Paul Rosenberg: Entrepreneurs vs. The Institutions

By Fitzroy McLean on 2010-11-09 23:43:30

Fitz here. Today we are fortunate to have another contribution from friend and global thinker Paul Rosenberg. Paul is a driving force behind Cryptohippie and the author of the must read A Lodging of Wayfaring Men. The freedom movement owes a great deal to Paul, but beyond being a thinker and a writer, Paul is an entrepreneur at heart and as Without Borders readers know, we believe the entreprenuer is the lifeblood of any civil society. The Entrepreneur Versus The Institution I've been an entrepreneur for most of my adult life, but even in my early and desperate days, I could never bring myself to work for a huge company. Not that I think thought there was anything inherently evil about it, mind you; I just felt that it was somehow contrary to my nature. I had no comfort issue working for small companies, though at the time I wouldn't have articulated my reasons very well. The root of it was that in the huge company I felt de-humanized; as if I was not acknowledged as being fully conscious. But, again, I don't think I could have explained it very well. THE TWO STRUCTURES As it turns out, my gut feeling was correct: Large operations (I'll just call them institutions) ARE de-humanizing. To be specific, they enforce a reduced consciousness. Bear in mind that this is not because the people running the institutions want to diminish and devalue their employees – many of them work hard to minimize these effects – but because no other choice is possible for an institution. It is all about structure, not intent. Take a look at these two diagrams: The Institutional Model The Entrepreneurial Model The diagram on the left depicts mental action in a small operation, whether it be a business, a family or whatever. Notice how many connections there are and that they are all reciprocal. Under this scheme, each person is free to consider their goal, their methods of attaining it, and the other individuals involved. The diagram on the right depicts mental action in an institution. Notice that the connections are unidirectional: from the order-givers to the order-takers. The people in this arrangement are not free to independently consider the goal, methods and individuals involved – only the executives are permitted to do that. Put simply: Full mental range is permitted, if not encouraged, by the entrepreneurial model. Full mental action is forbidden to all but a few by the institutional model. To whatever extent we consider humans to be conscious, thinking beings, the institutional model is de-humanizing. PRO-COURAGE, ANTI-COURAGE Being an entrepreneur requires courage, as do most of the important things of life, like liberty and love. So, it is doubly damning to the institution in that it opposes courage. Even those institutions which have no choice but to endorse courage (such as militaries) are very careful to limit expressions of courage to narrow areas. But why should an institution want to reduce courage? Well, once again, it is not so much a want as a need. There is no other choice – the power of the institution flows ultimately from obedience. All large, hierarchical organizations require the people in the lower levels to obey without question. There are far too many people involved; if the boss had to explain every decision to each of them, it would take far too much time. Such an operation would be impossible. Uncritical obedience is necessary; the institution is fully unable to operate without it. This obedience can come in three ways: If a person deeply admires and respects the order-giver, he or she may obey without questioning. However, this sort of near-worship never lasts very long. The order-taker is rewarded so well that they don't want to question anything. This works in the short-term, but it soon fails. As soon as the person's most basic and pressing needs are met, they begin looking for internal sources of satisfaction, which nearly always leads to thinking for one's self. That the order-taker is afraid to disobey. This is the only method that endures. The first and most obvious type of fear is external fear: Being physically injured, starved or otherwise terrorized. This method can work, but not usually for long or very well. It is too obvious and insulting – people rebel, evade or escape far too often, including many of the mid-level bosses. But, there is another fear method that does work: Internal fear, usually described as shame or conditioning. People obey quite reliably when they fear becoming an outcast. If they fear being unable to keep friends, or to find a good mate, or to escape ridicule, they fall into line very reliably. Inside the institution, a fear of insecurity combined with conditioning have always secured obedience. Some may object to my characterization of this, but it is a general fact that can't really be disputed. People can be convinced to join the institution at first, but convincing addresses a person's full mental faculties, and the full use of mental faculties cannot be tolerated inside the institution. So, convincing can be only an occasional method. Once I again I will add: This is not the result of intent – it is the result of structure. The institution is simply unable to exist in any other state. Now, since courage is the enemy of fear, the institution must generally oppose courage. Once we have the courage to think for ourselves, conditioning no longer works. An institution widely supporting courage opposes its own existence. Once people begin thinking in their own voices alone, the institution cannot stand. ORGANIZATIONAL LIMITS It is worth adding that the entrepreneurial model has a size limit, which is often referred to as Dunbar's Number. Dunbar's Number defines the quantity of identities a human can manage, usually thought of as 150 or so. Beyond this number, humans lack the mental power to maintain the entrepreneurial type of cooperation. So, maintaining a cohesive and responsive group larger than this size requires rules and enforcement… which is the institutional model. Rules are simple, binary decision mechanisms, usually of the yes/no model. Because of this, people who are organized according to an institutional model have to operate below their abilities. MARKETS Large cooperative organizations do exist, but with one crucial characteristic: They lack all executive function. That is, they do not decide anything or attempt to enforce anything. There is no inherent size limit to such an organization, since executive functions are provided for each player, by each player. Such organizations are properly called free markets. This term is not to be confused with "free-market economies," which generally refers to large, controlled economies. A market with no executive function is one without an overseer. This is a foreign arrangement to people of the early 21st Century, existing only in the form of local, temporary, informal, or illegal markets. The players in a true free market are left to survive by means of their personal virtues alone. They must function at or near their capacities at nearly all times. A free market is a place of interaction, and nothing more. It has no end goal and no executive function. The mechanisms of a market do not perceive "fairness," they know only exchange. A market that promises anything requires an executive function and an institutional model. ENTREPRENEURIAL CREATIVITY The entrepreneurial model breeds creativity and the institutional model does not. Every informed business-person knows this, including the people who run institutions. In fact, many of them work very hard to mitigate this difficulty. The core of the institution's problem is this: Creativity and obedience are mutually-exclusive operations. Humans do no operate creatively and obediently at the same time and in the same way: One excludes the other. Obedience demands that you override your own thoughts and act according an external command. Creativity requires unobstructed thinking. It is closed in the direction and to the extent that you are being obedient. This was actually Lech Walesa's secret as he and his associates ruined the USSR's domination of Poland. Here's what he said afterward: In the past, you could stand with a gun behind a man who had a pick and a spade and tell him to dig a hole two hundred meters long. But you can't put a man behind someone working creatively, behind a computer, and tell him, "Please devise something original." There is no way to do it, and I took advantage of that. So, my fellow entrepreneurs, go out proud, and create! Fitz again. Every time I read something Paul writes I feel better about the future of humanity. It may be an illusion or merely the feeling he inspires because I can say, ¨That guy says what I think.¨ or ¨Man I wish I said that.¨ Regardless, we appreciate having Paul as a regular contributor to Global Speculations. Please forward this post to your friends and family who will benefit from his thoughts. Thoughts on freedom and entrepreneurship deserve the widest possible distribution.

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