Sections of this chapter
Ethical Economics
A Personal Path
Specific Suggestions
Problems and Solutions
Investment in Creative Transformation
The Greatest Problem
Network Feedback
A Sufficient Algorithm for Composite Autopoiesis
Destructive Networks
National Ethical Economics

All current economic systems are inherently self-destructive because they all have as their optimizing criteria something other than maximizing creativity. In communist countries, regardless of their stated goals, the entire society is structured to maximize the power of the Communist party and its leaders. Gorbachev's reforms were tolerated only because it was argued that they would make the Soviet Union stronger. The control of the Communist party was supposed to be preserved, although clearly not all the bureaucrats believed this. There were no other optimality criteria. In order to maintain power, most forms of communism eventually destroy, all the creativity of their people. This is particularly true of Soviet communism, which controls some of the most creative nations on earth. Chinese Communism may become different, but I personally believe that it will eventually revert to something as destructive as the traditional Soviet pattern in which all negative feedback to the system is destroyed, and creative, individual initiative is punished. This is the case because the concentration of power over others inevitably destroys. I hope I am wrong and that the Chinese as well as the Soviet communists continue to loosen their control over their very creative people. As we have seen, no mixture of socialism and democracy is viable in the long run. Only an Ethical State is viable. It is not impossible for a communist society to mutate into an Ethical State.

In democratic countries there are more complex structures, with conflicting special-interest groups. In spite of democratic ideology, all democratic countries constantly sacrifice freedom for the promise of security. Each special-interest group wishes to maximize its power at the expense of other special-interest groups. Most of the special-interest groups are bureaucracies, e.g., political parties, corporate monopolies (usually closer to oligopolies), or government agencies. They believe only in zero-sum games, where one person's gain is another person's loss. Creative organizations know that through creativity it is possible to create more than is consumed. But these organizations are a decreasing minority whose surpluses are constantly being extorted with the consent of the democratic majority by the bureaucracies which in turn destroy the creativity which keeps them alive. The bureaucracies control the democratic majority by taking the surpluses of the creative minorities to buy propaganda with which to deceive the electorate. Then they consolidate their positions by redistributing the surpluses to the less creative majority after taking a substantial commission for themselves. This is how all bureaucracies destroy themselves. There-fore, no combination of socialism and democracy will avoid self-destruction, although some forms destroy themselves more slowly than others. Only an ethically based libertarian society, an Ethical State, is viable in the long run. Capitalism works only insofar as it is also libertarian. Democratic capitalism leads inevitably to to socialism. Socrates knew that 2,400 years ago, although Marx missed the point.

The problem is not how to create an alternative to democracy, capitalism, and socialism, but rather how to begin creating an alternative in the midst of a world economic system that has irreversible entropy. In order to do this we must first understand the nature of "wealth."

Wealth is anything that can be accumulated and exchanged for the products of creative labor. Creative labor is any labor that produces any goods or services that can in any way be used to enhance anyone's creativity or intelligence, i.e., ability to predict and control the total environment. Only creative persons can produce creative labor. Since C = IE, creative labor increases intelligence, ethics, or both. Wealth can be accumulated in the form of (1) defendable and controllable natural or manufactured resources, including knowledge, (2) commitments by creative persons to labor on one's behalf, or (3) money. Money is a symbolic representation of alleged units of creative labor which has value only insofar as persons are willing to exchange creative labor or resources for the money. The key to wealth, therefore, is not money but creative labor. Natural resources are of little or no value in themselves unless they are used to fuel creative labor. Natural resources without creative labor have even less value than petroleum has without fire or heat engines.

Uncreative persons are, by definition, destructive persons, since trivia is a set of measure zero. The cost in wealth of interacting with destructive persons is always greater than any profit in wealth that one might obtain from the interaction. In other words, destructive persons (when 0 > E >= -1), even when they are capable of creative labor, will by definition producemore destructive acts than creative acts, so that they will decrease the wealth of anyone with whom they freely interact. Destructive persons can only accumulate wealth by exploiting creative persons and in some way forcibly taking it away from them. To exploit a person is to interact with the person in such a way that we decrease his/her wealth. When two crea-tive persons interact they both end up with more wealth than when they began, even if this wealth is entirely in the form of knowledge and it is unevenly distributed.

A general theorem is that, when persons interact, the least creative receives the greatest benefit or the least damage if they are both destructive. If they are both creative, then the most creative also receives a benefit even if it is less than the other's, but no one's wealth is decreased. This is a form of natural, ethical communism by which the wealth of all creative persons is both equalized and maximized in the long run. In conventional (Leninist) communism, wealth is minimized and unequally distributed. In the long run only poverty is distributed under Leninism.

Corollary: We are each ethically obligated to interact with the most creative persons we can find, but we should never fear interacting with anyone so long as we emphasize ethical information exchange, i.e., we emphasize maximizing each other's ethics.

Therefore, if we are to maximize our wealth we should maximize the number of maximally creative persons with whom we interact and minimize the number of destructive persons with whom we interact. This is true whether we are destructive or creative.

The greatest and most secure form of wealth that we ever accumulate is our own creativity. The only form of wealth which is not necessarily destroyed by interacting with destructive persons is our personal creativity. This is true if and only if we love our enemies, i.e., destructive persons. If we respond to our enemies with anger or hatred, then, through fear, we decrease in creativity by decreasing in ethics.

There is nothing we can do that will do more to reduce our fear and increase our ethics than to love our enemies. Recall that a current enemy is any person who is currently destructive. Ethically, we are constrained to love our enemy, i.e., increase his or her creativity, solely by helping him or her increase his or her ethics. If the person is truly an enemy, our love will drive the person away from us, while increasing our ethics. This is part of the cosmic quarantine. If the person is not an enemy, but an ethical person merely behaving unethically, our love will be reciprocated and that person will increase our ethics and our wealth as well as his/hers. In other words, ethical love can only increase wealth and never diminish it, because ethical love will always, as a minimum, increase our creativity by increasing our ethics. Insofar as the person we love is also creative, love will also increase our intelligence directly or through another form of wealth. If the person we love is ethical and it is our imperfections that drive that person away when we try to love him or her, both our intelligence and our ethics will have been increased (our intelligence by making us more aware of our imperfections). Therefore, we never fear interacting with anyone and use creative transformation to choose our friends. Remember, it is always unethical to judge the ethics of another person. We judge acts, not persons.

From this it follows that only by seeking to maximize creativity will we maximize our true wealth, which is our personal creativity. Trying to maximize wealth directly may get us a lot of money but it will not maximize our true wealth. Indeed, persons who equate money and wealth are invariably driven by fear. When they have no money they are afraid because they have no faith in being able to create what they need. When they have money they are even more afraid that they are going to lose it. Their mindset forces them to accumulate more and more money to protect the money they already have until they die loveless and totally uncreative. As Jesus said, "What does it profit a man if he gains the whole world and in the end loses his own soul?"

To lose our creativity is to have lost our soul by closing our quantum connection to God. Creativity is the only true, lasting wealth. It is a wealth we maximize by giving it away rather than hoarding it. Those who are already creative shall become more creative through our love. Those who are uncreative shall be driven away by our love and become even less creative. "For whosoever hath, to him shall be given and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath." (Matthew 13:12)
Ethical Economics

Any economic system which is not self-destructive must be based on the notion of maximizing creativity for everybody rather than on maximizing, with or without constraints, any other concept of wealth for anybody. Creativity is the only form of wealth that the more we distribute it, the more everyone has. Therefore, the true economic problems to be solved are: (1) How do we interact with others so as to maximize their creativity? and (2) How do we select with whom we are going to interact? If we solve these problems, the solution to the problem of how to acquire the resources we need falls out as a trivial by-product. If we are maximally creative we always have the resources we need to keep increasing our creativity and that of others at the maximum rate. Everyone who plays the Game of Life wins.

All these problems have a common solution. The solution is creative transformation. If we do our best to engage in creative transformation, we automatically maximize our creativity and that of those with whom we interact. To do our best to engage in creative transformation is to follow the eight steps previously given. We are ethically obligated to create an octet around us or to join an octet that someone else has created, unless we have discovered a better form of creative transformation. We do not have to limit ourselves to a single octet. Being part of at least one octet may be a necessary condition for creative transformation. It may not be sufficient. The eight steps are a sufficient condition for creative transformation; there may be other sufficient conditions. The optimal conditionsfor creative transformation will involve variations on the eight steps that will be different for each person. Like all creative processes this will be self-catalyzing.

By engaging in creative transformation you will each understand how to optimize it for yourself. There are an infinity of paths between us and the Moral Society. Each person must discover for him or herself what is the best path. I will here give you one out of an infinity of paths. Those of you who wish it are welcome to join us on it; but do not be afraid to explore other paths with other persons. The more you explore the more likely you are to discover the path that is optimal for yourself. The path of SEE may be in error. Together we can correct our errors. If we do not help correct each other's errors, we all fail. The only danger is self-deception. This danger can be eliminated by ethics and scientific method.
A Personal Path

For me the first four steps for engaging in creative transformation are absolutely essential. If I had not done my best to take them, I would not now have been able to take the fifth step, which involves becoming self-sufficient within an ethical context. Intuitively I have known since 1971 that self-sufficiency was important. Many others perceive the same need. Yet we all fail in this endeavor because it takes more than one family to make a self-sufficient community. Communities integrated by anything other than the evolutionary ethic and the creative transformation process are doomed to fail and eventually succumb to either predatory capitalism or socialistic confiscation. That is why so many American farmers are going bankrupt. Farming communities are the closest approximation we have to self-sufficiency.

Farmers value their independence so much that they are willing to take great risks and work extremely hard for very little money in order to maintain it; yet they are failing by the thousands because their priorities are wrong. The most important self-sufficiency to achieve first is not in housing or food, but in education. It is our ignorance that makes us poor. Dependence on the educational bureaucracy is worse than no formal education at all. We can always educate ourselves.

Self-sufficiency is extremely important because so long as we are a part of the larger economy we cannot avoid increasing the wealth of destructive persons. Every time we attend or send our children to the educational bureaucracy we strengthen that system and contribute to the destruction of the creativity of others and our own. Yet the educational bureaucracy has the knowledge we need to create an educational alternative such as was presented in the previous chapter. The creation of such an alternative requires a critical mass of creative talent to form the teaching octets plus a certain minimum of material resources. The process of creative transformation automatically links us to the creative talent necessary tocreate SEE. It also opens new economic opportunities which automatically provide the resources necessary for the school. These resources autonomize us from the current destructive educational and economic system. We need only have the courage to take these opportunities as they are presented to us. We must learn to become economically independent of the bureaucracy or we will not become creatively transformed. Although the belief that we cannot love creatively is the most difficult fear to overcome, the belief that we cannot create the means for our own survival is the first fear we ever conquer. Many persons can never go beyond this fear. They cannot even begin creative transformation.

All wealth comes from creativity. The human species is continuously depleting its readily available resources and being forced to create new technologies to utilize the resources that remain. We have increased our obvious material wealth over the centuries solely through creativity. First our hunting-gathering ancestors depleted the readily available food supply. Then our ancestors developed group hunting to compensate for this but depleted the big game. Then they developed the spear thrower but depleted smaller, fleeter animals. Then they developed the bow and arrow but depleted the most wily game of all. Then they developed herding technologies but depleted the natural pastures. Then they developed agriculture but depleted the soil. This forced them to invent ever newer agricultural technologies, from fertilizers to plows and irrigation, to use what was left, as well as food processing and other technologies. These technologies led to such an enormous increase in the numbers of humans that soon there was not enough land for everyone, or so it was perceived. Humanity has been in constant warfare for thousands of years, and even today, over territorial rights. Each culture survives only by constantly (1) innovating or borrowing innovations to squeeze new livelihoods out of the remaining resourcesand (2) defending itself from the more predatory cultures who want their territory and/or wish to control their people. This process has now brought us to the point of nuclear annihilation, although the nuclear threat has somewhat lowered the actual warfare to be expected under the current realities.

We now need a radical, psychosocial innovation which eliminates the need for war as a means of maintaining natural selection among ourselves. No nation is going to allow itself to be destroyed if it has a chance of preventing that through the use of nuclear weapons. The complexity and cost of nuclear weapons alone have kept them from spreading to every nation on earth. By and large it is the least creative nations that are incapable of producing nuclear weapons. The most creative nations all either have nuclear weapons or have the capacity to quickly develop them. However, as technology transfer from the most creative to the least creative nations continues along its inexorable path, soon every nation - even the most evil and destructive societies, such as those resulting from despotic, totally uncreative dictatorships in the Middle East, Asia, Africa and Latin America - will also have nuclear weapons. With hundreds of fingers on the nuclear trigger, nuclear annihilation will be almost impossible to avoid. The only way to prevent the impending holocaust is to deny evil, uncreative persons access to the creative talent that gives them all their power.

The most ethical way to deny evil persons access to creative talent is to have an alternative way of life available that will be so attractive that creative persons will choose it in spite of all apparent risks and hardships. This alternative is a self-sufficient, libertarian community engaging in creative transformation. One way to create such a community is as follows:

We can neither teach what we do not know nor lead where we do not go. Each of us must in time be prepared to serve alone as a nucleus for creating an ethical, libertarian, self-sufficient society engaging in creative transformation. It is always best to join other societies that share our values if they exist. It amplifies our personal creativity. We hope that you will consider SEE such a society; but if you do not, you should create your own society just as we have. Remember, SEE and I may be in error. The price of innovation is to risk accidental self-destruction through self-deception. If you want something and it does not exist, you create it. If you wait for someone to create it for you, you will probably wait forever. Thus, if neither SEE nor any other society meets your ethical requirements, you begin with yourself. The first step is to educate yourself as closely as possible to the equivalent of completing the thirteenth level of the SEE program. This is very difficult within the educational bureaucracy. You can only do your best. If you do your best, you always win the Game of Life.

Simultaneously with this process you create one or more octets around yourself to whom you can relate as equals and who give you constructive feedback. An octet that gives you no negative feedback is useless to you, unless you believe you are already perfect. In the latter case you are useless to yourself.

Independently of your octet(s), if necessary, although it will be easier if others cooperate with you on this, gradually but surely break away from the bureaucracy and go to work for yourself. In working for yourself do the most creative work you can think of. If that does not enable you to support yourself at an acceptable standard of living and meet your obligations to others, then do the next most creative thing you can or the next most creative until you can maintain a minimally acceptable standard of living. Try to ignore the profitability of your enterprise as much as possible and focus on your creative output. Creative self-employment is an extension of our quantum modality into the economic sphere. In general, follow these eight personal, economic principles to the best of your ability:

You should eventually be in at least one octet in which everyone in the octet lives by the same principles. They are (1) educating themselves, (2) doing their best to be maximally creative, and (3) self-employed either alone, in conjunction with you, or in conjunction with others. Do your best to work only with persons who share your values and your goals both as associates and clients. Never take an associate who does not share your values and your goals even if it means working entirely alone.

Only if it is absolutely necessary to survive economically should you work with clients who do not share your goals or values, even though they may be ethical. Always give preference to clients who most closely share your values even if it means minimizing your income to the lowest acceptable level. Never, under any circumstances, knowingly cooperate with or aid any potential client or associate who is engaged in any way in a destructive enterprise. Be uncompromising in this even if it appears that lack of cooperation will lead to economic or physical disaster for you. This last possibility is almost always an illusion, induced by fear.

When you and the other members of your octet(s) feel ready, begin creating your own version of SEE. Do this by pledging a given percentageof your income and/or your time to the creation of your own school. Those of you who feel competent to create the school on your own, do so. If none of you feels competent to do so, use your contributions to hire by consensus at least one person to serve as the nucleus for the teaching octet that will build the school. As you all grow economically - and you will if you follow this path - increase your contributions to the school until you have a full-time teaching octet devoted to building the school. Set the school up as a not-for-profit organization, or integrate it completely into your economic networks. You and all contributors to the school should organize your businesses and your estates to continue to endow the school with scholarships for yourself, your employees, and for your children to attend the school, or another school if they prefer, even if this is on a part-time basis. Since you are collectively creating the school, it should provide the kind of education which is not available elsewhere and which maximizes creativity. Therefore, you, your associates, and your children will almost always prefer to attend the school that you are helping to create. If a more creative school exists, merge with it and learn from it.

In attending and creating the school, you, your employees, and your families will become more creative, and your businesses will become more profitable.

Once your business consists of a full octet, use part of your surplus income not to grow in a conventional way by simply hiring more employees, but rather to create new affiliated, partially independent businesses which supplement your capabilities and provide you with the additional goods and services that new employees would have provided. Your original business does not directly manage the new affiliated business, but rather is an investor in the new business, owning an equitable share, having at least one male and one female of the original octet sitting on the board of directors of the new business, and providing the employees of that new business, which should not exceed an octet, the opportunity to buy out the interest of the original octet under equitable terms. Each business is therefore based on an octet which sets up other businesses based on an octet.

The members of each business octet own all the stock in that octet once they have bought out the stock of the octet which helped create it. At that time they are completely independent. They can follow their own chosen pattern of growth or create new subsidiary business octets of their own. If the theory predicts correctly, eventually the main business of every octet becomes the creation of new, creative, economic octets - each one slightly different, innovating and improving the pattern of its creators. At the same time there is a rapidly growing economic network of small, creative companies, all dedicated to and guided by common ethical principles and goals. They provide an ever expanding variety of goods and services for the network and the schools the network supports. As they become fully autonomous, each economic octet may deviate from this pattern if it wishes andcreate its own schools or simply devote itself to growing and enriching itself like any other capitalistic enterprise. The companies that follow the most creative path will attract the most creative persons. The networks to which they belong will eventually be able to attract most of the creative persons in the world by providing them with the best opportunities to be creative and independent within an economic or a teaching octet of their choosing. Research and development will be carried out by the teaching octets and economic octets devoted to more immediate applications. Networks of economic octets may also choose to support long-range, pure research in any area as a way of maximizing their collective creativity.

Therefore, a single, autonomous economic octet can begin a network by creating a single school and then spinning off new economic octets as well as new schools as its creativity and its wealth increase. Each economic or teaching octet it spins off makes the original economic octet more creative and wealthy. The schools and economic octets that are spun off are a reflection of the original octet that created them. They have a common set of goals and ethical codes, and in many cases personnel that came from the original octet and decided to try something new within a new octet. These components collectively constitute the genetic code of the octet network.

As each octet becomes totally autonomous of its parent it may mutate in new directions and become either more creative or more destructive. If it becomes more destructive and does not correct this trend, then the octet will destroy itself by not being able to attract students or creative contributors to its programs. If it becomes more creative, it will serve as an example to other octets to improve themselves, and in the meantime this octet and its network will attract the best students and creative contributors. This is, of course, completely analogous to natural selection, with the selection criteria based entirely on creativity. It should in time lead to a Moral Society. The process has already started, but is far from perfect and may even have serious, destructive errors.

Each creative person, as of this instant, has an option either to start his/her own octet and create a network or to join an existing network and be incorporated in a new teaching or economic octet created by an already existing octet. In the latter case, the octet in which the person starts - although he/she will eventually have an equal voice in consensus with seven other persons - is not entirely of his or her creation, but it represents an easier, quicker step for many persons than creating their own network from scratch. Many fine, creative persons find creating their own job the most difficult task of all. We can all be creative but we cannot all be equally entrepreneurial. It is a goal of SEE to help persons become creative entrepreneurs and/or teachers within an octet that complements their skills and inclinations, or alone if they prefer.

As the network expands there will be an ever expanding number of new economic and teaching octets, each one different from the others.Therefore, nonentrepreneurial, creative persons will have ever expanding sets of options for themselves. However, I strongly encourage independent-minded persons with even the slightest entrepreneurial streak to start their own octet and network. Almost anyone can do it, if he/she is not too afraid.
Specific Suggestions

The advantage of limiting organizations to eight persons is that, besides maximizing the creativity of the organization's members and minimizing their danger of becoming corrupted by power, it allows the organization to keep a low profile, while the network itself is all but invisible to outsiders. This will hopefully minimize the fear of corporate and government bureaucracies, which are the natural enemies of any ethical enterprise not under their control. In fact, this type of organization and networking is even possible in many communist countries as they become increasingly forced to allow free enterprise lest they collapse economically. However, it will be easiest to implement in capitalistic democracies in general and in the United States in particular. Societies in which radical educational innovation is no longer possible, because of absolute, tyrannical control by government bureaucracies, already have irreversible entropy and probably cannot be reformed without revolution.

The United States probably has more entrepreneurial opportunities and is more open to educational experimentation than any other nation. Millions of legal and illegal immigrants, most of them penniless, without a knowledge of English and poorly educated, come to the United States every year and eventually start businesses of their own. Indeed, the poor, poorly educated immigrants without readily marketable skills are as a group far more entrepreneurial and eventually earn higher incomes than many native-born Americans. They do this because their high intelligence combined with a lack of skills and knowledge relevant to conventional employment forces them to become self-employed.

The American economic system, in spite of all its corruption, is still heavily biased in favor of the self-employed entrepreneur. This is a fortunate but eroding relic of the libertarian ethics of the Founding Fathers. Unless we succeed in creating an Ethical State, this will probably not last much longer. The 1986 tax "reform" law together with lingering "Reagonomics" will favor established monopolies and inhibit new, creative enter-prises. The Democratic party is just as destructive in this regard as are the Republicans. Therefore, I encourage everyone who wishes to create an Ethical State, either in conjunction with an existing SEE network or by creating his/her own SEE network, to come and do it soon in the United States; the current opportunities are rapidly vanishing as the U.S. government confiscates an ever greater part of the wealth of its most creative citizens and gives it to its least creative citizens, as in other socialistic nations.

There is already so much bureaucracy in the United States that almost anyone willing to work hard and honestly in any creative endeavor can start his/her own business. For example, completely uneducated persons with almost no knowledge of English can immediately create their own businessin most cities by simply providing house cleaning and janitorial services. Al-most all native-born Americans with only these low skill levels prefer to liveas welfare parasites or as employees of corporate, legal, and government bureaucracies. Bureaucracy is the welfare system of the middle class. These unfortunates have no confidence at all in their creativity or their intelligence.

If you have a few more skills, there are even more economic opportunities in providing gardening, handy-person, mechanical, office, tailoring, restaurant, or similar services to an increasingly specialized population that can no longer even take care of their own basic needs. Finally, if you have professional-level skills in almost any area you can easily create your own business by selling your services directly to the public, providing tutorial services to students or creative services as a subcontractor to existing American enterprises. The latter are often so inefficient that independent, creative professionals can earn an excellent living in their own business while providing services to these larger organizations at much less than the cost that these organizations can provide services to themselves. I have been supporting myself this way as an applied mathematician and systems engineer since 1970, when I sold my first business and decided to focus my life on creating an Ethical State. I personally have learned that inventing new products and services, developing prototypes, and then selling patent and manufacturing rights to these is better than consulting or mass production.

Whatever your educational or economic background, if you are at all creative, you have valuable skills that can be sold on the open market to start you on your way to economic independence and your own SEE network. In the process, you may just need a little help in the form of a few, not more than seven, partners. Those whose major skills are psychosocial can be independent by offering your skills to technically creative persons with weak psychosocial skills. Your help can be in the organization and administration of their businesses plus the marketing of their products and services. In this way you can become part of many creative enterprises.

Therefore, you can take the best creative skill you have that has any commercial value and create a business around it or join an existing SEE network and let them help you create an economic octet around your best skill in exchange for a percentage of your business. You and your octet can later repurchase this outside percentage and completely control your own business. Once this is achieved you may start your own school if you wish or contribute to an existing SEE school by giving yourself, your employees, and your children scholarships from your business to attend the schools of their choice. This last activity is very important; it will enhance your busi-ness and its ability to generate spinoffs. Always set aside as large a percentage of your profits as is feasible to educate yourself and those you love outside of the academic bureaucracy. This maximizes both wealth and creativity.

Once you have a full economic octet, are profitable, and have begun giving scholarships to your employees (who should become your partners) and their families, you take the most essential service or product for which you are a consumer and which can be provided by a small business within your means, and create an economic octet to run this business. A good way to do this is to use a consensus to take half of your octet to form the nucleus of the new business and run it while each quartet retains a 50% interest in each other's business. Then you each recruit new members for each other's octets and let each of the new octets buy out the other octet's interest in their business. This splitting approach to creating new economic octets also applies if your original business is growing so fast that you have to hire more employees to keep up with the demand for your octet's services and/or products. In this case you would split the original octet in two by consensus and then create two new economic octets from each quartet to handle the business of the old (parent) economic octet. Ironically, these procedures, which are creatively optimal, are also in harmony with both the antitrust (antimonopoly) laws in capitalist countries and the anticapitalist laws in communist countries that are now opening their systems to free enterprise, in order to avoid economic collapse.

The first communist countries which permit this type of capitalism to operate in all sectors of their society will achieve a rapidly growing economic advantage over all other communist countries as well as some capitalist countries. This will be achieved without in any way having to deviate from the basic goals of communism of guaranteeing economic security to everyone or giving up the political monopoly of the communist party. The recent developments in the Soviet Union and other communist countries are in this direction, but they still have a long way to go.

The only reason a communist party might not allow this liberation process to continue is that it would fear losing control of the people--which it will. This is what happened in Hungary in 1956, in Czechoslovakia in 1968, and in Poland in 1980 and then extensively in 1989. The capitalistic bureaucracies may also fear the process for the same reason. Once persons lose their economic fear, they become very difficult to control by any destructive organization. When they have lost all their fear and learned to love their enemies, they are impossible to control. They can then only be rationally and ethically persuaded to cooperate with others.
Problems and Solutions

Both capitalistic and communistic societies control the masses by lies and manipulation of their fears. This process is merely easier to implement in acommunistic than in a capitalistic society. In democracies, lawyers and politicians have to be highly skillful liars to succeed. But nobody ever lost a legal case, money, or an election by underestimating the intelligence of the democratic masses, to paraphrase P.T. Barnum.

The last way in which ethical persons are ever manipulated by unethical persons is when the latter use fear and hatred toward enemies to control them. However valid our assessment of our enemies' destructiveness may be, we merely decrease our creativity by fearing and hating them. This process is something that political bureaucrats understand very well. Almost all governments use fear and hatred of foreigners masked as patriotism to control their subjects.

The best protection of the creative transformation process in the United States is that those who manipulate the population by lies and fear will be much more afraid and preoccupied with each other than with a system that works entirely within the letter and the spirit of the laws of the United States, never lies, and in which autonomous organizations are never much larger than eight persons. Hopefully the projection of their own fear onto others will prevent them from seeing the potentially liberating effect of creative transformation through voluntary cooperation. Persons with high levels of conflicting fear cannot voluntarily cooperate with each other or imagine that it might be otherwise. Common fear can only unite persons in common destructiveness, as has always happened in nation states.

The main problems for the octets will not come because growth is too slow but because growth is too fast. When they grow too fast they may feel compelled to spin off subsidiary (daughter) octets too soon with too little input from the parent octet. The danger here is that they will create businesses and give them to persons who have not been adequately prepared and who will use the business for destructive purposes. The best way to prevent this is to: (1) spinoff not more than four daughter octets at any time; that is, do not spinoff more octets than can be closely supervised by at least one male-female pair from the parent octet; (2) hire on a temporary basis only those who have gone through the creative transformation process and become part of an octet; (3) permanently hire only those persons who have been in a creative transformation octet for extended periods of time and are unanimously recommended for the job by all other members of their current octet plus all members of the parent octet; and (4) ensure that permanent employees slowly but surely acquire stock or a percentage interest in the daughter octets until they each own an equitable part within eight years. The first key employee of the daughter octet should have the most essential key skills and may end up with more than one eighth of the octet ownership, but probably not more than one fourth. Octets in which anyone's labor is worth more than four times another octet member's labor may not be socially or economically optimal. Each octet member must be treated fairly, without exploitation or special privileges.

My own experience is that the second step above, as it has now been refined, will eliminate about 90% of the destructive persons who might join the octet solely for economic security; the third step will eliminate almost all of the remaining destructive persons. They will not be able to hide their fear simultaneously from their own octet and from the parent octet for an extended period. Persons who are not accepted in economic or teaching octets should be encouraged to remain in creative transformation octets and to continue the creative transformation process, but they should not be hired permanently until they have lowered their fear by ceasing to be objectively destructive in their behavior. We each have the moral duty to help everyone we can to lower their fear.

Those who are not hired but remain in the creative transformation process should be hired as soon as their octet and the parent octet decide that their destructive behavior is sufficiently low that they will add to and not detract from the daughter octet. In the meantime they can do consulting or contract labor for the network, where an interdependency is not necessary. This means that independent octets will at first grow very slowly until they are part of a network for recruiting employees for daughter octets. In order to grow creatively each octet will have to continually invest resources in teaching creative transformation to the general public and creating new octets solely for the purpose of continuing creative transformation. This is where the creative transformation network can be very useful.
Investment in Creative Transformation

In Chapter 5 we saw that creative transformation is an end in itself. It is worth investing in solely as a creative act because anything that increases anyone's creativity benefits all humanity, including us. The most creative thing we can do for ourselves is to help another person become more creative. For this reason SEE has a program for continuously teaching creative transformation to others at no charge. We should not charge others for benefiting ourselves even if we benefit them in the process. By charging for a basic act of love we corrupt our love and decrease our creativity and that of others. Ethical love cannot be bought or sold. However, we do get an indirect economic benefit out of creating a creative transformation network independently of the schools and the economic octets.

Each creative transformation octet is a potential source of recruits for our teaching and economic octets. These are recruits that are already ethically prepared and readily available to be hired by our schools and our businesses. Therefore, from a purely economic point of view they are a worthwhile investment and should be seen as a personnel expense for our octets that can in the long run save considerable expense and time in helping our network grow optimally. We want to promote the maximum creative growth of all octets and networks, not only those with which we aredirectly affiliated. At the same time we wish to help all creative persons become more creative by becoming economically independent within their own octet: it is in our own enlightened self-interest to do so. We will therefore help any octet or network which appears to share our values, but may differ with us on details, to hire persons from our own octet or network.

Whatever maximizes anyone's creativity is in the best interest of all. If a valued associate of ours believes that he or she would be more creative in another octet or another network, we want them to do what is best for themselves because that is what is best for ourselves. This will serve as a source of negative feedback for us and help to maximize the collective creativity of humanity - which is the only ultimate goal.

For this reason we will help the octets and networks recruit personnel from our network even if they do not reciprocate. The economic return will come later and indirectly, just as it does from teaching creative transformation to others at no charge. I hope that all octets and networks recognize this and reciprocate by facilitating recruitment of personnel throughout their creative transformation, teaching, and economic octets. It is in their own best interest. However, if we are to be self-sufficient we cannot depend on others and must, as a minimum part of any octet, have an ongoing program of setting up creative transformation octets. A business or a school can presumably invest more in creating creative transformation octets than can the creative transformation octets themselves.

In the teaching and economic octets we must be careful to recruit personnel who use our resources most creatively. But in the creative transformation octet, which has no extrinsic rewards, we can be much more bold since the process is self-selecting. We accept all who wish to participate in the process and let them select themselves in or out. Those who do not select themselves out will in time become creatively transformed, and in the process become a potential, valuable ally to us. Each octet should set aside a percentage of its resources to recruit and teach the creative transformation process to members of the general population and help them join an octet of their choosing. It should not charge for this service, but see it as a long-term investment which is both an end in itself as well as a potential source of future associates. Educational and economic octets can do this by running the following - or similar - advertisement in a local newspaper and then teaching creative transformation to those who apply:


Immediate openings from apprentice to Ph.D. professional level for those with high creative potential in Science, Technology, Art, Crafts, Trades, Communication and Administration. We offer outstanding opportunities for you to be maximally creative. For detailed application, call or write:

School of Experimental Ecology
P.O. Box 10851
Eugene, Oregon 97440

We then answer all persons who answer the advertisement with the following (or similar) cover letter:

Dear Applicant:

Thank you for your interest in SEE. Briefly I can tell you that we are a secular Scientific-Educational-Economic cooperative with the sole goal of maximizing creativity for ourselves and for others. We hope that you join us and work with us.

In order to make sure that you understand who we are, how we operate, and whether you would like to work with us, we offer you the opportunity to participate free of charge in a three-day seminar and workshop with other applicants. During the seminar we will also provide you with room and board at no charge to you. The seminar involves learning a new, still experimental, technique that we have developed for enhancing creativity. Since this technique is a central part of our teaching, working, and operational methodology, we wish to make sure you understand it and are comfortable with it before we hire you.

If you understand and are comfortable with the technique and share our values, we may offer you a position paying not less than $100.00 per month with room and board for a full-time apprentice to not more than $2000.00 per month with no room and board, but with generous equity and profit-sharing based on your own contributions, for a full-time, high-level professional with skills we currently need.

Since our personnel needs and economic condition are constantly changing, the positions currently available at SEE may no longer be available when you are hireable, but other positions may open at that time. After being employed with SEE over one year, all full-time SEE associates and their immediate family are eligible to receive excellent conventional fringe benefits plus full scholarships for each dependent to attend the school of his/her choice. These scholarships include guaranteed admittance for applicants and/or their family at one of our affiliated Schools for Evolutionary Education, when available, where all the Sciences, Humanities, Arts, and Technology are taught as a single unified field, tied together by a generalized theory of evolution, in such a way as to maximize creativity. These studies range from pre-kindergarten to the post-graduate level.

Before you register for the seminar, we require that you read and understand a book that covers the material of the seminar. This book, Creative Transformation, is available to you through most libraries and bookstores. If you cannot find it, we will lend you a copy at no charge. When you feel you understand the book and are ready to take the seminar, please fill in the enclosed application and send it to us. At that time we will interview you to make sure you have understood the book, and are ready for the seminar. If you have trouble understanding the book we will tutor you at no charge until you understand it. Then we will admit you to theseminar and workshop. The seminar will begin in the afternoon. It will include an intense four-hour audiovisual summary of Creative Transformation with extended group discussion plus question-and-answer periods with an expert creative transformation teacher. That evening you and other seminar participants who wish to remain for the workshop will be our guests at dinner, followed by a group social for all of you to get a chance to know one another. There will usually be at least eight seminar participants but rarely more than twenty-four. There will usually be about the same number of men and women.

During the next two days you will all participate, in groups of approximately four men and four women, in a series of practical creative transformation exercises designed to teach by solving problems related to maximizing creativity. On the final, or third, day you will engage in an exercise we call "autopoiesis," which means self-creation. This exercise is usually over by five. At that time, or afterward if you prefer, we will integrate you into a group of four men and four women who are continuing to practice creative transformation and autopoiesis on their own. They will meet twice during the following month. If after meeting twice with this group you still wish to work with SEE and you appear to share our values, we will offer you a job as an outside contractor on a 90-day probationary basis. If after the 90 days of probation we mutually agree to work together, we will offer you a junior partnership within an affiliate of SEE, with no more than eight members, in which you will have an opportunity to eventually own substantial equity and share profits in full partnership within eight years by consensus of the other partners.

We look forward to working with you. At this time we recommend that you read and understand Creative Transformation as soon as possible. Whenever you are ready to proceed with the seminar and workshop we will arrange a starting time for you.


John David Garcia
School of Experimental Ecology

This is one way in which teaching or economic octets in a position to employ new personnel can recruit them. They may also focus the ads on more specific skills. Creative transformation octets without employment opportunities should use a different approach to teaching creative transformation. The main difference would be that purely creative transformation octets would not recruit in the newspaper help-wanted columns and would not offer employment. They would merely look for persons to participate in an experimental process for enhancing creativity at no cost to the participants (see Appendix).

By offering employment opportunities, octets will be more prone torecruit persons driven by economic fear. This problem is ameliorated by offering as the main compensation relatively low starting base income, profit-sharing, and family scholarships. This approach will be in the best interest of all octets. It will enhance the creativity of each octet and provide creative employment opportunities to each person in the United States and, eventually, other countries. It is a creative alternative to the bureaucratic welfare systems that destroy those they claim to serve. Persons who are driven by fear always show it by destructive acts or by responding with anger to negative feedback. They will avoid the octets. However destructive and mistaken the criticism we receive, we will respond to it with love, if we have truly begun to be creatively transformed.
The Greatest Problem

The major problem within the octets will come from their economic success. Economic success leads to the accumulation of wealth, and wealth gives us power over others, particularly over those driven by fear. Any form of power over human beings (personal power) can be extremely destructive to persons who are not yet moral. But it may be that none of us is ever moral except within an octet that is engaged in creative transformation.

We try to minimize this problem by not controlling organizations with more than eight persons and by eventually sharing our power equally with the seven other persons who make up that organization. But the economic process outlined here will lead to ever increasing wealth for each octet if it is followed in the ethical spirit of seeking at all times to maximize creativity and not money.

Octets who pay more attention to money than to creativity will usually end up with neither money nor creativity. If what you really want is a lot of money, do not use this process, since it is a quantum process that only works for those who are engaging in creative transformation in all aspects of their life. What helps the process remain ethical is that the scholarships to SEE, or whatever ethical variant of SEE your octet creates, be an integral part of your octet. The real goal should be to make a maximally creative education available to as many persons as possible by doing the most creative work we can. Money is a constraint, not a goal. In order to keep the process evolving we must keep creating new octets and setting them free from us. Each octet we create represents a risk to us in two ways: (1) We may not recover our investment, and/or more importantly, (2) the octet we create may become destructive. (I have, but not lately, created organizations that have become destructive and are still operating today.) This risk will produce a tendency to be over-conservative. Instead of investing the octet's wealth in continuing to expand creativity for all humanity, an octet may want to accumulate its wealth in the form of money to be more secure. However, this is an illusion. The greatest security for all ethi-cal persons lies in the maximum expansion of a creative libertarian society, an Ethical State. This maximizes the creativity of all by creating the maximum number of creative alternatives to the current destructive educational and economic system. Creativity is always our greatest security as well as our greatest opportunity.

As each octet expands by creating ever more independent octets to support its activities, it becomes part of an increasingly larger and more complex network, which constantly enriches the original octet but which the original octet neither controls nor can control. The network is self-controlled by the independent ethical actions of all its members and by mutual self-interest. The network becomes part of ever larger, more complex networks in which all the information of the entire network exists at each node, which is an independent octet. The octets play a role analogous to that of neurons in the brain.

Each octet becomes increasingly creative and wealthy or it disintegrates. So long as the growth of each octet is focused on maximizing creativity, the entire network grows in creativity and wealth. If any octet deviates and focuses on accumulating money, it becomes a cancer in the network and can destroy the entire network, just as a malignancy in a single neuron can lead to death of the entire brain. Therefore, the network needs an internodal feedback system to eliminate malignant octets.

Fortunately, this feedback is immediate and obvious. Any octet that becomes malignant quickly becomes less creative and perhaps destructive. By quickly communicating information within the network about the destructive activities of any octet, the other octets are forewarned. They then have a choice as to how to interact with a potentially malignant octet. Some will limit their interactions to the exchange of ethical information; others will take a chance and continue to interact intellectually and economically with the potentially malignant octet. Soon the doubtful octet will be either exonerated or further repudiated, until the octet is either totally excluded from the network, because no other octet will have transactions with it or it is totally reintegrated into the network because those that continued to interact with it found it still creative.

The important thing is that all network members live up to the contract for creative transformation and communicate quickly and concisely to all members of the network their perceptions, feelings, and intuitions about what is going on within the network. This will be facilitated by modern computer-networking technology. The ultimate limit on the size of a network will depend on the ability of all network members to quickly and accurately communicate with each other and to use all the information of the network at each node. When network members can no longer do this, it may be time for the entire network to split into two daughter networks, each with half the octets and half the wealth of the parent network. Each daughter network then reforms into a new autonomous network and beginsto integrate new members into its network from the creative transformation octets and from other networks until it has to split again. This process will continuously revitalize the networks, and add variety to their genetic structure, as it maximizes their creativity. It is a process to make sure that networks remain open to feedback.
Network Feedback

The key to keeping the creative transformation process vital is to keep the system open to all creative feedback. Feedback is creative when its perception enhances the creativity of those who perceive it. Feedback is destructive when it decreases the creativity of those who perceive it. All true feedback is creative and all false feedback is destructive by the definitions of truth and falsehood (see page 3). We wish to optimize feedback and allow the networks to grow to the maximum size leading to maximum creativity. So long as it is not interfering with feedback, size provides economies of scale, variety of resources, and maximum collective creativity. Size may interfere with feedback in two ways: (1) it may eventually become physically impossible for any octet to communicate in any meaningful way with every other octet; and (2) it may eventually become impossible to organize the information from all the octets in such a way that it meets the priorities of all the octets. Some of these problems are inherent in human beings and some are due to technological limitations.

As we have pointed out earlier, human beings have difficulty in communicating deeply and well with more than seven other persons at a time. Groups smaller or larger than eight become more prone to collective self-delusion. The smaller groups have insufficient variety of perceptions. The larger groups tend to become hierarchical and dominated by an elite, almost always a destructive elite that manipulates the majority. That is why the octet appears to be an optimal size for an autonomous organization.

Within an octet each member shares most of the detailed information on the activities of the octet. Within an organization of octets (a network) each octet has only summary information available on each octet in the network, even if it has access to the same computerized database as all the other octets. The summary information comes from the octet in question and from the interaction of other octets with the octet in question. As soon as information begins to be summarized it can easily become distorted by those who summarize it, without malice on their part but simply as a function of their priorities and interests.

There are two ways to minimize distortion and maximize creative feedback within the network. The first is by taking full advantage of computer network technology integrated with mathematical statistics and communications theory - an approach that would be far too technical for thispresentation. Instead we will consider the second method for optimizing network feedback - which is an extended version of creative transformation.

Through creative transformation in general and autopoiesis in particular there occurs a sharing of information and a form of feedback within each octet that transcends words, numbers, and other symbols. Autopoiesis is a form of communication by which we directly share our dreams, our hopes, and our highest love with seven other persons. This direct form of communication gives a type of feedback that is deeper and truer than any that is possible by any form of classical technology ranging from language, our oldest classical communication technology, to mathematically optimized multinodal computer networks, our newest form of classical communication technology.

Autopoiesis is not abstract. It is direct in the same sense that within our bodies communication among our four biological brains or, more appropriately, between our classical and our quantum brains is direct. Each of these two brains is in fact a system of biological brains and nonlocal hidden variables that directly tie us to God. Autopoiesis is another mixture of classical and quantum communication processes that enable those who are not overcome by fear to know the soul of each member of the octet (including his/her own). Therefore, the problem to solve is how to create a collective autopoiesis among all members of the network without violating the principle that four each of men and women is the optimal group of persons to engage in autopoiesis.

Consider the simplest network there is--one with two octets. How would we optimize autopoietic communication between the two octets? Clearly we might do it as follows: Consider two octets called octet {A} and octet {B}. The eight persons in each octet we respectively designate {A1,A2,...,A8} and {B1,B2,...,B8}, with the odd numbers being malesand the even numbers being females. A collective, optimized autopoiesisbetween the two would then involve the following procedure: First octets {A} and {B} engage in autopoiesis in the ordinary way. Then, at a later date (two same-day autopoietic sessions or even one or two days apart are difficult to take for most persons), {A} and {B} exchange quartets so that we have autopoiesis between two composite octets. These octets could be the following sets: {A1,A2,A3,A4,B1,B2,B3,B4} and {A5,A6,A7,A8,B5,B6,B7,B8}. There are 1,296 possible four-by-four composite octets!

To maximize the collective, autopoietic effect, both of the composite sets could engage in autopoiesis in close proximity to each other and at the same time. The easiest way to accomplish this is for both {A} and {B} to schedule their regular autopoietic sessions at the same time and place. This may not always be possible. If not, then any subset of two males and two females from both {A} and {B} may agree to get together at their mutual convenience and have an autopoietic session. This will provide excellent feedback, but it would not be as close to optimized as the former situation. A completely optimized autopoietic communication between the two octets would be as follows: Every other autopoietic session each octet would meet solely with itself. In between these sessions a different subset of two quartets from {A} would meet with two different quartets from {B}. If the octets normally engage in autopoiesis every two weeks, then every four weeks there would be the following composite autopoietic sessions:

4th week: {A1,A2,A3,A4,B1,B2,B3,B4} and {A5,A6,A7,A8,B5,B6,B7,B8}
8th week: {A1,A2,A5,A6,B1,B2,B5,B6} and {A3,A4,A7,A8,B3,B4,B7,B8}
12th week: {A1,A8,A5,A6,B1,B8,B5,B6} and {A3,A4,A7,A2,B2,B3,B4,B7}
2592th week: {A1,A2,A3,A4,B5,B6,B7,B8} and {A5,A6,A7,A8,B1,B2,B3,B4}

It would take almost 50 years to achieve optimal composite autopoiesis between two octets! Therefore, in network-composite autopoiesis the process will always be suboptimal. The larger the network the more suboptimal it will be. But there are always practical if not optimal ways of achieving composite autopoiesis in a sufficient way for any network. These are as follows:
A Sufficient Algorithm for Composite Autopoiesis

For the five or more octets, the outer octets in the lattice exchange members until each octet has exchanged two males and two females with four other octets. There will never be an extra outer lattice octet which only exchanges members with three or fewer octets!

Theorem: Once there are five or more octets there is always completion so that all octets may exchange one member of the same sex, two males and two females, with four other octets.

Both autopoiesis within an octet and composite network autopoiesis among five or more octets involve the simultaneous communication by touch of each entity with four different entities. Exchanging members between octets is the network analog of touching.

Each line between octets represents a communication link through exchange between octets of one member of the same sex. A double line or bond represents the exchange of two members of the opposite sex. The preceding eight steps and all their permutations represent a sufficient algorithm for composite autopoiesis for all networks. That is to say, this is an algorithm that will always maintain autopoietic feedback at a minimum acceptable level in all networks. Beyond this, my intuition is that the arrangements of the octets in the lattice should be randomized around the coordinating octet for each composite autopoiesis rather than put through a cycle of cycles through all the possible combinations and permutations trying to optimize the process. In any large network it would be impractical to try to synchronize the time and place of autopoietic interaction for all octets.

The best that can be hoped for is that the coordinating octet will produce a random, sufficient interaction for all octets, notifying each octet of its four composites, and that within four weeks all the octets will have interacted autopoietically with each other as well as within themselves. As the network becomes larger this process will become ever more difficult to complete in a period of four weeks, although octets never need to coordinate their exchange of members with more than four other octets at a time. As the octets within a network become separated geographically, the randomization of octets will become subject to geographic constraints. Eventually many octets in the network may reach a consensus that the time has come to reduce the size of the network in order to have better communication among fewer octets. Those octets that communicate best among themselves will tend to form new networks in affiliation with the old network. An "affiliation" occurs when composite autopoiesis between networks is not systematically pursued, but there is trust, communication, and some autopoietic interaction between the networks. The old network will in effect become a new network once a subnetwork has spun off.

The octets themselves can be self-perpetuating, since they can periodically split in half and recruit new members or replace lost members withnew members. Each octet will be maximally creative if it uses its accumulated wealth to create two new octets from itself whenever it can leave both daughter octets adequately financed. Octets that have complementary creative skills should merge, i.e., exchange complementary quartets, to maximize their generalized intelligence. The most creative octets should leave the maximum progeny. The entire process will emulate natural selection in the best sense of the word. This is evolution without the need for annihilation of the weak. The most creative multiply at the highest rate, but the least creative still multiply at a lower rate so long as they remain minimally creative. Within any network the wealth of all octets tends to equalize. Octets do not necessarily perish unless they are destructive. Octets that become destructive in this high-feedback environment are quickly identified and de facto excluded from any economic network because ethical octets will automatically limit their interaction with destructive octets to the exchange of ethical information, e.g., autopoiesis. Can destructive networks of octets be formed?
Destructive Networks

We know that destructive networks are feasible because the world is full of destructive organizations ranging from Islam and Leninist Communism to Organized Crime and the Ku Klux Klan. These are all organizations tied together by mutual fear often expressed in the form of hatred, greed, or both. Organizations driven by fear tend to minimize rather than maximize feedback among all their members. Only the leaders are supposed to know everything that is going on. However, the deliberate annihilation of feedback merely decreases creativity and increases fear still more. Common fear can be a powerful bonding force between destructive persons. Ethically, we cannot hold with the old Arab proverb that "The enemy of my enemy is my friend."

Destructive organizations cannot be effective unless they can control creative persons to utilize the wealth which is produced only by creative individuals and organizations. As the number of octets and of networks of octets grows, ever fewer creative persons will be able to be controlled by destructive persons because the creative persons will have an ever increasing number of creative economic alternatives. Therefore, it will become increasingly difficult for destructive persons and organizations to concentrate wealth, however much they may focus on it and however large and collectively intelligent they may be. Destructive persons will eventually be impoverished because they will have nothing to trade that will be valued by ethical persons.

This is why free trade is ethical only among creative persons. Every time that a creative person gives anything other than ethical information to a destructive person, destruction is amplified. Destructive persons and networks can be eventually eliminated only if all ethical persons refuse to trade wealth with all destructive persons, whatever the apparent advantages. The best protection against unethical trading is established if you: (1) become self-employed as soon as possible; (2) create an octet around you; (3) create a network around your octet; (4) limit your trading as much as possible to other octets within your network or affiliated networks; (5) trade wealth outside of the networks only with persons and organizations who are not engaged in destructive activity; and (6) never knowingly increase the intelligence of a destructive person or organization.

The preceding strategy will maximize the creativity of all ethical persons. It will minimize the destructive potential of all destructive persons and organizations. Although this strategy is designed to optimize the creation of an Ethical State starting with the individual, it also has economical implications for all nations in general and the United States in particular, as the following section shows.
National Ethical Economics

At the national level there may be no creative organizations. To the best of my knowledge all governments, as currently constituted, are destructive. That is why "that government which governs least governs best." However, there are creative societies and nations in spite of their governments. The creativity of those societies is due to the freedom that the government gives to its creative citizens. That is why the closer a society is to the libertarian ideal the more creative it will be. All societies seem to be moving away from the libertarian ideal. A few tyrannical societies with highly creative citizens (such as China and Hungary) are individually pressured by obvious self-interest to move toward a freer society, but they still have very far to go. The Russian people are highly creative, but Soviet communism has been terrified of its own people. Even in self-interest they may not come near to Czechoslovakia, Poland, and Hungary in giving more freedom to their citizens, although libertarian reforms are clearly being attempted in the Soviet Union. In every nation the main de facto purpose of government is to concentrate power and enrich itself and those who support it by exploiting its most creative citizens, although this exploitation may be cleverly masked as support of socially useful services. This "support" always comes from taking wealth, by force if necessary, from the most creative and redistributing it to the less creative and the destructive.

Just as creative individuals, octets and networks of octets should whenever possible avoid trading with destructive entities to maximize their creativity and (as an almost trivial by-product) also maximize their wealth, so should anyone - including destructive persons and governments - avoid trading with destructive persons and governments. In all interactions the least creative entity receives the maximum economic benefit or the leastdamage. Any creative entity can only lose by trading with destructive entities. Therefore, a corollary is that within relatively free nations with unethical governments, such as the United States, creative entities should never trade with tyrannical nations, such as the Soviet Union, in which all trade represents an arrangement between two destructive governments. Trade should be between free, creative entities. Insofar as any of the current governments intervene, they merely degrade the trade to augment their power to destroy. In the case of the U.S. government this degradation may only be slight, since we are much closer to a libertarian society than the Soviet Union. With the Soviet Union this degradation is so great that any trade with the Soviet Union contributes only to the power of the Soviet government to continue to enslave and degrade its own citizens. Insofar as it is possible to trade directly with ethical Soviet citizens, it should be done.

Lenin once said: "When the time is right we will make great concessions and overtures of peace to the capitalists and they will sell us the rope with which we will hang them" [707]. Lenin understood capitalists much better than he understood capitalism. He did not foresee that the capitalists would sell them the rope on credit.

The Achilles heel of capitalism is that the capitalistic ethic becomes that virtually anything that one can get away with is justified if it enhances one's wealth. For this reason American businesses ranging from grain farmers in the Midwest to the Chase Manhattan Bank, IBM, and the Ford Motor Company have absolutely no compunctions about trading with the Soviet Union. During the heyday of Henry Kissinger's "detente," American businesses even sold electronic police interrogation equipment to the Soviets. These capitalists are more than willing to sell the Soviets the rope with which they will hang them; they sell it on credit. The selling of arms by the Reagan administration to the evil tyranny in Iran is another example of destructive trade, whatever the true ultimate ends were. Unethical means can never achieve ethical ends.

With a nation such as the Soviet Union, or any other tyranny, such as most Islamic countries or the Asian, African and Latin American dictatorships, that does everything in its power to exploit its creative citizens, the only ethical response is to treat their government, not the people, as pariahs. These governments should be granted neither diplomatic recognition nor any type of trading privileges in the more creative countries. At the same time we should declare our solidarity with their people and do everything in our power to communicate the truth which their governments suppress. This can be done through massive broadcasting, clandestine publishing, smuggling of antigovernment literature, granting of refugee status to any ethical person who can escape, aiding ethical revolutionaries, and in every other way directly communicating with the people independently of their government. Probably the single most important information that Soviet citizens could receive to liberate themselves from their oppressive government would be the plans to a simple copying machine which could be made from readily available materials.

It is unethical to judge individuals, because individuals are far too complex. It is ethical to judge organizations, because human organizations are much simpler than the individuals who compose them. An organization is defined by its goals and rules of behavior de facto and de jure. An individual is defined by his intelligence, his ethics, and his quantum connection to God. We judge an organization in order to know how to interact with it. Any organization which in any way systematically suppresses and/or exploits the creativity of any person is unethical. This type of organizational behavior is usually obvious, except through gross self-deception. It applies to both our government and that of the Soviet Union. We should always be prepared to communicate ethically with any person, however destructive, but we should totally shun destructive organizations. There is no possible interaction with destructive organizations, other than their annihilation, that can make them less destructive. The annihilation of an organization does not necessarily require the annihilation of the individuals who make up that organization; it requires only the annihilation of the organization's power over all individuals.

In the history of the human race there has never been a destructive organization that became creative, although there have been marginally creative organizations that became more creative and in the process behaved less destructively. Recall that creative entities may occasionally behave destructively. The progressive religions such as Christianity and Judaism and possibly some democratic nations are examples of these marginally creative, evolving organizations. They still have a long way to go. They all still contain destructive elements and subsets. But once an organization becomes destructive it can only become more destructive. It has irreversible entropy. Communist nations can evolve by annihilating or totally transforming the party.

Therefore, it is in the economic best interest of any nation, including those with the most destructive governments, not to trade except with creative nations. The main motivation for many types of trade between nations is unethical political control. There are nations in which the private sector can overcome their government's destructiveness. This is true in almost alldemocracies, even those that have socialistic governments such as Sweden's.

Insofar as it is possible to interact with private individuals in these countries we should do so. When it is impossible to trade except through a parasitical government, we should avoid doing so. What is in the best interest of the octets is also what is in the best interest of their governments, no matter how destructive the latter may be. The octets will flourish in a free-trade environment. They can only be damaged by trade policies their government imposes on them through other governments. If a nation wishes to maximize its wealth it should pursue the same trade policies as the octets. It should have nothing to do with tyrannical governments, but should tolerate democratic governments and allow free trade whenever possible between free individuals or between private, nongovernment-controlled organizations. The consequence of this policy would be that either there would be completely free trade between countries, or there would be no trade at all.

Completely free trade between two countries means that there are absolutely no impediments to the exchange of goods, services, information, and persons between and within the two countries. Persons can move as freely between the two countries as they do within their own. Each other's currencies are legal tender in both countries. Workers and entrepreneurs have a free choice of working in either country in a spirit of laissez-faire capitalism.

Democratic countries such as Japan that do not allow free trade between their domestic businesses and foreign businesses, but intervene in the market process, would be boycotted until it was just as easy for nonJapanese companies to set up operations in Japan as it is now for Japan to set up businesses in other countries. There would also have to be free two-way migration of persons. Countries that trade in a free manner with some countries but then turn around and trade with tyrannical governments should also be boycotted until they ceased trading with tyrannical countries. It is unethical and self-destructive to support tyrannies either directly or indirectly. This is just as true for tyrannies as for democracies, as Stalin found out after his treaties with Hitler. What makes democratic governments tolerable even when they are totally socialistic is that they fulfill these four criteria:


Any democratic government which follows these policies will maximize the wealth of its citizens and transform itself into a libertarian society and an Ethical State. That is why no democratic government currently follows all four criteria, because doing so would weaken the power of the government over its ethical citizens. All governments support tyrannical governments for what they foolishly regard as political or economic expediency. They all restrict trade in many destructive ways, both internally and externally, although they may to some degree comply with the other criteria. The United States offers more economic and personal freedom than any other country, but this freedom is constantly being eroded to favor whatever special interest groups are most politically powerful at the time.

It is commonplace among almost all modern economists to believe that free trade can only benefit a nation. However, that is only true when it is reciprocal. Even libertarian economists, such as Milton Friedman, claim that if another nation restricts trade and hurts itself there is no reason why we should restrict trade with that nation and hurt ourselves [268]. However, this is a fallacious argument.

The general theorem is that in any free exchange of wealth the least creative party (which usually means the least ethical party, since organizations at the national level are usually of comparable intelligence) receives the greatest benefit in terms of increased wealth. A nation whose government meets the four criteria of tolerance would maximize its wealth and its creativity, while helping do the same for other nations, if it refused to trade any goods or services through any government which did not also live up to the four criteria of tolerance. It would have to do its best to be self-sufficient and live without any alleged trade advantages it might gain from supporting intolerably destructive governments. This would produce hardships at first, but it would quickly lead to a maximally creative and wealthy nation. Its example would eventually cause other democratic nations to follow suit.

The reason why one-way free trade hurts more than it helps is that when there is a government-caused distortion in the free market in the trade between nations, then the exchange is incomplete and more wealth flows from one nation than from the other. It always flows in the direction of the least creative nation. I will give two examples.

The Japanese, as a highly disciplined, well-organized, and highly intelligent people with a collective group ethic, are superior to almost any other people in the mass production of goods and services. However, because of their highly ritualistic society, which forces all persons to become extremely specialized, they are much less significantly inventive and original than the European democracies (or the latter's cultural outliers such as Canada, Australia, and the United States) in discovering important scientific laws, inventing breakthrough technologies, innovating creative social changes, or even in artistic creations, although the Japanese will quickly accept, and even improve, these innovations once they are created by others. For example, the world-famous Japanese system of quality control was developed by an American, William Demming. It also resulted in quality-control circles of eight persons with both men and women. In the one-way free trade practiced by Japan, the Japanese flood the Western democracies with cheaper and better mass produced goods, and they take away more wealth than they give. This imbalance in trade is only trivially reflected in the imbalance of money flowing between Japan and other countries. Recall that money is the least important form of wealth. The true costs are in the creativity of the exploited nations. Recall that creativity is the greatest form of wealth. Once the Japanese learn to manufacture something as well as another nation does, they destroy, by selling at a loss if necessary, the domestic capability in that industry unless the exploited nation takes protectionist measures. For example, in the United States certain key skills in optics, machining, and even electronics are being lost and not replaced because of Japanese dominance of certain markets such as lasers, cameras, motorcycles, copying equipment, memory chips, printers, and consumer electronics. If there were complete, one-way free trade between the United States and Japan, eventually no American automobile, steel, consumer electronics, or textile industry would be left.

By mutual agreement the Japanese and American governments have put quotas on Japanese imports to preserve these monopolistic and quite corrupt American industries. It has been the United States governmental interference in the free market - through defense contracts, government-protected union monopolies, labor laws, regulation of interstate trade, SEC laws, and general favored treatment for the large, monopolistic corporations and unions - that led to a system so corrupt that it could not respond to the Japanese challenge except through protectionism. If this merely led to the collapse of corrupt United States corporate monopolies and their substitution by less corrupt Japanese monopolies, it would not be so bad. But it leads also to the collapse of critical technical skills which may be lost forever to Japan. This in turn makes the United States a more specialized and less creative society, while Japan as it acquires those skills becomes more generalized and more creative. I predict that there will be a constant increase in Japanese technical innovation and a constant decrease in United States technical innovation as long as these trade policies persist. The trends in the patents granted to Japanese and American citizens provide evidence for this theorem.

The United States led the world in patents granted for over fifty years. Today, Japan leads. The United States still out-innovates Japan only in major technological and scientific breakthroughs. As destructive trade between Japan and the United States continues, even this lead will also be lost. The United States will eventually become a totally uncreative society living off its natural resources, as has almost happened to the Soviet Union.

If there were a true two-way trade between Japan and the United States, one of the natural consequences would be that many American companies would set up manufacturing subsidiaries in Japan instead of buying their goods from Japanese companies and in effect becoming Japanese distributors. Another natural occurrence would be a flow of Japanese workers with their collectivist ethic into the United States in order that they might get away from the enormous social pressures of Japan and acquire a higher standard of living. In short, the United States might lose some of its more corrupt monopolistic industries, but through immigration, negative feedback, and example, it would gain an understanding of Japanese organization and collective ethics. The two-way trade would in time lead to the reestablishment of lost industries in the two countries and an equalization of the creativity in the two countries at new higher levels plus an equalization of the standard of living at a higher standard than it was in either country at the start. This is not happening because the trade is not free both ways but is dependent on many unethical agreements between the two governments, all being done on both sides for political convenience with no concern for the creativity of their citizens. Although the standard of living in Japan is increasing, the standard of living in the United States has been decreasing in a significant way since 1965. This is partially reflected in the fact that prior to 1965 almost any person with a steady income could buy a home, while now it takes a middle-class income of a working couple to buy a home. Between 1973 and 1986 true income per person decreased by over 14%! During the same period, household income went down by over 6% in spite of an increase in the number of working couples. The United States has gone from being the world's greatest creditor nation to being the world's greatest debtor nation. This problem is constantly getting worse. The United States would have an even lower standard of living if its government were not increasingly mortgaging its children's future, through deficit spending, in order to avoid economic collapse and deceive the electorate with illusions of economic prosperity.

Another example of trade involving two unethical governments which is not free and is detrimental to both countries is that between India and the United States. In India the government intervenes so much in the economic life that, in spite of its extremely low labor costs and the high intelligence of its people, much Indian industry cannot compete with American industry. However, both India and the United States are democracies who give their peoples freedom of speech and the right to emigrate. Here is where the imbalance of trade occurs.

The Indian government tightly controls all large industries in its country. It wishes to diversify its economy in order to become self-sufficient. The best thing it could do would be to allow free trade and allow creative entrepreneurs from all over the world and within India itself to operate untrammeled by government control. Instead, it makes monopolistic agreements with monopolistic corporations from other countries, including the United States, to set up critical industries in India. These industries - produced by the interactions of two destructive organizations, the Government of India and the foreign Corporate Monopoly - are even more corrupt and inefficient than the original foreign monopoly (this is the opposite of what happens in Japan). In the process the foreign monopolies (including unions) become wealthier and more destructive in their home countries, and the creative potential of India is actually lowered. The Indian government, through regulation of creative entrepreneurial organizations, thereby denies these organizations and its people opportunities to be creative and to increase their, as well as India's, wealth. Countries such as the United States pay for this imbalance in trade by the strengthening of their most destructive monopolistic corporations and by limiting the economic opportunity of their most creative non-monopolistic organizations. The government of India pays for it by losing its most creative citizens and entrepreneurs as emigrants to the more libertarian society of the United States, and by the constant loss of its own capacity to innovate creatively in any field of the economy. Only the constant importation of foreign technology as well as foreign credits and aid keeps the Indian economy and those of similarly corrupt socialistic democracies (e.g., Mexico, Peru, and to a lesser extent, Israel) from collapsing. Other less corrupt socialistic democracies such as Sweden and New Zealand have learned not to kill the goose that lays the golden eggs by not directly controlling the economic sector, but by merely controlling the distribution of most of the golden eggs to the bureaucracies which support the government. Unfortunately, this usually means almost complete government control over all forms of education. Creative self-sufficiency must begin with an alternative to bureaucratically controlled education. All forms of democratic socialism are unethical.

Therefore, what is best for the octets is also best for the nations which host them. The ones who would oppose the octets and more libertarian policies are the political, governmental, union, and corporate monopolies or oligopolies who derive their power from the destructive control of creative persons and the redistribution of their wealth. These entities hold the balance of power in all democracies; they are not likely to implement the four criteria of toleration in their societies even though these maximize the wealth and power of their nations. But there is hope.

The hope in the democracies is that the most destructive organizations, e.g., the Republican and Democratic parties in the U.S., will be more concerned about destroying or controlling each other than they will be about destroying or controlling the apparently insignificant octets. Once the octets grow in number, their own example, wealth, and socially responsible openness to new membership may convince a majority of the electorate to join the octets and vote for a libertarian society. Ronald Reagan, who greatly increased the size of government, used libertarian rhetoric to im-pose a plutocratic oligopoly (particularly the western branch of organized crime) on the United States, while greatly diminishing liberty by expanding the power of the CIA, FBI, IRS, INS, and other police organizations [863-876]. The octets hope to use example to create a true libertarian society and an Ethical State.

The four criteria for a tolerable democracy are intuitively appealing to almost all ethical persons. If a majority of the electorate is still ethical, then the Ethical State and the octets that constitute it cannot be stopped from growing in any democratic society. The octets may even grow in communist societies through the moral courage of persons such as Gorbachev. This can lead to an infinitely expanding Moral Society.

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John David Garcia, 1991, All rights Reserved.