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Engineers Create Money

by Dan Robles on June 30, 2015

EIT GroupHere is a picture of one class of over 100 Mexican educated engineers sitting for the California EIT exams. During the 2 years that we conducted this program, we sent over 250 Mexican educated engineers to these US Board Exams. I must say that the whole process of making this happen was the most profound experience of my career. believe it or not, Engineers create money.

(Note: while professional engineering licensure reflects on a specific regulatory process discussed here, the use of the term engineer may be generalized to include all sciences and technical workers)  

But listening to the talk and banter of NAFTA, they were throwing around these words like money, value, risk, in ways that were simply did not match what I was seeing:

How could so many brilliant engineers be found in such a technologically underdeveloped country? The simple answer lies in the fact that for the developed world, modern finance allows for the capitalization of infrastructure projects. Engineering is, in fact, an extremely important financial instrument.

The Miracle of Capitalism

There is a large time gap between the moment that money flows to a project and the time that the project generates revenue. During this time gap, the profession of engineering serves to maintain the asset on the balance sheet. Engineering provides something called “assurance”. A bank and the insurance industry hedge each other’s risk, but without assurance the project cannot be capitalized. Again, capitalization and securitization FAILS without engineering assurance.

The 3-legged stool

3-legged stoolIn the preceding article, I said that the failure of NAFTA was that the financial service were successful in becoming a service of free trade while the engineering profession largely failed.  It is precisely the failure of the engineering profession to negotiate a meaningful Mutual Recognition Document which led the NAFTA to under perform. In essence, we kicked out one leg of the 3-legged stool.

Without the assurance of a viable professional engineering community, foreign direct investment in Mexico was limited to very high ROI investments, Government guaranteed construction, or partnerships with the Mexican oligarchy – in order to supplant an absent independent engineering sector.

Very large contracts for the sale of otherwise worthless desert land were being written contingent on 500 engineers being available to work in the foreign factory that would be built and guaranteed by the government.  Tacit or implicit, there certainly would be an incentive on all sides to not give engineers “wings” so that they could fly away, let alone enjoy free will.

I ran into trouble when the Federal Government found out that my program was doing precisely that – Mexican Engineers who passed the US Board exams were being scooped up by US Companies outside the jurisdiction of Mexico.  There was deep fear of a brain drain if the World learned that Mexican Engineers were as strong as we were measuring.

At one point a representative of the Mexican Federal Government negotiating NAFTA asked me to leave the country.  When the State of Baja California (governed by the opposition political party) heard about this, I was asked to stay and I lived in a private home under armed guard until the program could be completed.

The Big Flip

There is a great deal more to this story than I can not reveal in a short blog post, but the idea is clear.  Engineering productivity is an extremely important resource for the flow of money. Engineering assets play an important part in contractual agreements for tangible assets such as land and factories (factors of production).  They are central to the design and execution of international trade agreements.  Everyone wants to control engineering because to do so controls productivity.  In essence engineers CREATE money – money does NOT create engineers.

 

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The Big Bang of Modern Globalization

by Dan Robles on June 30, 2015

Tijauna_slums_against_the_fence_largeThe early 1990’s saw the end of the Cold War,  spectacular advances in computers, the Evolution of the Internet, and a new world order fueled by commerce instead of warfare. Upon this landscape,  NAFTA is considered to be the Big Bang of modern Globalization. What is not often considered is how NAFTA, for better or worse, was to influence every free trade agreement that followed.  The Secret of NAFTA was the failure of engineering mobility and therefore the failure of real economic development.

What made NAFTA unique was the provision for the trade of services specifically, financial services and professional engineering services.  The former succeeded while the latter largely failed.  Herein lies the flaw that needs to be corrected.

Many people remember NAFTA as that giant sucking sound of US jobs going South of the Boarder. When I was a young and idealistic engineer I saw NAFTA as Mexico needing everything that US engineers provided. With the free trade of financial services, engineering projects could be capitalized – this had to be huge.

Intangible Assets are the REAL tangible assets

I found myself in Mexico in 1994 taking what was supposed to be a temporary assignment in a small engineering department of a private university right over the California border – I ended up staying 3 years.  This turned out to be the most profound experience of my professional career.

What struck me the hardest was how intelligent, resourceful, and creative the Mexican engineering students were.  By contrast, I saw the general stage of development of Mexico – at the time it was still being described by the Cold War label as a “Third World Country”.   Soon after, I witnessed a tragic devaluation of the Mexican Peso, where the local currency lost about 1/2 of it’s value against the dollar seemingly overnight.  To observe the reaction of the Mexican citizens, was simply indescribable.  I wondered how could money and jobs just disappear when there was so much work to do and so many people who could do it?

I decided that I’d like to test the Mexican engineering students against a known standard.  I developed a program that prepared a select group of 12 students to take the NCEES EIT examination (The Board Exams for US Engineers).  Their success rate was exceptional; 11 out of 12 passed.   Over the next two years we sent a random sample of over 250 Mexican engineers to the US Exams with a success rate comparable to the US engineers pass ratio.  If the engineers were equally intelligent and equally educated as US Engineers, then something else must be happening here.

Cause and Effect

I would later learn that economic development is a hugely complex subject.  However, at the time, I was deeply intrigued by the following idea:

If you throw economic growth (money) at a country are you guaranteed increased productivity?

The answer is NO. 

However, if you throw productivity at a country, are you guaranteed economic growth?  

The answer is YES.

Herein lays a tiny and nearly imperceptible flaw in NAFTA that needs to be corrected.

Technological change MUST precede economic growth. Economic Growth cannot precede technological change. 

We have gotten it backwards

Banks and and associated securities exists for the sole purpose of creating money to fund innovation. The REAL economy lives where the fact of innovation creates the REAL money.  This is the domain of Engineering, therefore, this is the direction that The Ingenesist Project has and will continue to focus on.

 

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The Internet of Productivity

by Dan Robles on June 29, 2015

Internet-of-money(The Internet of Productivity challenges the Internet of Money and the Internet of Things the prevailing objective of the Internet / Crypto Currency ecosystem)

The simple idea that Crypto currencies represent “The Internet of Money” could be an extremely dangerous idea unless properly and fully considered. The problem may lie in the perception of money rather than the perception of the Internet’s ability to articulate money.

There are billions of words written about what money is and what money is not.   One of my guiding principles, however, is as follows: whenever I hear the word “money”, I replace it in my mind with the term “productivity”.  If the idea still makes sense, I’ll read on. If not, I’ll move on. The reality is that money must represent human productivity or else nobody would be willing to work in exchange for it; hence, there is a liquidity crisis.

True willingness is true freedom.

The operative, of course, is the term ‘willingness’. Shackles made slaves willing to work in exchange for sleep. Debt entraps people into the willingness to give up their future to survive the present. Free trade agreements are little more than sequestered productivity. Austerity measures are controls on money where there is no associated shortage of productivity.

Banksters on Steroids

Crypto-currencies are about to accelerate financial transactions to an astonishing rate. The organizations investing most heavily in crypto currencies today are the banks and insurance companies. Blockchain technology will allow them to eliminate their own brokers and the regulatory environment that constrains them while executing trades far faster than actual productivity can keep up. Thousands of hot-new BCT start-ups are looking for their day in the Wall Street sun. Governments are curiously absent, except for inserting their back-door taxation clause.   Meanwhile, start-ups demonstrating true benefits to mankind often fail for lack of money – not a lack of productivity.

The Big Play is on Productivity.

Everyone learned in high school economics that the factors of production for the Capitalist System are Land, Labor, and Capital (money). We learned that the benevolent merchant class allocates these factors in various combinations to produce everything that society needs. Today we learn that the BTC will accelerate the flow of capital and smart contracts will accelerate the allocation of land (title to property).  Decentralized exchanges will trade securities in an unregulated decentralized environment.  This is good because we can eliminate the labor of brokers.

What about labor? What about physical component of labor – the dreams and aspirations of 7 billion people? What about the physical component of land, our little spaceship Earth? Where does Blockchain technology explicitly accelerate human rights, where does blockchain specifically reallocate Earths precious resources for mankind through the miracle of decentralized consensus?  We need to keep our eye on the ball – it’s all about stealing the productivity of others.

The entire game is still contingent upon everyone in the World showing up to work everyday until they are no longer able to do so. It really has little to do with money, it has everything to do with productivity. Money is not where the focus needs to be.

Why Curiosumé?

My fear is that crypto currencies will fail to find decentralized liquidity without accounting for the fact of productivity in the consensus ledger. Curiosumé is the missing link that converts your “productivity” to cryptography.   A person’s past, present, and future productivity can be owned, controlled, and stored by that individual.  We all become capitalists of our own factors of production. It is available only to ourselves for exchange in whatever they feel is the highest allocation of our talents. That is true decentralization and something people are willing to work for.

Curiosumé is an analog to digital converter of knowledge assets that allows people to bypass the barter system and enjoy the same scale, liquidity, and capitalization of productivity as banks, governments, and corporations do with your money and title assets.

Things get really interesting when Curiosumé is combined with Blockchain Technology.   Anonymous until the point of transaction, Curiosumé creates a cryptographic tollbooth on personal data. If anyone wants to access the productivity of another person, they need to pay for it with their own.

The Internet of Money and the Internet of Productivity should be synonymous in the next global accounting system.  Wherever BTC proponents use the word money, insert the word “productivity” then imagine things like: Decentralized Integrated global productivity system, Decentralized and integrated global flow of productivity, decentralized smart keys to unlock decentralized smart contracts, decentralized exchange of productivity, Micro productivity.  But most importantly, consider a liquidity crisis on non-productive activity such as warfare, hatred, corruption, prejudice, endless consumption, etc.

The Complete Picture

Blockchain technology, not unlike the Internet itself, may someday be regarded as one of the greatest achievements of the human intellect. But like many great technological achievements before it, there are both positive and negative outcomes. We have a unique opportunity to alter the course of humanity in profound ways, but it is essential that we address the fundamental flaw of market capitalism: there is no accounting system for intangible assets – that is why they are called intangible.  We need to give people ownership of their own user-generated assets, that is, their productivity.  We need to build Curiosumé.

I will be delivering a very serious presentation at the Nation Society of Professional Engineers Annual Conference on July 2015 in Seattle.  My point will be crystal clear. Money must represent human productivity. Period. The base layer of any economy is a nation’s infrastructure.  As such, any new Cryptocurrency MUST be associated with the engineering domain otherwise it is equal to any other financial derivative whose value is also ultimately dependent on the value of engineered infrastructure.

It’s time to stop the poetry and time start building a civilization we can all be proud of.  It is time to build Curiosumé

Bitcoin Protocol Impact on the Engineering Profession

Abstract: 

The Bitcoin Protocol and Future Currency Impact on the Engineering Profession

In a Wall Street Journal essay, two authors wrote, “The digital currency known as bitcoin is only six years old, and many of its critics are already declaring it dead. But such dire predictions miss a far more important point: Whether bitcoin survives or not, the technology underlying it is here to stay.” This session will cover what digital currency means for the engineering profession.

“Decentralization” is a term being applied to platforms that use the Blockchain Protocol pioneered by Satoshi Nakamoto, the inventor of Bitcoin.  As a cryptographic currency, Bitcoin remains problematic.  However, as an algorithmic protocol, blockchain technology will enable society to cheaply perform common business processes that are now controlled by institutions such as banks, insurance companies, corporations, government, etc.  Today, rapidly emerging platforms are under development to bring “smart contracts” (algorithms based on blockchain technology) into the mainstream.  

An important and essential variant of smart contracts is called an “Adjudicated Smart Contract” that requires an independent 3rd party adjudicator that would “flip the switch” on algorithmic agreements in finance, insurance, and decisions of governance.  There is a staggering opportunity ahead for the engineering profession to position itself for the role of the adjudicator in a wide variety of important and high value transactions.  The caveat is that we too must change the way that we organize ourselves.   

This presentation, Decentralizing the Engineering Profession, begins with the failure of the NAFTA MRD followed by an introduction to blockchain technologies, and ending with specifications on how our profession can jump to the top of the value chain in the era of Social Capitalism – if, and only if, [the engineering profession] can choose to change.  

Date:

Thursday, July 16, 2015
Start Time: 3:15 pm
End Time: 4:15 pm
Number of PDHs: 1
Speaker: Dan Robles, P.E.
REF:

Bitcoin Protocol Impact on the Engineering Profession

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