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Yes, AI is here.
And at every corner of the internet, someone is talking about innovation and new technologies.
If you are studying STEM, your professors are talking about 3D printing, robotics, AI and their potential impact in industries. When you watch a Youtube video, they are telling you how AI will change the world. You start to work for a company, and on the first day your boss tells you to use their newly acquired AI tools because the leadership team invested in this toy in the hopes of catching the ever-changing world.
And many say we will lose our jobs sooner or later. But if this is so, is this the end of the economy we know? No jobs, no taxes, no government?
Yes, it is the end of the economy, at least an economy that is called Knowledge Economy.
An economy that we have started to establish since WW2, or as some can claim earlier than this, an economy where the capital is human intelligence and it is used to create innovations and new technologies, an economy that always needs and wants more to grow by continuously creating new knowledge, an economy that is so addicted to growth like a child’s craving for candy is at the starting line of a collapse, for the good or for the bad, thanks to its precious child: artificial intelligence.
Soon, we will see the AI economy be crowned by its predecessor. It will be an economy where the capital of human intelligence is replaced by artificial intelligence, but that’s not what I’ll talk about now. This midterm transition will be the next topic for us; before that, we need to look at what’s ahead of it, the long-term change.
All I can say for now is that the AI economy will continue to operate in the framework of the knowledge economy, and what is expiring is actually that framework.
Let us all pause for a moment and dare to understand the dynamics beyond the framework by taking a journey to the depths of the game we are all playing.
Down to the Rabbit Hole: DIKW, Knowledge Economy and Why will it collapse?
DIKW
First, we need to understand the DIKW or DIKIW Hierarchy. It essentially models a hierarchy among data (D), information (I), knowledge (K), intelligence (I) and wisdom (W) to explain human understanding.
Think of a funnel that represents our understanding, which includes layers of filters that help to strain valuable droplets for us. The top of the funnel represents data, while the bottom represents wisdom. According to this approach, data is processed and analyzed to generate an information bit, then we internalize this information as our knowledge to guide our decision mechanisms, which, in the end, creates a form of intelligence through restructuring our mental processing, and collectively we strain the very essence of knowledge and/or intelligence to wisdom [1].
For the time being, keep this funnel in your mind; we will talk more about this in the upcoming videos. But it is important to see that knowledge sits in the middle of the funnel.
Knowledge Economy
Now, we know how our understanding processes. Next, what is knowledge economy, and how have we come to this point?
In the very early days of digitalization, we have seen an increase in data and information, which still continues today. Governments, organizations and companies became lost in this data and information inflation. They were highly valuable because new data created new information, and new information was internalized rapidly as knowledge by the circles who found those new ways to collect data. Understandably, they needed a compass to navigate. And many chose to follow the cult of growth as their “true north star," whose high priests and priestesses were called “mainstream economists," as once Dani Rodrik said [2], although they were neither mainstream nor the majority.
Why is that? After all, mainstream economists praised more GDP and more wealth, and who holds the wealth can dictate when, where, and what to do. It was advantageous and convenient to follow this path. Technological advancements helped to gather a tremendous amount of data and information from anything we wanted, from the cells in our body to the depths of the universe for any topic you could imagine, and new algorithms and models speeded up straining any bits and bytes of knowledge from those data. And companies, countries, national and supranational organizations, anyone and anything who invested their time, intellectual effort and financial capital to gather more information to create “knowledge” and then used that knowledge to manipulate the prioritization of what you should value, what people should value, and what organizations should value, have accumulated a vast fortune.
So, in the sacred name of rationality, growth and efficiency, most of the investment went into projects, businesses and technologies that have exploited the environment and humankind, deliberately or unintentionally. That’s where we are now.
This is a system where:
The driving force is prioritizing innovation and technological advancements to get more and more from that economy.
And this technological progress demands even more qualifications and skills from the people who developed those.
Hence, this creates a culture of competition among people, among companies, among societies and among countries because first to make yielded huge returns. I repeat Huge Returns; that’s what the knowledge economy praises for.
This return in the form of more financial capital was also used to create more political power and more influence over people.
What is more, these dynamics fostered a political environment where governments and organizations advertised programs and schemes, adoring the ideas that help them to gain more from this economy. Many of those ideas were the products of opinion leaders and think tanks funded by corporations or for-profit organizations. This pushed the system even more to the limits. Economic liberalism and free trade, for goodness’ sake, are potentially great ideas for maintaining a peaceful world after two world wars, but they, you, and we did not care at the expense of what and who. A potentially great idea, but in the wrong hands and, most importantly, in the wrong mindsets. And now sharing economy in the shiny child of green new deals washed with sustainability prayers, same story. This mindset of always craving for more can only create solutions that are doomed to fail to create value for all.
This powerful reinforcing cycle distributes value based on 2 decisions:
Who owns what knowledge
Who owns what resource, usually natural resources.
Any technology needs natural resources, even codes, Google searches or AI prompts. To create mobile phones, laptops, and MRI scans, you need to extract gold, cobalt, aluminum, and many other common or rare elements. When you want ChatGPT to create an image for you, you are unawarely consuming an energy equal to the full charge of an iPhone. You are unaware because you don’t see it because it is consumed by the GPT’s servers [3].
That’s the operation model of knowledge economy. Take, Make and Waste. Super Simple, Super Linear.
Take natural resources, make something with a planned obsolescence, offer it to society, and watch them waste.
Take human resources, teach them to make something, use them as a worker with planned obsolescence, and dump them far away from the sights of productive human resources.
Take knowledge from a collectively built knowledge pool, restrain access to it, make something to earn more, and dump that knowledge by making it public again.
This mindset creates impact. it’s certain.
But it can’t create value for all.
Why will it collapse?
This hassle of failing to benefit everyone will not cause the system to collapse all alone, but certainly it will help to undermine some of its dynamics. However, the inflation dynamics within the system will certainly be the core reason.
The simple rule: If something is scarce and needed, it is highly valued, and if something is abundant (whether needed or not), it has low or no value at all.
The value of current knowledge will diminish as it becomes abundantly accessible through the hands of AI. And I’m sure in the meantime, some people will build new empires upon this AI boom within the framework of the very knowledge economy that created it, but they all will be ephemeral. Because the value cycle of each new knowledge is getting shorter and shorter since the internet became a thing. And now AI is simply accelerating this process, and eventually we will reach a point where generating new knowledge will be meaningless for many industries and even for AI (does anyone remember the prompt engineering hype?)
Yes, some will continue to try generating new knowledge and restrain access to it to gain more from the economy. But until when? Can you stop the unstoppable?
Wake up from the Nightmare
We all lack wisdom one by one, but collectively we have all the wisdom we need.
Balancing Forces
In the very same couple of decades, we saw people struggling to live a healthy life both mentally and physically. Societies started to be polarized and dismantled. The wealth gap between rich and poor countries, communities and people is widened enormously even in most developed economies. Obviously, the only habitable planet we know took its share from the knowledge economy; we disturb the ecological cycles and dynamics with the consumerism driven by growth addiction.
As Harari well said, “Despite our wisdom, we keep doing very stupid things … This is the basic tension in human history.”
Yes, tension. A Balancing Force. We ruined our capability to create this tension because of the dynamics we built. What we witness is actually the struggle of wisdom. Yes, there are attempts, but will they be enough?
We have seen a boost in environmental organizations across societies to fight against exploitation of natural resources.
We saw the rise of feminist ideas in all branches of social sciences. For the first time in our “written” history, half of us claimed their rightful place in society, to be equal to men, through fighting against patriarchy. That’s a balancing force too.
We have started to allow non-rational elements to have a chair in the academy and also use applied system theory in the social sciences to understand the complex socio-economic structures because, finally, we understand that we are not rational but complex creatures. That’s a balancing force again. This time against the wrong assumption that we are rational.
Whichever angle you choose to look at society, you will find a humble act to balance, sometimes strong but mostly undersized. However, those acts help a lot to leash knowledge economy. As the climate crisis became a hot topic, we have seen big corporations being forced to publish what they do to mitigate their impact on climate by the people who are fighting the system in politics, businesses or international organizations. We even see some mainstream economists talking about “degrowth” on the World Economic Forum [4].
Four Horsemen of Knowledge Economy Apocalypse
However, Donella Meadows explained and warned us 50 years ago that there are limits to this growth mindset. It took 50 years to call the attentions of the beneficiaries of this economy. And now we almost reached another precipice that can wipe out our entire civilization. We don’t have another 10, 20 or 50 years to wait until the beneficiaries make up their minds and find their profitable way to exploit the climate crisis or disruptive techs like AI. Our habitat is in the ER, and if we can't diagnose and treat immediately, we will find ourselves in the ICU in a decade or so.
And unlike our previous marches to countless precipices in our history, this time most of us are numb. Yes, some are fighting to rejuvenate the lost tension, to wake the numbed, to REBEL against this mania. We desperately need more of them. They will break the pyramid scheme of politicians, media and financial organizations feeding this mechanism. But those rebels need a vision for the future and a communication strategy. Actually, they need to be masters of communication.
Yes, some of you are aware. If you’re still watching, listening, or reading this, you have that feeling of “something is wrong, and I need to understand what it is." Welcome to my world. We are the SAGEs, the seekers of truth who are on a journey to understand the mysteries of this world. We want to grasp the truth in order to use it for our decisions to correct what is wrong. But we are surrounded by walls of judgment—the judgment, the judgment of ourselves and society. And with the infinite information flow, we are having a hard time navigating too. We need to overcome our fears of being wrong to map out the world and create a vision for the future.
And some of you have dreams. Even if you are not consciously dreaming, your subconscious is yelling at you in dreams. You starve for a better world for all. You have ideas in your mind. Wherever you look, you have the great capability to see through the problem and a desire to solve. You are the engineers, designers, architects, writers, and artists. You are the CREATORs of the future. You will first dismantle this economy piece by piece, and then, through the fresh lenses of prosperity for all, you will provide new structures for us. What you need is a place to see the whole map and a strategy to bring your ideas down to create impact.
And some of you are trapped in insecurities created by the system we live in. You want to avoid situations that may victimize you again because you distrust others and the system. You feel a dilemma every time you get the urge to change but then tremble with fear—the fear of losing the game, the fear of doing wrong. We have a room for EVERYPERSON struggling to survive this life. You need to be inside this house and help to build it. We need your boundless capacity to bring joy and love wherever you are and the acceptance of everyone. We will work together to earn each other’s trust because we already trust each other in the depths of our dreams. And we will help overcome our insecurities together.
the REBEL
the SAGE
the CREATOR
and the EVERYPERSON
4 horsemen of the apocalypse.
The Bearers of Death and Rebirth.
They are the forces of the human mind.
They are the 4 Archetypes of Our Collective Subconscious, all within you, all within us.
They are not a group of people; each of them echoes within us sometimes separately but most of the time collectively, in the depths of our minds.
And they will:
not only help bringing the end of knowledge economy while AI-driven knowledge boom crippling the system inside,
but also guide us to facilitate the transition to Wisdom Economy. Death and Rebirth.
This is the next big thing for humanity; it is not an ideology but a state of sanity. A sanity achieved by bringing our collective mind together willingly and deliberately.
What is Wisdom Economy?
It is not a coincidence that many people from western cultures are in the quest to find their inner peace and understand their true-self through ancient-old or new age belief systems, popping at every corner, every day. Because wisdom out of inner peace is becoming the most scarce resource. We learn and internalize things and call them our knowledge but we all lack the wisdom to make sound judgements in one case or another, that’s what we lost, that’s what we search for. And to find this, we are still wise enough to turn to ourself in all these different belief systems. We are the EVERYPERSON archetype. We are the generation who consistently labeled as “lost” by the previous ones who created this growth addiction, but, unlike them, we try our best to keep our hands clean. Because we value understanding ourselves more than gaining power.
That’s the golden key of wisdom economy: Understanding Self and Others
Unlike its predecessor, Wisdom Economy
values people over technology,
asserts qualities and principles over qualifications,
encourages collaboration over competition (for non-zero-sum setups and respects the opponents in zero-sum setups)
and understands the notion of sufficient to create value for all
Because it is grounded over the fact that each and every one of us is unique and wants to be heard and understood, it understands that knowledge is not the ultimate goal to yield more power, but a blunt mean of realizing ourselves, realizing what we are meant for, our true power to create value for all.
This proposition of “understanding self and others to create value for all” is world apart from “harnessing power through deciding who knows what by the means of politics funded by beneficiaries”. Being fundamentally different makes the current discourse of political ideologies obsolete. Being right or left means nothing in wisdom economy, they belong to old economy. Actually there is no room for politics in the coming age. Yes we will need to make decisions but not like today, not through the means of politics we are familiar today. We will talk more about this in future sessions.
You might be also wondering that Is Wisdom Economy against the tech and innovation and developing new skills? or may want to ask me: Don’t you think what you paint for us here is a picture of birds and flowers?
No.
Wisdom Economy will not nail innovation to the cross. On the contrary, it craves for innovation. What it does is simply change the angle of the frame we look through the world by putting human and nature first. Innovation is not just about tech and gadgets even if you were told so for the last couple of decades. Innovation is a process, a process of taking ideas from inception to impact as MIT defined to us [4].
It is about creating an impact.
It will not nail innovation to the cross but will be OK to pause any technological development to consider the future consequences. Wisdom is all about foreseeing the future impacts of our decisions through questioning the deployment of technology and innovation from the perspective of every stakeholder including nature. Because technology is just a tool.
That’s why, unlike its predecessor, Wisdom Economy is circular. It is circular in every aspect you can think of, not just for economic activities. It understands that feedback loops keep the balance. It demands consumers to be CREATORs too by leading you to design considering the nature and others at every step, thus it rejects “take-make-waste” linearity of knowledge economy and encourages you to bend the line to create a circular economy through repurposing, repairing, reusing, upcycling and recycling.
It’s obvious that this mindset demands new qualifications but requires them to be aligned with qualities. At the heart of it, it does not want you to suppress symptoms for the sake’s of profit, it encourages you to eradicate it, so creators should break the shackles of age-old innovation approach inherited from the prior economy.
But, if we shift to this, don’t you think that economy will shrink, and companies will be unsustainable to operate, and we all become unemployed? Yes and No. This answer requires a long analysis, which I will do my best to cover in future videos, and if you want to hear more about it, please subscribe my channel now. But to put it shortly, This is a transition. Transition in resource allocation from some industries to new ones led by REBELs, along with another change, this time driven by SAGEs challenging the 400 years old market dynamics that mainstream economists taught you that it is the one and only bible. However, for a long period time we will see both economies in the market.
Living the Transition: Be the Agents of Transformation through Creating Value
If you research academic papers that talks about wisdom economy, in most papers you’ll see arguments about our need for wise leaders and their qualities to bring the transition. While I agree with what they argue overall, I want to give you a different perspective here.
First, I don’t feel ok to externalize this transition in the form of wise leaders coming and saving us as Hollywood wishes for. I want to simply remind you the heroes within yourselves.
Second, I urge the heroes within us to create value for all, because I like to prioritize practicality when it comes to solve problems.
However, I must say that these papers guide us thoroughly [6]. And with their guidance, we can identify the initial principles to build the foundation for a strategy to create value.
They are:
Allowing non-rational and subjective elements have a chair on the table from inception to impact
Life-Long Learning
Understanding the essence: first to create shared context and then to communicate it for practicality
Seeking the goal of balance: Balance among personal, social and environmental rewards.
You might be thinking that allowing non-rationality and subjective elements can be a bit overstretch. But hear me out: what we defined as irrational, actually signals to us that we lack the knowledge there. If something is a fact even if non-rational, that means it’s a fact and that’s what makes it a datapoint which means there exists an information to be extracted. And if you skip that part of information you can’t have the wisdom at the bottom of the funnel. They are all interrelated.
Now we set the foundational stones, next let me set the stage:
First, REBELS, we are neither in a war nor in a competition. Knowledge economy is not an enemy. This is simply a shift of paradigm. Rome wasn’t built in a day and didn’t fall over a night.
Second, SAGES, we can’t have and actually we don’t need every detail of this paradigm, we can’t forecast the future, we are not fortune-tellers.
Thus the Third one, CREATORS, we all must embrace the complexity.
Fourth and last, EVERYPERSON, we are not naive to dream of a utopia.
Keep these four in your mind from now on and when you struggle to understand a situation, filter that through these 4 facts of the stage we are on and see if it belongs to any of them. They are crucial to maintain resilience along the journey.
Finally, The Strategy:
So, how will we accelerate the transition?
This is not the first time we live through transition as humanity. After every transition we told stories to next generations in the form of myths, sagas and legends. We will simply repeat one of the strategies that fits best for our current condition:
The disadvantaged one using its leverages to gain ground against the advantaged based on principles it stands for. And usually this is combined with exploiting opponent’s handicaps to break their leverages, again without compromising the principles. David and Goliath, Theseus and Minotaur, Myths of Norse gods and heroes fighting and defeating giants, Arthurian Legend, all give us similar, if not the same, strategies collectively.
When we say like this, it looks simpler than it is. What leverages or handicaps does wisdom economy and knowledge economy have?
Here is a quick summary:
So, basic articulation of this strategy theory in this case:
Wisdom Economy uses its capacity to solve common burning issues as Knowledge Economy fails to meet the needs
This will shift the ground from KE to WE and weaken the infrastructure of KE
Each ground gained by WE should be used for establishing infrastructure and institutions around it, aligned with its principles and used for connecting to other grounds to have a cohesive infrastructure that can accelerate its capacity
Based on the assumptions that:
KE cannot create value for all because its system is not designed to do so
Based on its principles, WE can provide solutions that creates value for all
and thus, the strategy dynamics:
Ok, how to carry out this theory? To complete the whole picture, we need to add a system of high-level tactics.
Tactics
The following set of tactics can be useful to begin with, especially to get 4 archetypes moving, yet we can add more during the process.
First, for everyperson: Understand yourself and find a cause that you can't help yourself but desire to solve.
Then, start trusting others to connect with each other’s creator sides together.
Use your creation energy wisely by internalizing the fact of complexity, try and fail and try again,
At each iteration bring your sage side to table to understand the essence and once you crack the problem, call your rebel side to the scene to promote yourself and flock more people around you and let them be part of the solution, encourage them to find their fire to solve another problem.
Along the journey you will build a powerful force of success: Trust. Establish infrastructures around trusting bonds you have.
In the future videos, we will talk about potential projects, initiatives to draw certain paths and infrastructures to facilitate this transition faster and helpful tools to deal with complexity while understanding the essence.
Architecture of Strategy
Now we finally have an initial set of strategy system and I believe best way to capture and internalize a strategy is to draw the architecture of it.
A system of strategy that mimics our understanding process and feeds each other:
Principles at the bottom helping to restructure our mental models
and those mental models externalized in the form of strategy,
which focuses to capture the data by the means of high-level tactics.
Before closing this session, I’d like to address the elephant in the room, quickly: How all these will be financed?
We’ll use our intelligence capital, the core resource of knowledge economy, to push the transition. Some examples :
If you are an entrepreneur or high level leader in a company, design financially self sustaining business models
If you are working for an NGO, create initiatives and projects which can provide some infrastructure for wisdom economy by utilizing funds from philanthropy or funds issued by supranational organizations
If you are an employee, use company resources, especially in non-efficient business units, to prove wisdom economy’s capability.
We will talk about this topic more in the future.
If you have reached to this point, I assume we have something in common. So please consider subscribing newsletter and share it in your network. We will learn from each other. This is not a place where I share my knowledge, it’s a learning platform for me as well. So please do not hesitate to ask your questions or share your perspectives in the comments, that will be greatly helpful for the community.
Thank you.
References
[1] DIKIW: Data, Information, Knowledge, Intelligence, Wisdom and their Interrelationships (researchgate.net)
[2] Why We Must Resist Economic Conventional Wisdom (youtube.com)
[4] Degrowth: what's behind this economic theory and why it matters today | World Economic Forum (weforum.org)
[5] innovation.mit.edu/assets/BuddenMurray_An-MIT-Approach-to-Innovation2.pdf