Walking like an Egyptian

After all, my business is named ISIS Papyrus and I thought it was time to revisit some of the places of my novel ‘Journey To Eden‘. I now think that maybe I should not have gone. Egypt has lost the magic that it held for me. I forcibly have to distinguish between its history and modern-day Egypt. That includes the grand historic monuments that have been turned into the many locations of ‘Pharao World Egypt’. What a shame!

While Ethiopia is thought to be the genetic cradle of modern man, Egypt – just down the Nile river – is quite obviously the cradle of civilization.  Hieroglyphs were called ‘mdjuh ndjer’ – the ‘Words of the Gods’ – quite obviously invented by its priests to tally the taxes, plan the grand temple projects and – why not – document the achievements of pharaohs and the virtues of the Gods. Thirty-one dynasties of pharaohs were thus able to lead the ancient Egyptians to grand achievements. And they do need the leadership. Egyptians joke about Europeans boasting that within two hours of the end of an election they know who won, while in Egypt they are so advanced they know it even two weeks before.

Travel always inspires me to write. Life is a journey. The ancient Egyptians thought so too. The journey just does not stop when you die. They thought it plausible that like the sun has to travel through the dark underworld to reemerge in the morning, our soul travels through the underworld to be reborn some day. The death cults of Egypt are focused on making that journey as pleasant as possible. I find that not much has changed. Life is still much less relevant than the afterlife in Egypt. Egypt is wonderful – where it is empty – without tourists and Egyptians. Add the two together and Bingo – Hell on Earth. Cairo is one of the most unpleasant places of this planet. Much of the decline of this grand civilization has to do with how Islam (much like Christianity) has been misinterpreted and misused for political reasons.

There is no logic in much of Egyptian mythology: why would it be dark in the underworld if the sun goes through there? There is no logic in what happens there today too. Egypt is all about corruption. But consider for a moment that we in the civilized world pay a huge price (more than half of what we own) for legalized corruption in the form of tax laws and social security. The other thing that is so different is that there is no interest in keeping things clean. I was watching a woman throwing rubbish out of her window. She threw it to the side so it would not end up in front of her window. Obviously her neighbors do the same so she does not see the benefit of trying to keep her front yard clean. So it is no surprise that despite all the show of plastic-gloved, good intent of the hotel staff, I ended up sacrificing the food I ate there to the gods pretty soon.

Finally, looking at the magnificent carvings in the 134 pillar hall in the temple of Karnak (trying to tone out being shoved by thousands of tourists) history jumped once again into my face to say that all existing religions took their cues and plagiarized their stories from our ancestors in Egypt. The Jewish kings were quite obviously pharaohs.

I could not appreciate the beauty of the Nile valley landscape by ignoring the thick diesel clouds of the stern-to-bow convoy of 350 Nile cruisers. The side-by-side overnight docking of three to four cruisers with noisy power plants, took away the view and fresh air and made it hard to sleep.

The 3am police-escorted-100-tourist-bus convoy from Aswan to the relocated temple of Abu Simbel we managed to escape by going with our own police escort, who might not even have woken up if we had thrown him off. While the temple is amazing to look at it feels like a Disney World Joy Ride inside. When you then hear the weak arguments that ‘only’ a hundred thousand Nubians had to be forcibly removed so they would not drown in the Aswan dam lake, and see the dreadful places they are now offered to come back to, it is difficult to see it positive.

Why I found it hard to appreciate the food – and I love Arabic/Levantine from the time I lived in Saudi Arabia – I already told you. It is equally impossible to appreciate the local arts and handicrafts. Tourists have to run the gauntlet (Spiessrutenlauf) through dozens of puffers and mongers outside each temple, who constantly yell ‘one Euro’ at you as if you had not heard it the first time. The dump their ware on your shoulder to claim you touched it and now you have to buy it. I tried to buy handmade Papyrus paintings as I had bought them years ago, but today they are all just printed-on rubbish. The Papyrus bark on our company logo is from the original that hangs in the Vienna office.

If you want to see Egyptian art in peace and quiet I would not recommend the Egyptian Museum. The only two interesting exhibits were the death mask of Tutankhamun and the still live Morgan Freeman (plus bodyguards!). Was it an item on his own ‘Bucket List’? Rather go to the Egyptian exhibit of the Louvre in Paris or visit the Papyrus library at the Wiener Staatsbibliothek, which has over three hundred thousand Papyri, with hundreds on constant display.

What did I like? The sensation of the dizzying power of the temple of Karnak; the amazing view of Abu Simbel; that the sarcophagus chamber of the Khufu pyramid resists photography; and the Bedouin who – after a 20 Pound bakshish – took my hand to lead me back to the bus saying ‘good man Islam’ over and over again. Saying goodbye he offered me to kiss his camel … he really liked me!

That was it for me from Egypt. Signing off.

The Strategy of the Day?

If you are a strategy officer or a strategy consultant you will obviously deny that strategy could be dead, says Stefan Stern in Financial Times. But how can you have a strategy when there is no way of knowing what the future will bring? Is ‘Be Flexible’ or ‘Keep the ear to ground’ and ‘go with the flow’ the only sensible strategy?

Stern says that in times like these such an ‘adaptive’ strategy is needed. Hm, are these in any way special times? I certainly don’t think so. They are only special to those folks who don’t understand business cycles and thought that the market bubble would expand forever. Those are the managers that went on spending sprees when times were good and now have throttle back by whatever means to make the business survive. Certainly such managers don’t earn the that title.

Stern says, that those managers executing an ‘adaptive strategy’ have to have access to good business data and react to them quickly. That is at best a tactic, possibly no more than a plan that involves getting the data and analyzing it. Strategy has to be a lot more than ‘I will react to business data.’ Good managers certainly don’t need business data to define their strategy.

Lowell Bryan of McKinsey is now saying something that I was laughed at for saying ten years ago: ‘You have to give up the pretence that you can predict the future. Leaders have to intuitively navigate a complex adaptive economy rather than assuming away uncertainty in the annual budgeting process.’ Hey, those were exactly my words. But then I am not working for McKinsey. An adaptive strategy without rigid budgeting seems to be a tough choice for a 100.000 employee enterprise. So I believe that these dinosaurs won’t last because global enterprises are neither innovative nor are they good in using technology. The only capability they know how to use is market domination.

But then the priorities of consumers are changing. They are looking for more quality that lasts, for better service and long term relationships. All elements of business that a cost-cutting, process optimized, mostly outsourced global player has no way of providing. In the end I disagree with Stern when he says: ‘Something like recovery is on its way. You will need a strategy to make the most of it.’

I think we are still failing to recover because we are too focused on strategy and not enough on people and the reality of now.

The Paradox of Thrift

The day that Lehman Brothers collapsed I was in Washington. I sat in front of the TV in a restaurant and said to myself: ‘What I predicted for years is actually happening.’

Over the last year I had many discussions about the reasons for the recession. I am not talking about the financial crisis, because the reasons for that are pretty well known and I have discussed them here too.  Surprisingly, a lot of capitalists are suddenly Keynesian converts and are yelling for the government to step in and do ’something’. Apart from propping up failing banks, the government is called upon to undo the real estate bubble they caused in the first place. Hmm, I always thought that you can’t solve a problem with the means that created it?

There are those who claim that the recession is caused by a lack of consumer confidence and the related ‘Paradox of Thrift’ as described (but not first) by John Maynard Keynes in his General Theory in 1936. Keynes proposed that the excessive saving by consumers in a recession does not lead to increased savings that will make money available for investments, but that the related downturn in the economy actually reduces the amount of savings overall. Therefore the hoarding of cash has to be made unattractive by higher taxation for the wealthy to enable increased government (even deficit causing) spending to revive the economy. While that might sound logical it assumes a kind of market equilibrium and does not really take the time-delayed world market situation into account that did not exist in 1936.

There are numerous other relationships in the economy as a complex adaptive system. The media were playing their part by motivating consumers to act differently. This time around, the banks are in no position to offer more loans and the savings would just prop up their capital rate. Given the lack of confidence in banks and stocks, consumers are buying gold and real estate and thus their savings will not increase bank lending. What about falling prices or deflation in a recession that might stimulate demand anyway, regardless of savings? Why does anyone see a correction of inflated prices as such a problem?

I see large enterprises much more responsible because they reduced cost in expectation of a downturn and thus created the recession from the financial instability.  In the US alone large publicly traded businesses have laid off more than 600.000 well paid employees since last year and are therefore more profitable than before the recession. Consumer confidence and cash is however so low that they can’t afford or don’t trust the stocks and thus they remain low despite that. So am I back to bashing the large greedy enterprises out of principle? No, I never have but I am just pointing out the incompetence of CEOs and the shortsightedness of shareholder value – as did last weeks ‘The Economist’  by the way. It said clearly that for example Bank of America with $23 TRILLION in assets is an unmanageable black box.

So as long as we have those unmanageable behemoths it is up to the government to save us from management incompetence? The problem is that whatever governments do is too late and, given the lack of working causal models, mostly wrong. Most economic theories are based on outdated, non-global economic models. Yes, ultimately the planet is a closed economy too but the national market situations and politics are still different enough and have different time lags and linkage parameters to be predictable.

So should governments not do anything? Absolutely not! That would be the worst of all situations, because not only consumers but also businesses would take a wait-and-see attitude. But if government monetary actions are maxed out (i.e. a near 0% base rate) or further taxation could have dire political consequences, what is it that a government could do beyond accepting the drawbacks of deficit spending?

It is really not that hard! Governments can CHANGE REGULATION! That is cheap and effective. So am I asking for more regulation? No, actually I ask for LESS. Simplify regulation for consumers and SMBs but regulate large businesses to the point that there won’t be an incentive to grow beyond a sensible size. Smaller businesses are nimble and would recreate the free market economy we have lost. Smaller businesses focus more on quality and service and employ more people to that effect. They are also local and outsource much less to Asia. That is more than a taxation or cash-for-clunkers program could stimulate the economy, mostly by creating new businesses, new jobs and thus consumer confidence.

Why in the world is that so hard to understand and accept?