Monday, January 28, 2013

The Economy as an Adaptive Network

Paradigms are important. They provide the context for interpreting events which we use to construct information as data-in-context that guides the choices that drive our actions.

Paradigms both empower choice, and limit expectations. What we cannot see in context, we cannot choose as possible.

The dominant paradigm empowering choice and limiting expectations for stewardship investing today shows us a vision of prosperity as inertial, in which change is disruptive.  Within this paradigm, the best available architecture for investment is indirect asset trading.

So, our stewardship institutions earnestly pursue Asset Allocation using Modern Portfolio Theory in the expectation that through diversification they can transform an activity that is architecturally speculative and opportunistic into a portfolio experience that is purposeful and generational.

The results have been uneven.  Much depends on the exact point in time on which we choose to measure our successes.  What looks like a maximized risk-adjusted return at the end of one period can evaporate in the next!

What if we started with a different paradigm?

Consider the choices that become available for stewardship investors, if the economy is viewed as a network of values that are monetized through public and private commercial exchanges.

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