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Moral Innovators perspectives on Innovation

Innovations did not happen all in one step. There have been many more incremental small steps (or continuous improvements), together with a few break-through innovations for higher productivity. We generally know Sumerians/Muslims invented wheels, battering rams and crank shaft; Chinese invented compass, gunpowder, paper and print; Indians invented the number zero and was the first to discover (by Aryabhata) that planetary orbits around the Sun are ellipses. None, however, have been more innovative in the last 500 years than the Egyptians/Romans that evolved into our Christians today.

Pope Alexander VI (one of the most corrupt Popes that encouraged Martin Luther to push for Protestant Reformation) authored the Treaty of Tordesillas in 1494 after Christopher Columbus returned from his first trip to the Caribbean Islands. This Treaty give most of the Americas to Spain and a small portion to Portugal (today’s Brazil), followed by the 1529 Treaty of Zaragoza that gave all of Africa and almost all of Asia to Portugal, and a small portion to Spain. Spain collected 20% royalty on the value of all trades in the Americas to Spain. Spanish King Philip II (1527-1598) used his wealth to build an armada that was defeated by England in 1588. This armada revealed to England the wealth available in the New World, but England could not risk a challenge to the Pope’s authority. The concept of “company” emerged in England to help share risks among the wealthy investors to explore the New World. The British East India Company (BEIC) was established in 1600 originally to follow the path of Columbus, but instead pursued the more abundant wealth available in Asia, ultimately receiving British military support and charter with monopoly power to trade opium. BEIC produced opium in India, and forcibly imported opium into China, against written Chinese laws in the 1800s. British military backed up the opium trade that took >70,000 tons of silver out of China before corruption destroyed BEIC. The Golden Rule (Do unto others what you want others to do unto you) is haunting the Christian world today, as Southeast Asians learned with the Indians who produced opium to spread opium production to Mexico and South America in the very profitable illicit drug trades that target the USA and European Christians.

The following “waves” of innovation should help us understand the evolution of innovations:
1. Formation of companies in 1600s but did not show up in productivity until the 1830s.
2. Steam Technology in the 1850s backed by military technology (dominated by England)
3. Chemical manufacturing (fertilizers, electricity, steelmaking, etc) in the 1870s (still in Europe). With the participation of Standard Oil monopoly, the USA took over 24% of global manufacturing by 1900, followed by England at 19% and Germany at 13%. The British percentage began to include factories in colonies like India that produced over 1 million tons of opium shipped to China in exchange for a large portion of 70,000 tons of silver taken from China. China did not prepare for Britain’s invasion and did not learn from America’s hard fought revolution that started by rejecting British imports with Stamp and Tea Taxes. Instead, others like Japan joined Christians from Russia, Italy, Spain, Portugal, France and Germany to pillage China. USA built an advance transportation sector (railways, steamships, etc) to achieve global dominance. Education, health and attitudes began to play a more important role (which started to change from Taylor’s theory of management to a more behavioral theory of management).
4. Internal combustion engine began in late 19th century, fueled by more established oil infrastructure, and created “multinational corporations” that focused on profit, not morality. Internal combustion engines sustained innovation and productivity to the wave of inventions.
5. Atomic power and electronics sustained the next level of innovation through the atomic bomb and nuclear energy. Manufacturing efficiency helped USA to become a global leader, especially with the advantage of not entering World War II until after Pearl Harbor. Mainland USA had not been ravaged by war. This is similar to the French Napoleon wars fought in Europe while England stay focused on industrialization in the early 19th century. France was stronger than England entering this period, and England emerged stronger than France afterwards. At this time, globalization was still only at its nascent stage.
6. Internet and genetic technologies began to deliver near real time flow of information at the end of the 20th century, and drove us to the current “Information Age.”

Between 1820 and 1950, total output of global economy increased from $600 billion to $5 trillion. Between 1950 and 2003, total output of global economy increased to $41 trillion (all in 1990 international dollars which is often associated with Purchase Power Parity estimates).

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The next waves will undoubtedly include environmental considerations, along with opportunities to implement the Moral Innovation framework to achieve a Homologous World of Harmony which the Chinese have identified thousands of years ago as Datong (大同世界).
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Sources:
1. “Maps of Time” book by David Christian, ISBN 978-0-520-27144-9, University of California Press, Los Angeles, 2011
2. http://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)
3. Wu & Associates LLC.

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Innovators World

Moral Innovators review of events leading up to the USA

Contrary to popular belief, the truth is the fact that Christopher Columbus never discovered USA. The Italian adventurer reached only the Caribbean Islands during his voyage in 1492. Even though he received approval from the Portuguese King for the voyage first, it was funding from the Spanish King that financed his 1492 voyage. It also appears that the Spanish King (Ferdinand the Catholic and his wife Isabella) used his treasures after expelling (The Fall of Granada) the Muslim Moors from Iberia to pay for Columbus’ voyage. The Spanish Inquisition, original started in 1480 to exert social and religious control, led to the Spanish ultimatum in 1501 in Granada to convert to Christianity or be expelled from Iberia. Perhaps credit can be given to the Muslims who facilitated Columbus’ voyage with their funds…

Upon Columbus’ return to Spain with news of the New World, the newly elected Catholic Pope Alexander VI of Spanish descent (who was among the most corrupt Popes in history) drafted the Treaty of Tordesillas (Valladolid Province, Spain) which was signed in 1494 by Portugal’s King John II and Spain’s King Ferdinand II, his wife Isabella and son Prince John to dispel Portugal’s claim to the New World. Territories east of the 370 meridian belonged to Portugal, and west of the meridian to Spain. This meridian crosses the present day Brazil which explains why Brazilians speak Portuguese, and Spanish is spoken elsewhere in Americas. The longest continuously occupied city in the USA is Florida’s St. Augustine, founded in 1565 by Spanish admiral Pedro Menendez de Aviles. The Treaty of Tordesillas was the basis for Spanish Kings to collect 20% royalties on all trades with the Americas. This was an important source of wealth that made Spanish King Philip II one of the wealthiest humans on earth in the last millennium.

Since earth is round, two meridian lines were needed to define an area (or territories). The Treaty of Zaragoza (Aragon, Spain) was signed in 1529 by Portugal’s King John III and Spanish King Charles V that defined Moluccas Antimeridian in Asia as the second line, giving all of Africa and essentially all of Asia to Portugal, even though Portugal did not strongly object to the initial Spanish trading post in Manila, Philippines in 1565. In fact, Philippines was named in honor of the Spanish King Philip II.

Note: Think about what this means. Without any discussions outside Portugal and Spain, the world was divided between them, and the author of the 1494 Treaty of Tordesillas was Pope Alexander VI, who had oversight over all Christians before the 1517 Protestant Reformation. Through these treaties, innovative Christians were the first to declare the world belongs to Christians, without any consideration of non-Christians. It is crystal clear in these treaties that Christians did not follow the Golden Rule: Do unto others what you want others to do unto you.

No one, including Britain and other European Christians, cared at the beginning. It did not surface as a topic of interest until the informal (undeclared) Anglo-Spanish War of 1585-1604 over Christianity: Spain’s Catholic King Philip II believed England’s Protestant Queen (Elizabeth I) was a heretic and unworthy to rule England. In 1588, Britain and Europeans outside Iberia discovered the wealth available in the Americas as they pondered the source of wealth for Spain’s King Phillip II to produce 130 ships and 26,000 sailors and soldiers to invade English from the North (i.e. from Ireland).

The defeat of the Spanish Armada in 1588 had two major consequences:
1. Protestants gained confidence and grew as a major force within Christianity.
2. Britain, France, and Dutch Europeans observed the wealth accumulated by Spain from Americas.

There were many failed attempts to settle in the USA before 1600 by many countries. After 1588, there were more attempts but the risks were too high without government funding. To accumulate sufficient funds to explore the New World, Britain innovatively created the concept of “Company” and established the British East India Company in 1600, allowing multiple investors to accumulate sufficient funds to explore new wealth across the globe. British East India Company was formed to pursue trade with the Americas, but ended up trading mainly in Asia (and ruled India when it received monopoly power to trade in opium which the company taught the Indians in India to produce opium that likely spawned the illicit drug trade worldwide today). Netherlands followed with the Dutch East India Company (or VOC) in 1602 with monopoly colonial powers in Asia. In 1604, France granted monopoly rights of furs to Pierre Dugua Sieur de Monts that led to Canadian settlements like Quebec City in 1607. Britain sent over the first of 50,000 (criminal) convicts after first settling in Virginia’s Jamestown in 1607, before the arrival of the Mayflower in 1620.

It took about 150 years for Britain to impose the Stamp Tax in 1765. It was the hidden and illegal taxes that led to the Boston Tea Party (which was a tax revolt) in 1773 and eventually the US Revolution. It should be highlighted that factors that drove the rapid rise of Islam after its Hijra in 622ce also included high Christian taxes relative to Muslims who also offered higher religious tolerance than Christians. Today, USA is still working with a complicated tax system that has given us the biggest wealth gap ever, with 1% of super-rich Americans accounting for about 50% of all wealth. This is clearly against the referendum that led to the formation of our great nation.

Take this knowledge, do the right things together and make our world a better world.

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Innovators World

Encourage USA to become a Moral Innovator

For at least 50 years USA has not always taken actions with knowledge, and the credibility of the USA has been severely damaged as a result. For example, we told the world there were weapons of mass destruction in Iraq and we could not find them. Even after spending trillions of dollars that have contributed to our budget deficit, Iraq is ranked #5 in countries that HATE the USA, or 67% of Iraqi hate Americans, according to the US Global Leadership Project. More Iraqi citizens hate Americans than Iranians or Egyptians.
In the past, USA acted without knowledge in China by supporting Nationalist China that eventually lost to the Communist Chinese. USA acted without knowledge in Vietnam when the Americans went to war against the majority of Vietnamese. We are not being loved by the Afghani people, and Pakistani hates Americans more than the Iraqi… Why are we investing trillions of dollars just to be hated?
Today, Secretary Hagel and the Obama administration have voiced strong support for Japan, even though Japan has not redressed its atrocities during World War II, and continue to teach their children Japan went to war to defend Japan. Does this map look like Japan is defending itself?

1942 map-japan

As we celebrate over 100 years of Cherry Blossom Festivals in Washington DC, we need to remember that Commodore Perry forcibly imposed American interests onto the Japanese in 1865. This effort coincided with the Japanese Meiji Reformation, away from the Samurai and toward guns and cannons.

There is no doubt Japanese decided to change its culture to become modernized. The development has not been even, as the Japanese personality (if guided by their nationalists) is extremely aggressive. Japanese were aligned with Nazi Germans during World War II, and the most intensive massacre was the murder and rape of hundreds of thousands of unarmed civilians in December, 1937. Women were captured so they can be raped repeatedly by Japanese soldiers, with the gentle label of “comfort women.” How is it possible that Japan never had to face up to these atrocities? Not only has there not been redress, the Japanese continue to visit the shrine of the military leaders that ordered the massacres and “comfort ladies.” Today, Japan is pursuing expansionist policies, perhaps with American encouragement to relieve us of the burden of global defense.

Yes, Americans dropped the atomic bombs in Japan. However, the Americans have been paying for this atrocity by paying for the defense of Japan for the last 70 years. We know that the US Defense Department spends hundreds of billions of dollars each year. That annual amount was saved for 70 years which allowed the Japanese to develop consumer electronics and automobiles using American patents!!! That is the price that the Americans have paid to help the Japanese economy recover. Once their radical nationalists were removed from power, the Japanese have completely reinvigorated as the third largest global economy today, after several decades as the second largest economy on earth with only 100 million people.

We learned that personalities are difficult to change, so we need to remain diligent to prevent the ultra-aggressive faction of the Japanese nationalists from power again. In 2013, an unrepentant Abe was the first Japanese serving Prime Minister to visit the Yasukuni War Shrine since 2006. While the Japanese logically should be responsible for its own defense, there is a fine line between defense and offense. The Americans must start with knowledge, not just our belief that the Japanese will follow the Americans (remember Pearl Harbour). Further, we need to examine American motives for taking action with our beliefs without knowledge.
Let us examine the facts related to what is now Okinawa (which was Ryukyu Islands before Japan unilaterally declared this was Japanese territory in 1879):

After two atomic bombs were dropped at Hiroshima and Nagasaki on the 6th and 9th of August, 1945, Japan’s Emperor Hirohito surrendered to the Allies by sending his foreign minister as a representative to sign the Instrument of Surrender on the deck of USS Missouri in Tokyo Bay on September 2, 1945. (His radio broadcast announced the acceptance of terms of the Potsdam Declaration at noon on August 15, 1945.) Commodore Perry’s flag was flown on the USS Missouri that day, as General Douglas MacArthur was a direct descendant of the Perry family. The Potsdam Declaration (issued by the Allies on July 26th) states: “Japanese sovereignty shall be limited to the islands of Honshu(本州), Hokkaido(北海道), Kyushu(九州), and Shikoku(四国) and such minor islands as the Allies determine per the Cairo Declaration. The Cairo Declaration was issued on November 27th, 1943 with two relevant provisions: 1) All territories Japan had won from China, such as Manchuria, Formosa (Taiwan), and the Pescadores (Penghu) shall be restored to the Republic of China, and 2) Japan will also be expelled from all other territories taken by violence and greed. The first provision did not limit the territories to listed territories. It seems the Ryukyu Islands were taken by greed, and Japan should be expelled according to the second provision. Instead, Japan innovatively added the Okinawa Prefecture to the Island of Kyushu, but this was clearly a greedy decision. If Taiwan was occupied in 1895 and returned, why should not Ryukyu which was occupied in 1879, only 16 years earlier? USA is not an objective party with military bases there.

KyuShu and Okinawa

This map shows Islands of Kyushu clearly isolates Ryukyu Islands that is labelled as Okinawa in the lower left hand side of this map. Japan unilaterally forced the King of Ryukyu Islands Sho Tai (1843-1901) to move to Tokyo in 1879. This is what the Cairo Declaration dictates: “…that Japan will be expelled from all territories taken by violence and greed…” This is only 16 years before the Island of Taiwan was colonized in 1895 (via the Treaty of Shimonoseki) and returned to China in 1945.

Please, USA, donot act with self-interest by aligning with Japan on territorial disputes without facts! Our credibility depends on it.

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Overview

What are high priority issues for Moral Innovators today?

While we are guided by our beliefs, please do not let time’s pressure hasten our appropriate actions. Let us act based on knowledge (or beliefs verified with truths). Do not take actions based on beliefs alone because that have led us to conflicts and future problems.

The link to many issues we face today relate to how we view “companies” that started with a history of corruption like the 17th–19th century British East India Company and Dutch East India Company (or VOC). Companies have been risk-sharing entities for investors who focus on higher profits using continuous improvement methods (i.e. innovations). Even before we treated “companies” as legal entities, ancient civilizations had monopoly practices for several thousands of years where the “victims” have been the general public. In the USA, Rockefeller’s Standard Oil Company was broken up 100 years ago. Today, OPEC (as an oligopoly) has been transferring trillions of dollars of wealth to the (mostly Muslim) oil producing nations, and Bill Gates’ Microsoft created the world’s wealthiest person (and now a Foundation that is the largest shareholder of ExxonMobil) for decades. There have not been sufficient considerations for anything not related to generating higher profit which is the difference between sales revenue offset by expenses such as labor, material, and taxes. Higher profit can be achieved by a combination of higher revenues and/or lower expenses.

To generate higher revenues, we sell products supported by advertisement and marketing. For example, Marlboro Man and Virginia Slims encouraged cigarette smoking that we have learned over the last 30 years could be harmful to our health. The Chinese are still smoking 2.3 trillion cigarettes a year, or 8 times that of the USA on a per capita basis (1800/year/person, or 5/day/person). It is important that we organize efforts to fight intentional unethical practices while respecting regional differences.  Instead of confronting the Chinese by imposing ill-defined human rights practices, we could help the Chinese save many more lives by sharing our experience on the future health care burden from smoking.

Let’s address the expenses by their major components:  Labor, Material, and Taxes. 

To reduce labor expenses, we have squeezed the US middle class with alternatives such as globalization which started with manufacturing (and continuing with services today).  The top 1% of Americans has not been affected because 1) they benefit from the resultant higher profits, and 2) the CEOs and a few other executives have not been squeezed.  Let us illustrate with a public company that trades at 10 time Price/Earnings ratio.  The company can transfer an operation (say from USA to China) to release 100 “middle class” US employees at a salary of $40,000 per year and hire 300 Chinese employees at $5,000 per year.  This would save $2.5 million per year for the company, but the CEO gets $25 million credit towards his/her bonus (calculated from $2.5 million per year times the P/E ratio of 10).  The worst part of this scheme is the fact that the CEOs walk away with big severance packages if anything goes wrong. We know that Mr. Akerson left General Motors and the new CEO Ms. Barra is addressing the faulty GM products that have killed customers during Mr. Akerson’s (and his predecessors’) tenure(s).  Usually the beginning of the change of command carries continuous improvement or innovative ideas, until the change of command is no longer new, when the focus turns to the big severance package(s).

Under normal circumstances, there is not much savings on material expenses, especially if we focus on comparable quality of materials.  Often the savings relate to logistics expenses like transportation and customs expenses.  However, the assumption of comparable quality of materials cannot be taken for granted, as there have been false claims to quality (e.g. Chinese baby milk with toxic melamine).

To reduce taxes, there is an army of experts to address a wide variety of tax issues especially for globalized businesses.  This is partly why the manufacturing economy has shifted to the services economy – because logistics, financial reporting, treasury, taxes are all services to support globalization.

Moral Innovators seek knowledge of where we are in the world.  We do the rights things to make the world a better place.  The right thing to do, in this context, is to know this process, and reward appropriate value add contributors.   Should CEOs get credit for higher profits when they are not held responsible for the delivery of higher profits?  Should governments be responsible for the “victims” of achieving higher profits driven by the CEO?  Should governments subsidize failing companies (e.g. GM, Chrysler, Citibank, Carlyle, etc.) when the CEOs continue to receive incentives in the form of bonuses and severance packages?  Can we count on our faith (e.g. US Christians) to deliver the appropriate moral foundation to support doing the right thing?

This process partially explains why the wealth gap in the USA has widened to support the super-wealthy 1% while the middle-class (the 100 jobs eliminated in this illustration) has been squeezed.

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Overview

Human Communications

There are different forms of communications that evolve, eventually, to written words. Here is a logical sequence of events for our reference:
1. Most likely our first gestures/sounds were made to attract mates millions of years ago.
2. As hunters, we communicated to our children how to capture prey and avoid predators.
3. For larger preys, we communicated ways to capture and share the food together.
4. About one million years ago, we learned the controlled use of fire to cook food.
5. We painted cave walls and drawings beginning about 100,000 years ago.
6. We were nomads, guided by the climate. When (Indonesia’s) Toba eruption happened 75,000 years ago, Asians and Africans scattered away from the volcanic eruption.
7. After the end of the last Ice Age 20,000 years ago, the sea level was 400 feet higher. We scattered to dry land, “trapped” in tens of thousands of islands (big and small).
8. When we settled down with farming and domesticated animals 10,000 years ago, we started to study astronomy to decide when to plant seeds and when to harvest.
9. When we harvested, we started to count what we had. Counting was used to trade what we had for what we wanted. China was among the first to have 16 recognizable markings on 9,000 year old Neolithic artifacts in Henan, China (Jiahu or賈湖契刻符號), followed by 8,000 year old European (Vinca and Tartaria) markings.
10. Writing “words” as we know them today seem to have started with Egyptians and Sumerians about 5,000 years ago, before Semitic Akkadians started to change the writing that eventually led to alphabets and English. India had 5,000 year old Indus scripts before Vedas and Sanskrit were introduced. Chinese words similar to the Jiahu markings were recognized by the Christians about 3,200 years ago. Hebrew became a recognized language 3,000 years ago, and we have about 3,000 languages today.
9000 year old jiahu chinese writing sample
Literature, as we know them in the form of novels, poems, etc., represents either: 1) Eloquent and/or 2) concise methods for the readers to understand what is being communicated. For example the “Art of War” may be a war strategy book, but the original form in Chinese would be a lot more eloquent and concise (and requires higher level Chinese to understand).

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