Archive for the ‘Current Events’ Category

Putting Integrity Into Finance: A Purely Positive Approach (Excerpt)

Conclusion:

We argue that the financial economics paradigm is incomplete. The evidence for any paradigm being incomplete is the presence of a significant continuing breakdown in the discipline, along with the discipline’s continuing ineffectiveness in dealing with that breakdown
(what Kuhn (1962, 2012) termed “crises and anomalies” in a discipline). In the world of finance, the combination of 1) the extent of out-of-integrity behavior and its consequent impact on value, coupled with 2) the financial economics discipline having provided little or
nothing that has been effective in stemming this out-of-integrity behavior, is evidence for our argument that the financial economics paradigm is incomplete.

The out-of-integrity behavior we termed the “scandals” in Section 2 and the various examples of out-of-integrity behavior discussed in Sections 3 through 11 (mostly unrecognized as out-of-integrity behavior) are important examples of what contributes to the general
atmosphere of low integrity in the world of finance (albeit not identified as such and certainly not spoken of). Out-of-integrity behavior has become virtually institutionalized.

The environment of low integrity is so pervasive it seems to be nothing more than business as usual, or just a part of the nature of finance. Forstmoser’s (2006) first three indicators of the lack of integrity (listed in Section 6.b)—”Everyone else is doing it.”; “We’ve always done
it.”; and “This is the way this business works.”—illustrate this environment. When we speak of “integrity”, in the case of a system (or object) we mean nothing more than, but nothing less than, that the design, the implementation of the design, and the use of the system (or object) are whole, complete, unbroken, sound, and in perfect condition with respect to its intended purpose. When we speak of integrity for a person or other human entity, we mean nothing more than, but nothing less than, that the word (as defined earlier) of the person or other human entity is whole, complete, unbroken, sound, in perfect condition. We have shown that integrity dealt with in this way is an important factor of
production.

However, integrity as it is currently understood has been undistinguished as a factor of production, with the result that its impact on workability, and therefore productivity and value (by its presence or absence) has been wrongfully assigned to other causes. Integrity,
as we define it, matters. Not because it is virtuous, but because it creates workability. And workability increases the opportunity for performance, and maximum workability is necessary for realizing maximum value.

Note that describing the effects of integrity is not normative. In addition, we make no admonition to act with integrity; it doesn’t work to tell people what they should do. People act in what they perceive to be in their self-interest in the way it shows up for them in the
circumstances they are dealing with or are confronted by. We don’t tell people what to do, rather we give a picture of reality (in this case a picture of the reality of integrity revealed as a positive phenomenon) that naturally alters their correlated behavior.

As the Law of Integrity states: As the integrity (the state of being whole and complete, etc.) of an object, system, person, or other human entity or practice declines, workability declines, and as workability declines the opportunity for performance declines. Note however that when the behavior is not recognized as out of integrity, the decline in the opportunity for performance will be explained in some other way.

The model of integrity introduced in this paper makes clear just how widespread out-of-integrity behavior actually is, and the enormity of the cost of out-of-integrity behavior. The model also makes clear that given the way integrity is currently understood, our out-of-integrity behavior does not occur for us as such, and as a result we ascribe the cause of the damage of out-of-integrity behavior to something other than our out-of-integrity behavior. But the recognition of the foregoing is only a beginning for persons, groups, and organizations to have access to acting with integrity.
From within our new model of integrity when it is fully understood, integrity occurs for people (is understood by people, shows up for people) such that:
1) out-of-integrity behavior actually shows up for people as out-of-integrity behavior, but most importantly,
2) the damaging consequences of that behavior, whether immediate or long term, show up in present time right along with the out-of-integrity behavior, and
3) the damaging consequences show up as being caused by the out-of-integrity
behavior.
This shift in the showing up profoundly alters the way out-of-integrity behavior occurs or shows up for people. As we have said, people with normal brains act in what appears to them to be in their self-interest, but in their self-interest given the way in which what they are dealing with occurs or shows up for them.

Our purpose here has been to show that including integrity as a purely positive phenomenon, and as such an important factor of production in the paradigm of financial economics, would allow financial economics scholars to develop the tools to effectively deal with the “crises and anomalies” of the value-destroying out-of-integrity behavior in the world of finance, and ultimately to transform the culture of finance into one of integrity.

What makes this addition to the current financial economics paradigm challenging for most professionals is that the “proof ” of a paradigm is the “testing” of it in practice, rather than in the a priori theoretical proof of it. While the proposition that “as integrity (whole and complete) decreases, workability decreases” is unmistakably valid, the proposition that “any diminution in the integrity (wholeness and completeness) of an individual’s or other human entity’s word results in a diminution of workability for that individual or entity” is a heuristic. It just works. When the fact that it actually works in practice becomes a clear-cut personal discovery, this naturally alters future behavior.

 

Erhard, Werner and Jensen, Michael C., Putting Integrity Into Finance: A Purely Positive Approach (2017). Capitalism and Society, Vol. 12 [2017], Iss. 1, Art. 1. Available at SSRN: https://ssrn.com/abstract=2963231

Werner Erhard Video 2016

Werner Erhard and Professor Jonathan D. Moreno discuss Werner’s ideas, the est Training, and more at the University of Pennsylvania in April 2016 where the film Transformation: The Life and Legacy of Werner Erhard was featured in their First Annual Bioethics Film Festival.  Watch the full discussion between Werner Erhard and Jonathan D. Moreno:

The New York Times

“For several years before his latest professional reincarnation, Mr. Erhard consulted for businesses and government agencies like the Russian adult-education program the Znaniye Society and a nonprofit organization supporting clergy in Ireland.

Enter the Harvard economist Michael Jensen. Dr. Jensen, who is famous in financial circles for championing the concepts of shareholder value and executive stock options, had taken a Landmark course in Boston at the suggestion of his daughter, who mended a rocky relationship with Dr. Jensen after taking the course herself.

“I became convinced we should work to get this kind of transformational material into the academies,” he said, adding that he considers Mr. Erhard “one of the great intellectuals of the century.”

Interview in The New York Times, November 29, 2015: “He had traveled with his Dutch-born third wife, Gonneke Spits, from Toronto to see friends, do a little business and visit his favorite chiropractor and tailor. He was also in the city to meet with a reporter — virtually the only press he has done in more than two decades.”

Modelos y Aplicaciones Transformacionales

Werner Erhard ha creado modelos y aplicaciones transformacionales para individuos y organizaciones durante más de 40 años. Werner Erhard es considerado un importante pensador en grupos académicos y corporativos y actualmente se ocupa de un examen y presentación rigurosa de sus ideas. Como creador de modelos, provee nuevos paradigmas a pensadores y practicantes en campos tan diversos como la filosofía, la administración, la educación, la psicoterapia, el desarrollo en el tercer mundo, la medicina, la resolución de conflictos y la creación de comunidades. Werner Erhard ha disertado en universidades y escuelas como la Harvard University, La Universidad de Rochester, Erasmus Academie, Universidad del Sur de California, y la Escuela de Administración Sloan de MIT.

Werner Erhard at NBER

 Working Paper by Werner Erhard and Michael C Jensen available at the National Bureau of Economic Research: Putting Integrity Into Finance: A Purely Positive Approach

The seemingly never ending scandals in the world of finance with their damaging effects on value and human welfare (that continue unabated in spite of all the various efforts to curtail the behavior that results in those scandals) argues strongly for an addition to the current paradigm of financial economics. We summarize here our new theory of integrity that reveals integrity as a purely positive phenomenon with no normative aspects whatsoever. Adding integrity as a positive phenomenon to the paradigm of financial economics provides actionable access (rather than mere explanation with no access) to the source of the behavior that has resulted in those damaging effects on value and human welfare, thereby significantly reducing that behavior. More generally we argue that this addition to the paradigm of financial economics can create significant increases in economic efficiency and productivity.

Werner Erhard and Michael C. Jensen – 2014 Sands Leadership Lecture Series

“Professor Michael Jensen and Werner Erhard, two extraordinary thinkers, engage in a conversation that explores groundbreaking access to being a leader and to the effective exercise of leadership as one’s natural self-expression.” -Simon Business School, University of Rochester

Creating Leaders

The being of being a leader and the actions of the effective exercise of leadership can be accessed, researched, and taught either:

1) as being and action are observed and commented on “from the stands”, specifically as these are observed by someone, and then described, interpreted and explained (third-person theory of), or

2) as being and action are actually experienced “on the court”, specifically as these are actually lived (real-time first-person experience of). As a formal discipline, the “on the court” method of accessing being and action (that is, as being and action are actually lived) is named phenomenology.

In short, an epistemological mastery of a subject leaves one knowing.
An ontological mastery of a subject leaves one being.

excerpt from Creating Leaders: An Ontological/Phenomenological Model found on Werner Erhard’s Ideas on Facebook

 

Werner Erhard Speaks at Harvard

Werner Erhard speaks to Kennedy School students on his latest work: “Why We Do What We Do: A New Model Providing Actionable Access to the Source of Performance.”   Find out more at the Werner Erhard & est Training website

Top 10 CPL Videos of 2010: Harvard University Kennedy School of Leadership

Top 10 CPL Videos of 2010: Harvard University Kennedy School of Leadership

The Harvard University Center for Public Leadership announced their top ten videos of  2010.  With 21,763 views, Werner Erhard speaks to Kennedy School students was their second most viewed video of the year.  The Center for Public Leadership posts their videos, including archived footage from a decade of leadership events, speeches, and interviews—on their YouTube channel.

The Harvard Kennedy School Center for Public Leadership is committed to advancing the frontiers of knowledge about leadership through teaching and research and deepening the pool of leaders for the common good through cocurricular activities that include skill-building workshops, fellowships, and classes in leadership for social change.

Werner Erhard Photograph

Werner Erhard 2010

In November 2010 Werner Erhard delivered presentations in Mumbai and New Delhi on the topic of Mastery and led a course on Leadership to business executives in Panchgani India under the sponsorship of MW Corporation.  View the full slide show