally published 11/21/06 on my weblog "might as well be alive" at http://mawba.blogspot.com)