Archive for the ‘Werner Erhard’ 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

Capitalism and Society

In their groundbreaking paper published by Yale University’s Center on Capitalism and Society, “Putting Integrity Into Finance: A Purely Positive Approach,” Werner Erhard and Professor Michael C. Jensen discuss their positive model of integrity that links integrity and personal and corporate performance.   The creation of this model reveals a causal link between integrity and increased performance. Through the work of clarifying and defining what integrity is and it’s causal link to performance, this model provides access to increased performance for private individuals, executives, economists, philosophers, policy makers, leaders, legal and government authorities.

“The Center on Capitalism and Society brings together leading scholars in economics, business, finance, and law to study capitalist institutions, their effectiveness, and their weaknesses in order to get some answers to such basic questions about capitalism – its working, its dynamism, and the instability it may cause, its inclusiveness or lack thereof and its role in a democracy.”

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Breaking Out Of The Box

Social paradigms dictate our behavior and collective values. In the 1950s, the rule was “throw it anywhere, it will go away,” and smokestacks billowing black smoke were a proud symbol of productivity…

While we are in a paradigm, we take its rules and boundaries for granted. It is what we call “reality.” Like eyeglasses with colored lenses, our paradigm colors whatever we perceive. “Most of our notions about the world come from a set of assumptions which we take for granted, and which, for the most part, we don’t examine or question,” says Werner Erhard. “We bring these assumptions to the table with us as a given. They are so much a part of who we are that it is difficult for us to separate ourselves from them enough to be able to talk about them. We do not think these assumptions, we think from them.”

Expressions such as “that’s impossible,” or “that’s not the way we do it around here” speak to the existence of paradigms, or belief systems, that are operating, unseen, in the background. Like water to a fish, they are not recognized by us as our paradigms. Yet, they influence what we think – and even what we see.

Once we recognize that our paradigms are an invisible structure through which we think, the next step is to understand the degree to which they determine what we see and experience. Their influence is far more powerful than we may realize.

Thomas Khun, who in 1962 wrote a seminal book on scientific paradigms called The Structure of Scientific Revolutions, points to an experiment that illustrates the paradigm effect. In the experiment, originally reported in 1949, people were briefly shown a deck of playing cards in which some cards had red spades instead of black. The subjects literally saw the red spades as black, because that’s what they expected. Once the anomaly was pointed out, the subjects had no trouble spotting the red spades. The experiment and others like it led Khun to the conviction that our paradigms act as filters on reality. We never see the world directly; we always see it through these paradigms filters. We never see the world in its entirety; we only see pieces. And our mental frameworks naturally bias us toward only seeing that part of the world that supports our paradigms.

“Our paradigms determine the way the world ‘shows up’ for us,” Says Erhard, “and that allows for only certain possibilities. Our paradigms determine our worldview, the way we perceive things, what we perceive, what we can see as possible, what we can’t see as possible and what we can’t see at all. Ultimately, they limit our strategies and our actions.”

The secret of paradigms is that, with them, we construct our own reality. As Thomas Khun said in 1962: “When paradigms change, the world itself changes with them.”

It’s a revolutionary thought, and it is the most important thing to know about paradigms.

How reality occurs – or “shows up” – for people is not determined by what’s there to be seen, but by how we are seeing it.

Erhard says that instead of waiting for a new paradigm to become apparent, we can create and invent futures that “were not going to happen anyway.”  He points out that when a breakthrough is needed, what is often called for is the development of a new paradigm.

“Changing the paradigm does not negate the need for realistic, hard-headed thinking,” he says. “In ‘business as usual,’ we get clear about the situation to determine what we can do and what we can’t. But to produce a breakthrough, you have to stand the usual approach on its head.”

The process begins with inventing a new possibility, without regard to whether you know what to do to realize it. You then look back at the situation from the standpoint of that new possibility.

“That is what gives you the new perspective and what allows you to see the situation in a way you haven’t seen it before,” says Erhard. “That is the beginning of generating a new paradigm. Breakthroughs are a product of seeing something in a new way, which enables you to see new opportunities and new openings for action that you couldn’t see before. Breakthroughs come as a result of shifting your commitment from the predictable future to a possible future.”

In so doing, we will – literally – change the world that there is for us to see.

The Erhard Jensen Ontological / Phenomenological Initiative

The Purpose of The Erhard Jensen Ontological / Phenomenological Initiative is to:

Stimulate and support research into the development and application of the ontological / phenomenological laws of human nature and human behavior to the lives of individuals and human entities to reliably and significantly elevate human performance and quality of life. This includes all areas of living across the entire spectrum of human activity, for example:

  • Individuals, families and groups
  • Public and private organizations such as partnerships, corporations, non-profit and educational entities
  • Public agencies and governmental entities
  • Bring the ontological / phenomenological model and methodology utilized in this leadership course to education — including research, course development, and teaching.

Stimulate and support research into the study and teaching of the ontological /phenomenological laws of human nature and human behavior, and the impact of these laws on life, living, and self.

For more information see http://www.erhardjensen.org

(Content Curated from the Werner Erhard Biography Website)

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:

What There is To Do Today

HAVING: THE ONLY THING THERE IS TO DO TODAY IS WHAT YOU DO TODAY

From PAGES: Essays by Werner Erhard for the est training staff, January 1, 1981

The only thing you are going to do today is: what you do today.  Therefore, the only thing there is to do today is: what you do today.  That’s all there was to do when you started no matter what you thought or think.

THE “OH MY GOD” SYNDROME

Most people go around thinking that what there is to do today is all that stuff that there is to do, that is to say, everything that isn’t done.  This is a lie.  This lie leads to stupidity.  This stupidity leads to ineffectiveness.  The ineffectiveness leads to fewer results being produced, leaving, apparently, more to be done.  And there you have the downward spiral which is unworkability.

The only thing there is to do today is: what you actually do today!  There is nothing else to do today!  You get it?  There isn’t anything to do today except what you actually do.  That’s all there is to do today.  Do you get it?  If you do actually get it, you should feel the muscles in your body begin to relax.  A sense of freedom and power begins to well up within you.  Read more…

Werner Erhard and The Hunger Project

“What The Hunger Project intended to do was to catalyze the global grass-roots committed movement and action that would put the end of persistent hunger into place, which means not just feeding hungry people today, but establishing the whole design, the whole infrastructure so that people can feed themselves and their children well into future generations. You see, it was a project of great faith in human beings. Great faith that if hundreds and thousands and millions of individuals took a stand for the end of the persistence of hunger, as an idea whose time has come, that they would then find an action that was appropriate to them. So if they were an engineer or an agricultural specialist, or if they were a politician, or a United Nations delegate, or if they happened to be a scientist or a professor, or the President of the High School Student Body, all of those individuals would have different actions available to them that would have a different impact. The entirety of the impact would be that child in Uganda being fed on a given day, being inoculated so as to survive disease, and being educated – of great importance to end the persistence of hunger – and that ultimately, we the global citizens of the world would be acting for the benefit of our children. And the necessary actions would take place.

So you see it was a stand based on faith and the goodness of humanity, that if human beings knew what they needed to know and lived inside of a context of “it can be done” they would take the actions that were theirs to take that would make that difference.

The Hunger Project enrolled over four million individuals who signed a paper saying “I have taken a stand. I will make the end of hunger an idea whose time has come as my personal responsibility.” The Global grass-roots educational campaign went on from 1977 and through the 80’s. Millions of people enrolled and participated and contributed money and there were many, many groups that broke off from The Hunger Project. “Results” was one that did political action in Washington, DC. Another was “World Runners” where people would do marathons to end world hunger, to get out the news, to alert people that something could be done. In those days, that was really rare, and now you see marathons for everything, which is wonderful. Walks to end breast cancer, and marathons for AIDS awareness, and in those days it was really unusual, it was new. And there was enormous participation through the 80’s and then at the end of the 80’s The Hunger Project made a transformation of its own and began to do very high level strategic work, which it’s currently doing in Africa and India primarily.

I would say in many ways it was successful all the way to the hungry people, in that millions more dollars were given and raised for organizations that were working on the ground doing relief work as well as for The Hunger Project. The Hunger Project raised hundreds of millions of dollars for other organizations as well. Infant Mortality rates fell in many countries. In some countries, due to war since then, they have again risen, The correlation between war and the infant mortality rate is a direct one. War creates the persistence of hunger and starvation. Also, really tens of thousands, if not more, of people, like me, became lifelong advocates for the end of the persistence of hunger and contribute as volunteers, contribute as donors, contribute as professionals to all kinds of organizations and vehicles and policies to help bring about the end of the persistence of hunger.

I think that once one makes a commitment with your heart and soul, I think it takes over your very molecules in a way. It becomes a very part of your personal life’s mission, and then the choices you make will be consistent with that mission. I’ve changed jobs and have participated with projects with many different countries and organizations, all of them consistent with the end of the persistence of hunger, and that will always be the case for me. And I think really for the many thousands of people who made this stand in the 70s and 80s.”

From an Interview with Catherine Parrish on The Hunger Project and Werner Erhard

ワーナー・エアハード

ワーナー・エアハードは、30 年以上前に「トランスフォメーション」という画期的な概念をアメリカ社会に紹介しました。この概念は、「既存の世界観や参照枠組の中で何かを変える」とい うことと、「まったく新しい世界観を創造する」ということとの明確な区別を作り出しました。やがてこのトランスフォメーションという概念は、現代社会にお ける強力で、実践的な、そして重要な知的財産であると見なされるようになりました。今今日では、エアハードが開発した思想を、世界中の様々な社会のなかに 見つけることができます

Life As A Three Act Play

“I  was working with Father Basil Pennington, a Cistercian priest and monk. I was doing a program with him designed for people from various faiths who minister to others. In those discussions, what came up for a Baptist minister was that he felt that sometimes his emotions got in the way of his being able to be authentic and being able to act with some wisdom when he was working with people.

This made me think about the question of emotions. I have emotions, but at least at that time, I thought I did not have much to say about my emotions. They just happened to me, without being something I caused. So I got very interested in that. And I thought, actors get up on the stage, and if they are acting on the stage they are no good as actors. They have got to be not acting, when they are on the stage.

I have a friend, Sandy Robbins, who heads a highly respected school of theater in the United States. So I said, “Sandy, let’s get some actors together and find out what it is with these people that they can choose to be this or choose to be that.” Because somehow when they are really good at their craft, they really be it, they don’t just pretend it or act it. So Sandy and I worked together with some professional actors and acting coaches for three years, and I really learned something. The idiom is fabulous, as a metaphor for life.

John van Praag and the other classicists here tell us that the ancient Greeks started this all the way back in their time, not as an entertainment but as an access to self in life. One of the things that we do in the program Sandy and I developed is ask people for three days, rather than being themselves, to be someone else.

So if I were in the program, I would not be Werner, I would be an actor playing this character called Werner in a three-act play called “Werner’s Life.” Some very interesting things then happen. Each of us plays the script perfectly. We never make a mistake, not one moment. I played my past absolutely as the script was written. I was the best Werner you could possibly be; people even thought I was Werner. So, in this three-act play, the first act is one’s past. The second act is the current era of my life – we will talk more about that in a minute – and the third act is the future.

Now, we all agree that the script for the first act is over. You can’t change the script for the first act. There are lots of things you can do with the past, but you cannot change the script, nor can you change who you were in the past. You might do some analysis that gives you some insight into the script of the first act that you weren’t aware of while you were playing it. You might come up with some different interpretations, but you cannot change who you were.

Now let us talk about the script for the second act, the current era of my life. I like to think that I am writing the script as I go along. Some of it is automatic, but I can really decide who I am in the current era of my life, and I can decide how my life is going to go.

But I would like you to look at something with me. In a three-act play, the script for the second act absolutely must bridge between the first act and the third act. The script for the current year of my life cannot violate what happened in the first act of my life. It does not mean it has to be the same. There can be a transformation in the second act. But whatever happens in the current era of my life has to be a bridge between the first act and the third act.

I would like you to consider the possibility that, at least to some degree, the script for the current era of your life is already written, and it is already written in the sense that it has to get you to the third act. It has to make sense when the third act opens and unfolds. We’ll talk about the third act in a moment. I want to stay with the second act now. If you think about it, the second act is already written. That is, the current era of my life, the kind of life I lead, is already even more determined than simply having to be a bridge. It has got to make sense when the third act unfolds.

Think about it for yourself. If your third act is one of world recognition as an artist, there are certain things that are going to have to happen in the second act for that third act to be able to be played. The second act has to be consistent with that third act. I’ll give you the extreme example. If in the third act you are a world famous ballerina, there cannot be an accident in the second act in which you lose your legs. Whatever happens in the second act has to have made sense, given the third act, even if the third act is discontinuous. Remember the script for the first act is already written. The third act is the future into which you are living.” – Werner Erhard

 

Excerpted from

A Presentation By Werner Erhard At The Eranos Conference
Ascona, Switzerland
18 June 2006

Werner Erhard

Werner Erhard -Scholar