Introducing Societal Relativity

It makes sense to broaden your thoughts from this post. As I state at the end, it is an introduction: not an endpoint.

The Universe is a large place and often it is hard to put our place in it into perspective. The vastness of the material reality out there can only be wondered at – what are we to make of it?

Back here on our pretty little planet, in a little corner of the Milkyway, the size of Society is often hard to put into perspective, as well. The vastness of the immaterial reality within the planetary border formed by our atmosphere can only be wondered at – what is our place within it?

Society is an immaterial construct, an agreement of order made between peoples. It is there, even though we cannot directly touch it. Society lives in the buildings we build, in the borders we draw, in the manners through which we act. Society is all around us. It is how we feel reality at the largest practically malleable scale.

Society ties us all together, but only because we choose to be part of it, to be able to partake in the modern way of living it has built for us. Society, in practice, exists through all the contracts we’ve made through the centuries that have co-ordinated our efforts to move us forward in time.

As we know, one does not simply observe contracts happen. The participants in a contract exercise the power of decision-making. How are we to consider this very important power in relation to Society?

D = ei²

Decision-making power, equity, ideas. The triumvirate source of thought that provides meaning and purpose to good old energy, mass, and light in the equation E = mc². We are now speaking metaphorically – the only point of showing D as a mathematical equation is to strongly highlight the similarity of the logic operating behind the equations for both D and E: more mass is more energy, more equity is more decision-making power.

As observed in everyday societal nature, in the immaterial realm we mentally inhabit (as opposed to the material realm of the planet we stand upon), the potential energy of equity is what is used to accelerate ideas into the material realm, giving rise to the logical underpinnings of the existence of decision-making power, D. One has an idea, applies it to equity, and (after a continuous working effort) voilá – an idea turns into reality, reflected back to us as some form of light.

In the immaterial realm of society, the more equity one holds in relation to others, the more decision-making power one will be able to exercise over Society. We can consider the notion of decision-making power-equity equivalence.

The material realm is most simply considered through the energy-mass equivalence equation, E = mc², discovered by Albert Einstein. By considering the equation, we can understand how the interplay of mass and light creates the different practical forms of energy that we observe. But, until we apply decision-making power, all our observations are without meaning and purpose. There is simply energy.

Physics & Society work together

The equitable meaning of words and the direction-giving purpose of ideas bring the flesh to the bones of physics. It could be said that psychology is one side of a coin and physics is the other, and both together form conscious reality. If you picture yourself standing in the middle of a city, then physics is seeing the buildings around you (observing the energy), and psychology is understanding what they represent (applying meaning and purpose. For example – the building next to you becomes a movie theatre only once you decide to observe it as such).

This leads me to the conclusion that, when the leading physicists a century ago were actively discussing the notion of a Conscious Universe, they must have been talking about Society providing meaning and purpose to all things in the Unconscious Universe. I believe that they simply didn’t have enough data about Global Society to see it then. We do now. It’s called the Internet (the content of which is a product of Society).

Definitions of equity and ideas

As said, this is but an introduction to the Theory of Societal Relativity. The work around defining equity and ideas is going to be an important part of the philosophical foundations for the stated logic, and will dig into historical perceptions of the terms. The key thing to understand at this point is that thoughts lead the world – how we think will inevitably lead to how we act. The key thoughts that we hold on to – our opinions – are what guide us the most, and form the basis of our personal thought equity.

As a fun anecdote, the Finnish language word for opinion is mielipide. Translated literally, it means mind-hold. We hold on to our key thoughts. We own our opinions. They are an equitable representation of who we are.

These are my first proper run at defining these terms but, as said, broader work needs to be done.

Equity is anything, material or immaterial, from an opinion to an object, that one can use to exert a force on the state of society. Assuming control over equity, over anything, means that taking ownership must always be the first force applied in decision-making. It takes a decision to start making decisions.

As an example of equity in the form of an opinion, a Finance Minister holds decision-making power over a national budget, power that is dependent upon a societal opinion that the position of Finance Minister is to carry out this function, based on pre-existent experience and underlying contracts.

But at a fundamental level, equity in the form of a thought can even be just a word that we have our own definition for. This then grows into the thought of owning something outside of us, be it an object or a position within the societal system. The position of Finance Minister, for example, is always on lease from Society to whoever is holding it. Though society technically “owns the term Finance Minister”, then only one at a time can claim to use it as their own (definition of a lease, by the way).

Ideas are thoughts that, when applied to equity, present an opportunity or a risk as a potential outcome. Whatever motivation one has for proceeding to test the worthiness of an idea will logically have to reduce down to seeking an opportunity or avoiding a risk.

As an example of an idea in the mind of an entrepreneur, a targeted supply to be brought to the market might have been formed from pre-existent experiences in an industry ripe for an operational upgrade. The idea brings inherent opportunities, such as but not limited to financial reward, but also inherent risk, such as but not limited to financial loss.

To remember from the definitions. It is important to stop and consider these two terms as relative metaphors to their physical counterparts of mass and light: mass thought of via the concept of equity provides meaning (definition), such as a word (which is “attached to the mass”, via the concept of equity in practice!).

Consider a table – thought of from a purely physical perspective, it is an observable mass in a certain shape and form. Equity, assignation of the word table to the mass, gives the mass meaning. Light thought of via the concept of an idea provides purpose to mass-equity (which holds meaning), such as “a table can be used to place things upon.” When you are looking at the table, when observing the equitable word table in practice, you can think of its purpose by “shining ideas on it” – what can you use a table for?

For any form of energy, stored in mass and reflected to us as light, to have relevance for us in reality, equity and ideas must bring them meaning (definition) and purpose (direction) through the use of numbers and words.

Entrepreneurial vigour

Whilst energy will always be conserved, it will also always be in a process of transformation, either through natural decay or entrepreneurial vigour. We all know how decay happens and how it is measured through half-life. Eventually, everything fades away.

In turn, we should also all know how entrepreneurial vigour creates things. Nothing really happens without entrepreneurs.

The other side of the coin of everything fading is that everything will inevitably, at least at the scale of the Universe, be growing somewhere (in order for decay to be possible, creation must be as well). The point here is to understand how it takes decision-making power to bring an idea into reality and see how physics provides the raw materials to do so.

To put together a mass m reflecting a light c in the form of a table, which will be equivalent to some amount of energy E, an entrepreneur must first combine equity e with a table idea i, and use decision-making power D to begin transforming raw materials into the end product. Aristoteles’ metaphysics describes this relationship between potential and actual beautifully, even if it has been 2400 years since he grounded the idea in ancient Greece.

Jumping from philosophy into practice, as any entrepreneur will attest to, nothing can happen in reality without a working effort. A budding entrepreneur, with capital equity in a bank account and reputational equity in the minds of a social network (such as potential customers and financiers), pulls upon this potential energy of equity, combines it with an idea, and exercises the power of decision-making to begin a process of creation. When something is then observable in reality, it takes one final decision to decide that the idea is now, finally, real. We see some reflection of light off of some matter as proof.

This process happens at scale around the world, constantly bringing new products and services into our planet’s material existence that either supplement or replace the existing offering in the economy. Creative destruction, as first presented by Joseph Schumpeter, is put into motion when market participants come together to form contracts to be executed upon, exercising the power of decision-making in an attempt to change the real state of Society. D and E interact constantly to shape and reshape what the reality of Society around us is like.

Entrepreneuring begins with sales, since that is what first impressions are, and first impressions are what you will have, when you meet with financiers
Entrepreneuring begins with sales, since that is what first impressions are, and first impressions are what you will have, when you meet with financiers

If contracts are executed upon as agreed, value is created in the form of proven trust, fuelling growth in the economy at the most fundamental level. Trust from fulfilled contracts is where money and interest rates are born, but that is a story for another time.

Societal Relativity

The concept of societal relativity between entities enters the frame when the existence of ownership rights are realised. Catalonia and Spain is a good example of this at a national level, happening right now (updated October 29 2017).

In the interests of avoiding anarchy, ownership rights to equity are allocated through contracts of mutual trust, effectively dividing up control of the common resources of the planet.

In a closed system, such as an interconnected global Society, the more equity one holds as relative to others will determine relative decision-making power between individuals. As we live in a global Society where equity ownership rights are connected through an interconnected financial, legal, and logistical system, this holds true now more than ever before.

Akin to the logic of chaos theory, the impacts of a decision made on one side of a global Society will be felt on the other, at some degree between the infinitely small (the impact of buying a chocolate bar) and the infinitely large (the impact of starting a nuclear war). If all equity control were to be condensed into one person, this one person would be, through the power vested in ownership rights, able to orchestrate all societal actions.

In the name of avoiding anarchy, we should be pleased to have ownership rights. But, to avoid the potential volatility of condensed power distribution, we should pay attention to how they are spread out through all members of society. Societal relativity, decision-making power-equity equivalence, gives us a logical starting point to begin considering societal power allocation at scale. MIT professor Alex Pentland, in his advancement of the science of Social Physics, has already created a solid base of mathematical understanding about how ideas spread within society.

To reiterate, because of ownership rights, holding more equity as relative to others will mean more decision-making power as relative to others. Decision-making power-equity equivalence is a fundamental first principle to understand in matters of societal debate.

What does all this mean in practice?

To be really honest – I have no idea what people will use this thought for. Societal Relativity is a tool for thought that anyone can use to make an argument they are trying to make. This is just a very short introduction meant to spread the word.

What I do know is that, by my own assessment, the Theory of Societal Relativity has broad potential applications in describing the logical underpinnings of co-operation and competition between citizens, from the scale of individuals to the scale of civilisations.

The key takeaway from this early introduction to the theory was to note the relativity of decision-making power and equity. Given that at any moment in time there is a fixed amount of equity in the societal system, it is clear that, if one holds more equity as relative to others, then one will have more decision-making power over others, due to the nature of ownership rights, which dictate control over equity.

But there is another key learning to take away from this early introduction, one that becomes clear when the decision-making power-equity equivalence equation D = ei² is drawn out on a graph:

It can be difficult to consider decision-making power at the largest scales, but in practice it is the same as the global politics conducted by nations, and all the mess that is involved there.

The graph above can be considered through national brands. Denmark. Finland. Germany, and so forth. All nations have some idea of who they want to be as part of the global society that they live in – all nations have some level of a target brand (the accumulated opinions of one’s nationality held within a nation).

Whilst their ideas about themselves may not be strictly defined, nor should we perhaps desire them to be so (who’s up for 1984 in reality?), then we can always consider the relative valuation of a nations ideas about themselves as compared to other nations.

If nations undervalue themselves in relation to others (place their self-valuation into zone A, see graph), they will constantly be accelerating towards a sense of worthlessness, unless corrective action is taken. If nations, in turn, overvalue themselves in relation to others (place their self-valuation into zone B, see graph), they will constantly be accelerating towards visions of grandiosity. As seems to currently be happening, by the way, in more places than just one.

Only if we take the middle road – see our nations as equals in sovereignty – will we avoid the exponential slide in either direction.

It makes perfect economic sense, as well. A perception of equality amongst nations offers the path of least resistance towards maximal self-control of our national sovereignties. If nations, for example, overvalue themselves as compared to other nations, they will need to be spending time selling themselves not only their ideas of themselves, but also why they are better than others – an added time cost of sale for how a nation sits around spending its time.

If you end up using the tools for thought presented here, do let me know in the comments!

Addendum

Just to clarify on the metaphorical relationship between physics and society, between energy-mass equivalence and decision-making power-equity equivalence: I’ll try and explain it with a simple picture. The logic of the picture is a straight copy from Wikipedia’s page on mass-energy equivalence, found here.
 
 

The idea here is really simple, and this depiction is meant to “hook” the existence of societal concepts to those of physical concepts.

One way to think about things is that everything you’re looking at is in the past, because of the speed of light. You ingest the data, and perceive it according to your past history and future desires, and act accordingly. Your perception defines your experience, and vice-versa.

For example, a poor person sees a physical 10€ bill and thinks “food” (a term invented and held by society), whereas a rich person thinks “toilet paper” (another term, another viewpoint). The 10€ bill is the exact same physical object for both (physics is saying “things are as they are”) but completely different when considered through the societal perceptions of the individual’s decision-making power in the moment.

How each decides to act regarding the 10€ bill is completely open – theoretically it would be predictable only with complete information on each individual, but since that would mean a 100% understanding of life history and future preferences (and an assumed future creation capacity), then we can accept that this isn’t practically feasible.

Thus, I just sort of assume that quantum theory has something to do with everything that’s possible in the future, because at least to me it seems like the whole beef around quantum theory is just that all things are uncertain until they happen to you (causing you to observe). Perhaps you’ll get how this paragraph is linked to this little thinker of a post-it:

Entrepreneurs are pirates
Entrepreneurs are pirates

Addendum 2

I’m finding it convenient to practice playing with the thought of societal relativity through metaphorical logic, comparing its life-defining human characters with physical objects. For example:

1.) Projectile:target as messenger:recipient. Consider the relativity.
2.) Projectile force:target reaction as sticker shock:your face. Consider the relativity of the situation for a Finance Minister and someone getting a car repaired.

How brand makes its entrance

Brands lead the world, but equity powers them.

Before we can understand brand, we must understand its source – equity. To move from equity to brand, equity needs to be separated into two forms, capital (1) and reputational (2), material and immaterial. At the end of the chain, the forms come together again to form brand.

The equity-to-brand process

We all traditionally consider equity as something we own, and quickly associate ownership with the material realm – we quickly think in terms of capital equity, money, cars and houses and whatnot.However, we should not be forgetful of the immaterial realm. Indeed, at the end of the day, we also own our reputations as the perceived history of our actions. We own how we perceive our own actions and we must respect how others perceive our actions, in order to guide us to be better in the eyes of society (should we wish to be respectable in the eyes of society).

When discussing equity, we should always remember the immaterial realm and our ownership of reputational equity.


Molding equity with actions

Let’s remember at all times: both forms of equity, capital and reputational, are things that you own because you have the capacity to have an impact upon them.

Say a man and his wife and are laden with cash. By taking action with the cash, they are molding the form that their capital equity takes. They can build a new house, for example, and a pile of cash will have turned into a mansion.

Building a house has an impact on their reputational equity as well, but that is only partly in their control. How neighbors perceive architecture will define their first rating principle of the arriving couple’s reputational equity, as the neighbors will have to look at what the couple have built. Views are a public good that belong to all of society, and having an impact on them (as viewed by others) with a capital allocation decision will no doubt have an impact on reputation.

Of course, to mitigate issues, the couple would strive for co-creation with their neighbors, as they’d want them to be on their side in terms of positive relations. The couple would include their neighbours in the house design process, at least to some extent, and hope that the inclusion would allay the neighbors’ fears of the couple wrecking the scenery (which was probably a factor in the neighbors’ own home purchase decision, the biggest investment most people make).

Having acted in good faith towards the people that their actions have an impact on, the couple would be able to rate their own reputational equity positively. Also, they’d have a higher likelihood of getting positive reviews from their neighbours, as well. Because they have a higher chance of looking good in the eyes of society (the neighbors, to start with), as the couple tried to be good, they can look better in their own eyes, as well, and be more trusting of the future. We can see how reputation is built on memories of previous interactions, which forms a perception.

Alas, through the purchase decision of building a house, we can see how capital allocation flows through to have an impact on our reputational equity, as well. We perceive the capital’s transformation from cash-to-house before our eyes, and we perceive the reputation’s transformation from past-to-present as we assess the result and our interpretation of our own role within the change.

 

Where brand comes in

How you allocate equity depends on your intentions and the numbers and words you subscribe to them. These form the preconditions for defining a target brand at the end of a brand horizon that extends outwards, as perceived from the source of equity.

If you intend to look good (your brand target), then one realized demonstration of that could be investing into some help from experts on how to define that target. This would be a capital equity allocation decision that will impact reputational equity. For example, as a leader, you’d want to know you were doing your best in reaching your goal, and investing into the best help you can get would be one representative action towards it.

The investment would be a capital demonstration of business intentions, and how that demonstration is explained by the leader to self and others (the investment pitch), in relation to the brand target, would be a reputational demonstration of business intentions.

If the leader can explain why spending money is worth it, then he or she can live with the outcome of what spending the money brings, as there will always be the pitch from before the investment decision. For example, as a leader, you’d be willing to accept that hiring the best help means that they might be better at you at something, which is why you hired them in the first place. So, instead of coming to preach to you what you already know, you realize you’re inviting them over to teach you something you didn’t. Which also means something you thought might have been a smart idea might turn out to not be, and you will end up having to question yourself.

As the demonstrations of capital and reputation collide, brand forms at an impact frontier, which is almost like an atmosphere around a planet, or the borders of a nation. Within the boundary lies everything that that can be attributed to the brand, such as salespersons or products, which are things that can be interacted with. A country, thought of as a brand, contains all the citizens and technologies and built structures that a visitor can interact with on a visit to form her or his assessment of the country’s brand.

We can see how equity has taken a practical form of capital (all materiality within a brand) and reputation (all immateriality within a brand) and, in turn, created a brand. By this definition, brand is an outcome of allocated equity, defined by the equity actions taken and the intentions behind them. Like the atmosphere of a planet or the borders of a nation, we know that brand is there. Even if we cannot really touch brand as anything separate, we interact with it through the people and products associated with it.

 

Inseparable parts

Capital and reputational equity are inseparable. Allocating one will always have an impact on the other. These impacts, caused by the actions taken to mold equity, will continuously create brands into the marketplace, impacting you and society on some level – at minimum, on the level of product choices available in the market to purchase. Reallocations of equity – starting with information gleaned from daily purchases made by the masses – will always lead to changes in the market’s aggregate product offering, so brands are always being born, alive, or dying.

Interplay-to-assessment process

The link between equity and brand will always be present, but it will always be mediated by the interplay of capital and reputation in the passage of time. It can be seen that the intentions behind equity allocation decisions are what drive the brand outcome, so it is logical to examine equity intentions in relation to brand when defining operational strategy. It can be seen that, effectively speaking, operational strategy always reduces down to the allocation of equity, making an investment mentality the best attribute of a leader, followed immediately by an eye for assessing the present nature of a brand.

 

On honesty

To close, a word on honesty in the marketplace is required. It is extremely easy to present something that is not true – in practice, to lie. Many brands are constructed by marketing departments with the help of good intentions, but if those intentions are not realized in the equity allocation process, then the brand runs the risk of being exposed as fraudulent – a real risk in today’s world of free-flowing information.

In order to ensure brand honesty, and increase the likelihood of matching customer expectations with reality (a significant driver of potential recurring sales), brand should be considered strategically at the very earliest stages of equity allocation. Equity with a targeted brand knows where it is going and why, increasing the likelihood of good operative leadership that conveys purpose for the operative organization that is realizing the equity allocation decisions made by those who hold equity allocation power.

With good leadership, it is easier to respect the equity driving actions in the economy. Focusing on desired brand, at the very earliest stages of equity allocation, can drive transformational change in the economy, should equity investment guidelines and brand construction guidelines come together to guide decision-making.


On a final note

The fields of brand construction and consultation are sure to see strong growth for decades to come, as global equity prepares and rolls out its defence against the onslaught that it is receiving from global media. Hopefully, the brand strategy for global equity will, on an aggregate level, be one of honor and pride of rectifying mistakes from the past, and helping the private and public sector learn from each other in the interplay that makes a citizen’s free life possible.

Global equity should, from a general investment perspective, keep working towards a stable society, which deflates the impact of risk in the market and provides more stable returns. Considering what perception of its brand global equity wants people to take is a first-and-foremost task in preparing to dig out of the current brand hole that wealth is now in. Understanding what a stable society means to people, and how they value corporate and public brands’ roles in creating it, is how the story begins.