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“Tradition is not the worship of ashes, but the preservation of fire”*…

In the year 578AD Germanic tribes were warring over the remains of the Roman Empire, an eight-year-old boy named Muhammad was growing up in Mecca, the Mayan Empire was flourishing in Central America, and the world’s longest continuously operated business was founded in Japan. When Prince Shōtoku Taishi (572–622) commissioned the construction of Japan’s first Buddhist temple, Shitennō-ji, Japan was predominantly Shinto and had no miyadaiku(carpenters trained in the art of building Buddhist temples), so the prince hired three skilled men from Baekje, a Buddhist state in what is now Korea. Among them was Shigetsu Kongō, whose work would become the foundation of the construction firm Kongō Gumi.

In the centuries that followed, the maintenance, repair and reconstruction of Shitennō-ji (ravaged a number of times by wars and natural disasters) provided Kongō Gumi’s main source of income, but as Buddhism spread throughout Japan the scope of the company’s work also expanded to include contributions to other major temple complexes such as Hōryū-ji (607) and Koyasan (816), as well as Osaka Castle (1583). Kongō Gumi would continue to flourish under the Tokugawa shogunate (1603–1867), a period during which Buddhist temples received substantial financial support. The company weathered the pro-Shinto Meiji Period (1868–1912) and its often violent efforts to eradicate Buddhism from Japan, which included the destruction of tens of thousands of Buddhist temples. Kongō Gumi also survived the Shōwa Financial Crisis of 1927, keeping pace with economic and technological developments until it finally succumbed to financial difficulties and became a subsidiary of Takamatsu Kensetsu in 2006, after more than 1,400 years of independent operation.

Although Japan boasts six of the world’s oldest companies and an estimated 20,000 firms over 100 years old, Kongō Gumi’s longevity is certainly remarkable and worthy of study. Fortunately, the principles that guided the company over the centuries have been preserved by the Kongō family itself. The 32nd leader of the company, Yoshisada Kongō, writing during the Meiji Period, left a creed, later titled Shokuke kokoroe no koto, or ‘family knowledge of the trade’, a list of 16 precepts distilled from the company’s successful past and intended to guide and preserve the family’s operations into the future. Western observers might be surprised to discover that while the creed addresses ‘business’ subjects such as quality control and customer satisfaction, it puts equal emphasis on ‘personal’ issues such as how to dress (in keeping with one’s station), how much to drink (in moderation) and how to treat others (with utmost respect). Indeed, the first article of the creed states that minding the precepts of Confucianism, Buddhism and Shinto, and training to use the carpenter’s rule are ‘our most important duty’, suggesting that the standards against which a Kongō measures his life are as critical to success as the instrument by which he measures his work…

Learning from the long-lived: “Building on Tradition — 1,400 Years of a Family Business.”

See also: “The Data of Long-Lived Institutions” from @zander at The Long Now Foundation.

* Gustav Mahler

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As we take the long view, we might recall that it was on this date in 1911 that RMS Titanic was launched from the boatyard in Belfast in which it was built, the largest passenger ship of its day. A state-of-the-art steamship, it set sail from Southampton on its maiden voyage on march 10th of the following year, bound for New York City.  Four days later, after calls at Cherbourg in France and Queenstown (now Cobh) in Ireland, the “unsinkable” Titanic collided with the iceberg that sent it under in the North Atlantic, 375 miles south of Newfoundland.

(For perspective on scale)

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Written by (Roughly) Daily

May 31, 2021 at 1:01 am

“Nothing turns out to be so oppressive and unjust as a feeble government”*…

Yes, the private sector deftly turned publicly-funded technologies into commercial successes, and there was a place for individual genius in that. But those successes were also built on long hours by tens of thousands of engineers (many of them immigrants, many of whom went to public schools). The Ayn Rand image of the solo entrepreneur — Hank Reardon toiling alone in his laboratory to invent a new kind of steel — is a pernicious deception.

Myths have their place, and America’s worship of individual innovators inspires real achievement. The opportunity for success attracts the ambitious and those willing to work hard, like my parents, along with millions of others who land on American shores. But the myth becomes a liability when society becomes so enamoured with the idea of individual success that it forgets, and even attacks, the very institutions that enable it…

The efficiency of public-sector programmes can be seen all the time. An American family with an annual income of $52,000 per year pays approximately $16,000 a year in federal, state, and local taxes. In exchange, that family gets roads, public schools, environmental protection, national security, fire, and police. Try assembling that as a package of private services and see what it costs.

Antipathy to government institutions is often called “conservatism,” but it bears no resemblance to any principled tradition by that name. Conservatism is rooted in a respect for institutions. Its intellectual founding father, Edmund Burke, wrote, “Nothing turns out to be so oppressive and unjust as a feeble government.” The observation comes from his most famous work, a criticism of the anti-institutional, pro-individualism of the French Revolution and the bloody terror that followed. There is plenty to criticise about the American administrative state, but idolatry of the individual is hardly a true “conservative” critique.

Nor can the current, degraded notion of freedom be found in the works of America’s founders. The premise of the Declaration of Independence is not simply that our rights are “self-evident” but that “to secure these rights, Governments are instituted among Men.” This is to say, the founders respected “government” — they saw the state as a vehicle to guarantee freedom. In the years after the American Revolution, those who fought for liberty spent the rest of their lives progressively strengthening the central government they had formed in order to secure that freedom. Their legacy is the stability and prosperity we have come to take for granted. The exaggerated emphasis on individualism imperils their achievements.

In the U.S., Covid-19 did not find an exceptional country. Instead, the virus found a land of individuals — too many of them poor, overweight, under-educated, and overly imprisoned. It found underfunded institutions and a population teeming with a sense of entitlement rather than community.

What separated America from countries that staunched Covid-19 is neither size nor geography. China has the world’s largest population (Wuhan has more people than New York City). And though many countries that did well are islands, oceans offer scant protection from a pandemic. (The first person to die of Covid-19 in Iceland was an Australian, and the virus reached America from China and Europe, not Mexico or Canada.) No common political system or cultural tradition links the successful countries.

America’s response was inept because the institutions designed to protect the public failed or were enfeebled. At almost every level of society, people chose individual convenience over collective well-being.

What can be done to reverse the country’s self-destructive course, and to repair and prepare? America should use the pandemic as a turning point for renewal. Just as the human immune system develops antibodies from one viral infection to fight off another, Covid-19 presents us with the opportunity to build “societal antibodies” — practices to fend off the contagious disease of selfishness.

The country needs a “Corona Corps.” Similar to the armed forces or the Peace Corps, it would consist of people largely aged 18 to 24, trained and equipped to fight the virus. The Corps would conduct contact tracing, staff testing, and vaccination centers, and work with people required to isolate, providing anything from food delivery to a sympathetic ear. Corona Corps members could not only be paid but could also earn credits to reduce tuition and lower their debt — as well as gain experiences that serve as an on-ramp to jobs post-graduation.Once the virus is tamed, we should transition Corona Corps into a robust national service programme. 

A second reform is our tax system — a government function that is fundamental to all public programmes, but which has been ravaged by our disregard for the state institutions. Allowing the super-wealthy 0.1 percent to enjoy a greater share of spoils while we cut their taxes is not the hallmark of a functioning society. 

Regardless of the tax rules we adopt, administering them requires an efficient institution — and America’s Internal Revenue Service has been severely underfunded. A recent congressional report estimated that a $100bn investment in tax enforcement would take in $1.2trn — yes, trillion — in revenue over the next decade.

But the bigger point is that we must pursue a cultural shift: a renewed recognition of the value of institutions, and of the balance between the individual and the community in a prosperous society. Certainly, people should complain about the arcane and sometimes onerous regulations that hamper entrepreneurship — at the point of contact, institutions often feel like friction, like something to be avoided. Yet we must also recognise that beyond disagreements over the size and specifics of government institutions, those institutions are essential and honourable — as are the people who serve in them.

Individualism is embedded in America’s cultural identity, but it is a sign of national character to act together as a community. 

An excerpt from an essay by Scott Galloway (@profgalloway): “Institutions,” eminently worth reading in full. Indeed, this piece is a slightly-abridged version of “Scott Galloway on recasting American individualism and institutions” in The Economist (but behind their paywall).

See also the apposite (but differently-focused) piece by Scott’s NYU colleague, Davis Stasavage: “Lessons from all democracies.”

* Edmund Burke, Reflections on the Revolution in France

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As we seek a middle path, we might recall that it was on this date in 44 BCE, that Casca and Cassius decided that Mark Antony (Marcus Antonius) should not be killed with his ally Julius Caesar in the assassination planned for the next day; rather, that he should be waylaid so as not be in Senate at the time. It was the conspirators’ undoing.

They believed Caesar’s death would restore the Republic. But Caesar had been immensely popular with the Roman middle and lower classes, who became enraged upon learning a small group of aristocrats had killed their champion. Antony, as the sole consul, soon took the initiative and seized the state treasury. Calpurnia, Caesar’s widow, presented him with Caesar’s personal papers and custody of his extensive property, clearly marking him as Caesar’s heir and leader of the Caesarian faction. Antony negotiated a crafty compromise with the conspirators… then, on March 20th, gave his famous speech at Caesar’s funeral– which ended with Antony’s brandishing of Caesar’s blood-satined toga… Several buildings in the Forum and some houses of the conspirators were burned to the ground. Panicked, most of the conspirators fled Italy. The few remaining– including Brutus and Cassius– were assigned distant (and relatively menial) posts in Sicily and Asia by Antony “for their own protection”; insulted, they fled instead to Greece.

George Edward Robertson, “Marc Antony’s Oration at Caesar’s Funeral”

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“If you want to know what an institution does, watch it when it’s doing nothing”*…

 

Depression

 

Realizing an institution is near failure is a difficult epistemic problem. There are many outwardly visible pieces of institutions that do not reflect their actual health.

Before the collapse of financial institutions starting in 1929, naive observers were optimistic on the basis of soaring stock prices. Even after the Black Tuesday stock market crash, most observers expected a normal depression and recovery. Instead, the system continued to deteriorate, bank failures wiped out savings, the gold standard was abandoned internationally, and the Great Depression ensued.

Particularly in mature organizations, many automated systems handle tasks. Such systems can persist and even fulfill their function, while the institution as a whole is failing.The default is decay, maintenance of old abilities is difficult, and growth of new abilities is rare. One must look at what features of an institution indicate the current health of the core organization itself, while carefully distinguishing these from features reflective of past health and support from outside institutions.

From these signs, it’s possible to discover whether an institution has the ability to face new threats or is merely trudging through a slow process of decay. If an institution is unable to adapt to meet new challenges, it will lose again and again. Enduring defeat can only last for so long, no matter how large or well established the retreating organization. Eventually the inability to win dooms all institutions…

Samo Burja (@SamoBurja), from whom we’ve learned before, on the future of the social, political, commercial, and cultural organizations on which we depend: “Institutional Failure as Surprise.”

See also: “How Do You Know If You’re Living Through the Death of an Empire?” (Spoiler alert: it’s the little things…)

* P.J. O’Rourke, Parliament of Whores

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As we think systemically, we might recall that it was on this date in 1912 that the RMS Titanic, a state-of-the-art steamship, set sail from Southampton on its maiden voyage, bound for New York City.  Four days later, after calls at Cherbourg in France and Queenstown (now Cobh) in Ireland, the “unsinkable” Titanic collided with the iceberg that sent it under in the North Atlantic, 375 miles south of Newfoundland.

300px-RMS_Titanic_3

RMS Titanic leaving Southampton

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Written by (Roughly) Daily

April 10, 2020 at 1:01 am

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