From the early 1990s through 2019, China's GDP grew at above 5% per annum on average. By contrast, the US economy grew below 5% per annum durnig that entire period. In fact, if we slightly extend the parameters in search of higher GDP growth, we find that the US economy grew above 5% per annum in 1984 and 2021. In the second case, since GDP growth is always calculated relative to the previous year, the growth in 2021 was artificially inflated given that the economy was forcibly closed in 2020. Yes, you might say the same about. China's economic growth rates given the poverty from which the country rose, but there is a limit to this sort of thinking (more on that below). Ergo, if we adjust 2021 growth for this "base effect," the real growth rate was just 3.97%. Bottom line: China enjoyed 29 consecutive years of growth above 5%. Within those 29 years, the US economy never once reached even close to that level of growth.
The last time the United States sustained a period of consecutive economic growth was from 1992 to 2000. However, during that time, the highest rate of growth was in 1999 (4.8%) and the average for the entire 9 year period comes to 3.8%. If you extend the period from 1990-2000, the average falls to just 3.2%. The previous decade saw a growth rate of 7.24% in 1984 and the average rate of growth from 1980-1989 was 3.36%. Structurally, the 1980s and 1990s saw similar growth patterns which, if we factor in major policy events of the time, were mainly related to monetary policy. In the 1980s, tight monetary policy was used to repair the damage done by the inflation of the 1970s and put the economy back on a healthy footing. in the 1990s, loose monetary policy was used to artificially keep the economy going. The 1980s were also the last decade during which a large percentage of American economic growth was based on manufacturing. The growth of the 1990s was primarily rooted in credit and consumption. The Federal budget deficit began to spiral upwards in the 1980s and continued to do so throughout the entire 1990s. Neither period's growth rates seem impressive in retrospect when compared to China's economic growth. The basis of that growth, namely larger budget deficits and loose monetary policy as opposed to China's basis of growth (manufacturing) seem equally alarming. In fact, it almost seems as though a constant alarm was sounding - but nobody heard it because the value of the US economy from 1980-2000 was far higher than the value of the Chinese economy.
The stereotype that developing economies grow faster because they are so far behind while developed economies grow slower is a dangerous one, particularly for developed economies. The underlying presumption is that once an economy achieves a certain level of wealth, it necessarily stops growing rapidly. Where does this presumption come from? Certainly the numbers seem to bear it out, but the cause is misunderstood. Rapid economic growth no longer takes place in developed economies because consumption becomes easier compared to production and capital accumulation. Low interest rates discourage savings and encourage credit based consumption (by private consumer and by way of government deficit spending). That said, because wealth is relative, there is no objectively logical point at which a given amount of wealth would necessarily prompt a national economy to fall into consumerism and abandon capital accumulation and production. In theory, the Chinese could have, at any point in their 29 year long span of +5% growth in GDP, "taken a growth vacation" and started spending. That China did not do so is a matter of policy. Countries choose whether to be frugal and focus on development or whether to spend the presumed fruits of tomorrow's labor on today's appetites. The United States of America averaged a nominal GDP growth of 6.7% per year in the 1950s and 6.9% per year in the 1960s. The real GDP growth for those decades is of course less impressive than the nominal one (4.2% and 4.5% respectively), but the 1950s and 1960s still sustained higher average GDP growth than any decade since. It is not a coincidence that it was in the 1970s that the United States commenced a policy by which it aimed to sustain the US dollar as the reserve currency of the world and purchase goods manufactured overseas for paper printed in the United States. Independent of economic policy changes from 1970 to the present, that general policy remained in place for the duration and resulted declining rates of comparative economic growth from the 1970s onward. Who needs economic growth when you have a credit-line backed by future generations?
The comparison holds true not only for China. Japan's average annual GDP growth in the 1950s was 9.1% - far higher than the US average for this period), reaching 10% in the 1960s. From 1955-1973, Japan doubled the size of its' economy. The robust growth of Japan's economy began to stagnate at around the same time as the US economy and growth rates have remained moribund since. If we look to Russia, we see economic growth averaging 7% per year from 2000-2008 after the economy declined by 50% from 1990-1995 and began its' recovery with a 1999 quarterly growth rate of 12.1%. Although not as dramatic as South Korea's rise from abject poverty to becoming one of the leading economy's in the world, Russia has clearly gone from being an economic catastrophe to a formidable world economy. The same can be said for Poland, which outperformed the US in terms of economic growth since the early 1990s. Poland's case is especially interesting given that in 1989, despite its considerable economic woes - the Polish economy was wealthier than the entire economy of the People's Republic of China. The point is that while an economically moribund Poland outpaced US economic growth from 1990 to the present, China rose from a level far below that of Poland in 1989 to its' present heights. Such comparisons really bring home the transformative power of economic growth and the destructive power of economic policy which prioritizes consumption and easy money over capital accumulation and growth. A key factor in understanding these two policy preferences is that Western economies prioritizing consumption often mislabel consumption as investment. The misunderstanding stems from the fact that investment is only possible where there is capital accumulation. Credit based expenditures, whether demand or supply side, are not investment because they are credit based.
A simple key indicator of this truth is the public debt to GDP ratio (including not just government debt at all levels) as compiled by CEIC: Public debt/GDP ratios stand at: 255% for Japan, 124% for the United States, 55.3% for Poland, 25.6% for China, and 14.6% for Russia. What does this mean? This means that the United States consumes more than it produces. For Japan, the situation is mitigated by the fact that while government debt is over 250% of GDP, net public liabilities are lower (78% of GDP) because the government holds substantial assets (although this accounting trick is by no means a long term solution to Japan's problems). No doubt all of the above figures are only figures - they are statistics that can be viewed from a multitude of perspectives. It is the typical approach and mindset of the majority of economic analysts and government policymakers to make light of these figures - the assumption being that at the macroeconomic scale, national economies do not need to be concerned by the same things which concern a household budget.
If a household spent 124% of their annual earnings, saw that their average earnings were rising at about 3% while those of their neighbors - who spent between 14-50% of what they earn while their earnings were, in some cases, rising by above 5% - then this household would not doubt be concerned. It would be concerned independent of whether or not it was "more wealthy" than the other household. It would be concerned because its' wealth would be dwindling while the other household's wealth would be rising. It would be concerned because these figures suggest that while the members of the first household might enjoy a temporarily higher standard of living than the members of the second household, it would be at the expense of their children. Furthermore, the first houeshold would soon find itself holding overpriced assets - out of date computers and mobile phones, anachronistic cars (just like a country which does not grow its economy can find itself holding overpriced assets like out of date infrastructure, old buses, old trains, old airports). The first household would either bask in its' temporary luxury and leverage its' present wealth to re-finance its' debt and buy even more things on credit, or it would stop and attempt some structural reforms.
One thing that can be said of the Polish, Russian and Chinese economy is that all three of them went through periods of severe controlled economic depression and extensive systemic reforms. None of them are by any means "out of the woods," but there is no doubt that the periods of turbulent reforms are responsible for setting those economies on the path towards future growth. Japan, by comparisson, never went through any period of severe controlled economic depression and extensive systemic reforms - holding fast to the gradualist approach in search of a way out of their decades long slump. Only the United States seems to have persisted in leveraging the present to buy credit from the future. The future has arrived. There are growing economies on the horizon not even touched upon in this article. However, this may seem irrelevant if economic growth is no longer seen as valuable by societies pre-occupied with work-life balance, stress reduction, wellness or any number of "issues" that seem to exist parallel to bread-and-butter economics. The above data can, of course, be subject to debate as we live in a world not only of multiple data-sources, but changing calculation methods and competing standards. The key observations and arguments, however, still hold solid independent of any eventual slight margin of error.
In the short time I have been living on X (as of this writing), I have noticed a tendency on the part of many tech-minded users to shower the platform with tips and tricks about "the best prompts" to do this or that or other "hacks" (or whatever the fashionable word of the day might be) for getting AI to work miracles for users. I already wrote one newsletter about what I called the "magic prompt fallacy" which expressed my deep reservations about why you should trust this kind of advise. Now, I'd like to return to the topic and write about why you should trust (and pay me) for my advise: because there is a high chance that I am in the elite 1% of human beings on Earth who actually understands AI - a proposition I extrapolate by way of analogy with something called "Body dismorphia". At this point you can either go back to chasing down magical "best prompt" formulas from the snake-oil salesman pool or take a moment to let me explain why you would be better suited by investing in my Digital Literacy in AI courses.
Body dismorphia is the terms for a psychological phenomenon amongst serious bodybuilders that goes something like this: because bodybuilders tend to compare themselves to other bodybuilders, they exagerrate their faults and downplay their strengths, all the more so if they are not part of the genetically gifted elite. A regular person who is bodybuilding for health and longevity will be comparing themselves to those with elite status and, if this person is not careful, may fall into body dysmorphia. Symptoms of body dysmorphia are easy to spot. Whenever a person is comparatively more muscular than the vast majority of the general population, but considers their musculatur to be of inferior quality, this is a sign of body dismorphia. It is simple to understand: the person in question is holding themselves up to the highest existing standards while far surpassing the lowest common denominator.
This happens in other areas of life as well, which brings us to AI.
My benchpress is just barely 225lbs. In fact, I can't even say it is a bench press. It is a variation of the bench press called the gorilla glute press. You still need to press the barbell from your chest, but there is no bench - your body forms a bench (kind of). I am not proud of my ability on this front. That said, a simple google search reveals that I am in the elite for the entire human population. According to AI overviews only 1-2% of the global population can bench 225 and even less can perform a gorilla glute press at 225.
Let's refrain from verifying the data here, since it is anecdotal anyways, and just accept for a moment that AI overviews has provided us with information that has a high level of accuracy. According to this, not only am I in the world elite of 1-2% of the human population that can bench 225, I am in an even smaller elite of humans who can gorilla glute press 225 (in fairness, I did this with a spotter, my best without a spotter was 215 for reps - but I am getting there).
Now what does this have to do with AI? Well, I am pretty sure if I compared myself to the global elite of programmers and developers who write, research and create AI, my abilities would be equally as unimpressive as if I were to compare my bench press to the global elite of powerlifters or even your professional bodybuilder. But, if we compared my understanding of AI to the vast majority of "experts" in the field, then it would turn out that it is elite level.
That's usually what happens to any of us if we find ourselves knee deep in some field of inquiry or endeavor and we just happen to be saying something which is the complete opposite of the crowd. AI is a new field, so it's honestly hard to say with confidence whether or not I am wrong in my approach - but you can be sure of one thing: if there really were some magic prompt sequence to get AI to do what you need it to do, there wouldn't be so many people trying to get you to click their link on the subject.
If you are using AI on the job or are trying to learn how to use it on the job and find yourself hitting a brick wall, getting indentation errors back about your code, false information, impractical insights, excessively lengthy responses or finding that all the time you were supposed to save with AI is being used to solve new problems that emerged from using AI (not to mention verification), you naturally might think you're doing something wrong - like there's some magic button you just don't see and need to press, or magic prompt you need to input. There isn't. What you need to do is learn the fundamentals of the philosophy of dialogue and understand the discourse of synthetic logic. Let me put this in the simplest possible language for you: you cannot and will not learn how to use something called "Aritificial Intelligence" unless you actually learn how to increase your intelligence by working hard on intelligent things. Just like you have no chance of increasing your bench press (or any other lift) by going to the gym and lifting light weights all the time or listening to the advise of people who lift light weights because it's easier. You don't need easier, you need smarter. Send me an email and let's get you started.
Surviving systemic corrections is a tricky business. Unlike an economic correction, wherein the field of play remains essentially the same, but everyone is getting roughed up by gale force winds, pouring rain, thunder and lightning, a systemic correction is more like an earthquake: it upends the existing field of play, overturns everything and, at best, leaves ruins for the survivers to scavenge through in the most random of places. It's not a pretty sight, but that doesn't mean it doesn't have to be a profitable sight. There is no general short-term advice that can be given outside of knowing your very specific circumstances that would help you navigate your particular stormy neck of the woods during a systematic correction, but believe it or not, taking a moment to look ahead and think beyond the immediate is necessary if you want to get ahead. With that said, let's look ahead and think forward.
We all know that whenever there is a temporary state of disequilibrium between supply and demand, one way or another the market is going to clear. Systemic upheavils are nothing but symptoms of disequilibrium at scale. They are macrotrauma, usually induced by decades of fiscal, monetary and trade policy which creates a house of cards. The essence of a house of cards is that it seems to stand - until it starts to fall. Before the fall, most people are preoccupied with that house of cards, they treat is as though it were an eternal reality, immutable, unalterable. But if you take a look at past systematic corrections, the emerging order is nothing like what came before. Let's take the house of cards we are currently dealing with:
International Trade:
BYD has already announced the introduction of humanoid AI powered robots set to come on the market at $10,000 a piece by the end of this year. Whether or not this actually happens is immaterial. BYD is not the only company racing to get to the finish line in this emerging industry, and humanoid robots are just the next step in a wider process that is rapidly accelerating as robots begin to take over production on a mass scale. Individualized single function robots already play larger and larger roles in factories and production at large. It is not inconcievable that not long from now, all manufacturing will take place in roboticized factories. When this happens, the human cost of labor, the income tax system, the exchange rate - all of the things we take for granted as impacting supply chains in international trade - all of this will take a back seat to one primary variable: energy prices.
Robots don't need a paycheck, they don't go on strike, they don't form unions, they don't get tired from over-work nor lazy and entitled from being over-pampered. Robots do what they do and they only need one thing to keep going: energy. This is why the future of manufacturing is going to be tied to the future of low cost energy output. Will it end up being solar power? Petrol? Lithium batteries? There's no sure way to tell because technological developments are unpredictable, but one thing is clear: any country that restricts existing cost-effective energy output because they hope to reach some idealized alternative energy output goal will be driving up its' costs and making it difficult to roboticize manufacturing. Of course, the extraction of energy can also be a task performed by robots, as can many others.
Another potential change on the horizon has to do with 3D printing, a technology which has been around for quite some time now. It is concievable that eventually, much of the entire supply chain that grew up around the industrial revolution and persisted to the present day (factory, trader, wholesaler, retailer and anything and everything in between) will eventually be replaced by people having their own 3D printers "manufactur" many common household items at home: furtniture comes to mind, but not only. Other than the raw material that the 3D printer will need, the one thing it will definitely require is - again - energy.
We could go on and on, using available data about developing trechnological trends, to imagine the world that will emerge following the present systemic correction. The key is not whether or not you believe that my predictions are plausible, but whether or not you are able to generate your own. This takes an understanding of political economy, history and economics. It means taking a long term perspective and trying to strategize to prepare your business for the coming future and guard against becoming anachronistic. To be able to think creatively and imaginatively about strengths, weaknesses, opportunities and threats, you need to email me and let me put you through one of my business economics professional development courses. It will give you the tools with which to engage in strategic thinking about the future of your enterprise.
The ideas of nobel prize winning economist James Buchanan go a long way in understanding why so many geopolitical analysts, experts and consultants who believe they can give private businesses profitable advising services end up being wrong about everything and "shocked" when their predictions and advice are flawed. They base their confidence in their own expertise on the fact that they have years of experience in the military or government administration. According to Public Choice economics, which James Buchanan championed, the system of incentives that functions within the state sector is the polar opposite to the system of incentives that functions on the market. The basic teaching of Public Choice theory is simple: if you want to succeed on the market, you need to accurately percieve reality in the form of what your potential customers value and provide it for them. The better you can serve their needs by generating value at low cost, the more you can profit. Meanwhile, if you want to succeed in the state sector, you need to fail to accomplish your mission so as to have a basis upon which to gain additional funds from the state budget. In short, the experts who charge high prices for their advice based on years of experience have years of experience failing. Is that the kind of experience you are looking to pay for?
Public choice theory can be summarized in two points: first, states accumulate their budgets through coercive taxation, rather than voluntary patronage on the part of customers. Secondly, if a state agency successfully fulfills the purpose of its budget, it becomes redundant. Its' task is done. This is why state agencies charged with tasks such a preventing pollution, alleviating poverty or providing education do the opposite. The more pollution there is, the more poverty there is, the more people are without an education, the longer the state agency can endure. Buchanan summarizes the reason for this in his Nobel prize lecture:
"In political exchange, there is no decentralized process that allows “efficiency” to be evaluated deontologically, akin to the evaluation of a market. Individuals cannot, by the nature of the goods that are collectively “purchased” in politics, adjust their own behavior to common terms of trade."
If you are paying for a consulting firm full of former government or military strategists who have hands on experience in war-gaming, planning, strategizing, fiscal or monetary policy in the United States for the last 25 years: you are literally paying for advice from people who have lost two wars, one of which turned out to be the longest war in American history and who took an economy which was operating in a budget surplus at the beginning of the XXI century and led it into the first severe combination of stagnation and high inflation in American history. So think long and hard about why you or your busniess would profit from listening to anything these kinds of people had to say?
Have you ever noticed how recently, the experts have all been "in shock." Things that have been happening in the world since Brexit in 2016 have been "shocking" for them - because the smoke and mirrors fairy-tales they studied in their government funded universities and the endless streams of data and papers they read in ther government or military jobs and the endless amounts of fake news they consumed in their media bubbles have all made them severely ignorant of reality. Reality is now "shocking" them. So when you decide to spend your money on geopolitical analysis in a far off corner of the world, domestic policy analysis or conflict analysis: think real hard about who you hire. Because if you go to people whose only claim to fame is that they have years of experience in military and political affairs then, with rare exceptions, you are going to be paying people who have been wrong about everything for 25 years to be wrong about what matters to you to.
If you are an American or non-European company entering the EU market, whether directly, or by establishing a branch office, or even if you are just building a business partnership with EU-based companies, you need to understand the regulatory and tax environment that you or your partners in the EU will function in. Is it a nightmare? Absolutely. Is it possible to navigate? If you know what you're doing - yes. While it might be tempting to outsource your problems to some of the big consulting companies out there, consider for a moment just how much time and money you and your team could save by understanding the European Union business system better. My professional development course "Understand the EU Business Framework" is based on 18 years of experience navigating that framework. Here, I will share the tip of the iceberg - for free! So read on to get a taste of what you can learn by signing up for the full course!
We can divide the European Union Business Framework into industry specific and general. By industry specific, I mean regulatory requirements specific to your particular industry. The general European Union Business Framework concerns regulatory requirements that are mandatory for all market actors independent of industry. Of those, there are two principle topics of huge importance to understand: first - Income Taxes and second - Value Added Taxes. Let's tackle income taxes first.
The first thing to recognize about the European Union is that there is no EU income tax. In fact, there is no EU mandated tax period. There are rules and regulations that the EU imposes on member states regarding the member state tax systems, even going so far as to set floors and ceilings on certain types of taxes, but there is no EU-wide tax. Combine this fact with the open market in the EU, specifically with the fact that your company can be located in country A and do business in country B within the European Union perfectly legally. In practice, what this boils down to is: if you want to run a company from a low-tax EU member state to provide goods and services in a high-tax EU members state: you can. It might not always be easy (France, for example, tried to block competition from Polish trucking companies by supporting laws that restrict the amount of hours a trucker from Poland can actually drive his truck in France without returning to Poland first), but because the general architecture of the European Union is that of an open market, it is far easier to navigate and mitigate eventual minor regulations that may result from having your headquarters in a low-tax member state and providing goods and services in a high-tax member state than it is to navigate and mitigate the crushing tax burdens of high tax member states.
That said, the tax rate is only one part of the equation. Certain member states may have nominally lower taxes, but may also have far more complex tax systems. Tax systems should be understood twofold: the actual letter of the law and the practical application of the law. Many times, practical application of law can be random. For instance, tax offices in one city of country A can offer up a completely contradictory interpreation of the same tax law from that of a tax office in another city of the same country. Both contradictory interpretations will stand because both concern different entities and are issued by different authorities. So just because you hear that there was a favorable tax-law interpretation for a circumstance that is similar to yours - there is no guarantee that if the tax office decides to audit you it will come to the same conclusion. This is why as a matter of course, it is a good idea to develop a cordial relationship with your local tax office. Better still, register your company in a small town where the tax office is also small. Get to know people and let them get to know you. Small towns like to collect local taxes from businesses that otherwise might have established themselves in big cities, so as long as you are not acting with malice but simply trying to make the most of the tax labyrinth, you may find it easier to deal with a small town tax office than be an anonymous number in a big one.
Finally, don't fall into the "Westerner trap." The majority of Western businessmen think of the eastern part of the European Union as thought it were a charity case, a jungle or a vast resource of cheap labor. In fact, it is the part of Europe which drives economic growth to such an extent that the more stagnant Western countries like Germany do everything possible to diminish its' impact and make sure that it remains exactly what Western businesses tend to see it as: a charity case and vast source of cheap labor. The reality is that if you are looking to work with well educated, worldly and entrepreneurial professionals, you are more likely to find them in Eastern than in Western Europe. Of course, you should make your decisions based on the specific needs of your business, but more often than not, Western businesses ignore the opportunities present in Eastern European countries because they are unable to identify them.
The second thing to recognize about the European Union is that there is a VAT tax system in place. While VAT taxes vary from country to country and product to product, they are a general fact of business life which creates significant accounting costs as well as potential cash flow problems. Business registered in the EU are formally VAT-neutral, which means that the VAT they pay out as part of their business expenditures can be offset by the amount of VAT they collect in the course of producing sales. Another way to think of this is that European governments force businesses to be mini-tax-collectors. They collect VAT taxes from consumers, deduct VAT taxes they themselves paid out as a business, and send the remainder to the government tax office. All of this is accounted in forms which, depending on the country you are doing business in, might need to be fileld quarterly or even monthly. In the long run, the VAT tax burden on businesses is zero. In the short run, business can struggle with cash flow issues, particularly import businesses which must pay VAT on the border but cannot reimburse it until product is actually sold. These issues are not unmanageable, but they are one of the biggest burdens of doing business in the EU.
The above is, of course, the tip of the iceberg. If you and your team want to know more - email me and let's set up a professional development course on understanding the European Union business framework tailored especially to your company's needs.
If you can read and understand this newsletter, your English communication skills are good. If you can do exercises on a website or in a book, your English communication skills are good. If you passed important English language tests, your English communication skills are good. If your English communication skills are good, why do you stress so much when you have to give a presentation in English? Why can't you communicate your ideas or ask your questions with confidence during a conference call or business meeting? Why is it easier to talk about grammar rules with your English teacher than negotiate contracts or sales with your business partners? Why do other people who make big grammar mistakes when they talk, still talk, while you don't talk because you make some small grammar mistakes? The answer is simple: sorry, but your English communication skills are not good. Your test-taking skills are good. English communication skills and English test taking skills are not the same. Let me explain and help you.
Most teachers, websites, youtube channels or books that try to help you learn Business English are made by English teachers, not business professionals. Most teachers think of learning Business English from the point of view of pedagogy, not prices, education, not economics, theory, not practice. They prepare you to do well on tests, to do well in exercises, to answer pre-fabricated questions well. Then, when you watch an American movie or go to a business lunch where everyone is speaking English, you feel like you are on a different planet listening to an alien language. Why?
It's because the language of "English classes" is not the language of common English speakers in business environments. This is why the most successful people are the ones who don't worry so much about grammar rules and correct tenses. They focus on two things: 1) vocabulary and 2) building confidence. The bigger your vocabulary, the more you can say and understand. Yes, how you say it is important. The better your grammar, the more competitive you are, but if you are a grammar perfectionist who will say nothing until you build the perfect sentences in your mind, opportunity will pass you by.
Remember: the goal of business is to make money. The goal of business English is to help people who speak different languages make money. That's all. Nobody cares about your English. Everybody cares about your product or service. Your English must be good enough to explain your product or service - that's all. You don't need to be Shakespeare. You don't need to have a perfect accent. You need to let people know why your product or service is the best.
The more time you spend doing exercises by yourself, taking tests, collecting certificates and pieces of paper - the more time you will waste. The more time your team has English classes with a pedagogue who is busy teaching them rules and exceptions to the rules, the more time your team is wasting. You need to have business English classes that focus on communication, that build your confidence, that broaden your vocabulary quickly instead of getting stuck in the grammar swamp.
You are not learning English to attend university, you are not learning English to write a better book than Hemingway. You are learning English to communicate in business and make money. Stop learning the wrong skill. Stop learning how to take English tests and start learning how to communicate using Business English. Email me and let's get started.
With BYD's announcement of the imminent market debut of a $10,000 humanoid robot, it might finally be time to start writing about robots in the present tense. If anything, it is a wake up call for all of us to re-imagine our businesses and re-invest in the kind of professional development and digital literacy courses that Strzelecki Polyglot Solutions provides. The rapid pace of change brought on by AI is about to accelerate and business professionals need to start adjusting to emerging market realities. The combination of a humanoid robot, an AI brain and a potential $10,000 price tag have immediate implications for your business. Everyone from receptionists to cleaners to factory line workers will be priced out of the market. To remain relevant rather than redundant, professionals will have to work symbiotically with robots, complementing them in order to enhance their performance. If there has every been a time when education will make the difference between being competitive or being redundant - that time is on the horizon. Ideas may indeed have a variety of consequences, but the lack of ideas has a uniform consequence: redundancy.
If the industrial revolution, mass production and standardized education systems brought us a world where people were expected to specialize is monotonous, repetitive tasks and memorize facts, the world of AI humanoid robots is a world where humans will need to excel in creativity, adaptability, logic and economics. Humanoid robots, like the human body itself, are very advanced tools. However, unlike the human body, they are not capable of conscious activity because the AI brain is still an LLM and for all intents and purposes will remain one. LLMs are able to mimic the functions of an average human intelligence, but we must remember that averages can be manipulated.
It is not a coincidence that this robot was developed by a company that had over 100,000 people working in its' R&D department. It is also not a coincidence that the robot will be available in a country where education standards are still relatively high, and therefore the average human intelligence which is the product of those education standards is likewise relatively high. Slowly, it is beginning to become increasingly clear just how important high standards of education, work ethic and having not just an educated workforce, but an educated consumer base are.
Statistics show that even if not all businesses understand this in theory, they do in practice. An interesting study came out 8 years ago, funded by Bill Gates, Google, JP Morgan and Walmart no less, which pointed out that the employers had spent a total of $138.8 billion (with a b) on direct training, understood as everything from business and secretarial schools to language schools to educational support services and a host of others in between. Sources used in the report noted that "although small companies have the smallest annual budgets, there are so many of them...that they account for 1/3 of the total budget for training expenditures."
The importance of workforce education, particularly in digital literacy, AI prompt mastery and trouble-shooting robots cannot be understated. And in case you're wondering: there are no simplistic formulas for how to handle the dawn of the robot age. This is because the nature of humanoid robots powered by AI is that they are dynamic. Machines produced from the XIX century and through most of the XXth century were single function units with clear performance goals and even clearer instructions. The first robots, mainly built for and put to use in industrial production, were likewise single function units. If anything, the first machines which began to offer the potential for multi-functionality (and user confusion) were computers. This is why the first computers (which, if anyone remembers, came in pieces which enthusiasts would put together themselves) were not widely popular. Only when Apple premiered the out-of-the-box Macintosh concept did they really take off. Even then, they were never really single-function units and while mass produced computers did a good job simplifying the user experience and creating single-function experiences within the framework of a computer (writing tool, listening tool, gaming tool etc), everybody was always perplexed by them from time to time. In the worst case, we needed some IT guy, in the best case scenario we figured things out ourselves.
With AI humanoid robots, we will need to figure even more things out ourselves. We will need to train our brains and keep them nimble throughout our working lives. Let's use a simple analogy: everybody agrees that fitness is a big industry nowadays. Health food, healthy diets, exercise - these are all staples of modern life. Maybe not everyone follows a healthy diet or a fitness regime, but if you listen to general conversation, hardly anyone will say "staying fit and eating healthy are not important." It wasn't always so. It actually took quite a long time from the moment the industrial revolution rolled out to get to a point where large numbers of people accepted that sitting around in offices or standing around in factories and consuming processed foods made at speed might require some offsetting in the form of exercise and learning more about what we put in our bodies.
It's now going to be the same with AI humanoid robots. Having more and more of these things all over the place means that companies will need employees who are aware of how to use them. Now if your employees are still at the stage where they're afraid to touch ChatGPT - it's high time to break through that fear barrier because pretty soon ChatGPT is going to have arms and legs and if you and your team don't develop the brain-power to put it to good use, you'll end up useless. So what are you waiting for? Don't waste another penny on professional development fads tailored to the stone age. Get in touch and let's get your team moving into the modern era so that you can take advantage of current market trends, increase productivity and leverage higher levels of creativity.
After a few days living on X, I have noticed that from time to time one comes across posts that basically go something like this "I was in situation X and discovered how to use AI to do action B by uncovering 10 GREAT PROMPTS which I will share with you here." I would like to cast a broadly skeptical net over all such claims, particularly the underlying premise of such claims. If you really want to optimize AI in your business, there is no shortcut and you have to be ready to invest in professional development. Furthermore, you need to be wary of investing in professional development with a prompt magician. There are none. AI is a new field, there are no experts, let alone magic wands. The best way to learn how to prompt AI towards creativity is by utilizing the same methodology that has traditionally worked when prompting human beings towards creativity: the liberal arts.
If there has ever been a time when the serious study of philosophy has demonstrated its practical utility, it is now: the new age of AI. Not so new for those of us who have spent years immersed in trying to understand concepts such as consciousness, intelligence, knowledge, truth, perception, language, ideal forms, epistemology, ontology and the like. To the liberal arts major, the philosopher and the poet, the challenge of AI is no different than the challenge of grasping fundamentals that thinkers from St. Thomas Aquinas to Kant have been grappling with over the last couple of centuries. Philosophers and adherents of the liberal arts are actually quite used to the art of prompting because we recall how we were trained by master prompters. Not just our professors, but the authors of the great books that we read. Great works of philosophy are the ultimate "super prompts" which unlock the creative potential of the human mind and send it thinking in new directions. The real reason why people have trouble interacting with AI is because most of them have not interacted with Heidegger.
Let's descend from the clouds now and break this down into more practical language: First, the key reason why there are no "magic prompts" out there is because each individual human has unique DNA which means, amongst other things, that we are all at the very least marginally (if not vastly) different people. In business, we all recognize the importance of internal communication and creating a clear language through which teams prompt one another towards successful completion of tasks. In fact, we even sometimes go so far as to recognize that every industry and sometimes even every work environment has its own unique jargon or nomenclature. These unique linguistic patterns develop organically and are in a constant flux. It's enough to fall out of the loop for a couple of months and return to your business environment to discover that new, unfamiliar buzzwords have taken the fore and that the language you are speaking may be somewhat outdated. The point is that the prompts people use between one another, like language itself, are constantly "in development" and very much relative to highly subjective circumstances.
You and your team's interaction with LLMs are no different in principle. And before you protest that this analogy is incorrect because "AI is not conscious and we are", let me remind you of the long lasting and highly problematic debate that has been all the rage amongst humans for centuries over the question of free will vs. determinism. I mention it in passing not so much because I intend on rehashing this debate, but only to demonstrate that the art of prompting artificial intelligence is not far removed from the art of prompting humans. The definition of human consciousness is open to debate and even if we accept the many definitions posited, there is no conclusive argument in favor of its existence (nor are there conclusive arguments against its existence). In fact, the debate about human consciousness is so nuanced as to be uninteresting from the point of view of the development of AI. This is exactly why LLMs were constructed. Large language models use probability theory to combine words in accordance with their most likely interplay - just like humans do. It is immaterial whether or not the human who does so is conscious or how consciousness is defined. It is immaterial whether or not the AI which delivers a human sounding answer merely "seems intelligent" or "is intelligent." All of this is immaterial because the goal of AI developers is to provide a practical, useful product - as practical and as useful as a human being's mind.
When human minds interact, there is a breaking in period where we try to understand one another. Insofar as some elementary cultural or linguistic commonalities exist between the two minds, this breaking in period can be shortened. If the subject of the mental interaction is uncommon, if each mind envisions the subject differently, particularly if these visions are backed up by divergent empirical experience (and of course each mind interprets its' unique set of empirical experiences to be "reality" and is therefore likely to find it jarring when confronted by another mind whose empirical experiences suggest an alternative "reality"), then this breaking in process could be far longer. Longer, but also more productive as thesis and antithesis clash along the path towards synthesis. If we add more minds into this mix, the process becomes even more complex. In the worst case we find ourselves faced with an argument or disagreement (each participant of the discussion believes the other to be doing the AI equivalent of hallucination - because of course my understanding of reality is true and really real, while everyone else is clearly mistaken!). In the best case scenario this chaotic process become brainstorming and generates creative ideas for tackling problems. Ultimately, if we prompt one another correctly, the result should be a synthesis which enhances everyone's understanding of reality while moving the creative process along and effectively increasing productive output.
What do I mean by "if we prompt one another correctly"? Well, human beings are not merely guided by intellect alone. We know from Plato that thymos and eros are programmed into the human brain by nature itself. Prompts which lead either of them to take precedence over the intellect will usually result in a system error. We know that AI is programmed to be helpful to human beings and not harmful. Prompts which demand that AI employ critical thinking to help us solve problems may crash up against this basic programming wall and result in AI refusing to do so, preferring instead to take on the role of a sycophantic yes-man. This deficiency is not limited to higher, complex creative tasks. If you think these problems do not concern you because you are "just using AI for research" or "just using AI as an enhanced, more optimal version of search" then you are mistaken. When AI sifts through the wealth of data and information it has been fed, it is - like a human - forced to evaluate what it is reading. If the pre-programmed criteria for evaluation are too strict, they may force AI to overlook vital or pertinent information. If they are too loose, AI may be more inclined towards hallucination because it will presume the validity of data based on the simple fact that it exists, that it has been written down and uploaded somewhere. If this sounds like an all-too-human problem - that's because it is. We humans are faced with exactly the same problem when we try to evaluate data. This is why, no matter what safeguards against hallucination AI is programmed with, it will fall to the human user to verify all output.
The point? The point is that you will not get a simple magic formula and a list of 10 prompts to boost your output at the end of this newsletter. Instead, you will get an invitation to consider investing in my online professional development courses in AI usage so I can help you and your team learn how to interact with AI and reap the benefits and avoid the pitfalls.
One of the key skills in international business is the ability to recognize when anomaly signals trouble and when it signals opportunity. By definition, working with foreign partners, interacting with alien officials and navigating business practices in an other-worldly regulatory environment can be unsettling to say the least. It is, by definition, a high risk venture. Like all high risk ventures, it is therefore potentially a high-reward environment. How do we know what we're doing when we don't know what we're doing?
The methodology for navigating such situations must be based on the identification of intelligence. Intelligence and its' opposite are universal human traits. They eventually penetrate all social norms and conventions. They may appear in surprising forms or emerge in unexpected circumstances, but emerge they will. Language and cultural barriers may, however, blur our ability to distinguish between them. This is where things get tricky. It is the eternal fear of highly skilled foreign professionals that they will fail to communicate their talents, intentions and interests due to the insufficiency of their English-language competencies. If you don't want to lose out on opportunities, you need to be sensitive to this fact. Demonstrate patience, exercise restraint, privilege written communication over verbal exchange. Allow for follow up. Do not jump to the conclusion that simply because someone is expressing themselves poorly it means there is no benefit to be had from pursuing further business relations. In short, judge the content, not the form.
While the identification of intelligence and the judgement of content are goals to be pursued, do not pass over the importance of convention. Conventions can be traditional or modern and their employment can tell us something about the intelligence of practitioner. Traditional conventions are very useful guides to intention, especially when dealing with foreigners. Yes, a tradition is a kind of play-acting, a convention is not necessarily rational or valid, but in the absence of clear mutual understanding, traditions and conventions can be important tools for demonstrating mutual respect and building understanding. This is why it is a good idea to learn about and try to follow the most elementary and almost stereotypical conventions of your host. Whether or not the convention or tradition is true or truly good is immaterial. It will allow you to form some basis for the development of good relations. It is also a sign of your counterpart's intelligence if they choose to use tradition and convention as a means of establishing the basis of trust in your business partnership.
Naturally, the excessive reliance on convention and tradition can mask ill-intent or low intelligence, or both. Tradition and convention can be used against you, as weapons meant to dull the conclusions your common sense recommends to you based on rational analysis. This is where patience and experience come in. The second of these can only be acquired by the employment of the first. You must sometimes take the risk of walking the dark road that common sense tells you to avoid, at least for a time, in order to reassess whether or not is is a threat or an opportunity that you are dealing with. As with any investment, you need to be ready to take a loss and know how much (whether time, money, effort or all three) you are willing to lose in order to - at best - gain experience. In international business relations, this kind of measured loss is always a marginal gain: the more experience you have, the better prepared you are to succeed in the future. It is a bit like learning how to swim: there is no use theorizing about it all day - at some point, you need to go into the water, albeit with appropriate precautions.
On the other hand, we find those who reject tradition and convention in favor of more modern trends and fashions. They will play towards the familiar. Here, much depends on whether or not you are yourself an idiot. There is no greater weapon to be used against you than an appeal to your vanity in the form of attempts to model behavior on what your foreign partners perceive to be the superior norms of your civilization (or what passes for it). Showing off just how much they are like you, or what they perceive you to be, can be indicative of low confidence on their part (which itself is questionable since you are looking for reliability) or of the employment of a type of strategy the result of which should be as obviously grotesque to you as it would have been had you done the same in reverse: presented yourself in forms that suggested you were trying to emulate them rather than simply being a stranger.
The fact is that there is a significant difference between the intelligent flouting of convention and the moronic habit of being trendy. If you are dealing with people who flout their own conventions in spectacularly creative ways, ways which appear equally alien to you as the original foreign conventions themselves - then you know you are dealing with intelligent partners. If, however, old and well established traditions are being flouted in favor of fashionable trends, you should be wary. The flouting of tradition is an attention grabbing marketing tool and nothing more. In the context of marketing, it is actually a well established tradition. In the context of building a solid foundation for a business relationship between diverse parties, it is perhaps not the most effective mechanism. Of course both the pomp and ritual of traditional convention and the flashiness of more trendy approaches could be used to dull your senses and entice you into a transaction that is not at all to your benefit. Still, as a matter of practical experience the rituals of traditional conventions usually allow for the one luxury you need to come to sensible conclusions about what is happening around you: time for patient reflection. Fashionable people are always in a rush, and this pressure of urgency will inevitably push you to make uncomfortable decisions.
You may at this point be wondering why the metrics often cited by the McDonalized version of the international consulting industry do not play a leading roll in this advisory note. The reason is simple: just as the strength of McDonalds is that while the quality is bad, it is at least predictable anywhere you go (and therefore you can "safely" eat it without worry), so it is with the big international consulting firms. They cater to your desire for the familiar and serve the exotic in palatable doses. They are principally the handmaidens of large corporations and larger governments which endeavor to create uniform systems that mitigate the risks associated with doing business in a heterogeneous world. As such, they are worthless for entrepreneurs who rely not on pre-existing systems, but on market fundamentals. To effectively profit from interaction with potential overseas partners and build stable, long terms business it pays to be aware of one of these fundamentals: the understanding of human nature in the context of cultures.
Why is it that the Chinese, despite having traditionally worked in the 996 regime, seem to be so resilient to stress? Why is it that the stereotypical Japanese salaryman, despite working longer hours, is more resilient than the stereotypical Belgian whose Wednesdays are often four hour days due to the perceived stress of working two full days in a row? Why is it that the more Americans are preoccupied with wellness and stress relief, the higher the rates of depression and in American society?
If we apply the principles of the General Adaptation Syndrome, which has had wide success in the arena of sports science, it becomes clear that just as increasing stress stimulus beyond tolerable levels could push us into the "exhaustion stage", so decreasing stress stimulus below tolerable levels could actually push us outside of the parameters of the "alarm stage." And if that prospect sounds not at all bad, it would help to realize that in terms of survival and adaptability, the "alarm stage" is vitally important because it stimulates the organism to actions without which its' preservation and progress could be threatened. Just as the "stress hormone", cortisol, is what gets us up in the morning, so too it is what musters our physical and mental capacities to deal with adversity.
If we train ourselves to avoid all levels of stress, we are effectively trying to prevent the General Adaptation Syndrome from playing itself out at all. Of course, we want to avoid the irreversible deterioration that the "exhaustion stage" culminates in, but in case you haven't realized it, it is the "resistance stage," brought on by the "alarm stage" that alleviates stress by solving the problems that lie at the source of stress. Without the alarm stage, there is no resistance stage and no solution to any problems.
And this is exactly why your company's productivity is bound to fall if you go overboard in the implementation of the wellness fad. In fact, to a large extent it may be why the productivity of the American economy overall has shrunk over the last few decades. It also may go to explain why economic policy has been so lax. It may not simply be a matter of economic theory being turned on its' head (New Monetary Policy being the prime example, whereby it was thought that one could in fact print money into eternity without creating inflationary pressures), it is a matter of a fundamental shift in goals. Traditional business economics measured success and progress using material criteria: profit, dividends, revenues, cash flow, customer acquisition and retention, turnover. However at some point, to great or lesser degrees, a shift started to take place. The material goals were interpreted as dehumanizaing and insufficient. New goals took precedence, most prominently amongst them vague and utterly immeasurable pseudo-metrics like a "happiness index." Why, there is even a "World Happiness Report" published by the university of Oxford in partnership with Gallup and the United Nations Sustainable Development Solutions Network. There we find pseudo-metrics like "positive emotions" and "negative emotions" as well as "benevolence indicators" such as whether or not someone has helped a stranger in the last month mixed with more traditional metrics such as GDP. It goes without saying that human nature being what it is, I am 100% confident - without any empirical data whatsoever - that in Zimbabwe there are hundreds if not thousands of human beings who experience positive emotions and help strangers on a daily basis. I am also 100% confident that the crushing inflation rate and harsh economic conditions which have normalized t-shirts as a medium of exchange make it so that no sane person would envy Zimbabwe or hold it up as a model of prosperity. Furthermore, I would posit that there is a connection between GDP and positive emotions, again, without any empirical data. Finally, and perhaps most importantly, cultures and languages permeated with strong social pressure to express happiness and well-being are more likely to rank very high in such databases than cultures and languages permeated with radically different social pressure hierarchies.
This last point may not be obvious to westerners who have a habit of universalizing all particular periods of their internal civilizational development and mistakenly believing that it applies to global humanity as such. It does however go a long way in explaining why, when we look at the World Happiness Report ranking, it turns out that countries where citizens are routinely taught linguistic forms expressing the buzzwords of wellness psychology outperform other countries where citizens have diametrically different cultural norms. Hence Finland, Denmark, Sweden and the Netherlands - cultures where language has evolved to communicate almost everything in wellness psychology buzzwords rank highest, while countries where language simply does not employ these buzzwords and concepts as categories of human action rank lower. Hence Japan and South Korea, both of which have experienced astonishing gains in GDP over the past 70 years, rank relatively low compared to the aforementioned leaders, all of whom have experienced substantial declines in economic living standards according to any traditional metrics.
What does this mean for you and your business? It's quite simple really: if you push wellness and prioritize a stress-free work environment, you will literally be training your workforce to be so frail it will fail. Just as western economies have significantly declined in proportion to the rise of wellness, so too many American businesses have seen reduced productivity. In fact, often times an American company will maintain high productivity by moving its' production to areas of the world where workers are able to tolerate higher demands at lower cost for the employer. That, or American companies will import overseas talent for whom levels of stress in a foreign country were comparatively so much higher that the worker's habits of thought and action are geared towards productive outcomes precisely because of having experienced a strong, persistent "alarm phase" of stress and reacted with an equally strong and effective "resistance stage." Again, we must remember that the product of the resistance stage in the general adaptation syndrome is a result which eliminates the original problem that brought on the stress. If it does not, if the stress grows in stages or adapts to resistence, it may eventually overcome the organism's ability to deal with it - this is when deterioration, burnout and worse are highly probable outcomes.
However, in the normal course of competitive business activity, the stress of managing real problems is what generates real solutions which resolve the original stressor more effectively than quiet rooms, meditation seances or group therapy and other wellness sessions. Getting the job done, focusing on strategies to tackle problems, the pride of accomplishment and humbling effect of failure - all of these build resilience. They build the qualities that you want in your team. So next time you are considering blowing part of your budget on some kind of wellness program, don't. Instead, email me and I will put together a professional development course that will motivate your team to think creatively and refocus on finding solutions to problems rather than methods of escaping from problems.
All economic data? Surely not! Is this hyperbolic clickbait or are you serious? Yes - I am serious. All economic data is futile. Econometrics are, at best, an exercise in probablity theory rooted in trends mapped on the basis of past economic action. We can measure what was done and extrapolate a tendency, but we can never calculate a future. Some econometric probability data is better, some worse. The best data can usually be found where real money is at stake, where there is no safety net, where mal-investment has tangible consequences. The problem is that such places do not exist because even the most competitive and open markets function within the confines of a legal political economy. That legal political economy will not only impact private econometric data sets, it will always distort them. Think of it in the abstract: in microeconomics we have the notion of "perfect competition." This notion helps us better undestand the effect of competition on the market in principle, but the real world is not the world of principle, it is the world of practice. Political economy bears down on everything, competition included. Just as there is no perfect competition in general, so to there is no pure free market econometric data that can be thought of as reliable. Just as growth is always at the margin, it is all the more true that reliability of data is likewise at the margin.
So what, then, is data? It is noise, marketing and, in the long run, it is always wrong. I will not even bother giving examples. People have short memories. Perhaps it is a psychological defense mechanism. We want to believe that things will be different "this time," that the "accidents" of the past will not be repeated. More often than not data drives decisions much the same way that advertising influences consumer spending. This is why those who labored to make sense of the data were often refereed to as speculators. This word has a pejorative conotation, but I use it here in a matter-of-fact way. A speculator is an extreme risk taker. Extreme risk takers have their place in the economy as well. My point is not to naively attempt to convince a wayward humanity that following data is pointless, I simply wish to make the case of sober analysis of reality. Sober analysis of reality is more often than not impossible due to what I like to call data-cloud. Market participants focus excessively on data while also lacking the faculties to apply theory to recognize the inevitable result of certain trends in political economy. Much has been written about this, but the short-hand consolidated version has been dubbed the "boom-and-bust-cycle."
Well if the above is true, why do so many people rely on data to make decisions? First, insofar as business professionals are concerned, most of them are not entrepreneurs, they are desk-jockeys and pencil pushers, they are corporate cogs. Again, this is not meant in the pejorative, it is merely a statement of fact. Public choice economics teaches us that government employees will act on the basis of a radically different system of self-interest than private-sector employees. This teaching can be modified when considering the intermediary stage between a government employee and a business entrepeneur: namely the corporate professional. Corporations are large scale systems heavily rooted in entrenched structures that grew out of enterprise and were sustained by process. Corporate professionals are not entrepreneurs using trial and error to find their bearings, they are an intermediary between a government administrative official and a private business employee. They operate in systems and it is in their interest to propagate and perpetuate data sets and econometric models which fit within the given patterns around which their corporations are structured. Unlike government administrators, corporate professionals (like corporations themselves) are not fully immune to market pressures. As soon as the economic conditions cease to be opportune and the corporation begins to face collapse or major challenges, this spurns corporate professionals into actions which seem more akin to entrepreneurship. Corporations may sink into a kind of complacency, but they also have a higher chance or righting their course precisely because (unlike governments) they have less resources with which to shield themselves from reality.
It is economic reality that we should seek to measure. Statistics, econometric models and data sets based on studies rooted in various methodologies is not economic reality. Economic reality usually appears to us in the form of financial loss, market chaos, job loss, increased cost - in short: failure. Failure or a variation thereof is when our preconceptions about how we organize our business activities confronts reality. Weak minds then panic, sober minds understand that this situation is the dawn of a correction. Correction is a process by which market players adjust to existing realities and continue to thrive. Most don't, which is why they go bust. Most people prefer systems, even eronious ones, to this harsh market reality. What seems to be suboptimal or inefficient remains attractive to the public at large because the entrepreneurial alternative is too risky. Risk-aversion is a natural instinct. The ability to identify reality and ignore economic fairy-tales is not. At least not amongst those who have by and large functioned in strong economies which are comparatively more robust and wealthy than those of the developing world. The complacency of luxury is as real a driver of economic decline as the urgency of need is a driver of economic growth. The instinct of those priviledged with relative economic abundance is to trust the data because it has never been that wrong. This tendency acts as a slow tranquilizer, robbing those who practice it of the long-term awareness of where things are headed. Meanwhile, their competitors who have ventured outside the proverbial bubble of allowable and respectable opinion and sometimes sought to at least verify the data while also applying solid theoretical reasoning to practical problems have usually come out on top (if only by not sinking to the bottom). So stop following the data and start understanding the reality of political economy - it will save you lots of wasted time and re-focus you on truly productive modes of business development. Above all, if you are a small business, you need to put economic thought ahead of following the herd in an attempt to fall in line with general econometric trends. Instead, look specifically at your market and consider a pragmatic course of action. If that is proving difficult, if you know that econometric data is leading you down a deadend or off a cliff, but you and your team are struggling to wrap your minds around an alternative thought-process, email me about Professional Development courses.
Two short stories from personal experience: First, a senior in an expensive private college prep school proclaims that governments should print money and give it to people so they can spend it in order to grow the economy. Second, a high level manager claims that his very large European company had to open a school to educate new hires given how poorly prepared they were to enter the workforce by their universities. Under the circumstances, professional development courses in the workplace are a must. That said, be wary of your company making the same mistake that governments throughout the Western world have been making for decades: over-spending on systems posing as education without considering the merits of authentic education.
The pitfalls of professional development are many. More often than not, professional development is treated as at best a perk (your employees get some down-time, go to a conference, have a nice lunch etc) or as a variation of a team-building excursion. In the worst case scenario, your company can end up seriously overpaying just to have your employees schooled in the latest feel-good fad which has no practical benefit in the workplace. The same problem which has infected the education system from k-12 up to state funded universities is also infecting professional development. It works to destroy real professional development in stages: first, rather than using surplus financial resources to effectively educate for practical success, it uses them to fund more fantasy masquerading as professionalism. This effectively leads to a situation where no one even remembers ever having experienced true education. Inevitably, someone points out the demerits of fantasy in professional development and calls are made to create a "merit-based" system, which effectively means that employees are forced to go through a maze of training videos and banal tests cumulating in the acquisition of exactly what they don't need more of: certificates.
When the above two options run their course, enter the third, dazzling star studded snake-oil salesman and his get-rich quick professional training schemes. In the end, it all seems like a fruitless waste of time. This is perhaps why many small businesses shy away from it altogether. In the end, professional development ends up being a social function in large corporations, reduced to virtue-signaling about wellness, stress-relief and projecting what I like to call competence fashion. Large companies can often afford such waste because their market position makes them a bit like the Titanic in slow motion: they confidently sale straight into an iceberg and then stay afloat long enough to think they aren't sinking. Large firms often rely heavily on past success, economic trends and (this is especially true for Europe) state subsidies. This combination guarantees the institutionalization of professional patterns of behavior and thought that stifle entrepreneurship and dynamism.
So now that we've gone over what I don't mean when I advocate professional development, let's go over what I do mean: above all professional development is learning how to think and solve problems independently by understanding economics. I stress economics above other academic disciplines because we are not talking about education broadly, only professional development. No matter what line of business you are in, your employees need to understand the basics of economics. To do so, they need to develop deductive reasoning skills, analytical skills, critical thinking skills and - most importantly - logic. Applying economic thinking to all aspects of office life will help clarify planning, objectives and execution in the office. It will help optimize management structures, improve forward-facing marketing, customer relations, negotiations. It will have a profound impact on all aspects of office life. Of course, in order to benefit from professional development which puts economic thinking at the core, you need to hire a professional development expert who understands economics as applied to practical business needs. A professional development expert who understands economics as applied to practical business needs is not necessarily an economist, so the two shouldn't be confused. We're not talking about someone who is going to present your team with dozens of graphs and drown them in financial data.
Fundamentally, economics is an exercise in the application of deductive logic to practical real world problems. Let me leave you with a simple practical example: most business owners instinctively understand that customer service is important and that providing a refund to unhappy customers is an absolute must. What they don't understand is the economic principle behind transactions. Let's say the customer paid $25 dollars for your product or service and was not satisfied. You refund the $25 in hopes of aleviating the customer's displeasure and retaining the possibility of future business. What you don't understand is that the customer did not want the $25, so getting them back does not rectify the situation. If the customer valued the $25 over your service or product, he would never have parted with the money in the first place. Instead, the customer valued your service or product more than $25. That's why the customer was happy to give you something he percieved as having lower value ($25) for something he percieved as having higher value (your service or product). If the result is that the customer didn't get what he valued more (the service or product) and recieved a refund of what he valued less ($25) that customer is far from satisfied (to put it mildly). This is why businesses need to go the extra mile by finding a way to reimburse lost value (how is another question). This one simple example shows us just how important economic logic is in business.
If you want your team to benefit from professional development which challenges them to think and excites them intellectually, then send me an email. I've been delighting clients with real professional development classes for over 20 years. Don't wait - get in touch and find out what I can do for you.
Confidence is the key to success. Confidence is built on the ability to realistically assess your skills relative to the competition and the context in which you are applying them. When it comes to business English, too many professionals make unrealistic assessments of their skills. Instead of measuring their English language skills relative to their competition and the context in which they are applying those skills, they will compare themselves to native speakers of English. This might be because when it comes to their primary skill-set (the industry they are an expert in), these professionals are very demanding of themselves and, understandably, wish to excell. They reason that since they must excell in their field or industry, they must also excel in English.
While it is true that effective business English is vital to communication, we need to remember that in the case of non-English native professionals, the English language is literally a communication tool, not an existential goal. Sure, we would all love it if we had our own private business jet to get around. We would be thrilled to have a personal stylist make sure we look our best day in and day out. But in the real world, professionals economize scarce resources and the market tends to favor specialization.
Our IT guy might not dress like Brad Pitt, but as long as he gets the job done we're happy. We may not be able to carry on a small talk conversation about the latest sports championship game, but as long as we serve our client's interests, we should be fine. Sure, the "soft skills" are important, but no one has infinite time and resources to be the Jack of all Spades: we must specialize in one thing at the expense of others. English communication, while obviously important, falls into the category of "others".
Am I suggesting a more carefree attitude towards business English professional development: not at all. What I am suggesting is a more realistic mindset. First, when you realize that Business English is a communication tool, and that the function of this tool is to help you make money, your self assessment changes. You stop judging your English from the perspective of the language and start judging it from the perspective of your business goals. Did you effectively communicate? Do you and your partners understand one another in practice? From the business point of view, that is all that matters. If you get a poorly worded, clunky English-language sentence from an investor telling you that one million dollars have been deposited in your company's account, are you going to frown at the poor grammar or jump for joy at your business success? Don't you think your own partners and clients will react in a similar fashion if you get the job done and communicate in English to the extent necessary to satisfy their needs?
The point here is that since you are struggling with business English, you should set realistic goals focused on very specific circumstances in which you need to use your English. Master phrases like "please email me and I will get back to you" for the spontaneous or surprising moments when you fear you just can't understand the entirety of what is being said. Be polished and prepared to get whatever your main message is across. Focus on that message, on the words you need to communicate it, on telling your story, giving your examples, and don't worry if you stumble over every second word.
I once had a student who did just that: worried. One exercise which helped immensely was searching for videos of top CEOs who speak broken English, who have a deep foreign accent and who routinely make grammar mistakes. They do exist. English is a global business language, but it is not a global language. It is used in business precisely because unlike other languages it allows for clear communication despite grammatical errors. Everyone can speak broken English and get the job done. This doesn't mean you shouldn't work to improve. Competition means that even marginal improvement could make the differene between winning or losing. What it does mean is that you need situational awareness. Understand the contexts within which you are going to use business English. Dont learn "everything," prepare for specific topics and situations. Finally, don't worry about being a poet at parties or turning a unique phrase every time your speak. Now that I've calmed you down and set your mind on a concrete goal, don't forget that last vital step: email me so I can help you make progress towards that goal.
Scott Sperling recently claimed that productivity in the economy would increase due to AI and that this increase in productivity would go so far as to potentially offset any negative tendencies theoretically resulting from interest rates still being too low to effectively combat inflation. Without getting into the broader macroeconomic issues brought up by this claim, let's use his insight to ask a microeconomic scale question: can AI increase your company's productivity, and if so - how?
The answer is a resounding yes - if you employ the proper AI management structure. AI management structure? What's that? Interestingly enough if you actually google "AI management structure", AI Overviews doesn't have anything to say on the topic. You get some images and the first actual link is primarily about ethical usage of AI and risk mitigation.
As with much of what google feeds us, this is not particularly useful for small businesses. "Ethical" anything is a marketing mechanism used by big market players to solidify their brand image and make the move from being perceived as an openly profit-driven business to being perceived as a social good and, eventually a social necessity. What I am talking about is more down-to-earth than theoretical questions regarding the ethics of AI. An AI management structure should be viewed in analagous terms to a human resource management structure. We all know that systems and practices are devised for the management of humans in the workplace. These systems are dynamic, but some have proven more effective than others. Certainly management as a brand of business administration is all about figuring out how to optimize the performance of humans working together within one enterprise. The exact same problem presents itself when we think about AI - if we think about AI correctly.
Step one to thinking about AI correctly is that there are many AIs and no, you don't have to "chose the best one to use" - you have to use all of them to their best potential. Whether Chatgpt, Deepseek, Perplexity, or others - don't waste your time trying to figure out which one is "best" for your purposes and refrain for as along as possible from paying for one of them until you first discover whether or not you can get an ROI relative to time invested. Because the currency of AI is time. If you have money to waste, you can end up buying all of the latest, newest versions of everything, but if you and your team don't put the time into learning how to use AI and teaching AI how to work with you, you'll be missing out. There is plenty that you can accomplish with AI without having to pay for it - if you know what you're doing. The problem is, you probably don't. The bigger problem is you might think that somewhere out there is someone who does.
There isn't. The father of philosophy's father, Socrates, was famous for claiming "I know that I don't know." This put him far above the sophists, a group of clever con-artists who charged high premiums to their clients for useless pretend-knowledge. Socrates' knowledge was not something you could buy in a simple transaction, it required an investment in time. It's the same with AI. Sure, everyone ended up paying Socrates in wine, food and hospitality, but above all, they had to listen to him and take the time to train themselves in philosophical dialogue. Sound familiar? If you've used AI correctly, by which I mean you didn't take the sophmoric approach of just asking it to do a task and accepting the result blindly because it "looked good", then you know that AI use is a socratic conversation. Socratic dialogue, according to Plato, was the methodology that achieved truth. Well, despite what you MBA instructor told you, those guys over in the philosophy department did actually have something valuable to teach - something very practical for business: because if you want to make money from AI, if you want to increase your team's productivity using AI, you need to understand the methodology of dialogue which is at the heart of AI. AI can't do anything on its' own, it only operates on the basis of prompts - and if you aren't ready to learn the ways of the Prompt Master, you will miss out.
Lucky for you, I'm an expert on Plato and Socratic philosophy, which makes me an expert on AI. So let's get the dialogue started. Don't get taken in by the high priced sophists who promise you magical formulas for productive AI use and don't think you need to buy all the pro and premium versions right off the bat. Get in touch and find out how much you can gain from letting me train you and your employees in AI use.
It doesn't matter what field of business you are in, you need to be tasking your employees with using AI at least one hour per day. If you're not, then not only are you failing to develop their AI skills, you're failing to develop AI's people skills. Some AI can learn from interaction and the more your team uses it, the more productive it will be in understanding, interpreting and ultimately performing prompts. If you don't mandate this interaction, you will eventually find your team out-competed. Not by the AI that so many fear is going to make people redundant, but by people who know how to use AI who are now making people who don't know how to use AI redundant. Above all, don't get stuck on one of the two extremes of AI-inefficiency: naive over-reliance and paranoid avoidance.
Naive over-reliance is whenever you read about a professional embarrassing themselves by asking AI to generate a report or presentation and then realizing when it's too late that all of the data in the report or presentation was hallucinated. Naive over-reliance happens because enthusiasts don't realize that just because something looks polished, professional and was produced at lightning speed it doesn't mean that it's actually true. Naive over-reliance carries over the human tendency to passively accept statistical information without bothering to verify the methodology of data collection to passive acceptance of whatever a machine happens to generate. Naive over-reliance assumes that AI makes mistake because of a glitch or a bug, kind of like when a computer program breaks down. The fact is, AI hallucinates for the same reason people do: it misses the forrest for the trees. How many econometric indicators turn out to be erroneous? How many humans make decisions based on this erroneous data? At best human generated data is an approximation or a static picture of a moment in time. We can talk about trends, but in the end deductive analysis is the key to understanding data. AI doesn't possess this capacity because despite its' lofty name (artificial intelligence) it isn't really intelligent - it's just a large language model generating responses based on probability theory applied to word-constructs.
All of this leads us to the opposite spectrum: paranoid avoidance. Because it lies, because it takes as much or more time to verify than the time it potentials saves by performing tasks otherwise done by humans, because the we are lead to believe that the data we feed it is not secure and for a host of other reasons: we just refuse to use it. Paranoid avoidance is unfortunate for a number of reasons. First, in terms of data security - the fact that there is anyone in the post-Snowden universe who actually believes that anything online, in our phones, in the cloud or anywhere connected with computers is "secure" and "protected" is perplexing. The vast majority of legislation passed to "secure" and "protect" data has had, as its' aim, the restriction or censoring of data, not to mention the monopolization (to the extent that is even possible) of access to data by big tech players. This is not to say that there aren't extremely foolproof methods of protecting data (block-chain comes to mind), but in general we are kidding ourselves if we think that only data we feed to AI is somehow "unprotected" or "unsecured." Secondly, paranoid avoidance misses the point: AI is neither a replacement for humans nor a threat to humans - it is a tool. Humans who are able to learn how to use this tool will outperform humans who are unable to do so.
To learn how to use AI, you need to use AI. Your team needs to talk to AI. Your team needs to be in constant communication, experimenting with different prompts, verifying output, jumping between one AI and another to take advantage of the particular strengths and weaknesses of different models. Training humans in AI use and training AI in human use are interconnected activities without a deadline. There is no three day "how to" AI course that will replace daily interaction. There is also no practical course that will replace a solid theoretical understanding. If you don't understand what AI is, how it works, why it works the way it does - if you simply interact with it at a surface level, chances are it will do more harm than good.
There's no way around it: your team needs to understand the philosophy of artificial intelligence in order to understand the practical application of AI intelligence. So the only question left to ask is: why haven't you emailed me to set up professional development in AI for your team yet?
Global economy, multipolar market: it's all the same, right? And even if it isn't, it doesn't really impact my business? Right? Wrong.
Like it or not, ideas matter for your bottom line. Business professionals understand this instinctively when they talk about entrepreneurship, start-ups and high risk investment. "I have an idea for a business" is a common phrase for the bright-eyed optimists and dreamers. This language changes as a business grows. Eventually, process takes precedence over ideas and innovation. Economies of scale impact the language we use just as much as they impact the way we organize our firms. Where the entrepreneur talks about ideas, the seasoned business professional talks about structures, organization and procedures. That's all well and good, but without ideas that business professional will likely end up talking about anachronistic ways of doing things because the market never sits still. Like a big tech algorithm, the market is constantly changing and, like big tech users, market actors need to think about the ideas underpinning those changes in order to anticipate market trends. One anachronism whose time is at an end is the idea, structure, organization and processes of the global economy. Once the way of the future, it's quite literally now a thing of the past.
The idea of the global economy was that of one planetary market governed by the same set of regulations, rules, laws, customs and practices. It was meant to be apolitical, with universal administrative bodies taking the place of governments representing nation-states. Trade barriers were to be a thing of the past, replaced by a free flow of goods and services. Comparative advantage and specialization were supposed to flourish on a global scale. That was the theory, or rather fairy - as in fairy tale.
The reality is that the "global economy" was nothing but clever advertising. For what? For the uni-polar market. The uni-polar market was a world dominated by one hegemon who held all the aces, by one regulatory body, one international sherif, one mega-firm if you will. The global economy was an accident turned into an idea that couldn't and didn't work out in practice. The accident was the Second World War. In its' aftermath, one country emerged both unscathed and therefore dominant in the realm of economics: the United States. From 1945-1973 this accidental dominance was perpetuated by the fact that America's principle potential economic rivals were committing economic suicide: both China and the USSR were on an unsustainable path as each country fumbled its way through the implementation of communism. This by definition left the US to lead global growth in spite of its' adherence to the principles of a mixed economy. The epitome of this global growth was reached in 1973, which saw the United States embark upon a free-floating currency regime and exit the gold-back dollar. At the time, this seemed like the natural next step towards the "global economy" to ensure unipolarity in economic relations. By divorcing the value of the dollar from gold, the United States was able to embark upon a vast campaign of increasing the global dollar supply in order to satisfy the demand for United States Dollars as the world's reserve currency and the principle currency for international trade. In effect, this meant the creation of a world which produced tangible goods for America in return for green pieces of paper.
Just as the United States embarked upon this course, China and the USSR were undergoing more nuanced, but equally significant changes of their own. Deng's rise to power in China opened the way for the end of the communist economic experiment in favor of a more economically sound policy rooted in free market principles. The introduction of first detente and then perestroyka in the USSR likewise paved the way towards the eventual end of economic communism in Eastern Europe and across much of Asia. In the long run, what all of this this produced was a Chinese economy that started to specialize in production and an American economy that started to specialize in consumption along with a multiplicity of developing economies throughout the world that offered alternatives to the uni-polar market. This long-run was not immediately evident. In the 1990s, it seemed the United States had become economically supreme, sustaining massive fiscal spending, public debt and credit-fueled consumption. Then came the beginning of the end. As with all hegemons built on an accident turned into an idea, American economic decline was gradual, but clearly accelerating. Quantitive Easing was used as a method to delay the inevitable reckoning, but nothing was done to address the underlying fact that in a world where countries ravaged by war and colonialism had begun coming into their own, an economic policy based on the presumption of the dominance of the US dollar and nothing else was bound to fail. Eventually, the US became a wholly credit-and-consumption based economy and fell into stagflation.
Of course, the United States remains the largest market in the world, its' wealth, if no longer unrivaled, still difficult to match, its' potential still boundless (in theory) although quite limited in practice. While the majority of SWIFT transfers are still in USD, there is a large swath of the world's economy that no longer relies on SWIFT. Even then, the amount of SWIFT transactions in USD in 2022 hit a multi-decade low of 41%. Yes, it has since then risen, but only after the "Belgium-headerquartered consortium revised how it collects the transaction data in mid-2023." Translated to plain English: they had to fudge the numbers to make the dollar look not-so-bad because there is no way to actually make it look good anymore. US dollars as a share of Central Bank holdings understood as currency reserves dropped from around 70% in the year 2000 to only 58% by 2024 (having earlier reached a record low of 47%). Commodities are still overwhelmingly priced in USD, but the trends are unmistakably clear: there is a tectonic shift away from uni-polarity towards multi-polarity. CIPS and SPFS are harbingers of the future to come: a future where uni-polar dominance fades away.
Some may lament this as the end of the global economy, but they are mistaken. The basic principles of economics still apply: whereever there is a mutual interest in trade, there will be trade, whether foreign or domestic. The key difference is that the mask of the global economy has come off: we now see that there never was such a thing as the "global economy" - there was merely a uni-polar market. A uni-polar market, as the term implies, is a worldwide economy oriented towards one region, or "pole." This pole was not so much the United States as such as it was the US Dollar. America became the global consumer relative to a world that slowly rose to become the global producer. The imbalance this situation lead to was very predictable: a country whose main product is credit and whose main preoccupation is consumption will eventually bankrupt itself. A country whose maine product is manufacturing and whose main preoccupation is savings will eventually accumulate capital. Capital accumulation is the basis not so much of present wealth as of future investment. This is why the credit-consumption economy always looks wealthy compared to the savings-production economy: the whole point of credit-consumption is to allow for the satisfaction of present wants at the expense of the future. The whole point of savings-production is to sacrifice present wants for the benefit of the future.
The point here is not that the United States economy will shrivel into oblivion (it won't). We can expect it to correct and thrive. The point is that there never was an never will be a "global economy." There was a uni-polar economy which resulted from the accidental confluence of events as was turned into an idea that became a failed policy. What this means for international market players is simple: there is no one, easy path. There is no uniform code, no universal regulatory body, no best practice across all industries, no final resting point for upon which to base business decisions. Each and every firm needs to look in practice to the specific context within which it functions. Business opportunities are, as they have always been, somewhere on the margin - in the loophole, the gap, the inconsistency.
So while those who believed in the global economy might be aghast at its' end, those who understand what is going on realize that the uni-polar market is being replaced by a multi-polar market. To navigate the multi-polar market you need the cross-cultural skills and practical realism that looks at market realities and turns them into market opportunities. What is now emerging is not the end of the global economy or the beginning of autarky, it is a true planetary market: chaotic, unpredictable, dynamic.