I once read that you can learn more from what has gone wrong than what has gone right. The idea is that a mistake presents myriad opportunities for reflection, analysis, and learning; a success leads to enjoyment of that success, and no meaningful reflection. I have no reason to doubt that this is true, yet what initially concerns me is the all-too-prevalent focus on the negatives of life — the anger, the jealousy, the failure, the flaws, and the many mistakes.

I include below a few examples in different areas of literature and history to demonstrate the focus on the negatives of life. Is it any wonder that students of the arts become cynical and hesitant?

Take Plutarch’s Lives, for instance. We soon learn that the aristocracy control society, but give plebeians the impression that they have a say. Bribery will always take place, the trick is ensuring you bribe the people who would bother to tell others about it. Good men will never win, because they’ll be killed by someone bad before they upset the status quo. Why settle things peacefully and compromise when we could fight to the death and one of us will get limitless power?

Or if you’d like a slightly later period, look at Suetonius’ Lives of the Caesars. One man may gain unlimited power and do as he wishes, so long as he can ensure that the greater fear of the public is that someone else takes power.

Zamyatin’s We, Orwell’s 1984 and Animal Farm, Huxley’s Brave New World, Atwood’s Oryx and Crake, Vonnegut’s Cat’s Cradle, and Bradbury’s Fahrenheit 451. A small group of individuals will always control a larger group of individuals. They’ll invent new technologies to improve their control; most people will never be aware that they’re controlled (the illusion of free will), or will be aware of the fact but not mind it. Some abnormal individuals may see what is happening or manage to escape, but they will either not be able to bring themselves to escape the system, want to go back after they’ve escaped, or will die. War is a way of making money, but we’ll end up destroying the world some day. Humans don’t actually want individuality; they just want not to have to think for themselves.

García Márquez, Camus, Süskind, Mishima, Solzhenitsyn, Nabokov — and even Oscar Wilde. Each shows us a different human flaw, most often fatal. There are humans so deranged that they will do things that I don’t particularly want to write about here.

If the above is a bit too abstract or literary, a more to-the-point book is Vaclav Smil’s Global Catastrophes and Trends. I have yet to find a better dose of pessimism in just a couple of hundred pages.

Many of you, I’m sure, will have been adding your own books to the above list. It is just a snapshot of some of the pessimism that comes to my mind, and if you’d like more abundant examples, think of the news that we read every day. Political crises, deaths, personal crises — some important, some not — all negative.

Writers see it as more worthwhile to write about the negative than the positive; they believe there’s more to show and more to learn from. The negatives permeate most novels and histories — and if they didn’t, would there be a gripping storyline? Stories, which include histories, need negatives to function. Mistakes, disasters, worst-case scenarios and deaths are what get through the most to the reader — we like crises, especially if they’re followed by a more positive conclusion. And if they’re not? Well, that’s when we get those stories that really shock us and stick in our minds. Hemingway’s A Farewell to Arms, for instance.

Is it any wonder that cynicism and pessimism have become what often seems the dominant mood of society?

I choose my next book to read, and read it expecting to learn of another crisis that could happen to me. I don’t expect to feel uplifted; and if I am, I read on in fear of the inevitable plot twist.

The optimism that I do see in life is in many ways an optimism born from a deeply-held pessimism. Dystopic novels, for instance, hint at possible solutions, or ways to avoid the undesirable end displayed. Fahrenheit 451 (a novel that made me think deeply) suggests a solution in safekeeping the stories of the past:

“All we want to do is keep the knowledge we think we will need, safe and intact… For if we are destroyed, the knowledge is dead, perhaps for good.”

There are glimmers of positive human emotions, and smatterings of optimism, in amongst a text built on foundations of pessimism.

I also see optimism built on pessimism within one of the most optimistic industries in the world. Elon Musk (Tesla, SpaceX) appears supremely optimistic, saying that we can most definitely create conditions on Mars where humans could live. It takes an optimist through-and-through to believe this is possible. Yet, when asked why humans would want to live on Mars, Musk retorts that our planet is inevitably going to be destroyed by something, someday — just look at the fossil record — and so we may as well start making alternative arrangements. Musk wants to work out a way of keeping humanity, and its knowledge, intact from inevitable destruction — just as Bradbury’s characters do.

Ironically, this post is not intended to be purely pessimistic. For I believe that optimism built on pessimist foundations is most often a boon.

A great proportion of technological breakthroughs come as a response to an impending crisis or problem. The increased use of renewable energy is a positive thing, and is a direct response to global warming. Space exploration came largely as a response to the apparent threat that the United States and the Soviet Union saw in each other. Commerce drives incremental improvement; crisis drives exponential improvement.

An education — in its broad sense — seems in many ways almost synonymous with an acceptance, a submission, to pessimism. Becoming educated means understanding the failings of individuals and society, so that these failings can later be mitigated at the least, and hopefully rectified. To know how to fix something, you need to understand the problem first.

It comes back to the ancient Chinese scholar’s debate from the Hundred Schools of Thought period about whether individuals are fundamentally good but then corrupted (as Confucius and Mencius believed), or fundamentally bad but made good through education (as Xunzi believed). The difference is that here we apply these categories to the world as a whole.

It seems that the dominant belief is that left to its own devices, the world will do bad things. We subscribe to the Xunzian view of human nature.

But submission to pessimism is not submission to a life full of negatives. It is submission to the idea that if we do not do something — if we do not stage an intervention — then the world in its natural state will be seen through to its pessimistic end. Inherent in this belief is the fact that we can do something. And there lies human optimism.

Pessimism is, in short, a prerequisite to optimism.

And if you, like me, believe that optimism is a good thing; let’s go find all the pessimism we can.

That post, however, was just a small part of my overall research and subsequent essay. After finishing the IB Diploma, I thought I would post the whole essay here in the hope that some startups can learn something from it.

The essay received an A, but what was more important to me than that was that I’d be researching something I personally find interesting, and that the findings of whatever I researched could be useful to a larger group of people than just the marker who happens to have the essay on their desk.

Applicability of Lean Startup Methods

“Lean” is a word that’s been thrown around a lot recently, usually in connection with startup companies. It describes methods used by startups to validate hypotheses about their business model and customers so that they can determine the best way to grow while spending as little as possible. I actually did an investigation for my International Baccalaureate Extended Essay into the applicability of lean startup methods to different types of companies. Since then I’ve been broadening my thinking. “Lean” can be applied to all sectors – indeed there’s already been a lot of thinking done around this – and I think education is a sector especially ready for “lean” to come in.

How does Yale-NUS College fit into this?

I would argue that Yale-NUS is the first Lean University. I’m going to explain here why this is, how it’s going to help Yale-NUS to succeed, and why it’s important for education everywhere.

In the “A New Community of Learning” paper that Yale-NUS put out this month, one of the paragraphs that struck me the most was the following:

“At Yale-NUS College, these forces resisting change do not exist. There are no entrenched department interests—indeed, as we will discuss below, there are no departments. There are no courses or curricular tracks honed to a fine edge by years of individual or collective effort that might be endangered by a new approach. And there are, as of yet, no alumni. Thus, a new institution like Yale-NUS has a unique opportunity to ask which of the various existing models of general education might be the most effective, and whether new models that do not exist at all in long-standing institutions might do even better. The question of “how do we get there from here” simply does not arise; the only question is, “where do we want to start?””

The inaugural faculty members who wrote this paper have a keen pragmatism that lends itself very well to “lean” ideas.

No departments? I think this is a crucial step. Most traditional universities are huge, and departments were created as a means of organisation. Yet the by-product of organisation by departments is that academic disciplines are siloed. The “departmental interests” mentioned in the above are things like competition among departments to have highest student numbers, or teaching awards. These things breed competitiveness among academic disciplines that I would argue is not in the best interests of students. To use an example I’ve previously used in a blog post, in New Zealand at university I’ve studied the historians Herodotus and Sima Qian – separately, in different departments. I doubt my professors in each of my classes have met each other, or whether they’ve realised that Herodotus and Sima Qian have anything in common. At Yale-NUS, by breaking down the boundaries of departments, professors are free to look at all the links between disciplines, and thus craft a curriculum that links everything together in a way that a traditional university could not.

The faculty’s willingness to do away with departments shows that they’re willing to try new things and take aspects of various types of education to see what works best. But they take this further:

“For a common curriculum to carry on encouraging true faculty deliberation, it will have to be subject to periodic review and renewal. The Yale-NUS faculty has committed itself in advance to reviewing the College’s common curriculum frequently, weighing the benefits of continuity and tradition in its deliberations but also the benefit of having the curriculum truly be a reflection of the faculty’s collective understanding.”

A core tenet of lean methods is “validation”, or checking to see whether your hypotheses are working out in reality. If they aren’t, you need to adjust aspects of your hypotheses and re-test them, or “pivot” entirely. The Yale-NUS faculty have shown – even before they have any students – that they’re aware of the importance of this, and as a future student I’m thrilled to see this. I think it means that what I’ll be learning will be much more relevant and applicable to my future because of this adaptability.

Yale-NUS’ small size is the other huge advantage lending itself to “lean” methods. When you have tens of thousands of students and thousands of faculty members, it can be virtually impossible to change at all, let alone adjust fundamental things like departments or curriculum. When you have 150 students and 50 faculty, the story is very different.

Take the following hypothetical. Say a group of ten faculty members are sitting at lunch one day with ten students, and they’re discussing their classes. If a couple of students make a suggestion as to how an aspect of a certain class could be improved, the staff are free to take this on right then and there and report back to other staff members that very day. Changes could be made within the week, or even a day, as the traditional barriers that cause delay in change simply do not exist at Yale-NUS because of its size.

The challenge for Yale-NUS will be maintaining adaptability as it grows its student body. Luckily, I think the residential college system – a “college within the college” – will help to keep the college as a whole feeling small and adaptable.

Change very rarely happens from the old and the large. In most cases, the most disruptive change comes from the new and the small. Yet change does spread to the old and the large. It will take time, but if Yale-NUS proves itself to be right, it will be only a matter of time before older and larger institutions are forced to look and learn.

I think Yale-NUS has set itself up perfectly to go about creating a truly 21st-century education, and I’m so glad to be a part of this.

Why is that my perfect university? I’ll explain each part. Quite frankly, the specialisation inherent in the UK system of tertiary education (what NZ follows) scares me. I know to a certain extent where my primary interests lie, but beyond that I want to try a huge number of different things and learn about completely different fields. In New Zealand, doing that is only partially possible if doing an Arts degree, which comes with other setbacks. Only a four-year liberal arts degree based on the US system would give me what I want.

And why Asia? Since I lived in the Philippines some years ago, nowhere has inspired me as much as Asia. The sense that things are happening excites me in a way other countries simply haven’t. I also feel that Asia will play a huge role both in my life and everyone’s lives, and I think it’s important that I try to understand Asia more fundamentally than taking a class at a university outside of Asia could do.

For a long time I thought that was just wishful thinking: I didn’t know of a single liberal arts college in Asia. So my task changed to trying to determine which half of my “perfect university” equation I should compromise on. Do I go to a non-liberal arts college in Asia, or do I go to a liberal arts college elsewhere in the world?

Then in the middle of last year I received an email from Jeremiah Quinlan, the dean of admissions at Yale-NUS College. I’d never heard of the place before. The email started:

“In April 2011, Yale University and the National University of Singapore announced a collaborative partnership to create a new liberal arts college in Singapore, the English-speaking economic heart of Southeast Asia. Yale-NUS is not an overseas campus for Yale students; in August of next year, Yale-NUS will enroll its pioneer class of 150 four-year students to study with dedicated Yale-NUS professors on its own brand-new campus nestled within one of Asia’s strongest universities. As American universities internationalize, and as Asia continues to develop its global political and economic presence, Yale is proud to be the first Ivy League school to establish a new college bearing its name outside of the US.”

(If you want some more detailed information about Yale-NUS, check out this blog post by one of my classmates-to-be and fellow Kiwi, Andy).

I can remember exactly where I was and what I was doing when I read that email, because it came as such a shock. It felt as though someone had read my thoughts and started a university just for me. Out of all the places I thought a university in Asia would be best, Singapore would’ve been my top pick.

But it amazed me in more ways. Something that I’d always been wary of in terms of studying at university was simply slotting into a hundred-year-old system where everything was stuck in its ways. Most existing institutions are too large and “heavy” to innovate successfully or to build a curriculum that links between departments. In addition, I’ve always considered myself an “early adopter”, as I love finding the “new” and then sharing it with everybody. The fact that this is a new university, giving its first students the opportunities to set the tone of the institution for decades to come, to me is a huge opportunity.

The university is built on connecting Asia and “the West”. If you take a literature course in the US, or NZ, it will be Western literature. If you want to learn about Asian literature, you have to take a separate, specific “Asian literature” course. That is so backward. It misses how important Asia is to the world. Yale-NUS, in every course it offers, bridges Asia and the West.

Clearly I applied. It was the place I most wanted to be accepted to, but it was also the most competitive from estimates. Sure enough, Yale-NUS has already had over 12,000 applicants for 150 spots, and its admit rate is approximately 3%.

I was lucky enough to be admitted with a merit scholarship.

I’m writing this blog post from the Auckland Koru Lounge on my way back to Wellington after a weekend in Singapore for the “Experience Yale-NUS Weekend”, where 120 admitted students were invited to spend the weekend in Singapore together. The weekend confirmed everything I thought about Yale-NUS: that it is the right place for me.

For example, we had some sample classes during the weekend, and one was a history course comparing the historians Herodotus and Sima Qian. I’ve learned about each of them individually in a Roman History course and a Chinese Civilisation course respectively – but never have I been able to draw comparisons between them. Yale-NUS, because its an agile education startup with a very tight-knit faculty, is able to bridge these things in every discipline.

I have accepted my offer of admission at Yale-NUS and will be joining the inaugural class from July this year.

Surprisingly, Yale-NUS wasn’t the only place I was considering. Another liberal arts college started up in Asia this year, and I was admitted there too: New York University Shanghai. Why am I not going there? I just don’t have as large a connection to it – it’s not as “me”, even though it will be a fantastic institution. I was lucky enough to be flown to different colleges to visit in order to determine what is “me” and what isn’t. For example, I visited NYU Abu Dhabi. While it’s a great college, I didn’t have anywhere near as large a connection to it as I did to Yale-NUS.

I was admitted to a number of other colleges around the world, and in turning them down to accept at Yale-NUS I have no worries or concerns. Often in decisions as big as this it would be normal to have some concerns or reservations, but I have none. I’m thrilled and excited and am so looking forward to the next four years.

After the past few years working towards getting admission to the right university for me it’s great to finally be able to say with certainty where I’ll be going.

It’s been a mixture of things. Sometimes I think we need to stop what we’ve been doing for a while and realign our perspectives. I’d been blogging for years, both on this blog and on others. Perhaps I was writing about things that were by and large inconsequential, and not worth the time. Or perhaps I wasn’t reflective enough in my writing. Whatever you think of my writing, the time I’ve stopped writing for has let me work out precisely what I want to get out of blogging, and why I should keep doing it. Stopping and readjusting is something we should all do in many different parts of our lives.

I plan to start blogging again, with perhaps a slightly different focus.

This change of focus is in line with change that is occurring elsewhere in my life.

Those of you who know me well will know that I finally finished high school in November last year when I sat my International Baccalaureate exams. I reached the goal I’ve held for the last few years of gaining admission to an international university that will let me study in a major city with a world-class education. I spent December and January working with a fantastic team at The Treasury in Wellington, putting into practice many of the things I’ve been learning about over the past few years. I’ve developed new interests and hobbies and have lost interest in many things that I now think were not worth the time.

Call it “growing up”, “maturing”, “learning”, or whatever you please. I’ll use the word change. Change is good provided it builds on the lessons of the past. Change is bound to end in disaster if it fails to take into account previous lessons and experiences. I would like to think that I’ve learned from what I’ve done in the past and from the advice other people have given me, and have built this into decisions I’m making now and change that I am facing (or causing).

What can you expect to see me writing about?

You can expect me to be writing about what I’m learning about and what I’m thinking about.

That’s broad, yes. And I hope many of you will enjoy that broadness. As I start university this year I’m very scared of defining interests or areas of focus too narrowly, in case I miss something that appeals to me a lot. And so I won’t define topics on here too much. You’ll see a range of things and topics perhaps with overarching themes, or perhaps not.

It is my hope that this blog chronicles my learning in a public manner, so that you can all point me to other things I should be learning and thinking about. Let’s say I write a post on a topic of history. I will want to learn a lot more about that topic. So if you have any suggestions about things I should be reading or watching, or people I should be talking to, please just comment or email me and I’d love to hear what you have to say. As I’ve always said, feedback is the reason I blog. That feedback can take any form you choose, whether it’s questions, comments, suggestions, or even abuse, provided it’s constructive abuse (perhaps that’s an oxymoron – we’ll have to wait and see).

So in one respect, in the few minutes a day you might spend reading my blog, change in my life can also lead to change in your life. It’s my hope that my process of learning and changing will help you to learn about something new too, and perhaps discover new interests or think about things you otherwise wouldn’t have.

Thanks for reading, especially to those of you who have been reading for a while.

But every day, I see people choose to read a textbook they’ve already read a dozen times over a new novel, because they can see an immediate reward for reading that book. Namely, that reward is better grades.

But getting better grades doesn’t mean you’ve learned more. Getting a better grade on a topic usually shows that you’ve trained your brain to regurgitate information on a given topic so well that your brain isn’t even conscious of it anymore. It wasn’t learning beyond the point that you understood the concepts – from there, it was simple memorisation.

In other words, people choose to learn less, simply because there is a more obvious reward that society offers by reading something less insightful that they already understand to a certain extent.

I think the rewards should be given to the people who choose to broaden their minds by learning about a larger range of topics, than those people who devote themselves to being able to recite their textbooks.

Yet no one gets credit for reading a book that is unrelated to school. It doesn’t go on their report, and doesn’t contribute to grades. In the mental equation that all students carry out, the most obvious payout comes from continuing to read the already-familiar textbook over a new book on an entirely new subject.

This is the commodification of learning. Learning becomes a process where an economic value is attached to the outcomes, in the form of good grades that (eventually) are said to lead to a better job. Yet not all learning is assigned an economic value – only very specific, measurable, tangible learning that is done in a classroom is assigned this value in the form of grades.

The result of this commodification is that the incentives facing students are wrong. The incentives should be geared toward encouraging learning and understanding of a range of topics, not the recital of textbooks and basic knowledge that all high school students have. The incentives brought about by this commodification of learning lead to homogenous thinking and lack of creativity – undesirable traits in the world today.

To fix this problem, we need to either:

• Commodify the learning of everything. 

or

• Ensure everyone realises that learning, in its true form, is an uncommodifiable concept.

Commodifying the learning of everything would involve giving individuals credit for the books they read, the topics they learn about, the subjects they speak on, and the artworks they create. In some ways, it’s fixing a problem by throwing more of the problem at it. But that might just work.

If everyone were to realise that learning cannot be truly commodified, then greater consideration could be given to individuals who exhibit learning beyond their textbooks. This attaches intrinsically recognisable value to all learning, without making that value economic, and thereby commodifying learning.

I don’t know which solution is better. But what I do know is that education, where it’s currently headed, shows no signs of creating broad-minded, creative individuals. And that’s a sad thought for me.

The notion that Europe could become a functioning federal system is far-fetched, in my opinion – and I want to explain why.

A federal system, where there is a single-currency, as well as a single monetary and fiscal policy, must have the ability to transfer productivity between states, or in Europe’s case countries. Look no further than the United States as an example. Less productive States in the USA that run deficits are funded by the more productive states and the taxes that are paid by the more productive states. There is an automatic mechanism to move wealth across America so that a single, less productive state (Greece, in Europe’s case) doesn’t threaten the other states’ wellbeing.

Perhaps an even more important aspect to a federal system is the easy transfer of labour between states. Depending on productivity, some states may show higher wages and incomes than other states – that’s normal, and it happens in most economies. But when people see higher wages in another state, economics says that those people should move to a state where there are higher wages, which then serves to reduce the real value of wages in the state that they just moved to, and increase wages in the state they moved away from (this follows from the law of supply). The result is that over the long-term, wages across America are generally balanced, and there is a kind of balancing of productivity between states that occurs as a result of the federal system.

It’s this kind of transfer that many people are saying Europe needs in order to fix some of its problems. But this is exactly where economists need to look at the realities of Europe, and not simply a diagram.

Europe is probably the place on earth where there is the highest concentration of different cultures and languages in the smallest area. In the Eurozone alone there are probably about ten different languages spoken. This gives rise to a few problems in terms of transfer of labour.

Take a worker in Greece, for example. The average Greek worker likely does not speak German. This automatically stops the transfer of labour between states that America exhibits, as culture comes in the way. A Greek cannot get a job in Germany easily if they don’t speak German.

That’s how culture stops even the Eurozone from being as effective as it should be, let alone even a federal system.

Perhaps a diagram can help aid understanding of this idea of cultures interfering with economic transfer.

Call the above the Culture-Sensitive Labour Supply Curve. Imagine, for this scenario, that it is explaining the inter-country labour market for Greece and Germany. If a Greek worker begins to see higher wages in Germany (say, if the “internal devaluation” in Greece works), then under economics they would be expected to move to Germany to chase those higher wages. This is shown on a normal labour supply curve – as price (value) of wages increases, so too does the quantity of labour (or the number of people willing to work in the country with the higher wages). Indeed, in a situation with Greece and Germany, it is likely that a number of Greeks in fact do speak German, don’t have very strong ties to Greece, and will be willing to move to Germany and work. This is shown on the first part of the supply curve (the diagonal part).

However, at a certain point, all Greeks who speak German and are willing to move will have done so. Classical ecconomics says that workers will continue to move between countries, or states, until wages are equal in both places. But this is not the case in our Greece-Germany example, because there simply aren’t that many Greeks who speak German. The number of Greeks who are willing and able to move to Germany is limited by the language barrier as well as very strong family ties that many Greeks have (culture). This aspect is shown on the second half of the supply curve, where it is vertical. In other words, no matter how high prices are in Germany, the remaining Greeks just cannot move to Germany because they don’t speak the language and therefore cannot. (Although, note that the second part of the supply curve is in fact on a very slight angle – some Greeks will learn German).

This shows how in markets, whether under a federal system or not, culture can dictate how well the market functions. In Europe’s case, I simply do not believe that it can function effectively due to centuries-old cultural difference. And no matter how much “more Europe” people press for, it will not mitigate the effects of culture. Culture – the sheer variety and strength of them – will be the largest barrier to making the Eurozone work.

A good analogy is watching a young family member, like a cousin, grow. You see them irregularly, and each time you see them they appear to have totally changed. On the other hand, if the family member is a brother or a sister, you see them every day and therefore the change is never as obvious – it’s continual, and you don’t notice the change as much.

Each time I return to Spain, it’s as though the place has changed in a major way since I left. The change is much more noticeable precisely because I haven’t been there every single day. Every time, there are a few more people living on the streets in central Madrid. There are less people in the shops. There are more people protesting. And there generally seems to be a less happy feeling in the city.

Reading the media, it seems as though a crisis in Spain has only just occurred in the past few weeks. And that’s true, yes, with the bailout of Bankia and the bond risk premium spiking. But those are the immediate causes. In reality, Spain has been looking in a bad spot on the verge of crisis for a while now.

When you look through history, people blame crises on a specific event – an immediate cause. An example that springs to mind is the assassination of Archduke Franz Ferdinand, which people often describe as the cause of the first world war. That wasn’t the cause of the war. A better description of it is the spark that ignited the war. And that description implies that there were larger causes that were just waiting for something to light them to become a war. Indeed, this description is very apt in this scenario, where those longer-term causes are often called the “Balkan Powder Keg”, where the volatile situation in Balkans, as well as the alliance system, made war inevitable.

Just in case you’re not convinced with that unrelated example, another example is the 2008 financial crisis. I usually hear people say that the collapse of Lehman caused it. I’d say that the state of the subprime mortgage market (perhaps the subprime system itself) made the crisis inevitable, and Lehman’s collapse was the “spark” that caused it.

It’s the same thing in Europe right now, from my perspective (and this is just an objective perspective – by no means any authority on the subject). For over a year now, things in Europe have been getting progressively worse, with unemployment rates rising, austerity being the goal, and growth very low or nonexistent. The way I see it, my intermittent trips to Madrid have demonstrated this worsening of situation by making the change more obvious.

Now with stories of workers withdrawing their life savings at lunch and converting them to Pounds and Swiss Francs, combined with Spain’s bond risk premium frighteningly high, it looks as though that spark may be about to be lit. I would guess however that a Greek exit of the Euro, or a major bank collapse in Spain, is most likely to be the spark in this case.

From reading European politicians’ statements in Europe a couple of weeks ago, you’d never have guessed that a disintegration of the Eurozone was a possibility. The statements were all strongly-worded, implying that they wouldn’t let a disintegration happen under their watch. This week, even Mario Draghi (head of the ECB) was saying that it was on the verge of disintegration.

A thought piece by a guy called Ivan Krastev provides a compelling look at the similarities between the Soviet collapse and the perhaps impending Euro collapse.

“The Soviet collapse teaches us that just because the economic costs of disintegration would be very high, this is not a reason for it not to happen. To believe that the EU cannot disintegrate simply because it would be too costly offers only weak reassurance that the Union will continue to be stable. Paradoxically, the belief that the Union cannot disintegrate, backed by the economists and shared by Europe’s political class, is one of the risks of disintegration. The last years of the Soviet Union are a classical manifestation of this dynamic.”

Read his full piece here, and notice how he mentions the change in tone in the Soviet Union from “it will never collapse” to “collapse is now much more likely”.

I’m trying to make two points here. Firstly, current events are the result of many underlying causes. Secondly, the answer to the crisis may not be found in dealing with the causes of the crisis.

It seems as though many of the underlying tensions in the Eurozone that are causing problems are between Germany and other countries. Other countries are not arguing amongst themselves, but rather every other country in the Eurozone is trying to deal with Germany. This comes from the fact that Germany’s economy is doing very well, and other economies aren’t. Logically, if they weren’t monetarily unified, other countries would simply encourage devaluation in order to regain competitiveness. But this can’t happen because Germany won’t let it. The other option is to transfer wealth from productive Eurozone countries (Germany) to non-productive countries (everyone else at the moment). But Germany isn’t happy to do that either.

Look at the United States. It works because a proper mechanism is in place to transfer wealth from productive states to less-productive ones. In Europe no such mechanism exists. Perhaps that’s the underlying cause.

What does that leave? It leads to the fact that perhaps Germany should be considering their own exit of the Eurozone. Every other country could then encourage Euro devaluation and become more competitive, and Germany can be free of its bonds to the other Eurozone nations. A few people I know have been saying this for a while now.

Whether that is the solution or not, I think continually bailing out banks is a bad idea – it simply keeps the “spark” at bay. But eventually – as with Lehman – a “spark” will manage to get past and light the fuse. Europe should be focussing on deflating the long-term causes, which in my opinion come from the German refusal to transfer wealth to less productive nations or to let the Euro lose value. A bailout may keep crisis at arm’s length for a few months, as the 2008 Bear Stearns bailout did – but we know where that story ended with Lehman.

But look at what GDP is. It measures in numerical terms the total value of all goods and services produced in a country in a given time period (usually a year). It’s fundamentally a measure of material production.

Rather than explaining the point I want to make myself, I’m going to let Robert Kennedy do it for me (why should I explain something when someone else did it better?). In a speech he gave at the University of Kansas in 1968, he discusses the problems with GDP as a measure of America’s success, and urges people to look for other, less-material measures.

“And this is one of the great tasks of leadership for us, as individuals and citizens this year. But even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction – purpose and dignity – that afflicts us all. Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product – if we judge the United States of America by that – that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.”

Beautifully put.

That was over 40 years ago. And yet for all intents and purposes, we still use GDP to measure countries’ progress.

The problems and limitations with GDP are extensively documented, and indeed alternatives have been created; The Index of Sustainable Economic Welfare, for example, or the Happy Planet Index. Both of these measures attempt to take into account things like environmental damage caused through growth, as well as income disparities and general happiness of citizens. However, have you ever heard these measures quoted instead of GDP? I haven’t.

This topic has been talked about often, and I’m not providing anything new here. I just want to question why, in 2012, a viable alternative to GDP as a measure of economic health and progress has not been created. It seems as though an alternative is crucial in order to accurately measure the effects of aid given to countries, or the rate of real progress of the “Rest” (ie., non-Western countries. The term is taken from Niall Ferguson’s book Civilization.)

Surely a more effective measure should be a priority.

I look forward to the day where another form of measurement is used by a nation’s government to assess how we’ll they’ve done in a year.

No part of the book made me think quite as much as epilogue, titled “Does History Repeat Itself? The Crowe Memorandum”. I’m going to summarise Kissinger’s argument, and explain why it got me thinking. I think of the whole book, this is the part most worth reading, as it is of huge importance and relevance going forward.

Kissinger explores the diplomatic situation in Europe at the start of the 20th century, and comes to conclusions as to why the First World War broke out. He places significance with the Crowe Memorandum, which was submitted by British Foreign Office official Eyre Crowe in 1907 and discussed Germany’s desires and foreign policy. The memorandum, in short, concluded with Crowe’s views that whatever course German foreign policy was taking, “Germany would clearly be wise to build as powerful a navy as she can afford”. Crowe then made the assessment that this fact, regardless of true German intentions, would be “an objective threat to Britain, and incompatible with the existence of the British Empire”.

Kissinger explains that this memorandum led to foreign relations becoming a zero-sum endeavor. Any decision by either nation would inherently harm the other, as to Britain, Germany’s existence was a threat in itself. “In other words, already in 1907, there was no longer any scope for diplomacy; the issue had become who would back down in a crisis, and whenever that condition was not fulfilled, war was nearly inevitable”.

The question that arises from this discussion is whether China’s rise puts the United States at a similar position as Germany’s rise did to Britain at the start of the century. Indeed, Kissinger acknowledges that there are signs pointing to this being true.

The epilogue ends with Kissinger citing the philosopher Immanuel Kant, who, in his essay Perpetual Peace, made a statement regarding the future of world peace. He believed that world peace would be accomplished in just one of two ways: either by human insight and design, or by conflicts and catastrophes so great that humanity is left with no other choice.

Kissinger states simply, “We are at such a juncture”.

I can’t help but think that the relationship between the United States and China will be what defines this century. It seems unavoidable that the way these two nations work together will be what allows the rest of the world to function smoothly. The mutual desire to stop Soviet hegemony brought China and the United States together, but as the past twenty years have shown, without that common goal, the relationship can be more strained.

A focus, therefore, should be on creating a relationship that leaves options open, and does not close doors as the Crowe Memorandum did in 1907. I believe this is the challenge that Kissinger leaves the world at the end of his book.