the eurozone as a koan


Robin Matthews

One aspect of a koan is that it is a statement that appears to be paradoxical or contradictory, an antinomy or riddle.

Although associated with Buddhism, koans appear in many contexts; in Sufism, all forms of mysticism, in the arts, poetry painting and literature, in myths and fairy tales, in philosophy, mathematics and logic: and in business, management and economics.

In myths and fairy tales riddles and problems are solved by children, animals, those thought to be simple, but those brave enough to adopt another orgrammar.

Holding the paradoxes and contradictions of the koan in mind is a route to creativity; entering an alternative orgrammar.

We distinguish between complete koans and koan type statements. Complete koans have an element of the ineffable. Koan type statements have a cognitive element that requires looking at things and organizing things through an alternative orgrammar.

Whether the examples in the box are complete koan, I leave for the reader to decide.

Seeing the koan in the EZ is a way of escaping from a failed orgrammar, a failed business model

By orgrammar, I refer not only to a dominant discourse, or manner of speaking, thinking and responding to things, but also formal and informal ways in which they are expressed or represented in society, organizations, institutions and policies.

Scientific statements, when they first appear, often seem koan like and this gives us a clue to their foundation. Koans arise within a particular organizational grammar (orgrammar) and their paradoxical nature can only be resolved by adopting an alternative orgrammar.

Some examples of the koan are given below.

Holding koans in mind, preserving their paradoxical nature, is a route to thinking creatively.

Not trying, as is so with current from loaded strategies in the EZ, to reconcile them within the prevailing orgrammar. We have found using the koan in teaching and consulting, to be fruitful in evoking creative approaches to business problems.

What do koan type statements have in common? Interdependence.

Koans express interdependence and relationships between actions, objects, issues and so on, that look distinct, separate and thus paradoxical within one orgrammar, but are seen to be inter- related in another.

If we think of a spectrum ranging from, at one end, complete interdependence, at the other, absolute unity; understanding koan type statements leans towards recognising interdependence, via an alternate orgrammar.

The complete koan is represented as complete unity; absolute interdependence An inconceivable situation of no orgrammar whatsoever.

Recent globalization and the information revolution resulted in an unprecedented degree of interdependence.

The new phase of globalisation is distinctive, because population growth and urbanisation has been exponential and worldwide and dominant business model, capitalism has permeated almost the entire globe.

From new media and technology has emerged a new information age that is revolutionary, unpredictable and is leading to the development of a machine intelligence that will challenge the common understanding of decisions, leadership and what it means to be conscious.

Interdependence means that there are potential gains from co-operation, increasing joint benefit or avoiding harm. Currently interdependence, especially the existence of joint causation and the need for joint solutions, is ignored in the EZ. Instead, the onus rests entirely with deficit countries, fiscal and structural reforms that can only extend the recession, increase unemployment and paradoxically debt.

Stability contagion (percolation) and singularity

Interdependence opens up systems to feedback and instability. Systems become unstable as the number and strength of interdependence increases. As the complexity increases there is risk of contagion within systems. The great recession spread throughout the global economy.

Contagion or spread of a shock (internal or external) throughout a system or to other systems depends on its connectedness or modularity within, or in relation to other systems. Risk of contagion from one system to another, especially in an era of informationalism; events like the Arab Spring are no doubt connected to economic and financial events in the wider world. The current EZ problem is the result of the EZ being a subset of the great recession that affected the entire global economy. Connectedness within the global financial system is expressed by the too big to fail (TBTF) problem. The real problem is that the global financial sector is too big.

Whether feedback results in such extensive instability that it merits being called a phase transition or singularity depends on this question: Do critical variables in the EZ behave according to a power law?

If so, the EZ situation opens up to possibilities of disruption way outside those conceivable if they are governed by a normal (Gaussian) distribution.

The fundamental paradox at the roots of the EZ problem lie orgrammar that has prevailed globally over the last thirty or more years. It is based upon:

Highly interdependent systems require cooperation between organizations and institutions rather than competition. Unless this happens, great recessions will continue to recur.

Specific contradictions (in addition to those noted above) inherent in the EZ

An alternative orgrammar and the resolution of the koan of the EZ?

The idea that deficits can be reduced and growth restored at the same time is not a koan. It is just wrong headed.

[1] For a fuller version of this paper see recent publications on this website

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