Tuesday, March 11, 2014

Liars and Outliers

_Liars and Outliers:  Enabling the Trust that Society Needs to Thrive_ by Bruce Schneier
Indianapolis, IN:  John Wiley & Sons, 2012
ISBN 978-1-118-14330-8

(2)  Trust is largely habit, and when there’s not enough trust to be had, people stop trusting each other.

(6)  Sociologist Barbara Misztal identified three critical functions performed by trust:  1)  it makes social life more predictable, 2)  it creates a sense of community, and 3)  it makes it easier for people to work together.

(23)  [NIcholas] Humphrey proposed that the primary role of primate intelligence and creativity was to deal with the complexities of living with other primates.  In other words, we evolved smarts not to outsmart the world, but to outsmart each other.

It’s more than that.  As we became more social, we needed to learn how to get along with each other:  both cooperating with each other and ensuring everyone else cooperates, too.  It involves understanding each other.

(28)  One way to think of the relationship between society as a whole and its defectors is as a parasitic relationship.  Take the human body as an example.  Only 10% of the total number of cells in our human bodies are us - human cells with our particular genome.  The other 90% are symbionts, genetically unrelated organisms.  Our relationship with them ranges from mutualism (we both benefit) to commensalism (one benefits) to parasitism (one benefits and the other is harmed).

(42)  Psychological studies show that we have what’s called a hyperbolic discounting rate:  we often prefer lower payoffs sooner to higher payoffs later.

(46)  Remember the Dunbar number?  Actually, Dunbar proposed several natural human group sizes that increase by a factor of three;  5, 15, 50, 150, 500, and 1,500 - although, really, the numbers aren’t as precise as all that.  The layers related to both the intensity and intimacy of relationships, and the frequency of contact.

The smallest, three to five, is a _clique_:  the number of people from whom you would seek help in times of severe emotional distress.  The 12-to-20 person group is the _sympathy group_:  people with whom you have a particularly close relationship.  After that, 30 to 50 is the typical size of the hunter-gatherer overnight camps, generally drawn from a single pool of 150 people.  The 500-person group is a the _megaband_, and the 1,500-person group is the _tribe_;  both terms are common in the ethnographic literature.  Fifteen hundred is roughly the number of faces we can recognize, and the typical size of a hunter-gatherer society.

(48)  Institutions scale in a way that morals and reputation do not, and this has allowed societies to grow at a rate never before seen on the planet.

(49)  Recall our two definitions of trust from chapter 1:  trust of intentions and trust of actions.  In smaller societies, we are usually concerned with trust in the first definition…  Societal pressures become more about inducing specific actions:  compliance.

(56)  If someone consistently takes all the cookies, Mother will stop baking them.  Remember:  it’s a bad parasite that kills its host.

(69 - 70)  There are many ways to sort societal pressures.  The system I’m using sorts them by origin:  moral pressures, reputational pressures, institutional pressures, and security systems…. Security systems comprise a weird hybrid:  it’s both a separate category, and it enhances the other three categories…

Moral pressure works best in small groups…
Reputational pressure works well in small- and medium-sized groups….
Institutional pressure works best in larger-sized groups….
Security systems can act as a societal pressure at a variety of scales.

(79)  Harm/care systems.  As discussed in Chapter 3, we are naturally predisposed to care for others.  From mirror neurons and empathy to oxytocin, our brains have evolved to exhibit altruism.
Fairness/reciprocity systems.  Also discussed in Chapter 3, we have natural notions of fairness and reciprocity.  
loyalty systems.  Humans have a strong tendency to divide people into two categories, those in our group (“us”) and those not in our group (“them”).  This has serious security ramifications, which we’ll talk about in the section on group norms later in the chapter, and in the next chapter about group membership.
Authority/respect systems.  Humans have a strong tendency to defer to authority and will follow orders simply because they’re told to by an authority.
Purity/sanctity systems.  This is probably the aspect of morality that has the least to do with security, although societies have used it to police all sorts of female [and male] behaviors.  Mary Douglas’ _Purity and Danger_ talks about how notions of purity and sanctity operate as stand-ins for concepts of unhealthy and dangerous, and this certainly influences morals.

(82)  Psychologist Andrew Colman called this the Bad Apple Effect.  Any large group is likely to contain a few bad apples who will defect at the expense of the group interest and inspire others to do likewise.  If someone is speeding, or littering, or watering his lawn in spite of water-use restrictions, others around him are more likely to do the same….

In psychological experiments, a single unpunished free rider in a group can cause the entire group to spiral towards less and less cooperation.  These patterns reflect the human tendency to adhere not only to social norms, but to moral norms.  In Islam, announcing that you’ve sinned it itself a sin.

(84)  Although it was easy to take a bagel without paying, [Paul] Feldman succeeded in collecting about 90% of the posted price [in his honor system office bagel business], resulting in much more profit than if he had to pay someone to sell the bagels and guard the money…

Philosopher Emmanuel Levinas said that morality is grounded in face-to-face interactions.  In general, moral pressure works best at close range.  It works best with family, friends, and other intimate groups:  people whose intentions we can trust.  It works well when the groups are close in both space and time.  It works well when it’s immediate:  in crises and other times of stress.  It works well with groups whose members are like each other, whether ethnically, in sharing an interest, or some other trait.  Even having a common enemy works in this regard.

(114)  Unexpectedly, they [inspections and fines in toxin cleanup experiment] had a negative effect:  subjects were more likely to cooperate if there were no compliance fines than if there were.  The addition of money made it a financial rather than a moral decision.  Paradoxically, financial penalties intended to discourage harmful behavior can have the reverse effect.
NB:  fine as fee - Israeli daycare pick-up experience

(115-116)  Ostrom’s rules for common pool resources:
1.  Everyone must understand the group interest and know what the group norm is.
2.  The group norm must be something that the group actually wants.
3.  The group must be able to modify the norm.
4.  Any institution delegated with enforcing the group norm must be accountable to the group, so it’s effectively self-regulated…
5.  The penalties for defecting must be commensurate with the seriousness of the defection.
6.  The system for assessing penalties must be consistent, fair, efficient, and relatively cheap.
7.  The group must be able to develop its own institutional pressure and not have it imposed from outside the group.
8.  If there are larger groups and larger group interests, then the groups need to be scaled properly and nested in multiple layers - each operating along these same lines.

(116)  Ostrom’s rules may very well be the closest model we have to our species’ first successful set of institutional pressures.  They’re not imposed from above, they grow organically from the group.  Societies of resource users are able to self-regulate if they follow these rules, and that self-regulation is stable over the long term.  It’s generally when outsiders come in and institutionalize a resource-management system that things start to fail.

(118)  Similarly, we can never ensure perfect security against terrorism.  All this talk of terrorism as an existential threat to society is nonsense.  As long as terrorism is rare enough, and most people survive, society will survive.  Unfortunately, it’s not politically viable to come out and say that.  We’re collectively in a pathological state where people expect perfect protection against a host of problems - not just terrorism - and are unwilling to accept that that is not a reasonable goal…

Any increase in the severity of punishment often doesn’t translate into a drop in crime;  an increase in the probability of punishment often does.  Often the societal causes of crime are what’s important, and changes in the law do very little to help.

(127)  Lojack, widely deployed, will reduce car theft (and will increase car theft in neighboring regions that don’t have the same system).  Various computer security systems can have a similar result.

(144)  Ralph Waldo Emerson wrote:
Society is a joint-stock company, in which the members agree, for the better securing of his bread to each shareholder, to surrender the liberty and culture of the eater.  The virtue in most request[s] is conformity.  Self-reliance is its aversion.  It loves not realities and creators, but names and customs.

Henry David Thoreau talks about how he went along with the group norm, despite what his morals told him:
The greater part of what my neighbors call good I believe in my soul to be bad, and if I repent of anything, it is very likely to be my good behavior.  What demon possessed me that I behaved so well?

(164)  But the church hierarchy (the bishops and the Vatican) decided that its ability to function as a trustworthy religious institution depended on reputation.  This is known as the “doctrine of scandal,” and means that its reputation was more important than justice - or preventing transgressions [in child sex scandals].

(174)  Merchants like doing this, because keeping prices high is profitable.  As Adam Smith, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

(216)  Also - and this is particularly interesting - the wealthier a country is, the lower its citizens’ tolerance for risk.  Along similar lines, the greater the income inequality a society has, the less trusting its citizens are.

(218)  When you start measuring something and then judge people based on that measurement, you encourage people to game the measurement instead of doing whatever it is you wanted in the first place.

(239)  The geopolitics that results in terrorism matter much more than any particular security measure against terrorists.

(240-241)  ...list of principles for designing effective societal pressures:
Understand the societal dilemma.  Not just what the group interest is, but what the group norm is, what the competing norms are, how the societal dilemma relates to other societal dilemmas, what the acceptable scope of defection is, and so on…
Consider all four societal pressures… effective societal pressure usually involves all four categories, though not necessarily in equal measure…
Pay attention to scale…
Foster empathy and community, increasing moral and reputational pressures…
Use security systems to scale moral and reputational pressures…
Harmonize institutional pressures across related technologies.  There shouldn’t be one law for paper mail and another for e-mail, or one laws for telephone conversations and another for Internet telephony…
Ensure that financial penalties account for the likelihood that a defection will be detected…  If we expect a fine to be an effective societal pressure, it needs to be more expensive than the risk of defecting and paying it.
Choose general and reactive security systems… we need to concentrate on the broad motivations for defection, rather than on blocking specific tactics, to prevent defectors from working around security systems…
Reduce concentrations of power.  Power, whether it’s concentrated in government, corporations, or non-governmental organizations, brings with it the ability to defect.  The greater the power, the greater the scope of defection.  One of the most important things society can do to reduce the risk of catastrophic defection is to reduce the amount of power held by individual actors in key positions.
require transparency - especially in corporations and government institutions.  Transparency minimizes the principal-agent problem and ensures the maximum effect of reputational pressures.

(250)  Adam Smith wrote:
If there is any society among robbers and murderers, they must at least, according to the trite observation, abstain from robbing and murdering one another.  Beneficence, therefore, is less essential to the existence of society than justice.  Society may subsist, tho’ not in the most comfortable state, without beneficence;  but the prevalence of injustice must utterly destroy it.

(258)  …books on neuropsychology:  Michael Schermer’s _The Science of Good and Evil_, Nigel Barber’s _Kindness in a Cruel World_, Donald Pfaff’s _The Neuroscience of Fair Play_, Martin Nowak’s _SuperCooperators_, and Patricia Churchland’s _Braintrust_.  The last two are the best.

(263-264)  Golden Rule/Silver Rule
Judaism:  “What is hateful to you, do not do to your fellow man.  This is the entire Law, all the rest is commentary.”  -Talmud, Shabbat 3id
Christianity:  “So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets.” - Matthew 7:12.  Also “Do to others as you would have them do to you.” - Luke 6:31.
Islam:  “No one of you is a believer until he desires for his brother that which he desires for himself.” - Forty Hadith of an-Nawawi 13.
Hinduism:  “This is the sum of duty;  do naught onto others what you would not have them do unto you. - Mahabharata 5,1517.
Confucianism:  “Do not do to others what you would not like yourself.  Then there will be no resentment against you, either in the family or in the state.” - Analecdts 12:2.
Buddhism:  “Hurt no others in ways that you yourself would find hurtful.” - Udana-Varga 5,1.
Taoism:  “Regard your neighbor’s gain as your gain, and your neighbor’s loss as your own loss.” - Tai Shang Kan Yin P’ien, Chapter 49.
Jainism:  “A man should wander about treating all creatures as he himself would be treated.” - Sutrakritanga 1.11.33.

(271)  In general, the altruistic portion of a person’s brain only works when the thrill center isn’t stimulated by the possibility of financial compensation.  If you try to stimulate both simultaneously, the thrill center wins.

(271-272)  Ostrom’s original rules are:
1.  The commons must be clearly defined, as must the list of individuals who use it.
2.  What can be taken out of the commons, and what sort of resources are needed to maintain it, must be suited to local conditions.
3.  Those affected by the rules of the commons need to have a say in how those rules can be modified.
4.  The group charged with monitoring or auditing use of the commons must be accountable to the individuals being monitored.
5.  Individuals who overuse the commons must be assessed graduated penalties, in line with the seriousness of their offense.
6.  Individual must have access to quick and cheap mechanisms to resolve the inevitable conflicts that come up.
7.  Individuals who use the commons must be able to come up with their own rules for managing it, without those rules being overruled by outside powers.
8.  If the commons is part of a larger system, all of this needs to be nested in multiple layers operating along the same lines.

(284)  Mussolini didn’t make the trains run on time;  he just made it illegal to complain about them.

Thursday, March 6, 2014


_Anti-Fragile_ by Nassim Nicholas Taleb
NY:  Random House, 2012
ISBN 978-1-4000-6748-6

(3)  Some things benefit from shocks;  they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty.  Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile.  Let us call it antifragile.
NB:  hardiness

(12)  The strangest thing is that this obvious property that _anything fragile hates volatility_, and vice versa, has been sitting completely outside the scientific and philosophical discourse.

(17)  As a member of the Christian minority in the Near East, I can vouch that commerce, particularly small commerce, is the door to tolerance - the only door, in my opinion, to any form of tolerance.  It beats rationalizations and lectures.
NB:  direct marketing, local ag and biz

It is worth re-explaining the following:  the robust or resilient is neither harmed nor helped by volatility and disorder, while the antifragile benefits from them.

(20)  Recall that the fragile wants tranquility, the antifragile grows from disorder, and the robust doesn't care too much.

(56)  In the complex world, the notion of "cause" itself is suspect;  it is either nearly impossible to detect or not really defined - another reason to ignore newspapers, with their constant supply of causes for things.

(58)  Humans tend to do better with acute than with chronic stressors, particularly when the former are followed by ample time for recovery, which allows the stressors to do their jobs as messengers.

(64)  Much of modern life is preventable chronic stress injury.

(69)  Black Swan Management 101:  nature (and nature-like systems) likes diversity _between_ organisms rather than diversity _within_ an immortal organism, unless you consider nature itself the immortal organism, as in the pantheism of Spinoza or that present in Asian religions, or the Stoicism of Chrisippus or Epictetus.

(74)  Further, my characterization of a loser is someone who, after making a mistake, doesn't introspect, doesn't exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on.  These types often consider themselves the "victims" of some large plot, a bad boss, or bad weather.

(77)  There is something like a switch in us that kills the individual in favor of the collective when people engage in communal dances, mass riots, or war.  Your mood is now that of the herd.  You are part of what Elias Canetti calls the _rhythmic and throbbing crowd_.  You can also feel a different variety of crowd experience during your next street riot, when fear of authorities vanishes completely under group fever.
NB:  zombies as crowd

(88)  … my (mathematical) point is that a collection of small units with semi-independent variations produces vastly different risk characteristics than a single large unit.

(95)  In the recent nostalgic book, _Levant_, Philip Mansel documents how the cities of the Eastern Mediterranean operated as city-states separated from the hinterland.

(98)  Some people have fallen for the naive turkey-style belief that the world is getting safer and safer, and of course they naively attribute it to the holy "state" (though bottom-up Switzerland has about the lowest rate of violence of any place on the planet).  It is exactly like saying that nuclear bombs are safer because they explode less often.  The world is subjected to fewer and fewer acts of violence, while wars have the potential to be more criminal.  We were very close to the mother of all catastrophes in the 1960s when the United States was about to pull the nuclear trigger on the Soviet Union.  Very close.  When we look at risks in Extremistan, we don't look at evidence (evidence comes too late), we look at potential damage:  never has the world been more prone to more damage:  never.  It is hard to explain to naive data-driven people that risk is in the future, not in the past.

(101)  Light control works;  close control leads to overreaction, sometimes causing the machinery to break into pieces.  In a famous paper "On Governors," published in 1867, Maxwell modeled the behavior and showed mathematically that tightly controlling the speed of engines leads to instability.

(109)  Modernity starts with the state monopoly on violence, and ends with the state's monopoly on fiscal irresponsibility.

(118)  Beware what you wish for:  small government might in the end be more effective at whatever it needs to do.  Reduction in size and scope may make it even more intrusive than large government.

(121)  The ideas advanced here are not political, but risk-management based.  I do not have a political affiliation or allegiance to a specific party;  rather, I am introducing the idea of harm and fragility into the vocabulary so we can formulate appropriate polices to ensure we don't end up blowing up the planet and ourselves.

(132)  It is the system and its fragility, not events, that must be studied - what physicists call "percolation theory," in which the properties of randomness of the terrain are studied rather than those of a single element of the terrain.

(152)  My point is that wisdom in decision making is vastly more important - not just practically, but philosophical - than knowledge.

(155)  LIkewise, when I was a trader, a profession rife with a high dose of randomness, with continuous psychological harm that drills deep into one's soul, I would go through the mental exercise of assuming every morning that the worst possible thing had actually happened - the rest of the day would be a bonus.

(156)  My idea of the modern Stoic sage is _someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking_.

He [Seneca] said that wealth is the slave of the wise man and master of the fool.

(157)  Seneca in De Beneficiis:  "The bookkeeping of benefits is simple:  it is all expenditure;  if anyone returns it, that is clear _gain_ (my emphasis);  if he does not return it, it is not lost, I gave it for the sake of giving."  
NB:  generosity, gratitude

(163)  Yiddish proverb:  "Provide for the worst;  the best can take care of itself."

(176)  And, it is worth repeating, options, any options, by allowing you more upside than downside, are vectors of antifragility.

(178)  Authors, artists, and even philosophers are much better off having a very small number of fanatics behind them than a large number of people who appreciate their work.
NB:  True Fan Theory

(188)  We said that the intellectual society rewards "difficult" derivations, compared to practice in which there is no penalty for simplicity.

(189)  The history of medicine is littered with the strange sequence of discovery of a cure followed, much later, by implementation - as if the two were completely separate ventures, the second harder, much harder, than the first.

(190)  The key is that the significant can only be revealed through practice.

(191)  We saw the gap between the wheel and its use.  Medical researchers call such lag the "translational gap," the time difference between formal discovery and first implementation, which, if anything, owing to excessive noise and academic interests, has been shown by Countopoulos-Ioannidis and her peers to be lengthening in modern times.

…(as I keep saying, removal of something non-natural does not carry long-term side effects;  it is typically iatrogenics-free).

(194)  apophatic

(198)  Is democracy epiphenomenal?  Supposedly, democracy works because of this hallowed rational decision making on the part of voters.  But consider that democracy may be something completely accidental to something else, the side effect of people liking to cast ballots for completely obscure reasons, just as people enjoy expressing themselves just to express themselves.

(199)  If life is lived forward but remembered backward, as Kierkegaard observed, then books exacerbate this effect - our own memories, learning and instinct have sequences in them.  Someone standing today looking at events _without having lived them_ would be inclined to develop illusions of causality, mostly from being mixed-up by the sequence of events.

(203)  … master aphorist Publilius Syrus:  "poverty makes experiences" (hominem experirir multi pauperitas iubet)

(205)  Julien Gracq - good literature

(222)  It is just that things that are implemented tend to want to be born from practice, not theory.
NB:  politics of swadeshi

(237)  Recall our mission to "not be a turkey."  The take-home is that, when facing a long sample subjected to turkey problems, one tends to estimate a _lower_ number of adverse events - simply, rare events are rare, and tend not to show up in past samples, and given that _the rare is almost always negative_, we get a rosier picture than reality.  But here we face the mirror image, the reverse situation.  Under positive asymmetries, that is, the antifragile case, the "unseen" is positive.  So "empirical evidence" tends to miss positive events and underestimate the total benefits.

(238)  Let me stop to issue rules based on the chapter so far (i) Look for optionality;   in fact, rank things according to optionality, (ii) preferably with open-ended, not closed-ended, payoffs;  (iii)  Do not invest in business plans but in people, so look for someone capable of changing six or seven times over his career, or more (an idea that is part of the modus operandi of the venture capitalist Marc Andreesen);  one gets immunity from the backlit narratives of the business plan by investing in people.  It is simply more robust to do so;  (iv) Make sure you are barbelled, whatever that means in your business.

(242)  Only the autodidacts are free.  And not just in school matters - those who decommoditize, detouristify their lives.

(245-246)  The trick is to be bored with a specific book, rather than with the act of reading.  So the number of pages absorbed could grow faster than otherwise.  And you find gold, so to speak, effortlessly, just as in rational but undirected trial-and-error-based research.  It is exactly like options, trial and error, not getting stuck, bifurcating when necessary but keeping a sense of broad freedom and opportunism.  Trial and error is freedom.

(I confess I still use that method at the time of this writing.  Avoidance of boredom is the only worthy mode of action.  Life otherwise is not worth living.)

(248)  But there is something central in following one's own direction in the selection of readings:  what I was given to study in school I have forgotten;  what I decided to read on my own, I still remember.

(249)  Indeed, the most severe mistake made in life is to mistake the unintelligible for the unintelligent - something Nietzsche figured out.

(256)  … Nietzsche understood something that I did not find explicitly stated in his work:  that growth in knowledge - or in anything - cannot proceed without the Dionysian.

(260)  _You decide principally based on fragility, not probability_.  Or to rephrase, _You decide principally based on fragility, not so much on True/False_.

Scientists have something called "confidence level";  a result obtained with a 95 percent confidence level means that there is no more than a 5 percent probability of the result being wrong.  The idea of course is inapplicable as it ignores the size of the effects, which of course, makes things worse with extreme events.

So, to repeat, the probability (hence True/False) does not work in the real world;  it is the payoff that matters.

(269)  Jumping from a height of thirty feet (ten meters) brings more than ten times the harm of jumping from a height of three feet (one meter) - actually, thirty feet seems to be the cutoff point for death from free fall.

(275)  When you hear of a "second-order" effect, it means convexity is causing the failure of approximation to represent the real story.

(278)  A squeeze occurs when people have no choice but to do something, and do it right away, regardless of the costs.

(279)  In spite of what is studied in business schools concerning "economies of scale," size hurts you at times of stress;  it is not a good idea to be large during difficult times.
NB:  what about production?

But the numbers show, at best, no gain from such increase in size - that was already true in 1978, when Richard Roll voiced the "hubris hypothesis,"  finding it irrational for companies to engage in mergers given their poor historical record.

(282)  … it is the size per segment of the project that matters, not the entire project - some projects can be divided into pieces, not others.  Bridge and tunnel projects involve monolithic planning, as these cannot be broken up into small portions;  their percentage costs overruns increase markedly with size.

It is wrong to use the calculus of benefits without including the probability of failure.

As with the European Union's subsidiary principle, "small" here means that smallest possible unit for a given function or task that can operate with a certain level of efficacy.

(286)  visionary researcher on extreme events Daniel Zajdenweber…  The economy can get more and more "efficient," but fragility is causing the costs of errors to be higher.

(288)  Ancestral humans did it differently. Jennifer Dunne, a complexity researcher who studies hunter-gatherers, examined evidence about the behavior of the Aleuts, a North American native tribe, for which we have ample data, covering five millennia.  They exhibit a remarkable lack of concentration in their predatory behavior, with a strategy of prey switching.  They were not as sticky and rigid as us in their habits.  Whenever they got low on a resource, they switched to another one, as if to preserve the ecosystem.  So they understood convexity effects - or, rather, their habits did.
NB:  flexibility, antifragility

(295)  The notion of average is of no significance when one is fragile to variations - the dispersion in possible thermal outcomes here matters much more.  Your grandmother is fragile to variations of temperature, to the volatility of the weather.  Let us call that second piece of information the _second-order effect_, or, more precisely, the _convexity effect_.

(301)  The "apophatic" focuses on what cannot be said directly in words, from the Greek _apophasis_ (saying no, or mentioning without mentioning).

(302)  I have used all my life a wonderfully simple heuristic:  charlatans are recognizable in that they will give you positive advice, and only positive advice, exploiting our gullibility and sucker-proneness…

Yet in practice it is the negative that's used by the pros, those selected by evolution:  chess grandmasters usually win by not losing;  people become rich by not going bust... 

(305)  Just worry about Black Swan exposures, and life is easy.

(306)  Few realize that we are moving into the far more uneven distribution of 99/1 across many things that used to be 80/20:  99 percent of Internet traffic is attributable to less than 1 percent of sites, 99 percent of book sales come from less than 1 percent of authors… and I need to stop because numbers are emotionally stirring.  Almost everything contemporary has winner-take-all effects, which includes sources of harm and benefits.  Accordingly, as I will show, 1 percent modification of systems can lower fragility (or increase antifragility) by about 99 percent - and all it takes is a few steps, a very few steps, often at low cost, to make things better and safer.

(308)  I discovered that I had been intuitively using the less-is-more idea as an aid in decision making (contrary to the method of putting a series of pros and cons side by side on a computer screen).  For instance, if you have more than one reason to do something (choose a doctor or veterinarian, hire a gardener or an employee, marry a person, go on a trip), just don't do it.  It does not mean that one reason is better than two, just that by invoking more than one reason you are trying to convince yourself to do something.  Obvious decisions (robust to error) _require_ no more than a single reason.

I have often followed what I call Bergson's razor:  "A philosopher should be known for one single idea, not more" ( I can't source it to Bergson, but the rule is food enough).

(309)  Antifragility implies - contrary to initial instinct - that the old is superior to the new, and much more than you think.  No matter how something looks to your intellectual machinery, or how well or poorly it narrates, time will know more about its fragilities and break it when necessary.

(314)  Technothinkers tend to have an "engineering mind" - to put it less politely, they have autistic tendencies.  While they don't usually wear ties, these types tend, of course, to exhibit all the textbook characteristics of nerdiness - mostly lack of charm, interest in objects instead of persons, causing them to neglect their looks.  They love precision at the expense of applicability.  And they typically share an absence of literary culture.

This absence of literary culture is actually a marker of future blindness because it is usually accompanied by a denigration of history, a by product of unconditional neomania.  Outside of the niche and isolated genre of science fiction, literature is about the past.  We do not learn physics or biology from medieval textbooks, but we still read Homer, Plato, or the very modern Shakespeare.  We cannot talk about sculpture without knowledge of the works of Phidias, Michelangelo, or the great Canova.
NB:  Canova

(316)  So it may be a natural property of technology to only want to be displaced by itself.

(317)  _For the perishable, every additional day in its life translates into a _shorter_ additional life expectancy.  For the nonperishable, every additional day may imply a _longer_ life expectancy_.

(319)  Remember the following principle:  I am not saying that _all_ technologies do not age, only that those technologies that were prone to aging are already dead.

(321)  Another mental bias causing the overhyping of technology comes form the fact that we notice change, not statics.  The classic example discovered by the psychologists Daniel Kahneman and Amos Tversky, applies to wealth.  (The pair developed the idea that our brains like minimal effort and get trapped that way, and they pioneered  attraction of cataloging and mapping human biases with respect to perception of random outcomes and decision making under uncertainty.)  If you announce to someone "you lost $10,000," he will be much more upset than if you tell him "you portfolio value, which was $785,000, is now $775,000."  Our brains have a predilection for shortcuts, and the variation is easier to notice (and store) than the entire record.  It requires less memory storage.  This psychological heuristic (often operating without our awareness), the error of variation in place of total, is quite pervasive, even with matters that are visual.

We notice what varies and changes more than what plays a large role but doesn't change.
NB:  Not with money if you're poor

(324)  But consider the difference between the artisanal - the other category - and the industrial.  What is artisanal has the love of the maker infused in it, and tends to satisfy - we don't have this nagging impression of incompleteness we encounter with electronics.

(325)  What is top-down is generally unwrinkled (that is, unfractal) and feels dead.

Wealth of details, ironically, leads to inner peace.

(331)  Amateurs in any discipline are the best, if you can connect with them.  Unlike dilettantes, career professionals are to knowledge what prostitutes are to love.

He [Taleb's student] told me that after his detoxification, he realized that all his peers do is read _timely_ material that becomes instantly obsolete.

(335)  There are secrets to our world that only practice can reveal, and no opinion or analysis will ever capture in full.

Let's take this idea of Empedocles' dog a bit further:  If something that makes no sense to you (say, religion - if you are an atheist - or some age-old habit or practice called irrational);  if that something has been around for a very, very long time, then, irrational or not, you can expect it to stick around much longer, and outlive those who call for its demise.

(337)  As usual, the solution is simple, an extension of via negativa and Fat Tony's _don't-be a sucker_ rule:  the non-natural needs to prove its benefits, not the natural - according to the statistical principle outlined earlier that nature is to be considered much less of a sucker than humans.  In a complex domain, only time - a long time - is evidence.

The "do you have evidence" fallacy, mistaking evidence of no harm for no evidence of harm, is similar to the one misinterpreting NED (no evidence of disease) for evidence of no disease.  This is the same error as mistaking absence of evidence for evidence of absence, the one that tends to affect smart and educated people, as if education made people more confirmatory in their responses and more liable to fall into simple logical errors.

(348-349)  Let me repeat the argument here in one block to make it clearer.  Evolution proceeds by undirected, convex bricolage or tinkering, inherently robust, i.e., with the achievement of potential stochastic gains thanks to continuous, repetitive, small, localized mistakes.  What men have done with top-down, command-and-control science has been exactly the reverse:  interventions with negative convexity effects, i.e., the achievement of small certain gains through exposure to massive potential mistakes.  Our record of understanding risks in complex systems (biology, economics, climate) has been pitiful, marred with retrospective distortions (we only understand the risks after the damage takes place, yet we keep making the mistake), and there is nothing to convince me that we have gotten better at risk management.  In this particular case, because of the scalability of the errors, you are exposed to the wildest possible form of randomness.

Simply, humans should not be given explosive toys (like atomic bombs, financial derivatives, or tools to create life).

Let me phrase the last point a bit differently.  If there is something in nature you don't understand, odds are it makes sense in a deeper way that is beyond your understanding.  So there is a logic to natural things that is much superior to our own.  Just as there is a dichotomy in law:  _innocent until proven guilty_ as opposed to _guilty until proven innocent_, let me express my rule as follows:  what Mother Nature does is rigorous until proven otherwise;  what humans and science do is flawed until proven otherwise.
NB:  stochastic 1. Of, relating to, or characterized by conjecture; conjectural.  2. Statistics  a. Involving or containing a random variable or variables: stochastic calculus.
b. Involving chance or probability: a stochastic stimulation.

(350)  We are built to be dupes for theories.  But theories come and go;  experience stays.

(380)  If you take risks and face your fate with dignity, there is nothing you can do that makes you small;  if you don't take risks, there is nothing you can do that makes you grand, nothing, And when you take risks, insults by half-men (small men, those who don't risk anything) are similar to barks by nonhuman animals:  you can't feel insulted by a dog.

(381)  …(to repeat, forecasts induce rise taking;  they are more toxic to us than any other form of human pollution).

(382)  Commentators need to have a status _below_ ordinary citizens.  Regular citizens, at least, face the downside of their statements.

So counter to the entire idea of the intellectual and commentator as a detached and protected member of society, I am stating here that I find it profoundly unethical to talk without doing, without exposure to harm, without having one's skin in the game, without having something at risk.  You express your opinion;  it can hurt others (who rely on it), yet you incur no liability.  Is this fair?

(383)  As in anything with words, it is not the victory of the most correct, but that of the most charming - or the one who can produce the most academic-sounding material.

(384)  There is no penalty for opinion makers who harm society.

(387)  An academic is not designed to remember his opinions because he doesn't have anything at risk from them.

(389)  Never ask anyone for their opinion, forecast, or recommendation.  Just ask them what they have - or don't have - in their portfolio.

The psychologist Gerd Gigerenzer has a simple heuristic.  Never ask the doctor what _you_ should do.  As him what _he_ would do if he were in your place.  You would be surprised at the difference.

(390)  To put in Fat Tony terms:  suckers try to be right, nonsuckers try to make the buck, or:
_Suckers try to win arguments, nonsuckers try to win._
To put it again in other words:  it is rather a good thing to lose arguments.

(393)  Almutanabbi, the best poet

(401)  … (business schools are more like acting schools) …

(403)  Anything one needs to market heavily is necessarily either an inferior produce or an evil one.

And marketing beyond conveying information is insecurity.

(404)  A (publicly listed) corporation does not feel shame.  We humans are restrained by some physical, natural inhibition.

A corporation does not feel pity.

A corporation does not have a sense of honor - while, alas, marketing documents mention "pride."

A corporation does not have generosity.  Only self-serving actions are acceptable.  Just imagine what would happen to a corporation that decided to unilaterally cancel its receivables - just to be nice.  Yet societies function thanks to random acts of generosity between people, even sometimes strangers.

All of these defects are the result of the absence of skin in the game, cultural or biological - an asymmetry that harms others for their benefit.

(405)  Only a sense of honor can lead to commerce.  Any commerce.

(408)  Tony:  Nero, you sucker.  Don't be fooled by money.  These are just numbers.  Being self-owned is a state of mind.

(410)  The definition of the _free man_, according Aristotle, is one who is free with his opinions - as a side effect of being free with his time.

Freedom in this sense is only a matter of sincerity in political opinions.

(412)  A simple solution, but quite drastic;  anyone who goes into public service should not be allowed to _subsequently_ earn more from any commercial activity than the income of the highest paid civil servant.  It is like a voluntary cap (it would prevent people from using public office as a credential-building temporary accommodation, then going to Wall Street to earn several million dollars).  This would get priestly people into office.

(417)  There is a certain property of data:  in large data sets, large deviations are vastly more attributable to noise (or variance) than to information (or signal).

The Tragedy of Big Data.  The more variables, the more correlations that can show significance in the hands of a "skilled" researcher.  Falsity grows faster than information;  it is nonlinear (convex) with respect to data.

(419)  Mistakes made collectively, not individually, are the hallmark of organized knowledge - and the best argument against it.  The argument "because everyone is doing it" or "that's how others do it" abounds.  It is not trivial:  people who on their own would not do something because they find it silly now engage in the same thing but in groups.  And this is where academia in its institutional structure tends to violate science.

(421)  Everything in religions law comes down to the refinements, applications, and interpretations of the Golden Rule, "Don't do unto others what you don't want them to do to you."  This we saw was the logic behind Hammurabi's rule.
NB:  Kung Fu Tze's formulation not Jesus', Silver Rule rather than Golden Rule

Shaiy's extraction was:  _Everything gains or loses from volatility.  Fragility is what loses from volatility and uncertainty._

(430)  Agency Problem:  Situation in which the manager of a business is not the true owner, so he follows a strategy that cosmetically seems to be sound, but in a hidden way benefits him and makes him antifragile at the expense (fragility) of the true owners or society.  When he is right, he collects large benefits;  when he is wrong, others pay the price.  Typically this problem leads to fragility, as it is easy to hide risks.  It also affects politicians and academics.  A major source of fragility.

(447)  Something estimated needs to have an estimation error.  So probability cannot be zero if it is estimated, its lower bound is linked to the estimation error;  the higher the estimation error, the higher the probability, up to a point.  As with Laplace's argument of total ignorance, an infinite estimation error pushes the probability toward 1/2.

(468)  Evolutionary heuristics:  This is central but I hide it here.  To summarize the view - a merger of what it is in the literature and the ideas of this book:  an evolutionary heuristic in a given activity has the following attributes:  (a) you don't know you are using it, (b) it has been done for a long time in the very same, or rather similar environment, by generations of practitioners, and reflects some evolutionary collective wisdom, (c) it is free of the agency problem and those who use it survived (this excludes medical heuristics used by doctors since the patient might not have survived, and is in favor of collective heuristics used by society), (d) it replaces complex problems that require a mathematical solution, (e)  you can only learn it by practicing and watching others, (f) you can always do "better" on a computer, as these do better on a computer than in real life.  For some reason, these heuristics that are second best do better than those that seem to be best, (g) the field in which it was developed allows for rapid feedback, in the sense that those who make mistakes are penalized and don't stick around for too long.  Finally, as the psychologists Kahneman and Tversky have shown, outside the domains in which they were formed, these can go awfully wrong.

(483)  Scott Berkun, _The Myths of Innovation_ Sebastopol, CA:  O'Reilly, 2007

(486)  Robert Dahl and Edward Tufte, _Size and Democracy_ Stanford:  Stanford Univ Press, 1973

(495)  Darrin McMahon, _Enemies of the Enlightenment:  The French Counter-Enlightenment and the Making of Modernity_ Oxford:  Oxford Univ Press, 2001

(498)  Martin Rees, _Our Final Century:  Will Civilisation Survive the Twenty-First Century?_  Arrow Books, 2003

Saturday, March 1, 2014

Holistic Management: A New Framework for Decision Making

_Holistic Management:  A New Framework for Decision Making_ by Allan Savory with Jody Butterfield
Washington DC:  Island Press, 1999
ISBN 1-55963-488-X

(x)  Four Fundamental Processes That Drive Our Ecosystem
Water Cycle
Community Dynamics
Mineral Cycle
Energy Flow

The Tools We Use to Manage Our Ecosystem
Money and Labor:  One or Both of These Tools Is Always Required
Human Creativity:  Key to Using All Tools Effectively
Fire:  The Most Ancient Tool
Rest:  The Most Misunderstood Tool
Grazing:  The Most Abused Tool
Animal Impact:  The Least Used Tool
Living Organisms:  The Most Complex Tool
Technology:  The Most Used Tool

(x-xi)  Testing Your Decisions
Cause and Effect:  Stop the Blows to Your Head Before You Take the Aspirin
Weak Link
Marginal Reaction:  Getting the Biggest Bank for Your Buck
Gross Profit Analysis
Energy and Money
Sustainability:  Generating Lasting Wealth
Society and Culture:  Personal Values and Social Responsibility

(xiii)  It [the way forward] involves a new framework for decision-making that enables people to make decisions that satisfy immediate needs without jeopardizing their future well-being or the well-being of future generations.  That, of course, requires that the actions ensuing from any decision also enhance the well-being of the environment that sustains us now and will have to sustain future generations.  

(7-8)  In brief, however, one begins by defining the entity being managed in terms of the people responsible for its management and the resources available to them.  These people then form what we refer to as a _holistic goal_ that describes the quality of life they collectively seek, what they have to produce to create that quality of life, and a description of the resource base they depend on _as it will have to be_, far into the future, to sustain what they must produce to create the quality of life they envision.

All the decisions they make in planning how to reach the holistic goal, or in addressing problems or opportunities that arise along the way, will be evaluated according to the same criteria they have always used.  In addition, however, they finally ask seven simple questions to ensure their decisions are socially, environmentally, and economically sound _and will lead them toward the holistic goal_.  In other words, any action taken to deal with a problem, to reach an objective, or to meet a basic need should not only accomplish what is required, but also enhance progress toward the holistic goal.  To ensure that this happens, a feedback loop is established to that if monitoring shows the decision is not taking you where you want to go, you can act immediately to correct it.

(15)  The first insight overturned the notion that the world could be viewed as a machine made up of parts that could be isolated for study or management.  In reality the world is composed of patterns - of matter, energy, and life - that function as _wholes_ whose qualities cannot be predicted by studying any aspect in isolation.

(16)  The four key insights are:
1.  A holistic perspective is essential in management….
2.  Environments may be classified on a continuum from nonbrittle to very brittle according to how well humidity is distributed throughout the year and how quickly vegetation breaks down….
3.  In brittle environments, relatively high numbers of large, herding animals, concentrated and moving as they naturally do in the presence of pack-hunting predators, are vital to maintaining the health of the lands we thought they destroyed.
4.  In any environment, overgrazing and damage from trampling bear little relationship to the number of animals, but rather tot he amount of _time_ plants and soils are exposed to the animals.

(19)  In _Holism and Evolution_ (1926), [Jan Christian] Smuts challenged the old mechanical viewpoint of science.  Like modern-day physicists, Smuts came to see that the world is not made up of substance, but of flexible, changing patterns.  "If you take patterns as the ultimate structure of the world, if it is arrangements and not stuff that make up the world," said Smuts, "the new concept leads you to the concept of wholes.  Wholes have no stuff, they are arrangements.  Science has come round to the view that the world consists of patterns, and I construe that to be that the world consists of wholes."

(25)  To more accurately view the world, one has to accept that _in reality_ there are no boundaries, only wholes within wholes in a variety of patterns.  And to understand the world, according to Smuts, we must first seek to understand the greater whole, which has qualities and characteristics not present in any of the lesser wholes that form it.

(30)  …that we had in fact two broad types of environment that had not been recognized.  at their extremes, these react differently to management.  Practices that benefited the one type of environment damaged the other.  The terms _brittle_ and _nonbrittle_ come from that insight….

Brittleness is not the same as fragility…

The features that distinguish any environment's position on the brittleness scale derive not so much from total rainfall as from the distribution of precipitation and humidity throughout the year.  Toward the very brittle end of the scale, environments characteristically experience erratic distribution of both precipitation and humidity during the year.

(36)  _It is how the bulk of the material has broken down by year's end that should concern you most._  During the growing season in a high rainfall area of the tropics, for instance, the breakdown might be predominately biological.  But in the long dry season that follows it is likely to be chemical and physical…

The presence of bare ground is another indicator of brittleness… at the very brittle end [of the scale], bare ground is easily created.

(38)  In effect, the animals [in a herd under prey conditions] did what any gardener would do to get seeds to grow:  first loosen the sealed soil surface, then bury the seed slightly, compact the soil around the seed, then cover the surface with a mulch.  I also noted that where the grazing herd had kept off steep, cutting edges of gullies, the bunched herd now beat down the edge creating a more gradual slope that could once again support vegetation.

(39)  It was the pack-hunting predators who were mainly responsible for producing the change in behavior of their herding prey.  Bunching up tightly in large numbers became the herd's chief form of protection, particularly of females and young, because  pack hunters are confused by a crowd and thus fear it.  They can only kill successfully when the herd strings out and they can isolate an individual.

(46)  He [AndrĂ© Voisin] had established that overgrazing bore little relationship to the number of animals but rather to the _time_ plants were exposed to the animals.  If animals remained in any one place for too long or if they returned to it before plants had recovered, they overgrazed plants.  The time of exposure was determined by the growth rate of the plants.

Plate 4:  We now take the perspective of the whole (gray), first of all be defining the limits of a "manageable" whole, then determining what that whole must become based on the needs of the people within it and the environment that must sustain their endeavors (the holistic goal).  Now the people making decisions within the whole can look outwardly at all available knowledge to determine which best serves their needs and takes them toward the holistic.

(48)  We realized that livestock do not select species but rather select for a balanced diet, regardless of species.  Wild herding animals also select for balanced diets;  they never graze all plants equally, and never has this been necessary.

(69)  Many an institution is formed for a specific purpose but later loses sight of it and becomes ineffective or self-serving.  If the entity you manage was formed for a specific purpose that you are _legally or morally obligated to meet_, you will need to ensure that your holistic goal addresses this purpose.  The best way to do this is to create a statement of purpose as a preface to your holistic goal.

(52-54)  The whole under management…  decision makers…resource base… money…  
The holistic goal…  quality of life…  forms of production…  future resource base…  
The ecosystem processes…  
The tools for managing ecosystem processes… rest, fire, living organisms, and technology…
The testing guidelines…  
The management guidelines…  
The planning procedures…  
The feedback loop….  plan-monitor-control-replan…

(59)  Before you can begin, however, you first have to define the whole your management encompasses…  

(60-62)  The Decision Makers
Decision makers are the people who will form the holistic goal….

The Resource Base
Next, list the major physical resources from which you will generate revenue or derive support in achieving your holistic goal:  the land, the factory and its machinery, the office building, your home, or whatever is relevant in your case…

Money will be involved in most wholes under management;  for better or worse, today it is the oil that makes the cogs of life go round.  Thus, in defining the whole, make a note of the sources of money available to you…

Keep Your Focus on the Big Picture
You do not, at this stage, need to reflect on the details… because if you do, you may lose sight of the whole you are  dealing with.  Try to keep your lists and notes brief.  Great detail is not needed now, only big-picture clarity...

Yet there is a minimum whole at which point Holistic Management becomes possible.  In any of the wholes just mentioned, this would include people directly involved in management and making decisions, the resources available to them - physical assets, as well as people who can assist, influence, or will be influenced by their management; and the money on hand or that can be generated. 

(71)  "Making a lot of money" is rarely as useful in a quality of life statement as naming instead what you gain from having money:  security, comfortable surroundings, enough to eat, and the wherewithal to do what you want to do.  The same can be said for any material object.

(74)  But even those living in the most impoverished and appalling conditions nourish the desire to make the world a better place for their children….

Anyone forced to compromise on something very important to him or her will not have much commitment to achieving the holistic goal. 

(75)  It becomes helpful if you ask the question:  "What don't we have now, or what aren't we doing now, that is preventing us from _achieving_ this?"  Rephrase the answer in positive terms and you will know what you have to produce.

(77)  In gathering together the notes from all of the above discussions, check to be sure that you have avoided some fairly common errors:
Are all of the ideas expressed in the quality of life statement covered?
Have you included what you must produce to achieve your stated purpose (if applicable)?
Are there any "how to's"?  You only want to list _what_has to be produced, not _how_ it will be produced.  _How_ something is to be produced is a decision that needs testing.
In determining what you need to produce did any conflicts arise?  If so, then again it is probably because you were beginning to discuss how to do something.

(81)  In any living community we manage, water will cycle.  Since almost all the life forms we depend on will require water from the soil, we must ensure that water is in face adequately present in usable form…

Similarly, the community always has a mineral cycle functioning at some level.  Again, the life forms we depend on will require mineral nutrients from the soil dn air, and to maintain them we must ensure that those nutrients cycle appropriately….

All living communities are dynamic, undergoing continuous change, becoming ever simpler or ever more complex.  Some forms of production will require a certain level of complexity in the communities being managed.  In the future you will want these desired levels to be self-sustaining.  

Last, self-sufficient life depends on the conversion of solar energy through green plants and into the stuff of life - food, fiber, and so on.  Most of what we produce from the land will require that the maximum energy be converted both to maximize production and to sustain it.

Your task as a land manager is to describe the land in terms of these four processes, not as they now are functioning, but as they will have to be functioning in the future if you are to sustain what you have to produce, and the quality of life you want to create, over many generations.

(86-87)  Until the holistic goal expresses what people genuinely desire and want to accomplish, they will tend to go back to arguing about tools and actions because they have more invested in their knowledge and areas of expertise than in the holistic goal.

(89)  When a goal focuses on a problem it provides no incentive to go beyond the problem to what people really want.  If your goal becomes "to end the conflict," you may be ending conflict the rest of your lives.  You need instead to describe what lies beyond the conflict, that is, how it will be when the conflict is over.  Then you know where you need to be heading and have an incentive to get there.

(94-95)  Wholes within Wholes…
1.  Make sure that some of the decision makers in the greater whole also make decisions in the smaller wholes, and thus help to form the holistic goal in each entity…
2.  Create a statement of purpose for each smaller whole…
3.  Make sure the future resource base described in each entity's holistic goal addresses client-supplier relationships.  The smaller wholes figure prominently in the resource base of the greater whole, and the greater whole figures strongly in theirs.  At one time or another each is a client or supplier of the other…
4.  Clarify financial relationships…

(101)  Rather than distinguish lesser ecosystems within it, I have found it more practical to speak in terms of different _environments_, each of which functions through the same fundamental processes:  water cycle, mineral cycle, community dynamics, and energy flow.

(103)  How does the puppeteer learn that when he moves the puppet's leg forward, he also has to tilt its head slightly, bend the torso, and shift both arms in opposite directions?  The puppeteer answered that [Heinrich] von Kleist had not understood the actual challenge, which was both simpler and more elegant.  Of course, no human could produce natural gestures by pulling any number of individual strings.  No matter now skilled the puppeteer, the result would still look mechanical.  On the other hand, a skillfully designed marionette had a center of gravity, and simply moving that center of gravity would bring about all the other gestures automatically, just as a human when taking a step automatically moves all the other parts of his body to stay in balance.

(106)  In an effective water cycle, plants make maximum use of rainfall or melting snow.  Little evaporates directly off the soil.  Any water that runs off the soil tends to do so slowly and carries little organic matter or soil with it.  A good air-to-water balance exists in the soil, enabling plant roots to absorb water readily, as most plants require oxygen as well as water around their roots to grow.

(107)  Effective rainfall is that which soaks in and becomes available to plant roots, insects, and microorganisms or that replenishes underground supplies with very little subsequently evaporating from the soil surface.  To make precipitation as effective as possible means producing a cycle that directs most water either out to the atmosphere _through plants_ or down to underground supplies.  In all the more brittle areas of the world where I have worked, rarely have I seen an effective water cycle.  Typically of, say, 14 inches (350mm) of rain received, only 5 or 6 inches (125 or 150 mm) is actually effective.  In very rough figures it takes approximately 600 tons of water to produce one ton of vegetation, so one cannot afford to waste any of the rain that falls.

(109)  The first large dam ever built (by humans) was located on the Arabian peninsula near the city of Marib, reputedly mentioned in the Koran as the original Garden of Eden.  Built in 400 B.C., the dam filed with silt and burst.  It was rebuilt in 200 B.C., but burst again soon after as the dam bed was still full of silt.  The remains of the dam wall are still visible today and the silt behind it remains, the river that fed the dam having carved a deep channel through it.

(111)  The greater the amount of bare ground, the higher the rate of water runoff - bare soil can shed more than half the water falling on it.  If 30 inches (750 mm) of rain were to fall on an acre (0.405 hectares) of land, that would total 814,625 gallons (3,3038 cubic meters) of water.

(121)  In _The Redesigned Forest_, ecologist Chris Maser offers a glimpse of the complexity inherent in a northern temperate forest when he describes a relationship that exists among squirrels, fungi, and trees...

Of the four ecosystem processes, community dynamics is the most vital.  Water and minerals cannot cycle effectively and solar energy cannot flow through life unless plants of some form - algae to trees - first convert sunlight to useable energy for life and cover the soil.  For this reason it is imperative that we learn to maintain healthy biological communities whether they be associated with grasslands, forests, rivers, lakes, coral reefs, or oceans….

There Are No Hardy Species
If we take _hardy_ to mean that an organism is able to withstand very adverse conditions, then there are few hardy species.  All living things are adapted to specific environments in which they can establish and thrive.
(122)  Nonnative Species Have Their Place

(123)  Once any species establishes in a community the species becomes a part of it, although the community always changes and over time the species itself can change.  If a new species causes major disruption, then it may take a very long time for the community to rebuild its former complexity and to stabilize.  Fortunately, most introduced species are either absorbed into the community without major catastrophe or die out altogether.

(124)  However, once a species has established itself in a community, we are better off managing for the health of the whole community….

Collaboration Is More Apparent Than Competition
There is far more collaboration than competition in nature.  What I am referring to as _collaboration_ most scientists call _symbiosis_, the mutually beneficial relationships that occur among species in a community.

(125)  Studies of island communities, dating from the earliest observations of Darwin and his contemporary, Alfred Wallace, have revealed that over time the new species will develop from existing species in an attempt to _avoid_ competing for the same ecological niche.  Personally, after years of working on several continents, I have been unable to find any _clear_ evidence of competition in nature.

(126)  The more complex and diverse communities become, the fewer the fluctuations in numbers within populations of species, and the more stable communities tend to be.

(127)  Scientists have long believed that complexity in a biological community leads to greater stability, although they have had difficult proving it.  In 1996, however, a group of researchers managed to provide convincing evidence.  Their well-replicated field experiment in the American Midwest, involving 147 grassland plots, established a significant connection between diversity of species, productivity, and stability.

Most of Nature's Wholes Function at the Community Level…

The members of any one species cannot exist outside their relationship with millions of other organisms of different species.

(129)  Our attempts to replace the role of the animals with fire, which started many thousands of years ago and continues today is, I believe, the most profound environmental error we have ever made.  Our planet's ability to balance the gases in the air pocket surrounding it took billions of years to develop, and we cannot expect it to adapt to this relatively sudden change of circumstances without fairly dramatic weather and climate changes….

Most Biological Activity Occurs Underground
Any changes brought about above ground are likely to cause even greater changes underground, simply because there is generally more life underground than above ground.  Figures vary widely with different soils, but on average, upper soil layers contain 7.75 tons of microorganisms, such as bacteria, fungi, earthworms, mites, nematodes, or protozoa, _per acre_ (17.5 metric tons per hectare).  The richest soils can contain up to fifteen tons of microorganisms per acre (33 metric tons per hectare)…

Scientists estimate that a full 75 to 85 percent of the prairie's biomass is underground.

(130)  Change Generally Occurs in Successional Stages
The process of change in biological communities from bare rock or new pool to mature grassland, forest, or lake is a gradual, often staggered, buildup of species diversity and biomass along with changes in the microenvironment.

(134)  If fallen material all lies in one direction, as in the case of lodged wheat, grass, or pine needles, it suppresses plant growth.  The reason is not yet well understood, although farmers have long known that a straw mulch has to be scattered to be effective.  On rangelands snow and wind will lay old, moribund bunch grass in one direction, suppressing growth.  Hail and animal impact tend to scatter it, encouraging growth  In forests a carpet of undisturbed pine needles may suppress plant growth.  But new plants establish when animal impact (or some other action) disturbs the pine needles.

(137)  In the Holistic Management model a dotted line surrounds both the ecosystem process Community Dynamics and the tool Living Organisms to indicate that they are in fact the same thing.  All life is successional and dynamic, and therefore the future resource base described in a holistic goal revolves around community dynamics….

If you wish to favor a species - game animal, plant, reptile, insect, or bird - then you must direct the successional movement of the community toward the optimum environment for that species, not by automatically intervening with some technological tool, but by applying whatever tools produce an environment in which that species thrives.  Simply protecting the species, desirable as that might be, will not save it, although protection may be a necessary interim step.

(138)  How many entomologists, however, consider the effectiveness of the water cycle in their predictions?  It is partly because this principle is not understood that insect damage to American crops has doubled since the massive use of pesticide began int he late 1940s.  The more chemicals are used, the simple the community becomes and the greater the tendency for outbreaks of problem, species.

(139)  It is my belief that if humans are to survive, our cropping practices will need to mimic nature.  That means increasing the use of perennial and deep-rooted crops, and creating ever more complex communities.  And it means using grazing animals when the environment leans toward the very brittle end of the scale…

Left to nature, I believe all communities would eventually regenerate.  In less brittle environments that could occur fairly quickly, because rest is such a powerful tool for restoring biodiversity.  In the more brittle environments, which cover most of the earth's land surface the time scale for regeneration would not be a human one but a geological one.

(144)  Biological, rather than chemical or physical, activity ideally should play the lead role in the breakdown of old plant material in all environments right across the brittleness scale, with one major different.  In the less brittle environments, the generally moist microenvironment at the soil surface typically supports extremely active communities of small organisms throughout most of the year that can break down old plant material without any contribution from larger animals.  In the more brittle environments large animals become critical because over the short period the the year when 50 to 95 percent of the above-ground plant material dies, the microorganism and insect populations also die down.  In such environments, large animals are needed either to trample the material down to the soil surface where it will break down more quickly or to reduce its bulk by grazing and digesting it.  The gut of the grazing animal is one place microorganisms do remain active year round.

(153)  Based on what we now know through the four key insights, we have come to view the energy pyramid as multidimensional, above and below the surface, that is, as two tetrahedrons joined at their bases.  In applying this concept we now have opportunities for increasing energy flow at the vital first level - the soil surface - greatly.  Level 1, in this three-dimensional diagram, now has three sides, which I call time, density, and area….

On land, the right management can increase the volume of energy stored at Level 1 by increasing not only the _density_ of standing vegetation on a unit of ground, but also the _time_ during which that vegetation can grow and increasing the rate at which it can grow and the leaf _area_ of individual plants to capture more energy.  In aquatic environments we have still to learn how we might use some of this new thinking.

(145)  By contrast, in more brittle environments, even those with high rainfall, most dead plant material breaks down slowly through oxidization and weathering in the absence of large animal populations.  Because weathering occurs from the top down, dead grass, brush, and trees do not readily fall to the soil surface where microorganisms could help speed their breakdown.  Dead trees in such environments can stand for a century or more.  The dead leaves and stems on perennial grass plants can stand for many decades.  This can create a bottleneck in the cycle as nutrients remain tied up in dead plant material above ground.

(162)  We should intervene with technology only in ways that allow for simultaneous development, but never damage, of the water cycle, mineral cycle, and biological communities.

(174)  Money has been the oil that has kept the wheels of society turning and allowed the complexity of our present civilization to develop, but credit, the centralized creation of money, interest, and particularly compound interest, have seriously destabilized the relationship between money and the goods and services, or wealth, it originally represented.

In my lifetime alone, the distinction between wealth and money has probably become more blurred than at any time in history….  Money itself has become a commodity, like grain or oil, that earns money and can be traded internationally…

In fact, according to the World Bank, the world's money supply is now fifteen to twenty times greater than the value of the goods and services produced in the world economy.

(178)  Thus, _every situation requires management that must be an original product of human imagination, and even that must evolve as the situation change_.  Creativity, not brainpower, is the crucial element and it is needed constantly.

(181)  Whatever time management system one uses, the keys to its success are _habit_ and _trust_.  A habitual procedure must be established whereby all the ideas that come to mind and all the commitments made are immediately recorded in one place,, rather than on scattered scraps of paper, so they can later be retrieved (and understood) and acted on.  Once this habit is formed then you cease to worry about commitments or ideas you might forget and you begin to _trust_ the procedure and let go of your subconscious, or conscious, worries.  This then frees up the mind for creative thought.

(182)  It is my firm belief that this increased frequency of fire, combined with a reduction in the disturbance to soil surfaces and vegetation caused by dwindling animal herds and their predators, is one of the prime factors leading to desertification in the world's brittle environments.

(190)  Scientists have calculated that the emissions _every second_ from a vegetation fire covering 1.5 acres (0.5 hectares) is equivalent to the carbon monoxide emissions produced per second by 3.694 cars and the nitrogen oxides produced per second by 1,260 cars.

Today, half the world's savanna land (1.85 billion acres/750 million hectares), is deliberately set of fire each year, releasing about 3.7 million metric tons of carbon into the atmosphere.  This is three times more carbon than is released through forest burning.

(191)  In 1994 scientists at Germany's Max Planck Institute found that disturbingly high levels of methyl bromide were also being produced by fires in Siberian forests, California chaparral, and South African savannas.  The bromine in methyl bromide is potentially 50 times more efficient than the chlorine in chloroflurocarbons (CFCs) in destroying upper-level atmospheric ozone.

(197)  The key to land management is always the state of the soil surface.

(208)  The critical distinction between rest as a long-term tool and rest as the time it takes a damaged plant to rebuild a root system has thrown our understanding of desertification off for several thousand years.  We correctly observed that animals in certain circumstances overgraze and damage plants.  If we run high animal numbers and overgraze most plants, as many did in the western United States at the run of the century, and we then remove the animals, the land appears to recover quickly and dramatically, as this early research plots showed.  In fact we had stopped two animal-produced effects, one negative, and one positive.  The result was that the positive and immediate effect of allowing overgrazed plants to recover colored our ability to determine and even see the eventual damage we created by eliminating beneficial animal impact.

(213)  What is natural?  Eons ago, before humankind controlled fire, livestock, and technology, there was an Eden to which we alas can no longer return.  Logic tells us that all plant and animal life developed together in wholes including microenvironment, community, and climate.  The brittleness scale, although we did not recognize it, existed for millions of years.  The extraordinary expansion of deserts in what were grasslands and savanna-woodlands a few thousand years ago can only be the work of humans.

(215)  Personally, although I once detested herds of cattle, like so many environmentalists, I find them a more natural tool to use to restore grassland health than nylon netting.

(217)  A thorough discussion of grazing requires a working definition of the term.  Strictly speaking, grazing refers only to the eating of grasses, not other types of vegetation, such as brush, trees, and forbs, which are technically _browsed_.  The tool of grazing encompasses both.

(219)  Thus, a simple definition of overgrazing is any grazing that takes place on leaves growing from stored energy, _at the expense of roots_, rather than directly from sunlight.  In other words, overgrazing is "grazing of the roots."

(240)  The discovery that brittle environments need periodic disturbance to maintain stable soil cover nevertheless leads us to recognize animal impact as the _only_ practical tool that can realistically halt the advance of deserts over billions of acres of rough country.  Here and there other tools can help, but what other way exists to treat millions of square miles of often rugged country each year without consuming fossil fuel, without pollution, and by a means millions of even illiterate people can employ even while it feeds them?

(260)  Such thinking overlooks two important attributes of nature.  First, our ecosystem is not a machine but a living thing that energetically moves and reproduces itself according to its own principles.  Second, the life that we artificially suppress or take to extinction may have contributed to our own survival.  To ignore these attributes triggers the same mechanisms of dependency familiar from cases of drug and alcohol abuse.

(268)  The Seven Tests
1.  Cause and Effect:  Does this action address the root cause of the problem?
2  Weak Link:  Social - Could this action, due to prevailing attitudes or beliefs, create a weak link in the chain of actions leading toward your holistic goal?  Biological - Does this action address the weakest point in the life cycle of this organism?  Financial - Does this action strengthen the weakest link in the chain of production?
3.  Marginal Reaction:  Which action provides the greatest return, in terms of your holistic goal, for the time and money spent?
4.  Gross Profit Analysis:  Which enterprises contribute the most to covering the overheads of the business?
5.  Energy/Money Source and Use:  Is the energy or money to be used in this action derived from the most appropriate source in terms of your holistic goal?  Will the way in which the energy or money is to be used lead toward your holistic goal?
6.  Sustainability:  If you take this action, will it lead toward or away from the future resource base described in your holistic goal?
7.  Society and Culture:  How do you feel about this action now?  Will it lead to the quality of life you desire?  Will it adversely affect the lives of others?

(269)  As mentioned at the outset, speed is essential to the testing process.  if you cannot quickly answer "yes" or "no" to a question, simply bypass the test and move on to the next.  If you cannot reach a conclusion after passing through all the others, then come back to the one or two you bypassed so you can give them more consideration.  In most cases, you have bypassed a test because you don't have enough information to know whether the decision passed or failed the test.

(271)  How to regulate the pace of that change is itself a decision we will need to test toward the holistic goals we form.

(275)  Identifying the cause of a problem can be fairly easy, but it can also require considerable probing.  In most situations, this is a relatively unstructured exercise.  You merely pose and answer the same questions over and over again:  "What is the cause of this?" and when you have your answer, "Well, what is the cause of that?"  You many have to ask this question three or four or more times, peeling away layers of symptoms, before you find the cause you should address. 

(276)  Some Japanese companies are noted for insisting their people ask "why" at least five times to get to the root cause of a problem…

There will be some instances, perhaps many, when you think you've got to the bottom of a problem and later find you have not.  If you have probed as deeply as you can and still not found the root cause, then you may need to look wider, rather than deeper.  Sometimes outsiders, not necessarily experts, can readily diagnose the cause of a problem when the answer has eluded you, simply because they can view the situation more objectively.  A number of apparent problems will fall into one of two categories:  (1) those related to resource management;  and (2) those related to human behavior.  The approach you take in diagnosing the cause in either category is slightly different.

(280)  When the problem is related to human behavior you should generally look first to how your organization is structured, how management functions, and how it is led.  Very seldom, perhaps 10 to 20 percent of the time, does it turn our that something is wrong with the people involved and that _they_ are the cause of the problem.

(281)  Bear in mind that occasionally things may get worse before they get better, no matter what sort of problem you are dealing with.  Sometimes this will affect your decision about the actions you plane to take….

Sometimes, decisions that pass the cause and effect test result in short-term "problems."  A rancher who uses animal impact to overcome the partial rest that has created a lot of bare ground and a moribund stand of a few rest-tolerant grass species may find that all he produces in the first year or two is a healthy crop of weeds.

(282)  Sometimes decisions you make can unleash future problems, even when the original decision had nothing to do with solving a problem.  One or more of the remaining six tests is likely to cover this possibility, but an early warning here - by asking, Could this action unleash problems later? - will keep you on the lookout.

(284)  Other links, no matter how frail they appear, are nonproblems until the weakest link is first fixed.  If $100 would correct the weakest link, and we spent $200 to make sure, we would have theoretically squandered $100, because after the first $100 repair, the chain had a different weakest link on which the second $100 should have been spent.

(292)  The power in this test [Weak Link] is that it asks you to focus on the chain of production as a whole, and only then to determine where your money is needed most in any one year.  _the products you finally sell are not responsible for your profit:  how you reinvest your money in the chain of production each year is_.

In an earlier example I talked of misspending exactly $100, but real life never allows that kind of accuracy.  Being consistently right with the vast majority of your dollars is what matters.  Remember, however, that once the weak link has been discovered, it _has_ to be dealt with.  It is not merely desirable or important to do so.

(294)  [Marginal reaction test] The question you ask is:  _Which action provides the greatest return, in terms of our holistic goal, for the time and money spent?_…

In applying the test you are essentially asking yourself which of two or more actions will result in _each additional dollar or hour of labor being invested where it provides the highest return in terms of your holistic goal._

(301)  Nowhere does the marginal reaction test apply more than in our allocation of time.  We have only a fixed amount, and it ticks by day and night.  Constant awareness of the marginal reaction when it comes to investments of time frees time to do things we love, and the emergencies and crisis management we thereby avoid saves the money to pay for them.

(303)  The key to Wallace's gross profit analysis, particularly when researching possible new enterprises, is the careful distinction of fixed (overhead) and variable (direct or running) costs _at a given moment in time_.  Wallace divided all business costs into these two categories.  Fixed costs exist no matter what or how much is produced.  Variable costs are a function of volume of production - the more you produce the more these costs increase.  However, when performing a gross profit analysis, the definition of what is fixed and what is variable changes depending on the current situation.

(306)  When the contemplating the addition of a new enterprise, to helps to remember that _in the very long term all costs are variable_ (you could seek the business) and _in the very short term all costs are fixed_ (the new enterprise could be started by utilizing materials on hand and already paid for).  To determine the fixed costs to be ignored in the _new enterprise_ and the variable costs to include, picture yourself standing on a bridge looking upstream.  Any water (cost) that has passed under your feet is fixed and should be ignored, while any water (cost) upstream is still variable and should be included.

(307)  A quick run through the rest of the tests will narrow your list down further.  Then you use this test a second time, but more formally.  You will need to gather fairly accurate figures before you can pass the final list of enterprises through this test, and you will need to use pencil, paper, and calculator to get your answers.  Those enterprises, both old and new, that pass this test by contributing the most to covering overheads, _and_ pass the remaining tests, will be the ones you engage in.  Finally, you analyze each enterprise again at the end of the year to determine how well it actually performed.  You then take this information into account in planning for the next year.

(308)  While doing a gross profit analysis and calculating the anticipated income and the variable costs involved in any possible new enterprise, you could be far off the mark in your estimates because of a number of variables outside your control.  To assess the risks involved, you should project the worst, average, and best scenarios.  When doing so, keep most income or expense figures average, and in each scenario vary the figures for whatever is least under your control.

(313)  Is the proposed use providing infrastructure that will assist in reaching your holistic goal?
Is the proposed use merely consumptive, with no lasting effect?

(314)  Is the proposed use cyclical in that once initiated, it would not require more money, or the purchase or more energy?

(321)  Any time you are dealing with organisms that become a problem because they are either too few or too many in number, focus first on community dynamics.

(324)   At least one German auto manufacturer, BMW, has built a pilot _disassembly_ plant to recycle its older cars, and newer models are being designed with disassembly in mind.

(327)  Pleasing everybody may seem impossible, but you can go a long way by embracing the holistic principle that the health of your particular interest is not distinct from the health of the greater whole.  This is, in effect, a test for social consciousness, and more than any other, it helps to ensure that a decision is socially sound.

(330-331)  Remember that speed is essential to the [testing] process.  It is the speed that gives you the big-picture clarity you need.  If you cannot quickly answer "yes" or "no" to a question, bypass the test.  Most of the time you will come back to that test only if you are unable to reach a conclusion after passing through all the others.  However, if you have to bypass the cause and effect or weak link tests, it may be pointless to continue the testing until you have answers for these two.

(336)  What you want to happen should be incorporated into your holistic goal.  Then it becomes _your_ responsibility to achieve it.  When your monitoring shows that no change has occurred where change was planned, or if any change occurs that is adverse to plan, and thus your holistic goal, _take action immediately_.  If control is quick, a simple adjustment may be all you need to get back on track.

(337)  In many cases, your biggest challenge initially is in identifying which indicators to monitor.  If you have made a plan for dealing with a problem, for instance, monitoring should tell you whether or not you have found the root cause of the problem.  If the problem remains or worsens, you obviously have not.

(339)  Make sure you are clear on what you are trying to achieve, and then ask yourself, "If this does not happen, where is the very earliest point at which I could detect it?"  That is the point you need to monitor in the simplest way you can devise.  Remember, you are not trying to _record_ change, you are trying to steer all changes in the direction of your holistic goal…

_The earliest changes are most likely to occur at or near the soil surface_.  They could show up in plant spacings, soil litter cover, soil density, soil aeration or organic content, insect activity, seedling success, quality of water runoff, and a host of other things.

(350)  Holistic decision making is itself a new paradigm that, like all new paradigms, requires a fundamental shift in thinking.  _You cannot adopt parts of it and hope to succeed_.  You could not, for instance, test decisions without having a holistic goal to test decisions toward.  Yet a number of people shy away from writing out a holistic goal because they fear the responsibility they take on for achieving it.  That is why such large segments of our population just want to be told what to do and why we so often prefer the answers prescribed by experts to thinking out solutions for ourselves.  Taking back that responsibility can be an enormous leap for some people.

Once they do realize they don't always have to be right, they heave a collective sigh of relief.  But only through practice will they make this discovery.  Most will find that confidence in their abilities does not depend so much on making the right decisions as in knowing quickly when those decisions prove wrong or need modification.

(352)  In _The Path of Least Resistance_, human development consultant Robert Fritz traces the creative process form the moment of inspiration through to the work or product that finally results.  He identifies three stages in the process that I believe apply equally when learning something new and putting it into practice.  In the _germination_ stage, you feel the special energy that comes as yo are introduced to the new idea and begin to put it into practice.  The next stage, _assimilation_ is the period during which you incorporate skills in such a way that they become a natural part of yourself.  In practicing Holistic Management, this is where you make most of your mistakes as you work to solidify your understanding.  The last stage, _completion_, is reached when you have internalized concepts you may previously only have grasped intellectually and become reasonably confident in practice.  You will still make mistakes, of course, but they will no longer threaten your confidence in the process.

The assimilation stage is the most difficult to pass through beaches sometimes, even for long periods, it seems as if nothing of significance is happening or being learned….

In any creative endeavor, says Robert Fritz, the process has to start with a vision of what you really want, followed by an assessment of what you currently have.  The discrepancy between the two creates a tension you can use to help to propel you toward the vision.  As long as you hold to the vision of what you want to create, enormous energy and power are generated because the path of least resistance to resolve this discrepancy between what you currently have and what you really want favors the latter.  So, when you lower your expectations, you weaken the creative tension because you are no longer aspiring to what you truly want.

(356)  Study circles have proven so valuable a method for involving the public in discussion of a wide variety of issues that the governments of both Sweden and Denmark today subsidize them and almost a third of all Swedish adults participate in them.

(356)  Once a plan is made, monitoring becomes essential because even though the decisions involved have been tested, events rarely unfold exactly as planned.  Monitoring can mean many different things, but in Holistic Management it means looking for deviations from the plan for the purpose of correcting them.  Although most quality-conscious corporations would define monitoring in the same way as would any number of engineers, in far too many situations we merely monitor "to see what happens."

In _any_ situation we manage, we should be monitoring in order to make happen what we want to happen, to bring about desired changes in line with a holistic goal.  The world _plan_ becomes a twenty-four-letter word:  _plan-monitor-control-replan_, with positive action following each step. 
NB:  John Boyd's OODA loop - Observe Orientation Decision Action

(362)  A collaborative organization first and foremost treats people as human beings rather than as "machines of production."  In structure it may resemble other organizations, but it functions quite differently.  The autocratic boss has disappeared, but there is still a leader who bears ultimate responsibility for getting the job done.  Now, however, that job includes encouraging leadership skills in those who work alongside him or her so they can share some of that responsibility.

(363)  Most people have a need and desire to exercise and display personal competence.  When they are allowed to come up with their own solutions, they will work harder to implement them….

People can do what needs to be done _if_ they are competent in their areas of responsibility.  No matter how committed or well meaning, a person lacking the basic skills or knowledge required of them will undermine the overall effort…

To the extent people feel recognized, appreciated, cared about, and supported, they will go to extremes to help those who help them.  A leader's primary role is to support the efforts of others….

Most people perform at their highest level when they find meaning and challenge in their work.  When they derive a sense of personal identity and self-esteem from doing a task well, they give more to the job and get more from it...

(365)  In _Enlightened Leadership_ Ed Oakley and Doug Krug stress that the way in which leaders ask questions is also important.  Among other things, they say, _effective_ questions emphasize _what_ and _how_ rather than _why_ (e.g., "What should we do?" and "How do we go about doing it" rather than "Why did this happen?").  _Why_ questions often put people on the defensive - they may assume they are being blamed for the problem in some way.  _What- and _how_ questions force people to think and to be creative in identifying solutions, which in turn builds _their_ confidence.

(366)  When people feel free to speak up, and do, you often find a common pattern in their response to new ideas.  Oakley and Krug, who specialize in change implementation, have   made a study of this phenomenon which they discuss in _Enlightened Leadership_.  About 20% of the people in a group, they say, are continually open to new ideas and will look for ways to make them work;  the other 80% are more likely to resist new ideas to some degree, no matter how much sense they make and may unconsciously sabotage their implementation.  You cannot address the concerns of the latter unless you know what they are.  In  some cases, however, these concerns will be tied to self-esteem, as a suggestion for doing something differently is seen as an indication people have done something wrong.  If the leader is aware of this possibility, he or she can work with these individuals to build their confidence.

(376)  In promoting the product itself, emphasize its benefits over its features - in other words, what the product _does_, rather than what it _is_.

(379)  Time, rather than numbers, governs the ultimate impact…

Maximum impact _over minimum time_ followed by a sufficient recovery period makes trampling an extremely effective tool for maintaining brittle savannas and water catchments as well as cropland soils.

(380)  … to reach the richest level of biological diversity in any predominantly grassland environment, time grazings according to the needs of perennial grasses.

(386)  Thus, in practice the more paddocks per cell, the better the distribution of the grazing on the plants, the fewer severely grazed plants, and the greater the proportion of plants able to recover quickly form grazing, all of which results in increased energy flow.

(391)  Now, we plan for drought by reserving time….

To ensure that you do not run out of forage, you calculate the number of _animal days_ of forage (the amount of forage an animal harvests in a day) available from every paddock and ration them out carefully.  This reflects the fact that we also measure drought in days - days until the rain comes, days until growth starts.

(399)  After a while, I startled the already bewildered manager by blurting out the observation that "cattle don't select species, they don't even know the Latin name of this plant." What they were selecting was the freshest and leafiest forage on _any species_.

(403)  Starting in my game department days, I gradually built on the observation that wherever predators caused bunching and the formation of large herds, the concentrated dung and urine of the herd also induced movement, and this in turn regulated the overgrazing of plants by governing their time of exposure and reexposure to animals.  Wherever the pack-hunting predators and their large prey were reduced or absent altogether over prolonged periods, the grassland became much more fragile, plant spacing widened, and more algae flourished on ground that became bare between plants.  Rhizomes, runners, and stolons, rather than seeds, often became the main agents of grass propagation.

(409)  This technique [inducing herding with attractants] has one major drawback:  very little ground is impacted over time.  Two thousand head will seriously affect an area only about 50 yards across each time they are attracted, although somewhat lesser impact grades out from there.  Very few managers are able, nor is it practical, to induce herd effect with attractants more frequently than once a day.

(414)  Millions of small farmers have since been displaced, more land is now lost to cultivation (through deterioration) than is brought into production annually, and we have rendered many environments toxic or sterile to varying degrees.

(415)  Keep Soil Covered Throughout the Year

Do Not Turn the Soil Over

(417)  Endeavor to Maintain Diversity and Complexity in the Community

(430)  Because results may vary considerably even in the best of circumstances, you must, as with any decision that attempts to modify an environment, monitor closely after a burn on the assumption your decision was wrong.

(440-441)  Among animal populations there are two fundamental types, which I referred to briefly in Chapter 20:  those that regulate their own numbers and those that do not.  We don't yet understand how some of the self-regulating populations manage to limit their numbers, but they do, even though they have very high breeding rates and thus a potential for rapid expansion.  Some of the small antelope of Africa, such as the duiker or stembuck, are good examples.  If we protect them for years, they do not increase.  If we try to shoot them out, as various tsetse fly eradication schemes attempted, they breed about as fast as they are shot.

(444)  The father of game management, Aldo Leopold, called the limiting pressures on a population at point C [top of S curve of population] _environmental resistance_, because they come from the entire biological community….

At each point on the sigmoid growth curve, the population has a characteristic age structure.  [More young when pop is low, numbers decline regularly through all age classes when pop at midpoint, at peak pop the very young and very old die off]

(446)  Because age structure reflects so precisely where on the S-curve a population lies, it provides much more useful information for management purposes than numbers of individuals generally do.  Knowing the size of a population seldom helps to decide what to do about it, whereas the age structure often does.  Accurate counts, especially of wild and mobile populations, are nearly impossible with currently available techniques, whereas a simple random sample will tell a lot about age structure.

(449)  Ultimately, I came to mistrust aerial counting more than any other technique.  We have learned the same lesson when trying to spot humans from the air.  During Algeria's war for independence, the Algerians marched large bodies of men over open country right under French spotter planes.  They had only to walk in ragged fashion, rather than in formation, and not look up at the planes.  We have to use spotter pigeons to find people lost in boats at sea because humans cannot see them, even when the boats are dayglo orange and the water a calm dark blue.

(450)  In order of importance, probably twenty other questions deserve more attention than numbers in the management of game.  Besides age structure, other factors such as the sex ratio in adults;  the feed, cover, and water requirements;  home ranges;  levels of use of feed plants;  the age structure of those feed plants;  and so on, deserve far more attention than game counts.

(452)  When attempting to increase the numbers of a certain species you should make sure that the actions taken first address the weakest link in the species' life cycle, as the weak link test reminds you.  If you then find that numbers still don't increase, look for a bottleneck that could be limiting the population.

(455)  Many years ago Charles Elton, one of the earliest animal ecologists, as they were then called, described the Eltonian pyramid of numbers.  In concept, it resembles the energy pyramid shown in Chapter 15 (figure 15-1).  Although we normally see the relationship in terms of the number of lower animals it takes to support one predator, if predation plays the crucial role we suspect it does, the pyramid also shows how many prey animals depend on a single species of predator….

Certainly as I think back on the many years that I have worked with croplands, rangelands, livestock, and game populations, the healthiest situations contained high levels of predators.  The only exception was where a population of omnivores, such as baboons, monkeys, pigs, or humans, turned predatory.  Because omnivores are not solely dependent on predation for their subsistence, they can kill out the species they prey on and continue to thrive.  To prevent this outcome, omnivore populations may have to be reduced through direct intervention.

(460)  Holistic Financial Planning grew out of these challenges.  My clients' tendency to let costs rise to the anticipated income appeared to be a trait most humans share, including myself.  In an attempt to thwart this tendency, we now plan the profit before planning expenses.  Then when planning expenses we give priority to those that will generate the most new income this year over those that merely keep the business ticking along.

(461)  Currently we, as a center, have no experience in planning any town or city holistically, but there would obviously be benefits to doing so.  Towns and cities demand a great deal of infrastructure, the development of which should be guided far more than it is now by social needs and, despite the artificiality of the urban environment, by ecological principles. 

(462)  _Handbook for Early-Warning Biological Monitoring_ (currently in preparation)

(466)  If you have made up your mind that you are powerless to plan a profit, and therefore not responsible for the outcome of your planning, you cannot expect anything but the most mediocre results.

To counter the tendency to let the costs of production rise to the anticipated income level, in Holistic Financial Planning you plan the profit _before_ allocating any money to expenses.  Once you have figures for the total income you expect to receive, cut that figure by up to one half and set that amount aside as your profit.  You have now set a limit on the amount o money available for expenses and to which costs can rise.

(467)  The profit planned needs to be substantial so that severe restraints are placed on the funds left for running the business.  If the amount of profit set aside is too great, however, people will be demoralized as there is so little left to run the business.  if the profit planned is too low, plenty of money is left and there is little challenge in keeping costs of production down…

The Holistic Financial Planning procedure includes two phases.  The preliminary phase is devoted to information-gathering and decision testing.  It takes place in several sessions held periodically over several months.  In the second phase, which generally requires a day or two (or more in a large or fairly complex business), you create the actual plan - set aside the profit, finalize income and expense figures, and make any adjustments needed to ensure an even cash flow over the year.

(468)  The people responsible for earning and spending the money, that is, those creating the products, dealing with the clients, purchasing supplies and consuming them, need to come up with the figures that are directly under their control.  If someone else does this for them, the figures are likely to be inaccurate.  More important, the people who earn and spend the money and consume the supplies have no ownership in the figures someone else plans, and thus no incentive to make sure that once the plan is implemented the figures stay on target.  When you do not involve everyone to at least this extent, the results you obtain will be far from ideal.  People will be at all different levels of understanding and sophistication, and you will have to make judgments and decisions on how much each individual can handle, but err on the side of giving people responsibility rather than not doing so out of fear.

(469)  _Is There a Logjam?_  Each year, it is essential that you mentally scan through your whole operation to see if a logjam exists that is preventing you from making genuine progress toward your holistic goal.  If you have been managing holistically for a couple of years and you have yet to see a dramatic turnaround in your situation, you need to find the blockage and identify its cause.

(470)  Market factors are seldom responsible for impeding rapid progress toward your holistic goal…

_Are There Any Other Factors Adversely Affecting the Business As a Whole?_

_Are the Gross Profits on Current Enterprises As Good As Planned?_

(471)  Many businesses today view growth solely in terms of sales volume, but in the future may well seek to grow in terms of quality - in their products and in the lives of those producing and consuming the products.  The idea that enables you to move in this direction could well emerge from brainstorming.

(474)  … the chain of production has three links (resource conversion, product conversion, and marketing), the first of which varies depending on the type of enterprise.  When you allocate money to cover expenses, actions taken to address the weak link will have priority because they generate additional money over and above what you are currently able to generate.

(375)  The main planning team needs to be aware of the weak link in each enterprise, how each management team plans to address it, and how the team arrived at these decisions.  Although this is largely an information-sharing session, it can also lead to changes in some decisions, as people not directly engaged in a specific enterprise often contribute insights gained from their perspective as outsiders….

Wealth-generatin expenses are those that will increase your income over and above what you are currently earning.  In the case of a government or nonprofit organization these expenses would be those that would enhance the services provided.

(476)  Inescapable expenses are those that are absolutely inescapable:  they cannot be adjusted, delayed, or changed in any way, _and you are morally obligated to pay them…

Maintenance expenses, are those that are essential to running the business and maintaining present income levels, but will not in themselves generate additional income by strengthening the weak link in any of your enterprises, clearing a logjam, and so on.

(477)  First, divide the wealth-generating expenses in each enterprise into two groups:  those that must have a specific amount allocated to them or nothing will happen;  and those that need every dollar they can get, but can still generate additional income with whatever you can allocate to them…

Second, use the marginal reaction test to compare the wealth-generating expenses within each enterprise.  What you are attempting to do in passing through this test is to eliminate any expenses that provide a relatively small marginal return toward your holistic goal compared to the others…

If the expenses in the first group, which require an all-or-nothing allocation, look fairly good, then allocate money to them right away so you can turn your attention to the wealth-generating expenses in the second group.  The expenses in the second group, remember, can generate additional income with a minimal investment, but will generate even more with a larger investment.

(481)  _Any actions taken to address the weak link will most likely increase income estimates_ and this increase should be taken into account when estimating the figures recorded on the worksheets…

Deciding how much to set aside as profit is once again a subjective exercise.  Remember, your sole purpose in taking this step is to place a ceiling on how high your expenses can rise.

(484)  Alternatively, you can base rewards on net managerial income (NMI), which provides a direct and immediate measure of management success in keeping income up and costs down.  NMI is derived by subtracting all the expenses under the control of those running the business or enterprise from all the income they are responsible for producing….

Ini allocating a percentage of NMI among all staff, I would encourage you to divide the amounts equally.  In a traditional bonus program, a higher percentage is paid to the people "at the top," even though it is the effort everyone, not just the top few, that is responsible for your success….

(484-485)  Those engaged in sunlight-harvesting businesses, such as ranching, farming, fishing, timber, or wildlife production, carry a much bigger burden than the rest of us, however because in making a profit they have the ability to enhance or diminish the biological capital that sustains us all.  That ability has now become a responsibility that people who make a living directly from the soil or the seas have no choice but to accept.

The bill for decades of treating their businesses as industries independent of nature has come due in the form of lost or lifeless soil and water.  To reflect a true profit, a successful business must also enhance the soil and water and the life within them that fuels their production.  If soil is destroyed rather than enhanced, or water polluted or depleted of life, the profits gained will not be genuine because biological capital is being consumed,  However, when you enhance biological capital you benefit not only the land, but also herself;  biological capital is the one form of capital gain no government can tax, even though it is the most productive.

(487)  Holistic Land Planning involvers four distinct phases.  The first phase is devoted to gathering information and the preparing of planning maps and can take up to a year or more to complete.  In the second phase, which lasts only a day or so, you brainstorm many possible layouts for the planned developments.  In the third phase, which lasts a year or more, you create the ideal plan based on the work entailed in the first two phases.  In the fourth and final phase, which can take decades to complete, you gradually implement the plan using the Holistic Financial Planning process to determine the order of implementation.

(501)  The whole you are managing includes much more than livestock, although they will be critical to achieving the holistic goal you have formed.  The traditional goal of "producing meant, milk, or fiber" generally becomes a by-product of more primary purposes - creating a landscape and harvesting sunlight.

In the process of creating a landscape, you must also plan for the needs of wildlife, crops, and other uses, as well as the potential fire or drought.  To harvest the maximum amount of sunlight, you have to decrease the amount of bare ground and increase the mass of plants.

(503)  If we knew how everything would turn out, we would not need to plan at all.  The only reason we need to plan is because we _can't_ be sure what will happen next.

(508)  The record of actual grazing times and animal days per acre/hectare (ADA/H) harvested plus the weather and growth rate information set down on the chart should provide all the information needed for future planning and will give an excellent picture of the strengths and weaknesses of each part of the land…

I cannot make this point strongly enough.  Planning is like looking forward through the windshield of your car to see where you want to go, monitoring for curves that may put you in the ditch, and controlling speed, gears, and steering to keep you on the road until you reach your destination.  Obviously, you cannot do this efficiently facing backwards.  Excessive record keeping is like gazing out the rear window to savor where you have been, when all you really need is a periodic glance in the rearview mirror….

The discovery that overgrazing reflects timing, not numbers, means that we now determine stocking rate by much more straightforward criteria, chiefly the volume of forage, the time it must last, and the holistic goal.  Almost by accident I hit on a way to make this assessment under normal working conditions in the field.

(509)  First, "estimate like a cow."  Imagine yourself with a large bag around your neck and the job of filling it in eight hours using only one hand by picking leafy material a whole handful at a time.  A cow, having teeth only in the lower jaw, cannot pick individual leaves and will avoid taking old oxidizing stems among the leaves.

(513)  The planned grazing of concentrated herds gives positive control over where the livestock go on any given day and takes into account all of the known wildlife needs (nesting, cover, habitat, breeding privacy, etc.) so that livestock will not disturb crucial areas at critical times.  The concentration of herds means that most sites have no livestock present up to 90 percent of the time and even then, where they are has been carefully planned considering all factors.  Fitting in wildlife considerations seldom presents as much difficulty as many people fear.

(514)  Chief among them [basic principles of grazing] is the need to achieve maximum density (of animals) for minimum time, followed by a prolonged recover period.

(516)  You will recall from earlier chapters that plants can be overgrazed in three situations:
1.  When the plant is exposed to the animals for too many days and they are around to regraze it as it tries to regrow.
2.  When animals move away but return too soon and graze the plant again while it is still using stored energy to reform leaf.
3.  Immediately following dormancy when the plant is growing new leaf from stored energy.

(517)  When grass is growing fast the color is normally a darker or richer shade of green.  Also you will notice this when you find yourself having to cut your lawn frequently.  As growth slows down so the color becomes paler.

(529)   In either instance, diagnosing what had gone wrong rested on knowing how brittle the environment was, and knowing the effects the six categories of tools (Chapters 19-24) tend to have on water and mineral cycles, energy flow, and community dynamics.  Much later, we found we could also diagnose problems of a very different nature by using the model to help identify obstacles, of _logjams_, that might be holding up overall progress toward a holistic goal.  In each of these instances, the approach to diagnosis is fairly straightforward.

(532)  1.  Which ecosystem process is the most appropriate to focus on to help you reason out what is happening?…
2.  Has any natural disaster occurred that could have contributed to the problem?
3.  How brittle is the environment?
4.  Which tools have been applied generally, for a prolonged period of time, and how?
5.  How does each tool applied tend to affect the ecosystem process under consideration at that level on the brittleness scale?
6.  Based on your answers, what is the probable cause of the problem?
7.  What should be done to remedy the cause?  Is this something you can test on a sample area to confirm that the diagnosis is correct?
8.  What criteria could you monitor to ensure your diagnosis and the proposed remedy are on target?

(534-535)  Identifying Logjams
If you have been practicing Holistic Management for a year or more and not much has changed, you have a logjam somewhere.  To find it, start at the top of the Holistic Management model and work your way down.
The whole under management.  
Have you defined a manageable whole (decision makers, resource base, and money)?  Are all the right people included and in the right places, either as decision makers or as resources to you in achieving your holistic goal?  Is the whole to large to be managed effectively as a single entity?  Should smaller wholes be formed within it?
The holistic goal.
Does it lack clarity?  ARe you able to test all your decisions toward it, or do you need to revise and update it?  Are people committed to achieving it?  Are you still working toward a temporary holistic goal formed in some haste and without the involvement of all the decision makers?
The tools.
Pay particular attention to the tools of Human Creativity, Money, and Labor.  There are times when undercapitalization prevents you from applying the tool of money effectively, but experience has taught us that most logjams are related to human creativity and labor.  A lack of knowledge, specific skills, poor communication, or any other human behavior could be affecting your ability to use either tool effectively.
The management guidelines.
Are these guidelines being heeded, particularly Organization and Leadership and Learning and Practice?  As you will recall from Chapter 26, in determine the cause of problems related to human behavior, look first to howl your organization is structured, how management functions, and how it is led.  The Organizaiton and Leadership guideline addresses these issues specifically.  A lack of knowledge of Holistic Management, or a lack of skill in practicing it is just as likely to be the cause of the problem, which the Learning and Practice guideline addresses.  Both these guidelines were develoed ;in tandem with the holistic decision-making process.  The struggles that resulted in the development of these guidelines forces us to look anew at conventional approaches to organization, leadership, and learning in the new context of Holistic Management.
The Planning Procedures
Have you put into practice those that apply, particularly Holistic Financial Planning?
The feedback loop
When results begin to deviate from what you have planned, are you taking action immediately to correct the situation, or are you merely waiting in the hope the situation will resolve itself?  Holistic Management, remember, is a practice process in which you are constantly expounding to the feedback gained from monitoring the results of your decisions.

(537)  Sometimes, a logjam becomes apparent only when a series of unrelated problems begin to form a pattern.  If, when creating a holistic financial plan, you discover that each enterprise shares the same weak link, which is not uncommon, a logjam probably exists that has not yet been  identified. 

(541)  It is highly likely that present-day epidemics, such as Dutch elm disease or even AIDS, exist _because an environment exists that supports them_.  Our task is to find what we have done to produce that environment.  In our passion to cure with technological non solutions rather than recent these diseases, we often overlook this basic question.  Let me cite three instances that would support this approach.
The Great Plague… Hoof and mouth disease…  The Irish potato famine...

(543)  Dr. Cliff Montagne, a soil scientist at Montana State University, is part of a multidisciplinary team researching ways for rural communities to enhance their sustainability.

(544)  Suddenly it dawned on me that we couldn't do anything relevant without defining a minimum whole, which would have to include the members of the community we planned to use as a case study.

(545)  Most policies are created either to solve a problem or to prevent a problem from occurring.  In the case of the former, the policy will prescribe a course of action;  in the latter, a set of rules or guidelines to be followed.  However, in either case a policy formed within the context of a holistic goal is likely to fare better than one oriented toward objectives to solve or prevent problems.  Formed within the context of a holistic goal, the policy would then reflect, and lead to, what you do want that the problem or potential problem is preventing (or would prevent) you from having.

(550)  Spraying that also decimates a broad range of predators unleashes the full power of the principle [S curve of populations] in the wrong direction, however, because prey populations always recover before the predators.

(551)  Any policy that concentrates on cure rather than prevention and that at the same time _exacerbates the cause_ ultimately contributes to ever-mounting crisis management.

(554)  Seven basic steps are involved in analyzing a policy holistically:
1.  Identify the cause of the problem the policy seeks to address.  First make sure you understand what the problem is, then identify its cause.
2.  Loosely define the whole the policy encompasses - the people involved, the resources affected, and the money available.
3.  Depending on the policy, form a holistic goal or identity the conditions that would exist if the problem did not.  Don't worry about making assumptions on behalf of people you may not know.  You can assume that for most people quality of life involved meeting basic needs, such as food and shelter, and basic desires for security, health, comfort, love, and companionship. one or more of which may be threatened by the problem the policy addresses…  All you are attempting to do here is to enlarge the perspective so that the focus is not on the problem but on what the problem is preventing you from achieving.  This will enable you to better see the ramifications of any actions taken, something that is not visible when the focus remains fixed on the problem.
4.  Identify the actions proposed in the policy.
5.  Test each of the action identified to see if they would lead to achieving the holistic goal.  The cause and effect test is particularly important in analyzing any policy.  If none of the actions prescribed address the underlying cause of the problem, the problem will remain and probably spawn new symptoms.
6.  Modify the policy if necessary…  No policy is working in the long run if people do not understand and accept it.  However, it is important that you not worry about how to sell the policy before you have clarity on the revisions that need to be made.  Once you have that clarity, you can determine what actions might need to be included in the policy that would address this issue.
7.  Determine what criteria to monitor to ensure that the revised policy, once implemented, will be successful.

(559-561)  That we are accelerating toward catastrophe means that minor improvements that only slow the rate of acceleration are ultimately meaningless.  Slowing down will not prevent you from driving your car over a cliff, only delay the time of the crash; _you have to change direction altogether_.  That is what we must do now to avoid a future none of us wants  Doing so will not be easy on a world scale, but I believe it is more possible now than ever before because four developments have coincided that will enable a significant turnaround to occur:  
1.  A new framework for decision making…. [Holistic Management]
2.  Common enemy…. [Global Climate Change]
Although the majority of people may not recognize the enemy yet, they surely will within the coming decade.
3.  Advances in technology.
Although the use of technology has led to many of our problems, we can now see that it will also be critical to solving them.
4.  Advances in communications.
With the help of modern technology, we have, for the first time in history, the ability to pass information to millions of people simultaneously and on every continent.  Ideas that have been ignored by the mainstream media or censored by others, or that risk being lost in a maze of bureaucracy, now have an outlet on the Internet.  This uncontrolled exchange of views may yet prove to be the greatest benefit computers bring to humanity.

(564)  Figure 51-3  based on what we now know - that all these problems ultimately have the same root cause [conventional decision making] - we can progress much further and more rapidly by first addressing that cause.  A few million dollars directed toward that cause, compared to the billions now spent addressing each problem, or cluster of problems, would enable people to develop their own solutions at low cost.

(564-564)  I once heard of a Navajo medicine man who, in mediating a grazing dispute between two families said, "You are neighbors whether you want to be or not, because the land itself unites you.  It links you both as you walk on it today, and you will both lie in it together when you die.  Then the plants that grow in the soil you become will infect your children with either your hatred or affection as you can choose now.  If you bless your land, it will return the blessing and your present argument will become insignificant."

(565)  Holistic Management starts with a holistic goal because it established at the outset what people want.   Because always act in their own self-interest it is important that they express what _is_ in their own interest.  In the same breath, however, they must also express what they will have to produce to sustain what they need and want for themselves and for future generations.  When they then test decisions toward _that_, they begin to see that keeping the land vital is in their own self-interest, and that building human relationships, rather than destroying then, is in their own self-interest.  Their actions begin to reflect this understanding.  Self-interest becomes enlightened self-interest.

(566)  When we cannot even debate the whole and the interconnectedness of all that governments take upon themselves to do, how can we ever transcend the problems that are created by compartmentalized thinking and actions….

An axiom of politics that impressed me early in my own political career says that unless all feel secure and well governed none are….

In _Banishing Bureaucracy_, David Osborne and Peter Plastrik cite a number of cases in which elected leaders and bureaucrats have worked together to make fairly radical changes in bureaucratic structures, and have documented the essential steps taken so that others might follow.

(567)  So great is the challenge now of re-creating a planet that is rich in biological diversity and where deserts are healing, that only ordinary people can do it - you and I - teachers, farmers, foresters, range managers, mothers, fathers, businesspeople, or whatever we are outside our institutional or social identities.  Until each of us individually begins to change the way we make decisions there will not be a sufficient groundswell of opinion to make it safe for elected leaders to change the way they make decisions.  Fortunately, that groundswell is beginning to build.