1. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsArrows (like ) are textmarks enabling navigation through the contents: Module BMSD1a Business Management SystemsINTRODUCTION TOBASIC DEVELOPMENTITS TERMS AND CONDITIONSModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada

2. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 3. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and Conditions Studyguide I. Contents II. Preface III. Introduction to some model aspectsIs Development Growth?A. Development a Succinct Historical ReviewA.1 Balmer Rinks Formula and the Harmonic DivisionA.2 Societys ProgressDevelopment is linked to Scientific DiscoveriesA.3 Schumpeters Definition of Development and Distinction from GrowthA.4 Applications of Keynes Model : Keeping up Development by Blowing DebtsA.5 InternetFinal Stages into the Infinitesimal and the Upcoming Jump.B. The Theory and Model of DevelopmentB.1 Terms and Conditions for DevelopmentB.2 Mathematical Approach: The Three means at Start and EndB.3 Developments Start and End and Some Striking ConsequencesB.4 The Harmonic Division Bridging Developments OppositesC. Application of the Model in Business PracticeC.1 Development, Corporate Governance, and Ethical IssuesC.2 Sustainable Development and Success StoriesD. D GlossaryE. . IndexF. . LiteratureModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 4. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 5. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and Conditions Studyguide = a symbol to indicate your assessment.Studytips Read the contents of each chapter carefully while gradually proceding. If according to your timeschedule time to study runs shortdo not start a new chapter. In order to get the gist, every single chapter should be read completely before detailed study starts. After a second careful reading explanations which seem important to you should get full attention: Get the idea by printing out textpassages if you think its important, or mark them and try to analyse every detail and core thoughts. After a longer pause contents should be studied a third time. Review any gaps in knowledge and comprehension. Contents can need clearification and adaptation from other information resources. Dont lose your joy studying otherwise study will soon be too much of a burden to carry. Dont start answering any questions before you fully completed the studymaterial. Written abstracts are to be succinct, relevant to the topic, formulated in your own words in a concise easy-to-follow way. We grade your knowledge of the material offered. As you know, correction and validation of the assessments is electronically. You will be informed in time by email and you will receive a graded report sended to your postal address. Make you own templatef.i. in MS Wordand plot dates on a copy of it. Save your files properly. This way you will always be in a position to arrange and work things over easily. We need sufficient space for proper correctionso before writing down your answers, take care of the layout and leave at least half of the page blank.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 6. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsNever hesitate to contact your lecturer or another responsible member of staff if somethingneeds to be cleared.Visuals like graphs and diagrams should be kept concise and clear.In this course by times clicks on navigations arrows or highlighted words will bring up pop-upwindows to give additional definitions or explanations. Allow your browser popups and cookiesas well. Apart from MS Excel or required plugins like Flash Player 5.0 we avoided embeddingfiles of technically advanced softwaref.i. CAD softwarein order to make the contents moreeasy to adapt for all students. But please do not forget that we innovate and keep up with newpossibilities for blended learning. We expect you to appreciate this.This study will cover a part of your lifetime and this time will never return. So make the bestout of it. We wish you a great time ! Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 7. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and ConditionsII. Preface| | War is the father of all.Heraclitus of Ephesos - 6. Century B.E.To put it succinctly: Today development as a topic needs a renewed scientific approach. Only ascientific concept as a background fundamental for development- and risk management in allapplicable fields can overcome critical problems occurring at various development stages. A renewedapproach would enable us to discern what to look for and where to look at should crises occur andthreaten to block off rational reasoning. In realworld practice we see that development do can havedangerous impacts like commencing wars to maintain an upward trend of a countrys GDP1. Thoughthis would be thoroughly in line, because, conflicting potentials are innate to development at its start aswe shall see in upcoming units. As stated by Heraclitus in another famous aphorism; gods play withthe tools of creation [i.e. of development]. Of course development should not only be regarded just asa playtoy for heavenly beings, but as a magnificent tool in the hands of responsible mankindyetnecessary to fully comprehend for a proper application. Development indeed carries an inflammablepotential of innate energy, whichonce enticed at startcould release the inextricable intertwinedand initially strict opposedforces into undesired directions.So its time for the quest on development and its conditions, because entering the third millenium weseem to embark for a totally new era of dynamics, in which development and the feat of its handlingwill be a main issue for globalized society to uphold prosperity and to maintain peace. It seems clearthat once again at various fields the world is preparing to meet the challenges for a totally newdevelopment stagethis time on a global scale. However we may say, that if there is no awareness ofthe implications of developmentstill to be uncoveredwe do can expect a future of increasingconflicting interests, of increasing hostilities, of chasms emerge. If not handled properly it will likelyresult in endless cruel wars. May war be the generator of all as Heraklitus stated and is to a certainextend still valid today, it never may be developments aim as such. And as we shall see; if war is nofinal target, then prosperity and harmony must be developments final result this by means of theconvergence of development forces initially opposed to each other as we shall cover further on.1GDP = Gross Domestic Product. An economic term to indicate the total market value of all final goods and services producedin a one-year period of a country. Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 8. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsThis course will give you a small overview of what we actually ought to capture mentallythinking andreasoning in terms of development and growth. Anticipating on items to come: development is by nomeans just growth and vice versa growth is by no means just development. From J. Schumpetertheknown Austrian economistwe inherited crucial thoughts how to distinct between both expressions.Society though seem not inclined to learn very fast. So for reasons of convention teachers andeconomists are forced not to stress the difference and not to distinct properly; talking about growthwhile pointing at events that would probably characterize development and talking about developmentwhile pointing at events that would under circumstances characterize growth. We cant blaim them, butwe should sense a responsibility not to continue with the usus. Still there is a job to do, to get theproper underlinement of developments terms and conditions. This starts in the first place with a properdefinition i.e. of a proper distinction of meaning and comprehension of ideas like development andgrowth. We have our famous forerunners in development research and are very grateful for it. One ofthem is the Austrian economist Joseph Alois Schumpeter. To regard Schumpeters contributions todevelopment as a basic construction indispensable for all further research on development is a mustto acknowledge for us and for generations to come. Therefore its up to us to handle the topicaccordingly. Much has been undertaken already. A look at the evolutionary economists contributionswith respect to Schumpeter will convince us. With this introduction course we try to contribute to thecomprehension of the term development by stressing some very basic maths as well.Of course there would be a lot to say about development to get all the different views conveyed. Thereis literature galore dealing with this. What could make this special course useful to the reader is thenew approach of development with respect of whats going onand going wrongin real-worldpractice, emerging development dynamics with its complexity, weird globalization aspects, potentialdangers and unique possibilities. For individuals living in this crucial timeappreciating innovation withrespect to development its possible to choose; either to adapt and step in the heart of realworlddevelopment dynamics or to step aside in reluctance, while looking how the stressy world is passingby. As PhD Tad James, leader in the neuro-dynamic field of Accelerated Human Change, once put it:We can regard ourselves being through time i.e. endogen active in developments process or ratherin time i.e. dependent on developments exogen conditions.The model of development introduced, together with the findings stated in this course is the result ofseveral years of indeep research and is by no means new in a sense that it has never been sensedby mankind before. But it is forgotten. And since those times of the ancients things has been changedenormously. A new world emerged. But these ancient insights mostly expressed in covert aphorismsare valid still today and can have their say even more trenchant then our modern views.Having said that, the model, presented here, is nevertheless backboned by maths and we were luckybeing enable to trace its principles from developments start right to developments entropic end. Thisturns out to be of great help on how to sail between the rocks of Scilla and Charybdis as in the storyModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 9. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditionsof Odysseus, when we want to be successful achieving our targets through the subsequent stagesand inherent bottlenecks in the flux of developments progress. Odysseus blindfolded the crew to passthe crises. Nowadays there can be no intention to blindfold our mates again like Odysseus did with histeam. On the contrary; we should strive to keep eyes open widely.This brings us to a next issue: Imagine, if a med has the wrong anamnesis the cure wont be much ofa successwill it? In the same way if an enterpriser or an economist has a biased anamnesis, whatwill be his planning for the firms management or what will his advice to the policymakers bring about?Speaking about development, we definitely need to look at the emergences of such phenomenons likecrises.Those complex and often enough desastrous situations should receive a proper foreseeingtreatment andlike Odysseus for his timewe also should have the right anamnesis resulting in theright action or cure to deal with it, to feat the critical situations inherently anchored in all development.But it has to be said, that people would like to avoid crises. We can easily imagine why. Mostly we allare inclined, not to go through those development traps and bottlenecks, that nevertheless will actuallybring us through and up to higher stages of development quality. So we can expect, that avoidingcrises, treating them as if they were accidents, is like preparing for the wrong anamnesis. And oftenenough a wrong advice or a fruitless strategic idea ends up in a derailed and tensefull developmentenvironmentof course an organizational mess is the result. That in turn can lead to a destruction ofall previous achievements. This doesnt make much sense and is an at all times painful experience. Afirst remedy were to take Schumpeter serious. But just avoiding the challenges of crises is nor a cureneither a way to envisage and treat such phenomenons. We got to look at it from a positive side. Inreality all crises are the sole potential possibility for the eliciting of sensefull but necessary steps andfor the passing to next stages of development, because the incremental rationals and gameplay logicof methods appropriate for growth periodsadmittedly most often a strategy f.i. of dull operationalresearch methodscant really do the job. We must state:Crises do not put off their iron helm andreveal themselves if regarded as merely threats and dangers to creep away from. So for those, wholauch developments and want them sound there is a great need for clearance and for the work up of alot of biased established views, attitudes and subsequent behaviors in order to master developmentand its requirements in a more sound way. A lot of literature on crises seems only ripe for the bin.Development is not something to be materialized off ones own bat, but demands a lot of courage ofall involved. As William Easterly in his study: The Elusive Quest for Growth put it: If you bake acake, according to a recipe, would you take just one or two out of 10 ingredients needed to start outand make you cooking a success? The answer of course is, no. Instead we take all ingredients andnot just two of them. If Easterly is right, then why is the cooking of a cake so simple and the inducingof development so difficult and complexeven though we take all ingredients the same time?Because the cooking of a cake does not require the experience of fatal crises nor the need of termsand conditionslike moralityinseparately connected with development. Nobody dies when somecooking failed, but inappropriate handling of development and crises on a large scale can have Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 10. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditionsnumerous victims. So in order to induce development we need not only all ingredients that makedevelopment a success as Easterly proposes, but the right reading of the recipe i.e. the ideas of whatelse is required to accomplish development with success. This implies, thatespecially for third worldcountries as was Easterlys focusall stake- and shareholders, donors and participants, need tocontribute in practical support as well as in a proper educational as well as ethical preparation2. Inorder to induce development we dont need consensus of all different viewson the contrary. Butthere can hardly be any successful development without a spark of development knowledge. Becausedevelopment for one thing is the result of the satisfying of demand and coming from two different sidesit is the ephemer result of an agreement based on mutual interests. Mutual interests are lucky facts,providing the basic for solutions as a satisfying, but ephemer outcome of originally opposed worlds.Entireties with opposing interests become partners and agree to create the - economic - opportunity ofexchance of resources. But there can hardly be any development without a simple grade of trust, ofgood will: i.e. honesty, constructiviness, clear thinking, extrapolation of mutual advantages and finallythe dynamics of good teamwork.In general, people you and me - are not altruistic and there is not always that innate skill or whatssoever to immediately gist the advantage of all by focussing the advantage of others. There is a moralaspect to this. To see the advantage of all involved in the process has to be trained on a daily base.On the field of business it is our conviction, that an enthousiastic enterpriser with the most valuableand usefull ideas and products in his output basket, with the best plannings to materialize it throughhis firm, but embarking with poor development capacities, simply isnt aware of the real power of hiscontrahentthe stakeholder, like a groom unaware of the real value of the bride. In the course ofdevelopment stakeholders increasingly penetrate the firm and can even overrule its managementstrategy with their own interests and power, especially the customers. To strive for the volatile andever ephemerical balance of harmony of opposed energies by way of development is a tremendouschallenge for the firms owner if he is just focussed on generating his own profit. As a strategy to aimfor this focus is not enough and will not hold very long.Nowadays peoplenationsunfortunately tend to fail to meet terms and conditions of developmenteven on a global scale. This study provides a small contribution at least to find the cause as to whyfailures were made in the past and can reasonably be expected for the futuref.i. by instigating warsand what can be done to prevend them.2 For a view on main ingredients to induce developmentnot just growthin the tropics, according to Easterly, look at theEasterlys recipe (PPS file): (rightclick PPS to full screen using spacetab to navigate).Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 11. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 12. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditions Module BMSD1a: Business Management Systems : Business DevelopmentTerms and Conditions III. Introduction to some model aspectsIs Development Growth? Overview This course Introduction to Development Its Terms and ConditionsMBS-D1ais organized in four core parts (A to D) with some usual additionals: A.Historical ReviewMainchapters B.The Theory and Model of Development C.Application of the Model in Business Practice D.Application of the Model in Macroeconomics E.Epilogue F.Glossary G.Index H.Literature Chapters A gives some historical background. The focus is on the introduction of some main contributors to the issue as a concept introduced here. Introducing them we would like to stress, that these menmainly economistsand there findings are still crucial for an understanding of law and order in dynamics and dynamics progress, though of course they all need revision and actualization. Chapter B introduces some main mathematical principles and conditions underlying the model. As mentioned in the preface, the material is certainly not new, but the context is. They are gathered piece by piece and reorganized to be compatible with development theory. Chapters C and D introduce some back of the envelop applications from realworld practice. Chapter C with relevance to corporate governance and strategies of firms. Chapter D with relevance to certain development phenomenons emerging on macroeconomic level.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 13. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsTargetIn this introduction we would like to emphasize, that the core target of this course is to give you anincentive to workout for yourself a new look on development. Partly we do this by let you pay attentionto the emergence of development nodes between two subsequent growth stages. In physics we knowthat in oscillation and wave theory two amplitude waves build nodes as a result of two or more wavesin case there frequencies differi. In development theory we would like to adapt this knowledgejustwith one small extension: We stress the additional fact, thatduring time development is runningthrough a critical nodean unseen kind of backward looping of developments motion takes place. Inphysics there are two opposed kinds of energy: potential and kinetic energy. We assume a change ofthe weighing of these two kinds of energy: From kinetic or direct (ignitional) energy beingdevelopments physical energy or main driver during direct progress into its opposite: The potentialenergy as the main energy during the senseningno physical realityof a retrograd progress orbackward looping. So inbetween the change of two growth periodes in development the two differentkinds of energy actually alternateii. This chapter is but an introduction to the materialyou canexpect a more indeep discussion in situ. We also would like to introduce the fact that, during the shorttime development goes through these nodes, we assume that this unseen motion of backward loopingisin this worldexperienced as a jump from a just completed to a next development stage. It is thisfamous jump in development which once Schumpeter regarded as being the actual developmentsprocedure. This with distinction to the subsequent growth stages. Basically these development jumpscan be regarded as jumps of quality rather than quantity (which would actually mean growth). Now, thecurve rising up from quality to quality cant be visualized by showing a wave in a graph, but by astraight line showing the rise in potency. In order to create a straight line for potencies we need alogarithmic scale. Thus:We can best show changes in quantity with a linear scale.We can best show changes in quality with a logarithmic scale.Here are two graphs with the same data showing the difference mind the different grid pattern. Clicks lead to *.pdf files so make use of Adobe Reader to view them.Fig A. a logarithmic scaleFig. B a linear scale Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 14. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsWe can best use linear scales on y-axes (vertical axes) to make changes in quantities clear. We canbest use logarithmic scales on y-axes to show changes in quality with regard to potencies and theirprogression. We use both linear and logarithmic scalessuperimposing them in the same graphtoshow you data changes of both developments progress and its inherent growth stages. Technicallythis isnt quite doable and seemingly in mathematics even not correct, but this grapha first scetch ofdevelopmentdepicts pretty good what we mean: But mind the underlying basic difference !For an introduction these short explanations will do. However to explain the model of development wehave to introduce to you a lot more aspects.VisualizationsWe cant touch, hear, smell or see development. Being unmaterialized its process is going on beyondour physical senses. We only experience our joy, relieve, tenses, our expectations, and the results asour failors and success and so on when we start to develop an idea. So in order to bring things a bitdown to earth and to make it more comprehensible we use certain visualizations like symbols. Thusfor the purpose of completition and comprehension and as an ideally visualization for the start of eachdevelopment we take the transparent cube as one of the platonic solids. Secondly to characterize theend of development we take the transparent regular dodekaedrona second platonic solidiii. Thishas a lot of reasons, which are to be explained later. Between both solids, the cube and the regulardodekaedron, as a way to show developments progress we visualize a straight staff or rod with twooscillating waves (or snakes) wrapped around the rod, which would symbolize the amplitude of any ofthe harmonic swings. All three symbols together are a complete visualization of the model ofdevelopment. As you perhaps know these symbols are famous since antique cultures of the Middle-East and there is a good reason for it. To stress it again:nobody has ever physically seen thiscomposition of symbols, but as a whole it is a meaningful auxiliary and it can help us to clear the ideaof development. This model is basic to all natural development.The nodes in the progress of development are allready mentioned. They are absolutely crucial and byall means indispensable. Not in a sense, that we would promote the final desaster and the going offof someone wrestling to come through. But nobody can and may escape critical situations inevitablecoming with the nodes. We should make it a rule for live never to try avoiding them. On the contrarywe are encouraged to master them and indeed pass through those bottlenecks in order to enter a nextperiod of growth on a higher level of quality. Lots of literature have been written about how to avoid orto minimize the emergence of crises. Sorry, but it simply wont work. Better mime the enterpriserscourage in your life and accept Schumpeters idea of creative destruction and youre far better off.From our exposition in theory we will procede to present a model with its inherent development laws.A next step is the adaption of the model by some characteristical examples taken from realworldpractice to show you that the outline of this model structure holds.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 15. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsWe complete the course with some examples in three appendages on fields that are not related witheconomics or business. However we presume that they are welcome for an additional criterion. Youshould know, that we are always glad with constructive critics and additional information from yourpoint of view.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 16. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and ConditionsA. Balmer Rinks Formula and the Harmonic DivisionA.1 Balmer Rincks Formula and The Harmonic DivisionAt the outset of our explanation of the model of development we first take a tour through the world ofphysics. This is required to give the new approach a framework and background for reference.From the range of research fields we take a look at atomic physics. There is a reason for starting ourtour with Balmer Rinck and his discovery. The formula discovered will be explained on the next page.Why is Balmer so important? Because with Balmers discovery of the mathematical background for theoccurrence of a specific spectral lines signature we, for the first time, get a glimps of what nature usesas a specific tool creating the numerous varieties and increasing complexity of levels of physicalmatter. Scientists later found out, that, with the use of logarithmics (potentials) nature seem to repeatits basic mathematical principle every time again, but each time on a higher level i.e. on a subsequentspectral line signature. The basic mathematical procedure however always stays the same. Havingdiscovered the quotient of this principle is Balmers important contribution to science. Since the time ofBalmer, search went on from Bohr to Einstein putting questions about the nature of the nucleus and itsshell, the excitation of photons and electrons, jumping from one to a next discret absorbtion level, if notexcited enough falling back while emitting X-ray. They discovered that by times the excitation isenough high, that photons jump all over the shells potential barrier and into the socalled continuum orplasma ionizising and altering the nucleus and its compound.If we realize on one hand how nature procedes to materialize and change physical matter creatingdifferent levels of quality and if we realize on the other hand how this is done, we get a clue whatSchumpeter had in mind defining development as a creative destruction and a leap or a jump to a nextlevel of growth. This higher level would be more suitable and convenient for a next developing stage ofthe original entity. Explaining principle and procedure of the spectral line signature we compare thetechnics nature uses as a kind of template for research on developments procedure in general. Weregard it as an important key process, a method or a rule to follow enabling induction of development.Lets have a more indeep look at Balmers discovery.According to one of the statements of Schumpeter in his Festschrift Development3, real and usefuldiscoveries always start with specific experiences on specific areas in praxis 4. J.J. Balmer Rinck was a3For this source go to www.schumpeter.info (assure internet connection) scroll down to find the link to open development.There is also an original text in german language available, for this look at: Entwicklung.4Quotation from Schumpter: Development 1932 p1: A preliminary remark is in order to protect the following unpretentious considerations from obvious misunderstanding: Everything I will have to say is to be understood from the perspective of each particular science, and not in aModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 17. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsSwiss mathematician and physician, who, in 1885 defined the second of a set of six different series5describing the spectral line emissions of the hydrogen atom. Balmer discovered the visible part of theelectromagnetic spectrum and in that year 1885 used an empiricial equation for it: Where (gr. Lambda) is the wavelength in ngststrm, nreferring to the ground e.g. lowest energy levelis equal to 2, m refers to the principal quantum number an integer above ground state of energy (m > n), C is a constant (potentialbarrier) with the value of 3.645610-7 m or 364.56 nm. The Balmer series is characterized by theelectron transitioning from m 3 to n = 2. The next levels or transitions are named sequentially by agreek letter: Starting m = 3 to n = 2 is called H (Hydrogen alpha), 4 to 2 is H, 5 to 2 is H, and 6 to 2is H. As the first spectrallines associated with this series are located in the visible part of thespectrum, these lines are historically referred to as "H-alpha", "H-beta" and so on. The spectral lines ofhydrogen correspond to stepsthough not yet jumps which in turn we would compare with anexpression of J. Schumpeter as a: creative destructionpromoting the electron within its shell tovarious energy levels. In general theory, excited photons promote electrons to higher levels or fallback while emitting X-ray as soon as energy returns to a lower state. The thing to remember here isthat the innate potential to step of the excited photons can increase to a real jump and override thepotential barriers of the atoms shell with its specific energy levels. In consequence they can unbound,freeing themselves into the socalled continuum and from there transforming the nucleus into a higherorganized atom with a changed shell and spectral lines signature. In science this potential barrierspenetrating jump is called the process of i o n i z i n g the atoms nucleus. Ionizing of an atom meansremoving electrons from their genuine orbit system (shell). The imaginary space between two shells orpotential barriersthe continuumis indicated in the energy level diagram of the Lyman and Balmer. Thus, excited photons with energy exceeding 13.6 eV (look again at the foregoing graph) canmake electrons disappear into the continuum ionizing the nucleus. The ionized nucleus reaches a nextpotential level with a different spectral lines signature. So the story goes.6 For us this all is to a certainextend comprehensible. However the magic unveiling of the secret for the context of development isthe following:From the formulas term in brackets (see Balmers formula above) we can derive thesocalled : HARMONIC DIVISION. philosophical sense if not exclusively from the perspective of one particular empirical science, then, solely from the general perspective of working in the particular sciences. If what is said here, in any case, turns out to be of some interest, it is because it has emerged from an altogether concrete problem found in one particular science. It is further because the awareness that a formally analogous situation is found in all the other particular fields of science and the supposition that such a situation is rooted in the structure of our mental apparatus, were in neither case merely postulated, but emerged afterwards, and step by step.5There are six different spectral line series: Lyman (n=2), Balmer(n=3), Pascher (n=4), Brackett (n=5), Pfund (n=6), Humphreys(n=7).6An applet can show you the jumping of the electron on five of the sixt series. The last seriesHumphreys series is not yetdepicted. This animation requires Flash Player 5.0 to see it and the explanations are in german. Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 18. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsTo keep things simple, we take the first of all series, the Lyman series with m = 2 and n = 1. (See theforegoing graph.) Being a mathematical component basic to development this harmonic division iscrucial for all progress by development. _Whats the big thing about this harmonic division? Here is how wiki.org explains harmonic division: Aharmonic division is about a specific dividing of a given linesegment. In geometry, harmonic division ofa line segment AB means identifying two points X and Y such that AB is divided internally andexternally in the same ratio. In an algebraic equation shown below, the ratio is two (2/1): XA YA = XB YBHarmonic division of a line segment is reciprocal as well; if points X and Y divide the line segment ABharmonically, the points A and B also divide the line segment XY harmonically. In that case, the ratiois one third given by:BX AX=BY AYwhich equals 1/3 in the second example above. Ratios (2/1 and 1/3) are not equal ! So far wiki.org.AX YXHere comes a third possibility to build a ratio (=2/3): =AB YAThis third ratio makes perhaps more clear that there are two o p p o s e d points of view. The leftsideterm of the equatation starts at point A (linesegment AX), the rightside term at point Y (linesegmentYA). The ratio is the same (the rightside terms doubled), but, whats important to notice, we view thescene from opposite sides. Here a few pictures of the harmonic division: 1. the divided square withpythegorean triangles drawn: 2. the same triangle derived from the harmonic division , and 3. thethree means derived from the triangle as well as the harmonic division and compare this 4. with theinherent opposition of forces: then we dont need much calcul at first to perhaps get an idea in whatcompound harmony is actually embedded shown in terms of algebra and geometry. Lets just takecognizance of this and procede with decomposing the quotient in Balmers formula: m2 = C 2 m n2 Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 19. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsWe see that we can do this decomposing into basic quotients to derive the harmonic division. For thededuction we use m = 2, and n = 1 equaling the value of the first of seven of spectrallines signaturescalled after its discoverer Harvard physicist Theodore Lyman (1906):Fig. D Balmer quotientwith Lyman valuesSo the squared term in the equation indicates the result of the harmonic linking of that inner and outerdivision as is shown by the harmonic division. From the quotient of Balmers formula and the harmonicdivision (again: m = 2 and n = 1) we can also derive the famous pythagorean triple: 3 : 4 : 5. Wealready showed you the graph (). To get this extension we simply draw two semicircles onlinesegment AY connecting all four points AXBY. As you can see it shows a clear relationship: Alldevelopment starts with a potential controverse situation, shown as semicircles being linked.Remember this carefully: It is ths energetic, tenseness, and intertwined situation, which the ancientgreek called harmonic. Of course from this ancient point of view we nowadays differ in opinion abouthow to define harmony. To us, harmony is a way of arranging pleasant sounds, objects and colours.Harmony however according to the opinion of the ancient greeks is the linkingthe ephemeralagreement on a specific place7 of genuinously different, even opposed forcesiv. So, to summarize some conclusions: A geometric harmonic division divides a given linesegment likeAB harmonically into two different line segments. If this is done in a manner to really show the innateopposites you will get the same ratio. From segment AB segment AX = 2/3 and from YA segment YX= 2/3. From starting point A (AB) there is a ratio directing to AX and from the ending point Y (YA) thereis a same ratio directing to YX. In both cases the ratio is the same (2/3), but each time we take theopposite point to start. Please put your mind on this, because it is important to realize that: The law of harmonic division is the result of anephemerallinkingof opposed starting points causing harmony.What are implications? To really see the implications we have to complete our deduction. A sounddevelopment like in the field of enterprising is defined as well restricted by principles causing harmony7 We assume, that, If an ancient Greek would describe the function of his temple, he would probably state, that his temple is thespecific place in which the ephemeral agreements (daily votive offerings and rituals) between strictly different entities (god andmen) take place. These consecrate activitiesaccording to the Greekis the constant attempt to create harmony momentum.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 20. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditionscoming from opposed directions i.e striving from opposed forces, because as will be seen in a nextchapter in an ultimate sense the linking of the oppositionand, if critical enough vor the next changeof state, emerging in logarithmic periodscan be defined as being an encounter of rational as well asirrational forces with there inherent different principles. Through the fact, that during developmentthese opposed realms regularly meet each other in the harmonic division, progressing from start tillend, we see the cause behind the appearances of nodes and thus from crises appearing.Now, what we assume in the context of development as well, is our sensitive apperception of a kind ofretrograde motion occuring while our development passes the periodical nodes. This doesnt occurphysically. Its just our experience of an illusion. Whats a retrograde motion? Spoken in terms ofastronomy: Direct or prograde motion is the motion of a body in a direction similar to that of otherbodies within its system. Retrograde motion is motion in the contrary direction. Search the internet tofind applets depicting a retrograde motion to8. In the field of physics we can show the emergence ofnodes by a simple synchron movement of two waves with slightly differing wavelenghts. In astronomywe can demonstrate the occurrenceand the illusionary impactof a retrograde motion through theorbiting of two entities on two distinct levels around one fixed centre, observed from one of the orbitingentities. As in physics we as well state that retrograde motion is the optical illusion of the movement ofentities with different orbitals caused by the point of observation, though our sensening of that fact isnot.We introduce to you a second phenomenon. Though it has nothing to do with the formulas mentionedabove nor with retrograde motion. We just want to give you a next example of this peculiar passing ofa node necessary for the entering of a next level of quality.If we heat water in a glass while looking at the constant rise of the quicksilver bar of a thermometre weput in the glass, water will reach a temperature of 96C and start boilingcorrect? Not correct,because for the boiling it actually needs 100C. However for a moment the indicating quicksilver barjust slowed down. After reaching 96C weagain for a momentdont see any further rising lookingat the thermometre. The difference is 4C. We now look what happens in the other direction: If wedecrease temperature, water can fall to 0C before turning into iceis this correct? Again no, for, to letfreeze water to ice temperature actually requires 4C. So, in both cases we dont know observe wateras a liquid with a temperature of +100C or -4C. Instead of real water we have either gas or solid ice.Look carefully: At 96C increasing and at 0 decreasing the temperature the quicksilver will slow down.And it will take a short time till water starts to change its state to either get a solid or evaporates togas. Obviously, in order to change its states, water passes nodes of development as well. It will reachanother level of quality or statebe this gas or ice. During the short time water passes its nodes tochange its state we, looking the thermometre, cant observe an increase or a decrease of temperatureat first. We of course dont know if its experiencing a retrograde motion while changing the state, butwhat we do know is the fact, that it can only change its state trespassing a node.8 An internet link to one of the numerous java applets which shows pretty clear what retrograde motion is. http://www.mhhe.com/physsci/astronomy/applets/Retro/frame.html (You will need a java plugin.)Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 21. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsThis is the simple conclusion: The trespassing of nodes in a process of development is positive relatedto the entering of new states or levels of quality. It has important implications for our conventionalview on development. We could of course start a discussion if water indeed can develop. Suchdiscussion however would nevertheless miss the point. Water cant develop in a sense living entitiescan, but it is highly sensitive acquiring kinetic energy not being in nodesas is growth. Water is alsohighly sensitive acquiring potential energy while trespassing a node unto other levels of state orqualityas is development. A thermometer can show an increase and decrease of kinetic energy, butit cant show an increase or decrease of potential energy (lets say skill). The quicksilver simply stopsincreasing. So, observation of half of reality is enabled. Its the physical side. Development is linked tothese phenomenons as well. Here comes the first of the implications. We can see nodes occur as aresult of two waves with slightly different wavelengths. They diminish the amplitude of the resultantwave. In development we experience those same nodes the same way as stagnating highly criticalsituations. Thus in order to explain development with its nodes we need the assumption not only ofone wave as used for instance to show the business cycle but of two waves. And if any nodes in theflow of developments progress do appear, then these two unsensed waves have: 1.SYNCHRON MOTIONe.g. processing within the same shellin the flow of time 2.Slightly DIFFERENT WAVELENGTHS (frequencies or speed)9 3.a third fixed point (nucleus) to SENSE the ILLUSION of retrograde motion during a node.In development we observe, that a crisis is the mostly tragic impact of the passing through thesenodesthe meeting of initialy opposed forces, as discussed above, necessary to gradually reach atarget at the end of development. Here you see, that our view on harmony needs a revision. Harmonyis no big relax, have a seat and listen idea. The emergence of harmony, or lets say harmonic, in theway it occurs in nature is a sudden robust change of all fixed variablesexperienced as a most criticalsituation. To make the critical impact of this harmonic even more clear, we have to add some moreinformation on what typifies or characterizes both opposite worlds, which will be done after explainingthe three means: the arithmetic, harmonic, and geometric mean (hereafter with abbreviations: am, hm,gm).The idea of Balmers discovery was subject to further scientific research. From his definement we seethat in the field of atomic e.g. nuclear physics Rutherford and Bohr, Heisenberg, Hahn a.o. contributedto develope, refine and apply atomic shell models. At start Einstein was very enthousiastic about thefindings. However seeing that in the hands of scientists like W. Heisenberg (who later on derailed finalresearch in german projects for moral reasons), this knowledge was used to build nuclear bombes hegot shocked. Lets quote from an article written by Hugh Gusterson published by Global Research:9Spectral lines theory acquires the assumption of wavelengths discretion subject to integers of variable n: ny n y 1 Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 22. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditions "The attitudes of those working in the life sciences contrast sharply with the nuclear community. Physicists since the beginning of the nuclear age, including Albert Einstein, understood the dangers of atomic power, and the need to participate actively in managing these risks. The life sciences sectors lag in this regard. Many neglect thinking about the potential risks of their work."10The uranium bombedeveloped and constructed by german and american physiciansturned out tobe the scientific result of a search for the power of ultimate power through destruction never intendednor used by mother nature.As in the situation of the excited electron transitioning from one energy level to a next, entities thatneed to be developed as wellf.i. the launch of a firmneed excitation in form of a vision or acreative and sound idea, that gets a haul of enthousiastic energy and sufficient financial resources tomaterialize over the long run of say 30 years. This idea emerges in the head of an enthousiasticindividual and is never the result of a discussion about the utility of an idea of a range of boardmembers of some corporation, institute or a policy party. A fertile idea is a sound idea for enterprisingwith rational expectations promising a high return on their investment (ROI) in the long run. The thrustinvestors put in a fertile idea is inextricable linked to the thrust they put in the individual enterprisermaterializing his idea by launching and leading his firm. Again to put thrust in an individual makessense, but to put thrust in the strategy of a collective of a group mutual agreeing in the utility of a firmto be launched is at odds and will hardly hold. So take cognizance to this: All development can start only with entities capable of excitation - individualsand the subsequent materializing of their sound ideas for the long run.On the other hand a firm relies on its customers. Their behaviour, targets, and plannings for the futureis crucial for the strategy and tactic of the firm to survive. The bigger the firm gets the more customerswill be attached to it, the more interests are involved. The more ROI of the firm will need to change itscomponents, becausegraduallyROI will not only consist of pure financial interests any longer. Thisneed some explanation: In this context with the term customers we mean everyone in some way andto some extend linked to the firm, be it customers, stakeholders, investors, managers or government.If we look in a broadened scene at the range of interests somehow linked to the firm we can look f.i. atthe plants location. Interests can be highly conflicting if only the enterprisers interests are beingmaterialized. So in order for firms to survive they become gradually more dependent on the communityof its location or within the virtual network they are operating in. If input can not be materializedanymore to a satisfying output (with or without changed ROI) firms are going bankrupt. This will be inall cases when throughput of resources or production factors (input) may still lead to high quality10 http://www.globalresearch.ca/index.php?context=viewArticle&code=GUS20070420&articleId=5445Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 23. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsproducts, but nevertheless do not lead to sufficient ROI anymore. Firms then suffer from resourcesentropy. The only solution for survival is enhanced concentration on the skills best acquired duringpast development, a turnaround management project, the firms embedding in greater industrialnetworks and/or the launching of a series of new small firms with the same identity. The key idea is toconcentrate the firm in some way with respect to the community to meet its interests again. All individual development will end by an entropy of throughput capacity of the entity. If development stayed sound, society will tend stronger and finally its interests will supercede.This knowledge can lead to important inferences: 1.Real development at all time starts on an INDIVIDUAL base. 2.Development can not be extended (or restarted) without a RECURRENCE of conditions equal or similar to the conditions at developments start. 3.Development will always end if ENTROPY of throughput offsets the benefits of ROI.Comprehensing the general idea of development conditions and of natures methods with respect todevelopment enabling to create all her varieties is important indeed. Therefore it is perhaps a goodthing to stay succinct. To conclude this chapter we return to the first topic and add some graphs thatshow you the spectral lines signatures on a specific grid already introduced in this unit. It is thelogarithmic grid. A section of that grid we showed you before. But remember this grid ? It showsa series of those sections as a rythmical recurrence of the first development stage on subsequentlevels! Unfortunately even recurrencies of this kind do not promise the firms eternal life and can leadto an end, which we shall explain later.11As an assignment: 1. Go to hotpots and fill out the gaps in the sentences. Sending your results tomy email address, please 2. Write a brief summary of the contents of this unit in your own words.Blended learning involves three educational methods:11 For a background please read this paper of a speech Schumpeter in 1931 held for the readers of Keizaigaku-Ronshuof the imperial university in Tokyo. http://www.schumpeter.info/text2%7E1.htm. Its english written Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 24. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditionsdistribution - the individual gathering of information f.i. lessons units.feedback - the interaction part; small tests, modules, forums, journal, chatting.collaboration - the real project part. The first part can be done on your own. The second part is teamwork. Feedback tools which you can do together. The third part you should do with additional help from outside practice.So, for the feedback build teams (all of you). Then:discuss the points of view you have acquired by reading this unit. (15 min.)specify, what implications in praxis development could have with respect to the terms and conditions explained. (20 min.)write a short essay applying the knowledge to your own experiences in life. (2p. A4)We skip the project part at this first unit. Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 25. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and ConditionsA 2. Societys ProgressDevelopment is linked to Scientific DiscoveriesSeen in a broadened sense we observe the fact, that Balmers discovery in the field of theoreticphysics was not a standalone and out of the social context of the days. Researchers in all kinds ofdisciplines became curious and strived to lift the many hidden mysteries of nature. As a research topicthey as well got sensitive for the quest for the development principle as employed in nature. Since theera of Enlightment society in general was evolving from an exploratory life heavily controlled by thechurch or other under patronage of the feudal aristocracy into a situation were scientific explorations,research, reasoning and development started to set the scene. Aspirations to enhance objectivity andtransparancy in science, to gain individual freedom in political and cultural, and to explore rationalismin social fields were trendy. The psychological cause for this change in mentality can obviously beseen in the coming into prominence of capitalism into society. Gradually the influence of capitalismled to a change in apprehension of moral and social values, of humanities. One of the impacts ofcapitalism was, that people lost traditional bonds which bounded them to their community. In the UK inthe early decades of the 20th c. questions raised, if capitalism could provide a comparable socialstability as experienced before. Schumpeters opinion being a known economic was appreciated. Hestated, that capitalism could provide in a technical stability, but called the economical and socialimpact of capitalism to the people as a kind of throw on their own resources. Here we quote from aspeech hold by Schumpeter in 1927 in Leeds in front of the Board of the British Association for theAdvancement of Science:If we take a look back we see that in the Middle Ages people lived in an environment essentiallystable. There were the church, the castle, the village community, the communal processes, whichcarried things on year after year in essentially the same way, and neither church nor castle werediscussed. There was no reason to discuss them. Discussion was always the precursor ofrevolution. Thus the environment of the day made the minds of people stable. It was not a systemof castle and churches to which they were attached, but a certain visible church and castle andcommunity and a family life quite different from the modern family life. It was an essentiallytraditional way of life and thinking. These did not exist anymore. Capitalism, with its privateproperty and the motives of private property, was tending to destroy them. It broke up the villagecommunity and two things necessarily followed. People lost their sense of anything absoluteexisting and of the existence of something which commanded allegiance irrespective of personaljudgment. Hence they were thrown on their own resources. They had to fight their way on slipperyground, and doing so naturally focussed their attention on the rationality of their behaviour, on Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 26. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditions producing something that would fetch what it had cost at least. The feeling of dependence on their own judgment influenced their culture, duty, mentality, religion, art, and so on. It tended also to cut a man off from all his humanities to other persons and things which in the past were among the most valuable of stimulants. Many of the things dear to our fathers were dear [to us] no more. Not only the bonds which formerly bound an employer to his factory and workpeople, but also the bonds of private life, the relations of man and wife, of parents and children, did not mean now what they meant when they were a necessary form of survival.12If we look at this changebut in the context of developmentwe see that since the introduction ofcapitalism society experienced a kind of split up or diversification of its social structure. Capitalismhad its few though strict principles (compare these principles with today real world practice): private property and private initiative production for the market and the division of labour enforcement of these principles by government rule financial resource creation by banks (legalized fractional banking system)Together with capitalism a social shift prone to the above principles occurred, which created: a small upper class of a few rich industrials a big labour force of dependent people with an organized income a shift of population from rural to urban society a stagnant pool of a few unemployed, left behind in a desolated state.Due to the induction of capitalism in society of most of the nations, the role of church and landlord wastaken over by other institutions like governments, with its rulemakers and politicians. U.K. and laterU.S. led liberalism and capitalism enforced society the social throw on the own resources. The fewthat could not bring up there own resources in a sufficient way which would enable them to survivestayed dependent on government. Since then government provided them with institutionalized formsof human aid. Together with the uprise of liberalism and capitalism, with its rationalization of socialand individual behaviour we see a next and most significant phenomenon occur: The economic boomsand depressions caused by the uprise of the business cycle.This uprise of the business cycle was the necessary form economic evolution took under capitalisticconditions. And the questions for economic and social stability coming in around 1927 got its robustanswer; the boomdestroying equilibriumfollowed by the depressioncreating equilibrium: twocharacteristical trends of the business cycle. In 1929/30 an economic depressionnever experiencedbefore occurred in the USA. People were unknown about any tools to manage the amplitude of thewave of the business cycle and for a moment they were baffled. The occurrence of this very unstablesituation in economics was swiftly followed by political and social instability. It was clear that society12 The instability of our economic system Speech of Schumpeter held in Leeds in 1927. Published in Manchester Guardian1927, and The Times 1927. see http://www.schumpeter.info/Edition-stable.htm Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 27. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditionshad entered a totally new era. With the introduction of capitalism and the business cycle society wasshiftinglets speak in terms of development as introduced herefrom a :linear grid into a linear + a logarithmic grid !With this unseen shift of terms and conditions, determining the change in background, all principles ofdevelopment were induced for the first time in mankind. Of course people had to struggle with the newgiven logarithmic rules of development. But they learned to take over responsibility. And so they tookcare for their individual lives. Through rules and their institutionalized enforcement on governmentallevel they started to take care for the poorest and for the entire society to survive.This is just a scetch of the broad social context which however should be seen as inextricably linked toindividual scientific discoveries summarized to mathematical formulas like those of Balmer, Bracket,Lyman a.o. To mentally link the uprise of the business cycle with its booms and depressions withseemingly irrespective occurencies like scientific discoveries, we can learn to discern and can indicatewhat concerted facts led to a global change of societys structure. To do so, we dont stress a logicalstring of single facts, but we put characteristical events in a context that enable us to perceive theimpulse, in what way society is on the march to build up a societys structure that strongly differs fromthe one known since the Middle Ages.In order to induce development it is necessary to start a concentration of powers by way of individualinitiatives like is the case with capitalism. We can see as well, that such a massive concentrationinevitably leads to a freeing of boundings of former social structures, leaving a few at the opposite sitethatat the same timeare forced to experience a great loss and isolation on all levels. The fact thatsociety as a whole can not be left on its own, but has to be organized and managed as well gavefinally rise to the opposed principle of capitalism and open market economy, to the theory of plannedeconomy. From this it was a short step to the collectivistic policies of socialism and communism.There is something inevitable in this contraction and spreading of powers. Sea starts to swell. In termsof development it is a condition sine qua non that such a beating of forces takes place. That the theoryof planned economy by communistic principle didnt work out as planned was due to the fact, that itoccurred in space and time NEXT to the synchron evolvement of capitalism (like in the SU, in China,Korea, and Myanmar). Instead of creating and materializing a theory of planned economy, this impulseshould have been embedded into the development model of capitalism and liberalism itselfsimply asthe economic scene of developments final stage. This fortunately start to happen now. So, torsos ortrunks of stages of the model of development were materialized at the same time in several countries.The torso of developments start is represented by capitalism, introduced in the US, the UK, Australia,Canada, and Europe; The end of development is represented by the range of collectivistic theories,introduced in countries like the SU and the PRC. In the course of time, both sides experience amissing part in developments inherent structure. Such a power contraction could never have beenocurred in the MA, in which daily live was ruled by values of tradition. However economic developmentcan not be induced by a day-to-day caroussel of economic events. Instead it bears all charactistics of Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 28. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsunfolding, evolving potentials, of being a project; it shows a plan, a start, a way to go, it experiencescrises, it matures with the expected output and finally it is brought to an end. Considering betweenindividualism and collectivism, leaders, politicians of course choosed the trunk of the developmentsmodel what they thought would best suit their country. Being opposed to all negative influencesentailed to capitalism, communistic leaders didnt focus on individual freedom (demand-consumption),but on the contrary stressed the distribution aspect of peoples collective wealth (supply-production) inorder to satisfy individual needs. One might argue that in the end choosing the one or other policydoesnt make much of a difference. But it does. And so it holds true, that those leaders, choosing theend trunk (communism and socialism), were at first far more worse off, becausein spite of the fact,that they were absolutely convinced about the value of their social collectivistic concept, in realworldpractice they cut off themselves from development before it even could start out. That was theeconomical, political, and socio-cultural tragedy as a result of the rationalizing behaviour and of thetrial and error method worked out in the 20th century.History came with the prove, that for the main part the choice of the collectivistic minded turned out tobe of target from the start and the choice of the capitalistic minded turned out to be stained by greatestsocial deficiencies on practically all levels at the very end. So, question remained: Who was in thepossession of the right key?- As an assignment for this second unit write a short essay in your own words about the businesscycle, its characteristics and first occurrence in society.- Since about the19th c. society of industrialized nations evolve into mainly two political andeconomical systems seemingly opposed to each other.Discuss this topic in your team striving the historical context, the reasons for their appearance andfinal decay in the last decade of the 20th c. Put the findings together and get the point by choosingone or two of you to make a short review in front of class with use of presentation tools (black-whiteboard, beamer (slideshows, filmed interviews, dvds?), visuals with ohp etc.- As a first project : Look for practical solutions to embed :the principles of socialism into policies of countries based on capitalism.the principles of capitalism into policies of countries based on socialism.This is teamwork defined by the method of:1.making your own individual written down point of view in advance2.a meeting of the team members discussing the matter from all sides.3.coming to theoretical e.g. practical solutionsonly as a result of the meeting!4.question: can you find Schumpeter remarks in this matter? (late Schumpeter)Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 29. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsAdmittedly you can contribute to, but not really find a solution on your own, because it would contradict terms andconditions of development, that as a rule need harmony of opposites. You can forward the opinion of the team and donot need to agree being still personally convinced of a different view.While looking at some websites for solutions just keep it simple.Here are a few pages:http://www.mtholyoke.edu/courses/sgabriel/economics/china-essays/15.htmhttp://www.mtholyoke.edu/courses/sgabriel/economics/china-essays/22.htmhttp://www.capmag.com/category.asp?catID=30http://www.guardian.co.uk/korea/article/0,2763,1098533,00.htmlhttp://www.atimes.com/atimes/Korea/FL14Dg01.htmlhttp://www.travelpod.com/travel-blog-entries/technotrekker/overland05/1130301960/tpod.htmlhttp://www.sochealth.co.uk/socialism.htmhttp://www.sochealth.co.uk/http://www.socialisteducation.org.uk/http://www.wsws.org/articles/2006/nov2006/vic-n01.shtmlhttp://www.cpa.org.au/cpa/cpa.htmlhttp://www.greenleft.org.au/2002/511/27376 Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 30. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and ConditionsA 3. Schumpeters Definition of Development and Distinction from Growth Development is changing all variables previously known ! So, if we restrict ourselves and just look at development of firmsin the end firms are basic to all societys progress, then development cant be characterized nor foreseen by a trend regressionline. Development isnt characterized by the idea of the unfolding of something identical. In development variables dont stay within their conventional context, they change simply because context changes. A change of context is dramatical, occasionally experienced as a great luck, accidently causing a tragedy. But at any time its impact always results in the emergence of the unexpected. Again development can be and was paralysed by influence of a bad policy of governments, but it cant be induced by the policy of the good ones either. Business is not a matter of governments but of enterprisers. Though weSchumpeter (left) with a personal friend observe the fact, that governments have strong links tonamed Redvers Opie in Bonn.certain enterprisers, which of course can give governmentsa strong impact on economy. Apart from governments main task to control by rule and to provide afair distribution of the countrys wealth it canto some extendoutweigh unexpected trends throughmonetary and fiscal tools, but neither rule nor governmental policy can really give the kick-start of anindividual excitation (enthousiasm) affordable to materialize a firms idea with goods and services. Itcan work on a propitious environment giving incentives necessary for firms to invest. By doing sogovernment can contribute to stabilize productivity on a favourable level to keep economy ongoing.However the efford to make a stable trend upwards just by outweighing instabilities towards a futureequilibirum will hardly be governments policy reaching through. The business cycle tells us thatforgovernmentsthe best recipe to achieve a prosperous economy is not only characterized bystabilizing upcoming instabilities striving to equilibrium, but additionally by granting the industry theflux of the business cycle - with its booms and depressions - and by providing sufficient incentives forindividual business activities.These are some thoughts explicitly in the line of Schumpeters reasoning. It is not our aim to give a fullreview of Schumpeters main thoughts on economy or biographic details. Together with KeynesSchumpeter was a leading economist of the 20th c. and made crucial contributions to economics andeconomic reasoning. He was not the kind of a shrewd thinker as Keynes perhaps has been, but heModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 31. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsinstead seem to be a wiseful man. For the first time in economic history he specified development as aleap to other quality levels changing all fixed variables. By explicitly devining development as the jumpinto a new level of quality he distincted it from growth and its only possible change by way of everdiminishing to infinetisimal marginal utility rates.So in order to introduce development in a way we presume be appropriate, we stress the importanceof J. Schumpeter. This can probably best be done by referring to one of his articles, a speech writtendown by Schumpeter in 1932 already in the aftermath of the Great Depression. 13 Before quoting him,lets have a look at the logarithmic grid of the Lyman spectral lines series. We would like to point at thegradually decreasing spaces (see: Gosschens law) between the various spectral lines within thesignature (indicating possibilites to ever decreasing steps to a next spectral line) as well as at thecontinuum space after passing the Lyman potential barrier a space between other spectral linessignatures. . The graph indicates clear what Schumpeter had in mind, explaining growth as beingthe result of ever decreasing steps of marginal rates of utility caused by rational reasoning anddevelopment. Its a leap or a jump into a total other quality level as the result of creative destruction.First of all Schumpeter defines the problematic of the traditional view on development. According toSchumpter development does not involve things that stay identical:The ambiguity of the unfortunate term "development" requires a remark .Expressions such as development or unfolding suggest the idea that some of what isdeveloping has to remain identical, an idea that can readily be the source of prejudice andaberration.People are used to understand changescharacterizing steps in developmentonly, if they can giverationalistic or logical reasons pointing to a cause for the change of variables even if this changeshould appear as a change in norm. As an example he mentions the attempt to explain evolutionlogically by way of adaptation to changed circumstances as with Charles Darwins theory. Schumpeterstresses the fact, that we can reasonable understand things changed, when we put them into arelation to each other.The fundamental economic truth, which is primarily accessible to observation, can beformulated as follows: all observable variables seek to place themselves in a certainrelation to each other, or in other words, they at all times react adaptively to changesin data.It is obvious that these changes in variables are but reactions of the previous cause. So, peopletend to capture all changes in datas/variables as results from a cause. This enables an explanationfrom as historical point of view. Schumpeter continuous:Obviously, the point at which this procedure fails is where a leap-like change of thenorm occurs. Where such a leap-like change of the norm follows a leap-like change inthe data, we cannot say anything about what will happen in our subject area, except13 Internetsource. http://www.schumpeter.info/Edition-Evolution.htmModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 32. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and Conditionsfor some trivialities or vague conjectures. From the perspective of each particularscience, however, we can consider ourselves excused we will shortly see that froma more general standpoint the matter is not quite the same which is why we nowwant to part with phenomena of this class. In the case of a jerky change of the normthat erupts spontaneously from the system itself, the same problem is much moreserious. An example can best show what we have to think of in the economic sphere:Without further ado, a continuous increase in population and wealth explains anequally continuous improvement of roads and an increase of the mail coaches incirculation in a step-wise adapting manner. But add as many mail coaches as youplease, you will never get a railroad by so doing. This kind of "novelty" constituteswhat we here understand as "development", which can now be exactly defined as:transition from one norm of the economic system to another norm in such a way thatthis transition cannot be decomposed into infinitesimal steps. In other words:Steps between which there is no strictly continuous path.To distinct this defintion of development from the one of growth:Only recently have I also become aware of the fact that precisely the kind of changedefined above is often excluded from the notion of development and is indeedconsidered the abrupt termination of what many want to understand as development,i.e. change that in some sense or another is "lawlike" and predictable, essentiallycontinuous, and within which each state becomes intelligible when it is based on theprevious one. What is called development in the sense just mentioned, I usuallycall growth which may, of course, also have a negative increment.We admit the lots of quoting to reflect the view of Schumpeter for an appropriate understanding ofthe term development and its differing from growth. But lets keep this in mind: As transitions of anexcited electron from one spectral line to a next oneproceding in ever decreasing steps within thesignaturediffer from the absolute jump into the continuum, while ionizing the core of the atom, inthe same way will growthsteps defining growthdiffer from developmentjumps to other levels.Therefore a change in norm or levelbe it productivity, quality or a chemical changeis not causedby excitement within the shellcalled growthbut by a sufficient amount of excitement causing ajump over the shells critical potential barriercalled development. If you get this idea, you willknow the difference between a closed system focussed on growth, stability nd equilibrium and anopen system focussed on envision (german: Gestalt), on dynamics of destruction and creation.Dynamic development always involve growth, but actually enables the typical jumps to a next level.But, as Schumpeter stressed, the mess we make reasoning with the same expressions yet thinkingwith total different contents is a greatest barrier for understanding and research. Lets jump overModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 33. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsthis conventional barrier and understand what development is about.1.Quiz with hot potatoes software ! Click quiz sites 1 to 5 to answer a few multiple choicequestions in my quiz. (As soon as you click, testtimer will start running we test comprehensionand distinction, so take your time and send your results to my email address for grading. Andplease, mind correct writing - bad writings is bad gradings!)2.Build a team and try to find outf.i. by internet,what opinion did John M. Keynes have about J. Schumpeters heretic contributions to thebusiness cycle in economic theory?Discuss this topic with each other: In a closed economic systemfocussed on maintaningstability, rational control and equilibrium of the economic system (Keynes)enterprisersprofit is regarded as a surplus and actually a spill, just handed out to keep business going;however, in an open dynamic economic systemfocussed on dynamics of change and ofthe increase of productivity (Schumpeter)enterprisers profit must be regarded as anecessary resource to finance the productivities of the future enabling the creation of futurejobs. The rationalist argues, that taking individual profits is something amoral and resourcesshould be returned to society (socialistic view).The irrationalist argues that profitand thuscapitalismis not an amoral thing at all, because it secures the maintaining and creation ofjobs for society. 1. Guess who is right ? 2. What has this discussion to do with growth anddevelopment?Tip :Discern between economic theorists focussing on maintainingstatic equilibrium (growth) and those economic theoristsfocussing on creative dynamic destruction (development).And here is a next precious tip :http://www.peterdrucker.at/frmset_en_texts.html3.Schumpeter once had a job in Cairo, Egypt. What was he actually doing in Cairo and whatnoble person in particular was interested in his financial advice? (tip: internet search)Lucky for you? No collaboration part as a project.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 34. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsModule BMSD1a:Business Management Systems : Business DevelopmentTerms and ConditionsA 4. Applications of Keynes Model : Keeping up Development by Blowing DebtsIn this unit we added a lot of text. Again your task is to read it carefully. It provides an overview of themain trend of development in economy. The Great Depression of the 1930s and all its subsequenteffects for economic reasoning in theory and in politics occurred in the United States. Since the GreatDepression the US had set the trend for development and its alignment till today, thus in this unit wewill focus mainly on US economic scenery.In a theoretical sense we will line out the conditions for development in upcoming units, but with thishistorical overview in mind you will be able to trace developments basic conditions more easily.Conditions at the start of development can change dramatically in the course of developmentsprocess especially at its end. So while reading try to focus on the slowly changing of developmentsguiding principles, as they force the context of economic systems and behavior to change merelybeyond rational reasoning.With Adam Smith in the late 1700sthe beginning of micro- and of macroeconomicseconomicreasoning starts with a relative closed system of rational guiding principles operating on a small scale.Today these principles are prone to trends of congenital unpredictable behavior on both sides of thesupply/demand and the monetary sector, in an open unprotected system on a global scale. Thus thetrend goes from rationality to irrationality; from launching ingenuous industrial ideas into society likethe invention of the spinning wheel, railroads, automobiles, electricity etc. to an increase of industrialand monetary entropy as never experienced before.Internet could either bring global society to a radical changeof ethic or moral behavior (which will not likely happen) orprovoke a stagnation like the one experienced in the 1930s,thoughthis timewith hardly a tool for a quick restabilizingthe old shell. So in this first decade of the third milleniumdevelopment has indeed reached a crucial potential barrier.The central economic question from the dawn of capitalism in the late 1700s has been over thestability of the relationship between production and consumption. There have been roughly threeanswers to this question, yes, no and maybe. Adam Smith, the father of economic reasoning, claimeda completely harmonious relationship, Karl Marx claimed a completely contradictory relationship, twoother economists, Nicholai Kondratiev and John Maynard Keynes, fell between the two extremes. Theone constant between these views seems to have been a common acceptance of the labor theory of Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 35. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsvalue, although not always explicitly stated, but with different beliefs in the labor theorys implicationsfor the production-consumption ratio and monetary policy. In short: Smith believed that productioncould never greatly exceed consumption, while Marx believed that production would catastrophicallyoutstrip consumption.Nikolai Kondratiev believed in a long termbut cyclicalstability within capitalism over forty to fiftyyear time spans with serious periodic depressions. He felt that there was an internal restabilizing factorwithin capitalism, which reasserted itself during serious depressions, with each major down turnholding within itself the seeds for the next upturn.Keynes knew that capitalism could build more capacity than it could absorb. However he believed thatthese imbalances could be resolved through counter-cyclical deficit spending by the federalgovernment. For Keynes, the weak point of capitalism lay within investment, and serious depressionsmade further private investment difficult, opening the door to direct federal intervention through thecounter-cyclical deficit spending. This type of intervention has become known as fiscal and monetarypolicy.Thus Smith created the labor theory of value to describe how a small village economy worked, butMarx later showed the consequences of how the labor theory would function within a larger capitalistsystem, leading to excess production and a serious economic downturn, followed by a politicalcollapse. Kondratiev believed that periodic downturns were resolvable within capitalism. Other longwave writers suggested that new labor-based innovations brought capitalism out of the seriousdepressions, in effect reestablishing the labor theory for another period, of perhaps twenty years.The 1920s experienced a different type of innovation, more accurately, the reapplication of an earlierinvention electricity, to the assembly lines. Electricity-based changes to the assembly lines allowedtotal manufacturing output to increase, while decreasing thenumber of manufacturing workers. A similar trend occurredon the farms simultaneously. The increase in productivity ofalmost fifty percent over five years during the early andmiddle 1920s allowed profits to rise, driving the stock marketforward during 1928 and 1929. Yet as wages failed to keepup with productivity, overproduction increased and amountain of inventory arose, leading into the GreatDepression.The Great Depression marked the end of conventional labor-based, innovation-driven long waves.Innovation during the 1930s continued the model of the 1920s and was more oriented to decreasingModule BMSD1a Albert Bernard Jansen, eMBAITAC Canada 36. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsthe number of workers by individual companies, in a partly successful attempt to maintain short-termcorporate profitability by decreasing labor costs. The countrywide effect was that production continuedto exceed consumption throughout most of the 1930sThe description of this economic collapse by Keynes was secular stagnation. Keynes attempted touse federal deficit spending to reemploy out-of work labor, thus in effect refloating the labor theory ofvalue until private investment could restart and support the labor theory again. Only worldwide wargave Franklin Roosevelt the political power to wrest control over the 1920s-1930s-investment model from the corporate sector and direct investment in such a fashion as to rebalance production and consumption through the war. This model of debt- driven consumption continued after 1945, ending approximately in the stock market crash of Oct.1987. There Federal Reserve chairman Alan Greenspan began guiding the economy out of the labor theory of value, towards some new amorphous model. As Internet usage began accelerating in the early 1990s, the outline of a post-labor economy began coming into focus. The conclusion of this lesson unit seeks to show you how the information-knowledge revolution over the Internet is finishing off the Roosevelt-Keynesian solution [war] to the1930s stagnation, probably eroding the labor theory of value permanently and thus destabilizing allprevious explanations for capitalist development. Each of the four economists wrote in different partsof the world and in very different economic times, with little intellectual overlap during their respectiveworking periods. Capitalism was an evolving phenomena, which each economist described to the bestof their abilities during their lifetimes. Each economists interpretation was influenced by the channel ofinformation, which was then available, and by the relative development of capitalism itself.In the classical era of the late 1700s, Adam Smith believed that by way of the price system aninvisible hand kept production and consumption together. Human labor provided both the productionas well as monetary value necessary for consuming the output of others in the village. This labortheory of value as described by Smith and later by David Ricardo, simply stated that the number ofhours of human labor involved in the production of an article largely determined its market price.Sixty years later Karl Marx, using this same labor theory of value, claimed that capitalism wasinherently incapable of providing enough total buying power to keep production recycling intoconsumption. He believed that not enough monetary value was being transferred to the working classto maintain the long-term balance between production and consumption. He believed that productionwould ultimately so outstrip consumption that the resulting instability would lead to a revolution by theworking class in the advanced industrial countries.Module BMSD1a Albert Bernard Jansen, eMBAITAC Canada 37. Module BMSD1aBusiness Management Systems Introduction to Development - Its Terms and ConditionsWriting during the 1930s, the economist John Maynard Keynes believed that overinvestment couldlead to excessive productive capacity and that the national inventory (= unsold goods stored) could getahead of total consumption power. The whole economy could almost stop, as was the case during the Great Depression. However, Keynes believed that the solution for such a period of stagnation was for the federal government to run deficits, stimulate consumption and restart production. The seeming contradictions between Smith, Marx and Keynes can be resolved however by reference to another less well known idea, the long wave theory associated with Nicholai Kondratiev. This idea can be compared with an elongated business cycle, but thiswas not Kondratievs intent. Kondratiev was writing in Russia before World War l and around 1915was publishing his theories. These forty to fifty year long waves represented the rise and fall of theoverall capitalist system. He was somewhat unclear as to the exact cause of the long waves andbelieved that starting around 1790 capitalism had had two complete waves of economic growth anddecline, with a third wave rising in the early 1900s. (See this chart ) Joseph Schumpeter believedthat each of these waves had been associated with a substantially new labor-based innovation, whichhad in turn increased employment.Later during the 1930s, Schumpeter revised Kondratievs theory such a way that the capitalistentrepreneur was responsible for particular labor-based innovations, which then precipitated the longwaves. The long wave collapses have occurred the way Karl Marx described. However, so long asnew labor-based innovations have developed, capitalism has rebuilt itself each time from eachcollapse. The concept of a long wave theory or a business cycle theory could not have perceived priorto the existence of more than one such long wave or cycle and the development of sufficiently strongdatabases to supply the evidence for such a theory. The economic data which has existed for much ofthe twentieth century and which formed the basis for the long wave theory of Kondratiev, did not existduring either Smiths or Marxs era. Thus Adam Smith could scarcely have imagined any type ofcyclical theory, based in modern economics. Marx lived and wrote during the long wave down turn ofcotton-based manufacturing and the upturn of the steel-based railroad long wave. Yet, an economicdatabase to explain either long wave did not exist. All Marx had to consider was his theory of capitalistdevelopment, the labor theory of value, the 1840-1850s economic problems and whatever anecdotaleconomic evidence he could find in the newspapers of his era.Adam Smith wrote the first major description of village-level capitalism in 1776, The Wealth of Nations,the same year as the start of the American Revolution. In it, he described how an invisible handseemed to balance out the productive capacity of the village with its consumptive needs. The clearimplication was that production and consumption would at large stay in balance, again with guidance Module BMSD1aAlbert Bernard Jansen, eMBAITAC Canada 38. Module BMSD1a Business Management SystemsIntroduction to Development - Its Terms and Conditionsof the invisible hand. His interpretation of economics was colored by the fact that modern capitalismhad just begun, and the invisible hand did indeed function at least somewhat as he described it.However, the first long wave economic boom was not even on the horizon. When Smith wrote,knowledge was hardly a f