A BIOLOGICAL MODEL FOR BUSINESS AND FINANCE


Introduction to an evolving world:

The human world has always been evolving. What is different is the speed, and the acceleration, of the change that is occurring within the span of a single lifetime. Change and evolution are now an integral part of the life of every person and every human institution.

Present human institutions and systems economic, financial and political are almost all based on a machine model of static processes that was appropriate for a time when change and evolution were proceeding at a significantly slower pace. Institutions and systems based on a machine model are able to cope and survive only as long as change and evolution are limited in scope. When they are confronted with changes that are too large or come too fast their static processes cannot adapt quickly enough and they break down.

The machine model is both a product of the Industrial Age and a creator of the Industrial Age. Like a machine, institutions and systems based on a machine model have the ability to function with great power but they can fail quickly if change overwhelms their ability to change their static processes.

A different model with dynamic processes is required for business, financial and governmental institutions and systems if they are to acquire the ability to thrive in a rapidly evolving world.

A biological model for business and finance:

The biological model is a model of dynamic processes that incorporates change and evolution. It has proven its ability over countless millennia to produce organisms and systems that change and evolve. Not all of the organisms survive, but their components are recycled into new and existing organisms, all part of a proven system of adaptation, change and evolution. Nothing is wasted.

I believe that applying a biological model to business and finance can produce organizations and systems with the ability to thrive on, and create, change. Not all of the organizations will survive, but the systems will recycle the components of failed institutions into new and growing organizations, thus creating a human world that thrives on increasing change.

Objectives of this essay:

My objective is to connect and work with people who share my vision of a world in which every person has the opportunity to choose prosperity, joy and personal growth while living in harmony with mother earth. I believe that we can manifest this vision by creating successful biological-model businesses and financial systems.

My area of expertise is finance and economics and my passion is understanding how systems work and evolve. In this essay I put forth my vision of the new financing instruments and the new ownership and financial structure that will be required by operating principles and organizational structure of a biological-model business.

I demonstrate that the two primary present financing instruments today common equity (common stock) and debt are not consistent with the operating principles and organizational structure of a biological-model business. Then I present new financial instruments and a new ownership and financial structure that I have developed to be consistent with the needs and principles of biological-model businesses.

In addition to financing instruments and new ownership and financial structures, I put forth my ideas of the requirements for creating a successful biological-model business. These requirements include: 1) workers who choose to learn and change; and, 2) supporting (and investing in) workers in their process of personal change and growth.

My experience of the operating principles of personal (and spiritual) change and growth is that they are the same as the operating principles of biological systems. Indeed, the two operating principles of biological-model organizations highlighted in this essay letting go of control and 100% responsibility have been, and continue to be, key principles in my process of personal and spiritual growth.

Teaching personal growth and change to the people who choose to participate in biological-model businesses is not my area of expertise. However, I am blessed with partners who are, in my experience, on the leading edge in teaching and living processes that produce the personal change and growth, communication skills and teamwork (processes that I refer to as social technology) that workers require in order to create a successful biological-model business. I know and appreciate from my own life the power of their work.

The principles of letting go of control and 100% responsibility are highlighted in this essay because of their importance in demonstrating the inconsistency of present financing instruments (and their associated financial and ownership structures) with the operating principles and organizational structure of biological-model businesses.

In the process of writing this essay I discovered a new understanding of the connection between the principle of letting go of control and my goal of increasing productivity to create a world of unlimited wealth. This new understanding changed my understanding of productivity and its relationship to efficiency that I learned in my professional training as an economist.

I have included my new understanding in this essay. It supports my belief that changing to a biological model for business and finance can make possible unlimited increases in productivity and manifest my vision of every person having the opportunity to choose prosperity, joy and personal growth while living in harmony with mother earth.

Letting go of control:

My understanding of the importance of letting go of control in human evolution owes much to the book Out of Control: the Rise of Neo-Biological Civilization by Kevin Kelly. The role of control and the process of letting go of control in human evolution is a central theme in his book.

We are, I believe, at a break point in the process of letting go of control in human organizations and systems. The centralized control of machine-model organizations is no longer compatible with the increasingly complex systems created by our evolution. The new sciences of chaos theory and complexity have provided proof of the failure of centralized control in complex systems and the collapse of command and control economies throughout the former communist world was an empirical demonstration of the inability of centralized control to manage complex systems.

For me, the process of letting go of control has also played (and continues to play) a central role in my spiritual evolution my personal change and growth. My process of letting go of control is my process for releasing my fear and limitations and moving into love and freedom. As long as I have a need to control I know that I am acting from fear rather than from love.

Letting go of control and increasing productivity:

My new understanding of productivity is that the economic productivity of a system is determined by its capacity for change and that capacity for change is increased by letting go of control.

Capacity for change determines productivity because the process of economic production (indeed the process of all creation) is the process of change changing what exists now into something different. Therefore, the greater the capacity for change, the greater the ability to produce.

Control limits the capacity to change and, therefore, the productivity of a system. Control limits the capacity to change because to control is to curb or restrain. When I curb or restrain a system I limit the capacity of the system for change.

Therefore, letting go of control is a requirement for increasing productivity. The more I let go of control, the more I increase my capacity for change and, therefore, my productivity. My fear, which is the source of my need for control, is my only limit on my capacity for change and my productivity. I put this statement in the first person because it applies to me as a system as well as to larger systems.

Productivity in static and dynamic worlds:

As a professional economist, I was trained to see efficiency as the goal of economic systems because maximizing efficiency (output divided by input) would maximize output given scarce (limited) resources.

The economics that I learned as a student was the study of a static, machine-model world. Indeed, my use of the words static and machine-model is redundant because a machine-model world is by definition a world of unchanging processes a static world.

It is true that in a static world, productivity is increased only by increasing efficiency (output divided by input). Productivity is also limited because efficiency cannot exceed (or even equal) 100% and resources (including knowledge and the set of available production processes) are fixed.

However, in a dynamic world knowledge is not fixed. There is no limit to knowledge and no limit to the set of available production processes. The capacity for change, and, therefore, productivity, is unlimited.

Just as machine-model systems are static, biological-model systems are dynamic. Therefore, in order to study productivity in dynamic, as opposed to static, systems, I look to the ultimate biological model system nature.

Nature is not efficient in a machine-model system (output divided by input) because it is full of redundancies (most of the DNA in our genes has been found to be “redundant”) and “mistakes” are frequent. However, nature is an incredibly productive system. It is also efficient if we change our definition of efficiency output divided by input to the elimination of waste. Nature recycles everything, including its “mistakes,” thus eliminating waste.

The lessons that I draw from this are: 1) that the greatest increases in productivity come from new processes rather than maximizing the efficiency of an unchanging process; and, 2) that redundancies and “mistakes” are an essential component of dynamic, biological-model systems and are, therefore, the price that we pay for unlimited increases in productivity. Xerox provided a real world example of the importance of first lesson when it invested large sums in a state-of-the-art computerized inventory management system and then could not compete with Japanese firms who introduced new processes just-in-time “lean” manufacturing.

Unlimited productivity and wealth in a biological-model world:

I believe that there are no limits on our productivity and wealth in a world of biological models for human organizations and systems in business and finance.

My views on the end of limits on our productivity and wealth owes much to work of Barry C. Carter and his book, Infinite Wealth: a New World of Collaboration and Abundance in the Knowledge Era, 1999.

Barry Carter points out the fundamental importance of our wealth paradigm. If our wealth paradigm is one of limited wealth, we see ourselves competing with each other for a bigger piece of a fixed pie. This behavior is counterproductive to increasing wealth and, as a result, we manifest that which we believe limited wealth.

If, on the other hand, we change our wealth paradigm to one of unlimited wealth, we see the value of working together to increase wealth. By working together we increase our knowledge and productivity without limit. As a result, we again manifest that which we believe, which is a basic spiritual principle, but this time we are manifesting unlimited wealth.

I see the shift to a biological model for business and finance as an essential accompaniment to shifting the wealth paradigm to a paradigm of unlimited wealth. This new wealth paradigm is that knowledge is wealth. Wealth is then unlimited because knowledge is unlimited.

A world of unlimited knowledge and unlimited wealth is dynamic. Today’s organizational model for businesses, the machine model, is a static world model. The fixed processes of a machine model are inconsistent with the changing processes of a dynamic world.

A biological model for businesses is a dynamic model, a model of continuously increasing knowledge and constantly changing processes. The operating principles (see Figure 1) of a biological model world are the operating principles of a world in which wealth is knowledge and, therefore, unlimited.

Biological systems are networked systems. As one of the founding principals of New Market Solutions, LLC (NMS), I have led the development of several patent-pending technologies for networked systems in finance in the areas of investment management and financial markets. These networked systems will open to their full potential when they are integrated with each other in a world of biological-model businesses.

Creating a successful biological-model organization:

Although letting go of control is vital for creating a successful biological-model organization, simply eliminating the hierarchy and command-and-control structure of a machine-model organization will not produce a successful biological-model organization. It will produce chaos and failure.

Failure will occur because the foundation for a successful biological-model organization will be absent. This foundation is the people that the organization requires. A successful biological-model organization requires people that have characteristics that are not the norm in a typical machine-model organization. They will practice teamwork and form interdependent, as opposed to co-dependent, relationships.

In the absence of a clear choice and a significant investment in training, the people making up a machine-model organization will not have characteristics needed in a successful biological-model organization. This is because of where we are in our human evolution and because of the impact of a machine-model organization on its workers. The command and control structure inhibits the formation of needed teamwork skills and creates supervisor/subordinate relationships that are co-dependent rather than interdependent.

Therefore, a successful transition from a machine-model organization requires offering people a clear choice (not everyone will desire to change) and a significant investment in training those who choose to change.

The people who choose to be a part of a successful biological-model organization will be united by their commitment to the organization’s vision and mission. They will be committed to learning and to speaking their truth (their experiences, feelings and desires) with no withholds. They will be trained in the tools of effective communication and authentic listening. Modern information technology will give each person equal access to all information. Each person will have been taught to create interdependent relationships and practice 100% responsibility.

100% responsibility:

I practice 100% responsibility when I accept 100% responsibility for my experiences and my emotions. I accept that I am 100% the creator of my experiences. Regardless of the events in my life, my experience of these events and my emotions are the result of my choices (see Conscious Loving and The Conscious Heart by Gay and Kathryn Hendricks).

When I practice 100% responsibility I let go of fear and the roles that I play in co-dependent relationships (victim, persecutor and rescuer). When I accept 100% responsibility for myself and allow others 100% responsibility, I move into love and the freedom required for interdependent relationships.

In my experience, assuming 100% responsibility is an integral component of giving up control. My belief that my experience and my emotions are determined by outside events is the source of my fear regarding the outcome of external events and, therefore, my need to control outside events. As I accept my power to choose how I experience the outcome of any outside event and my associated emotions (i.e., as I accept 100% responsibility), I release my fear regarding the outcome of external events and let go of my need to control them.

As I accept 100% responsibility and let go of control I experience true empowerment power over myself. Empowerment is an essential characteristic of the workers in a successful biological-model organization.

Empowerment of the components of a system increases the productivity of a system exponentially. In a machine-model system, only the central managing authority is fully empowered. This limits the productivity and wealth of the system, creating win-lose competition for control of the limited resources. In a biological-model system, every component is empowered. The result is unlimited productivity and wealth, creating win-win cooperation in the creation of resources.

The need for a new financing and ownership structure in a biological-model world:

The two major financing instruments today common equity (common stock) and debt are inconsistent with the operating principles and relationship characteristics of a biological-model world for business. Therefore, a new financing structure is required. This new financing structure will result in a new ownership structure, a structure consistent with the shift in the providers of the primary asset (see Figures 1, 2 and 3).

Figure 1 contrasts my vision of a biological-model world of business with my understanding of today’s world of business. It presents both worlds as consistent systems resting on fundamentally different wealth paradigms and organizational models. It builds on the work of Barry Carter and Alvin and Heidi Toffler.

The differing economic and organizational foundations of a biological-model world of business and today’s world of business result in systems with fundamentally opposed operating principles and relationship characteristics. What works in one world does not work in the other. This includes financing and ownership structures in business.

Debt financing is inconsistent with a biological-model world:

The characteristics of debt financing are separation, adversarial relationships, win-lose competition, and control. These traits are consistent with the operating principles and relationship characteristics of today’s world in business but not with the operating principles and relationship characteristics of a biological-model world for business.

Debt financing is based on the concept of a borrower who owes a lender, creating separation rather than unity. The financing agreement is based on, and enforced, by our adversarial and win-lose legal system. Protection of the lender’s interests is derived from the control granted the

Figure 1

A Biological-Model World and Today’s World in Business

A Biological-Model World Today’s Machine-Model World

Wealth is knowledge. Wealth Paradigm Wealth is making and moving things.
People working together. Source of Wealth Monetary resources.
Unlimited, infinite. Nature of Wealth Limited, finite.
Win-win cooperation;Letting go of control;100% responsibility;

Unity;

Celebration of diversity;

Trust;

Open communication with no withholds;

Truth;

Clear choices and clear agreements;

Love.

Operating Principles Win-lose competition;Control;Playing victim, persecutor and rescuer;

Separation;

Homogeneity;

Distrust;

Secrecy;

Deception;

Hidden choices and manipulation;

Fear.

Networked self-managed teams;Workers choose coordinators. Organizational Structure Hierarchical, command and control;Managers choose workers.
Cooperative;Team members;Interdependent. Relationship Characteristics Adversarial;Supervisor/subordinate;Codependent.
Empowered;Power is internal (power over myself);Freedom;

Love;

Joy.

Relationship Experiences Disempowered;Power is external (power over others);Control and manipulation;

Fear;

Pain.

Biological, natural systems;Decentralized, interdependent;Dynamic processes. Organizational Model Machine systems;Centralized, controlled;Static processes.
Unlimited as a result of giving up control. Productivity Limited by the need to control.
Mass customization;Customer driven. Production Model Mass production;Producer driven.
Knowledge. Primary Asset Capital.
Workers. Providers of Primary Asset Capitalists.

lender by the covenants contained in the agreement. The covenants are enforced by the lender’s power to force the borrower into bankruptcy proceedings upon default of the agreement, which results in a lose-lose outcome for both lender and borrower.

A further inconsistency with the operating principles of a biological-model world for business is created by the tradition of structuring the terms of debt financing in monetary units. The true economic returns and cost of a financing agreement are a function of the purchasing power amounts of the agreed upon future cash flows. Specifying the terms of debt financing in monetary units makes the purchasing power amounts of the agreed upon future cash flows

unknown and unknowable because future inflation cannot be accurately predicted. The result is unclear choices and unclear agreements in debt financing with terms specified in monetary units.

Common equity (common stock) financing is inconsistent with a biological-model world:

One problem with common equity (common stock) financing is that the perception of win-lose relationships may arise because the economic size of a common equity holding is measured in percent. This fixes the total holdings of common equity at 100%, making the issuance of new common equity to new investors appear to be a zero-sum, win-lose game (whatever you receive, I give up).

A more serious conflict between common equity financing and the operating principles of a biological-model world for business arises out of the difficulty in creating clear agreements regarding the economic value of the common stock given up (or received) in return for the financing. Clear agreements about economic value are difficult to create because of the uncertain nature of the economic value of common equity.

The economic value of common stock is the present value of the expected residual income stream of the business. Opinions regarding these expected amounts can vary widely from person to person and over time. The frequency of large, short-term fluctuations in the prices of the common stocks of even large, well-established companies is a testimony to the difficulty in establishing clear agreements regarding the economic value of common equity investments.

The fatal problem for common equity (common stock) financing in a biological-model world lies in the link that it creates between investment and ownership. When investors own the firm they must control the firm. Control of the firm violates the principle of letting go of control in a biological-model world. Control of the firm also requires the hierarchical, command-and-control organizational structure of a machine-model world, which is inconsistent with the networked, self-managed teams, organizational structure of a biological-model world.

Therefore, I see the separation of investment from ownership interests (e.g., common stock or common equity interests) as a requirement for financing in a biological-model world. This will mean the end of markets for common stock (our largest financial markets and the markets that ushered in the Industrial Age). It will also mean a new structure and concept of ownership for businesses. A new structure and concept of ownership that is fully consistent with a biological-model world for business.

Separation of investment and ownership a new structure and concept for the ownership of businesses:

Separating investment and the ownership of business will mean the end of the capitalist structure of business that defined business in the Industrial Age. The suppliers of capital the capitalists will no longer own and control businesses.

Ownership of businesses will move from the capitalists to the workers. This will bring ownership of businesses in a biological-model world into alignment with what I believe is a basic economic principle that the natural owners of a business are the suppliers of its most important asset. In a biological-model world, workers are the suppliers of knowledge, the most important business asset.

In addition, the separation of investment and ownership will make it possible to avoid the perverse result of worker “ownership” that often occurs in today’s world. In today’s world, where investment and ownership are not separated and, therefore, investors in ownership interests require control, worker “owners” are often powerless before the managers and bureaucrats who exercise control in their name, e.g., the employees of United Airlines.

This perverse outcome is the result of the need for control by investors in ownership interests (common stock) and the nature of representative government namely the great difficulty of unseating incumbent representatives given the power of their positions relative to the power of those whom they supposedly represent.

Separating investment and ownership eliminates the need for control and, therefore, the need for managers and bureaucrats to exercise power in the name of the shareholders. Therefore, it makes it possible for worker/owners to form networks of self-managed teams that operate and direct the firm, thus eliminating the perverse outcome of powerless worker/owners.

Just as importantly, I see separation of investment and ownership as fundamental to creating a new concept of ownership for businesses ownership as stewardship rather than ownership as possession. Although ownership as stewardship is a new concept of ownership for businesses, it has a long history in the cultures of Native Americans and many other indigenous peoples.

Ownership as possession is such a dominant concept in our culture that it can be difficult to see ownership as anything other than possession. However, when Native Americans met with European settlers, they had no concept of ownership of land as possession of the land.

When I experience ownership as possession I see myself as separate from that which I own and myself as having dominion over (control of) that which I own. The concept of ownership as possession has its cultural roots in the western philosophy of separation of observer and observed expressed by Descartes, which in turn became the basis for objective Newtonian science and the machine model of organization that powered the Industrial Age.

The principles of separation and control associated with ownership as possession are not consistent with the operating principles and relationship characteristics of a biological-model world for business, e.g., unity and interdependence. Ownership as stewardship of a business, on the other hand, has a connotation of unity with all stakeholders in the organization and service to the organization that is consistent with the operating principles, relationship characteristics and systems of a biological-model world for business.

Figure 2 contrasts my understanding of ownership as stewardship with ownership as possession as applied to business organizations. For me it is a further illustration of the vital role that the separation of investment and ownership will play in creating a biological-model world for business.

Figure 2

Ownership as Stewardship vs. Ownership as Possession in Business Organizations

Ownership as Stewardship Ownership as Possession of the Organization of the Organization

Commitment to the agreed upon vision and mission of the organization and ongoing contributions of work and knowledge. Source of Ownership Investment of money in ownership interests.
Ownership by workers;Networks of self-managed teams facilitated by coordinators;Workers select coordinators. Organizational Structure Ownership by investors;Managers work for and represent the investor/owners;Hierarchy and bureaucracy;

Managers select workers.

Service to the organization;Commitment. Relationship of Owners to the Organization Ownership of the profits.
Unity of interests;Cooperation;Love. Relationship of Owners to Other Stakeholders Separation of interests;Adversarial, us vs. them;Fear.

New financing instruments and a new ownership and financial structure for businesses:

New financing instruments and a new financial structure are needed for businesses in a biological-model world. The new financing instruments must be consistent with the operating principles and relationship characteristics of a biological-model world and they must be able to replace both debt and common equity (common stock) financing instruments. Therefore, the new instruments must be able to offer investors a full range of risk/return options all of the way from the lowest returns and risk of the safest, most secure debt instruments to the highest returns and risk of the most risky common equity (e.g., venture capital) investments.

I have been involved in the development of such instruments for many years. I have named the new instruments Real-Preferred-Return (RPR) securities. I call them Preferred Return securities because they offer a return and a claim on assets that is preferred to (prior to) the claim on income and assets of the owners of the business (the holders of the common equity interests), but they are not debt.

They are partnership interests in the enterprise, interests with a preferred claim on income and assets and no vote or management interest so long as the organization does not violate the financing agreement. The Limited Liability Company (LLC) is a natural legal form of organization for businesses in a biological-model world that use these new financing instruments. An LLC combines the limited liability of a corporation with the tax efficiency and flexibility of multiple classes of interests of a partnership.

Any number of preference levels can be created using RPR securities, thus allowing the company to create a full range risk/return options for investors. These options can range from the safest debt instruments that the company could issue if it borrowed money instead of issuing RPR securities all the way up to the riskiest equity financing needed by the company, even venture capital.

They are Real-Preferred-Return securities because the preferred return and payment schedules are all specified in units of constant purchasing power (monetary units adjusted for inflation using an agreed-upon price index such as the Consumer Price Index). This makes it possible to exactly specify the agreed-upon economic (real) return and value, thus facilitating the creation of the clear financing choices and agreements that are required in a biological-model world for businesses.

In addition to facilitating clear financing choices and agreements, the specification of preferred returns and payment schedules in real terms (units of constant purchasing power) produces a win-win for both the providers and users of funds. Specifying payments in real terms changes the division of cash flows over time in a way that reduces risk and increases expected returns for both the investors (providers of funds) and the owners of the business (the workers).

I discovered this win-win outcome and the source of the shared gains during the course of my work on these new financing instruments. I also developed the first accurate methodology for creating and servicing financial instruments of all types (including fully amortized instruments) that have their returns and payments specified in units of constant purchasing power.

RPR securities can meet all of the financing needs of a biological-model firm. They enable firms to separate investment from ownership, and they are consistent with the operating principles and organizational structures of a biological-model world. Therefore, RPR securities are the financing instruments in my vision of a financial and organizational structure for businesses in a biological-model world.

Figure 3 illustrates my vision of this new financial and organizational structure and compares it to a typical financial structure for a firm today.

Figure 3

Comparison of Financial Structures for Businesses

A Biological-Model World Today’s Machine-Model World

Held only by current workers;Cannot be bought and sold. Common Equity Interests (Common Stock) Held by investors in the firm;Can be bought and sold.
Junior (relative to securities sold to investors) RPR securities. Compensation to workers for start-up work, extraordinary contributions, etc. Common equity interests (common stock);Stock options.
Large variable component including the profits after payment of all promised real preferred returns. Worker compensation Mostly fixed wages and salaries.
RPR securities with risk and return similar to common equity interests;Senior RPR securities with a risk and return similar to long-term debt;Senior RPR securities with a risk and return similar to short-term debt. Financing Common equity interests (common stock);Long-term debt;Short-term debt.

Conclusion:

My vision is of a world in which every person has the opportunity to choose prosperity, joy and personal growth while living in harmony with mother earth. I believe that creating successful biological-model businesses and financial systems will manifest my vision.

I desire to connect with people who share my vision and will work with me to create successful biological-model businesses and financial systems.

I see successful biological model businesses being created in three ways:

  • Converting existing businesses that have owners who share my vision, are willing to make the required investment in their workers, and see the gains that they can receive by letting go of control;
  • Raising funds through the issuance of RPR securities to form new businesses with worker/owners who are committed to a common vision and mission, committed to learning and personal growth, and have the necessary training and skills; and,
  • Raising funds through the issuance of RPR securities to buy out existing firms and invest the resources necessary to transform them into successful biological-model businesses.

The most important step will be, I believe, the creation of the first successful biological-model firms. For some existing firms, the required changes may be relatively minor, perhaps mostly a matter of changes in the formal organizational and financial structure. Such firms would be ideal initial candidates for the vital process of creating a successful track record.

Building a successful track record will open the door to the availability of financing and a more rapid creation of successful biological model businesses. As financing availability increases, the biological model financing systems developed by New Market Solutions can be used to synergistically increase the rate of expansion of biological-model businesses and financial systems.

__________________________________________________

Dedicated to my parents for the priceless gift of their unconditional love.

ABOUT THE AUTHOR

Wayne F. Perg has a Ph.D. in Economics from Purdue University. He worked as a research economist for the Board of Governors of the Federal Reserve System. After leaving the Federal Reserve, he taught Finance for 12 years at Bowling Green State University. In subsequent years he served as president of a commercial mortgage brokerage firm and worked as a consultant for business and governmental clients. During this time he has continued to teach graduate level finance and economics as a adjunct professor. Three years ago he founded New Market Solutions, LLC with several partners.

E-mail: wayneperg@earthlink.net

__________________________________________________

EXECUTIVE SUMMARY — A BIOLOGICAL MODEL FOR BUSINESS AND FINANCE IN AN EVOLVING WORLD by Wayne F. Perg, Ph.D.

Human evolution is reaching a breakpoint as the rate of change accelerates to the point that machine-model organizations with their static processes are becoming nonviable. A different model with dynamic processes is required for business, financial and governmental institutions and systems if they are to be able to thrive in a rapidly evolving world. That model, proven over countless millennia in nature, is the biological model.

In this essay I put forth my vision of the new financing instruments and the new ownership and financial structure that will be required by the operating principles and organizational structure of a biological-model business.

I demonstrate that the two primary present financing instruments today common equity (common stock) and debt are not consistent with the operating principles and organizational structure of a biological-model business. Then I present new financial instruments and my vision of new ownership and financial structure that are consistent with the needs and principles of biological-model businesses.

In addition to financing instruments and new ownership and financial structures, I put forth my ideas of the requirements for creating a successful biological-model business. These requirements include: 1) workers who choose to learn and change; and, 2) supporting (and investing in) workers in their process of personal change and growth.

My experience of the operating principles of personal (and spiritual) change and growth is that they are the same as the operating principles of biological systems. Indeed, the two operating principles of biological-model organizations highlighted in this essay letting go of control and 100% responsibility have been, and continue to be, key principles in my process of personal change and spiritual growth.

The principles of letting go of control and 100% responsibility are highlighted in this essay because of their importance in demonstrating the inconsistency of present financing instruments (and their associated financial and ownership structures) with the operating principles and organizational structure of biological-model businesses.

In the process of writing this essay I discovered a new understanding of the connection between the principle of letting go of control and my goal of increasing productivity to create a world of unlimited wealth. This new understanding changed my understanding of productivity and its relationship to efficiency that I learned in my professional training as an economist.

I have included my new understanding in this essay. It supports my belief that changing to a biological model for business and finance can make possible unlimited increases in productivity and manifest my vision of a world in which every person has the opportunity to choose prosperity, joy and personal growth while living in harmony with mother earth.

__________________________________________

Copyright 2001 by Wayne F. Perg. All rights reserved, no part of this publication may, for commercial purposes, be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the author. Any part of this publication, including the whole, may be freely distributed for noncommercial purposes (i.e., no charge for distribution) so long as the material is identified with and attributed to, the author.

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