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  • Posted January 20th, 2019

    How the viable system model (VSM) can help build a new economy: Trevor Hilder of Web of Wealth

    How the viable system model (VSM) can help build a new economy: Trevor Hilder of Web of Wealth

    Today I’m talking with Trevor Hilder of WebofWealth.org, who is a specialist in Stafford Beer’s viable system model (VSM). What I’m really interested in is how we can use the VSM to build a non-extractive, co-operative federation – a federation that’s comprised of a large number of small units, not giant corporations, and not giant co-operatives either. I’m interested in how far we can scale this federation. In March, we’re hosting a meeting of key people working in the new economy, and the aim is to work out how we federate and grow the non-extractive economy in the UK.

    We currently have a state-corporate alliance that skews the market heavily in favour of multinational corporations, plus the state gives monopoly control of the money supply to private banks. Very difficult to federate and grow a non-extractive economy when so much advantage is given to extractive institutions – i.e. the corporate sector. Then wealth concentrates more, which is used to influence, lobby, give money to and employ politicians, who then skew the market more towards the extractive economy – and so on, in a downward spiral that destroys democracy and nature.

    I’ve heard from several sources that a way to federate, and maybe the only way, is via the viable system model. I’m very interested to find out if this is the case – especially in conjunction with mutual credit. I also know that some key people in the new economy – either in specific sectors, or in networking organisations, don’t know very much, if anything, about VSM. Plus we’re blogging this interview, and putting it on YouTube for a general audience. So I’m also keen to provide information about VSM and mutual credit in accessible ways that don’t involve arcane language.

    I’ll put links to more detailed information in the description below the video (and at the bottom of this article), but can you give us an overview of VSM – and how it might help federate the new economy?

    The basic principle – well, the secret’s in the name – it’s about viability. If we think of any living organism, or organisation that is made up of living organisms, they always have purposes – in other words, what makes a living organism different from an inanimate object is that they have internal purpose. The VSM says that a fundamental, foundational purpose has to be there, and that is to remain viable in the environment you find yourself in. So you might want to do lots of ambitious things – inventions, achievements, discoveries etc. But if you’re not alive, you’re not going to get too far. So can we work out whether there’s a set of laws that determine whether any organism or organisation, whether it’s your cat or this country, will remain viable in their environment? The evidence is that the answer is yes.

    The VSM says that if that’s the case, then what are those laws, because if we understand them better, then we won’t make blunders and undermine our own viability.

    Are you talking about individual organisations, or a federation of organisations?

    What’s interesting about the model is that it encapsulates the idea of recursion. You can think of recursion as Russian dolls nested inside each other. One of the main VSM principles is that viability is relative to a particular environment – but if you go up a level of recursion, you’re looking at another viable system, which itself has to follow the same principles. And above that, there will be another one. So if we look at the history of the cosmos, from day one, we find systems emerging into existence, and becoming more and more complex over time. But they all have to follow these principles of viability to sustain themselves in their environment. So the same principles work, whether we’re talking about me being viable, sitting in this room, or the people I love being viable as a family, or the business I run, or a giant company, or England as a part of the UK.

    The point about the laws of viability is that they apply at all these different levels. So whether you’re looking at an organisation or a federation, the same principles apply.

    For this federation, would there be a centre, or would it be a centre-less network?

    Let’s go back to fundamental principles. If you think about modern physics, that really got going with Isaac Newton’s Principia – he uncovered a set of principles – 3 laws of dynamics and the inverse square law of gravitation, that apply to all physical systems. But people had been throwing things around, or even playing cricket, for a long time before Newton uncovered those laws, but once we understood them, we could do much more powerful things like land a man on the moon. So the VSM is based on a very simple principle called Ashby’s Law of Requisite Variety. It’s the equivalent of Newton’s laws of dynamics in physics, and it says that the environment I find myself in has lots of tricks up its sleeve – lots of different states it can get into – which is what the variety principle is about. If I want to be viable, I have to be able to respond to any trick that the environment throws at me. If it gives me something I can’t cope with, I lose control of the situation.

    So if an asteroid is headed for the earth, you have to know about it?

    You have to know about it, and you have to know what to do about it. Variety is just the number of states something can get itself into, and Ashby’s Law of Requisite Variety says any state that the environment can pull off – if I want to stay viable in it, I have to have a trick up my sleeve to match that. If I successfully match the variety that’s coming at me, I can be viable. But if I fail to do that, I won’t be viable any more, and I’ll collapse. So it’s a very simple law, and the VSM is simply the unfolding of that principle to identify what functions are necessary for any entity to be viable in its environment, whatever that environment is.

    I’m going to try to relate all this to a federation of non-extractive organisations. In practical terms, would you have to organise the businesses in the federation along VSM lines before you can federate them? Where’s the starting point?

    The starting point is a bit more subtle than that. It’s like asking whether we all have to obey the laws of gravity. The laws of gravity are there, operating all the time, but if you know about them, you can do things like figure out how to build a spaceship to get to the moon. In other words, the viability rules are operating all the time, whether we’re conscious of it or not. But if we are conscious of it, we can do better than if we’re not. There are only 5 principles, actually (NB: called systems 1-5). I can go through those, and we can start applying them to federations of co-ops.

    I read Jon Walker’s guide. I was told by several people that it was complicated, and we need a more accessible version. I’m not a technical person, but I found it quite accessible – at least the basic principles.

    I run a crash course in VSM that lasts no longer than a day. My take on it is that once you get the principles, you don’t need to read a load of books and theory – you can just apply it and use it as a diagnostic tool to understand how to do better.

    Here’s a link to the 5 principles / systems. They’re pretty simple to understand. But I want to get to the practicalities of implementing them.

    The practicalities are mostly about looking at what you’ve got at the moment, and identifying these functions that are operating, so that you can consciously take them into account and make them operate better.

    Again, are you talking about within organisations or between organisations, in a federation?

    The way you would approach it, because it’s about nested things – you’d look at each of the organisations you want to federate, and if they are alive and running, then they must be viable systems already, so your federation should be one level of recursion up from them, and from the point of view of the federation, those organisations are what we call System 1, or ‘operations’. In other words, they are delivering services, otherwise they wouldn’t exist. From the perspective of the federation, each organisation is one operational entity.

    And within the organisations, they will have their own operations, and so on?

    Yes, at the next recursive level down, they’ll have all the same functions operating, in order for them to be a viable system. I’ve got all these functions operating as an individual human being, enabling me to be viable, to be able to be here having this conversation with you.

    So we can accept that the organisations, to actually be in the federation, would already be viable – so we can start at the federating level?

    Yes. So if we look at this level, the next function you need to examine the relationship between the system 1 operational units. In order to make our federation work properly, we have to have the function that Stafford Beer called System 2. This is a co-ordination function, that makes sure the organisations don’t get in each other’s way and trip each other up. This function makes sure that, for example, two organisations in the federation are not fighting each other for the same business. That might be because they’re right next door to each other in the same town. You’d have to have some sort of co-ordination agreement, so that they’re not in conflict with each other, and undermining each other. So we need a co-ordination function. Let’s take an example we all know about – school. Each teacher is a System 1 operating unit. You have to make sure that 2 teachers don’t try to teach different classes in the same classroom at the same time. The co-ordination mechanism that solves that problem is a timetable. The timetable is a function that makes sure that kids and teachers know which room to turn up in at which time.

    So the co-ordination function – if you can get the individual operations to agree amongst themselves, that’s great, to the extent that they can do that. But when necessary, you have to kick it upstairs to the next level – the co-ordination function, which in our case is the federation. The federation is overseeing the co-ordination, but it’s not imposing anything on anybody. Rather, it’s a service to the organisations that want to join the federation, to make sure that they’re not in conflict with each other.

    There’s then another function that Stafford Beer called System 3. It’s day-to-day management – cohesion, optimisation. Its job is to ensure that the federation is providing resources to reward members of the federation for being in it. This is called the ‘resource bargain’. Nobody is going to federate if there’s nothing in it for them. In exchange for the federation offering some sort of resource, we expect accountability from the operations. The members need to show that they’ve done the things required for them to receive the rewards.

    Also, the federation is going to be some kind of legally-constituted entity, and it will have legal obligations that come from its environment.

    Will this entity have staff?

    I’m not going to assume that. The thing about this model that is so powerful is that these functions must exist, but it doesn’t stipulate whether they are supplied by somebody who is a full-time employee, or who does it out of the kindness of their heart, or who works on it just one day a week. The functions have to be there, but there are no assumptions about how they’re deivered.

    OK, so they could be delivered by the member organisations themselves – just as long as they’re there.

    Yes. They have to be there.

    And what about co-operative organisations that already exist, but they’re already giant, almost command-and-control organisations? Could they be split up, to be incorporated into a federation?

    Can I just finish explaining the 5 systems first, and when we’ve got those in our heads, we can go back to reflect on particular organisations that exist now?


    So we’ve got this idea that there are operations that deliver something to some sort of client base, which we call System 1; a co-ordination / conflict resolution function between them that we call System 2; we have a day-to-day cohesion function that gives them synergy that wasn’t there before, which we call System 3. We’ve talked about the fact that it needs to have a resource bargain. It also has to oversee regulatory compliance. In other words, if you’re going to be part of this federation, it has an obligation to make sure you’re not breaking the laws that are imposed from the outside world, such as accounting, health & safety etc. If you’ve got those functions properly in place, then you’ve got an organisation that can run day to day. But there’s another function we need – System 4 – intelligence. That function has to say ‘here we are in an environment, and things are running properly, but the outside environment is evolving all the time. It’s not static.

    So Systems 2 & 3 are looking inwards, and System 4 is looking outwards?

    Correct. System 3 is overseeing Systems 1 and 2 on a day-to-day basis. But System 4 is saying ‘this is fine now, but what’s going on in the big wide world, and what’s the world going to look like in 10, 20 or 30 years time?’ We have to look at that, and make sure that we are all going to evolve to remain viable as the environment changes. This is the intelligence function, looking outside and forward in time to look for new laws, new business opportunities or business opportunities that are dying. For example, how are electric vehicles going to change the way we transport stuff around? This federation will have to have this intelligence function operating, for long-term viability as the environment changes.

    The final function is System 5. This is about our ethos. Why are we here? What are our policies? What is this federation for? What does it mean to be in it, as opposed to not being in the federation. Someone has to make those decisions about why it exists at all. What’s the overarching purpose? What’s its identity, and how do we stop that identity being distorted out of shape?

    So those are the 5 functions that have to be in any system for it to remain viable.

    But those 5 systems could equally be applied to a multinational corporation across all its operations? Could it give a competitive advantage to co-ops / the non-extractive sector?

    Most of my career has been IT consulting for all sorts of private sector organisations, from supermarkets to car fleets, plus sixth-form colleges – all sorts of different things. So this is about the ethos – why are we interested in co-operation? We’ve talked about this non-extractive ethos. In my experience, the kinds of organisation that the co-operative movement doesn’t like very much – the reason they’re not liked is, if you look at System 3 – the resource bargain, regulatory compliance and, day-to-day management and so on, it can easily collapse into a power hierarchy that is wielding power arbitrarily over people. If the other systems aren’t functioning properly, it tends to collapse into a command-and-control system that bosses people around by exerting power over them, and using the resource bargain as a mechanism for compliance, that becomes illegitimate and unjust compliance. Effectively, the System 3 function becomes a bullying entity that overwhelms everything else. That’s what we’re trying to get away from. But as you pointed out yourself, all organisations can fall victim to that, so that giant co-ops become not much different to any otther organisation.

    There was another reason I said that. If you look at what happened to the Co-op Bank – if that had been a federation of small, local financial institutions, then if one part of it had fallen over, it could have been patched up, or the federation could have survived without it. But the whole bank stumbled and got swallowed by a hedge fund, and has now gone, and there’s no longer a Co-op bank in the country.

    Yes, we all know the story of one of their non-executive directors who was a minister, but who turned out to be on crack cocaine, and came to be known as the ‘crystal methodist’. So in terms of dysfunction, it got about as ghastly as possible. RBS is another example. So all organisations can collapse into that trap – forgetting what the higher purpose is, and allowing dominating System 3 people to take over, at the expense of System 4 and System 5. Unless you’re very vigilant, any organisation can go that way. So it’s not true that co-ops are not susceptible to that. If System 3 gets too overwhelming, it can undermine the viability of everything else. The same thing happens with the Tesco supply chain. It’s seductive for a supplier to supply to a supermarket chain, but if you’re not careful, you lose your identity and become swallowed up and dominated by the entity that’s supposed to be running the supply chain.

    So if a co-operative federation can get this right, can VSM give it a competitive advantage over the corporate sector, if it can also be used by the corporate sector?

    The corporate sector has collapsed into believing that their customer is their shareholders. So the fundamental reason they’ve become dysfunctional, and destroyed their own identities is that they believe that the only purpose they exist for is to deliver value to their shareholders, at the expense of all other stakeholders. They’ve forgotten what their real purpose is, so they’ve allowed it to collapse down into an obsession with keeping the share price up. Their first priority should be to serve the needs of their customers.

    Are you saying that they’re unlikely to change in that respect, and therefore that’s our competitive advantage?

    If they can’t escape from that trap, they will collapse, along with the financial system. Using the same diagnosis now, at a different level of recursion – i.e. the financial system, you can diagnose why the financial system is unstable. It’s pretty clear to anyone using these diagnostics, that the causes of the crash in 2007-8 have not been understood, so that the financial system itself is not a viable system. In other words, it’s going to crash again, until these principles begin to be understood and applied, to make it more than just an extractive thing for hoovering up money, and passing it to an elite that understands how to manipulate the system to their advantage.

    So what I’m suggesting is that we build / federate a new system rather than patching up the one we’ve got.

    Exactly. And to a large extent, from my perspective, because money is such an important driver for all of us – that resource bargain is being used to put us in such a state of insecurity, where we feel as though we don’t have any other options, and we’re trapped on this treadmill, trying to make sure that we don’t get fired, and we get paid at the end of the month. Part of the solution to that is to reinvent money. It’s important to take a look at the nature of money, and to think about designing forms of money that serve us better – much more in the space of complementary currencies etc.

    Which leads me to the next question – do you think that VSM is a good match with mutual credit?

    Absolutely. It’s a much more viable way of thinking about the money system than the one we’ve got at the moment.

    I’m going to be talking to Thomas Greco next week, and interviewing him about mutual credit. Then the week after that I’m interviewing Dil Green about how to combine the two.

    I have a lot of connections with a group of people called Metacurrency, who have done super-interesting work in that space; and also the Holo project. I’m very involved with them.

    So here’s a question. Is VSM too complicated to be useful? Is that why it hasn’t taken off? If it’s such a good idea, why hasn’t it taken off? I know I said before that it’s a simple concept – and it is – but it seems complicated in its application.

    Well, I’ve been applying VSM principles to all the work I do, since I tracked down Stafford Beer and learnt it from him in 1995. I started to apply it to major ICT projects and things like that in 1996, and every time I’ve applied it, it’s produced spectacular results. The biggest difficulty I’ve found is selling the services I provide, because what I do on a routine basis looks impossible, and people don’t believe some of the things I’ve done. So ironically, one of the difficulties with using it, is that you get such good results, everyone else thinks it must have been a fluke. Paradoxically, the very power of it, and also the simplicity of it, makes it difficult to sell, because it looks…..

    . a bit like magic beans?

    A bit like magic, yes. People shrug their shoulders and say ‘that’s impossible’. Back in 1996 I was working on a project to rewrite all the IT systems for the Spar supermarket chain, which is itself a bit like a co-operative. I was asked to take 24 IT systems that didn’t even know about each other, and turn them into an integrated IT system for the future of the organisation. I did that in 3 years, from scratch, with only 5 developers. When I presented the results, it was benchmarked by someone from Warwick business school to prove that it was true. When I took it to conferences and presented it to people like Marks & Spencer and Tesco etc., their response was that I couldn’t possibly do that in their organisation – it’s impossible. So they just wouldn’t listen.

    Good – we don’t want them to succeed.

    It’s actually not difficult – it’s very, very simple, but it requires a paradigm shift into thinking this way. It’s a bit like the move from the Ptolemaic version of the movements of the planets to Isaac Newton’s Principia – a bit of maths and suddenly you can put people on the moon. But moving from one way of thinking to the other is a subtle process that isn’t very easy, and that’s why I’ve hit on this model of offering a one-day crash course, followed up by advice to help people get to grips with it. You can get your feet on the starting line in a day, and I’ll support you after that so that you can run with it. It’s taken me a long time to understand how to overcome that barrier. People think it’s too complicated – they study it, they write academic papers about it, they have conferences about it, but you don’t really need all that.

    To get to the starting point in one day sounds like a very good thing.

    Well I’m prepared to help people do that. I’m about to go to India to do it for some organisations there.

    I’ll interview you when you get back if you like, to see how it went.

    Yes, absolutely.

    Could a co-operative federation like Mondragon in the Basque country happen in the UK?

    If you reflect on where these things have been successful, they are in places that have a very strong sense of their own identity. I think that’s fundamental. Without a strong sense of that System 5 ethos, that identity, there’s no motivation to do it.

    Are you saying that with Mondragon, it was a sort of anti-Franco Basque nationalism?

    Exactly. If you look at Berkshares in Berkshire, Illinois – at least I think it’s Illinois (NB: it’s not – it’s in Massachusetts), you’ve got a very out-of-the-way rural community with a very strong sense of identity, thinking ‘what are we going to do to maintain our viability?’, so they invented themselves a new form of money. It’s also probably why there are some very important things going on in Preston, in Lancashire. The Preston Model is very interesting, because they realised that we’re being hung out to dry, and if we don’t do something ourselves, with our own resources, we’re not going to get anywhere. I think that starting point is super-important. it has to come from a very strong sense of identity.

    I think our strong principle could be system change.

    Yes, it doesn’t have to be geographical. So for example the Metacurrency Project, with Arthur Brock and Eric Harris-Braun – those guys have been going for well over a decade, because there’s a very strong ethos that underpins what they’re doing. You have to think hard about what is that – because if you get that right, and you understand the principles of viability, everything else will fall into place. Without that, you’ll fall into the conventional, day-to-day, keep-on-keeping-on mindset, which means you won’t be able to do it.

    So Stafford Beer used this model for the whole of Chile, didn’t he? Until Pinochet and the CIA put a stop to it.

    Yes. That’s not exactly what I’d call a success.

    It wasn’t his fault though, was it?

    I have great respect for Stafford – he was a lovely guy, but I think you have to take responsibility for the viability of what you’re doing. And unfortunately he got trapped in the middle of the Cold War, and to be honest, I think he was a bit politically naive. I’m not blaming him for that. I watched Henry Kissinger on TV, talking about what happened in Chile. It was fascinating to hear what he thought was going on. If you think about Stafford – he’s the guy who uncovered these laws. He did a fantastic job, but he’s a bit like a miner who finds a potentially beautiful jewel in a mine. You don’t also expect him to do the faceting and polishing etc. That’s asking too much. As the next generation, we have the obligation to do the work that he couldn’t do because of the circumstances he found himself in.

    Do you think the CIA were against VSM, or just against Allende?

    They perceived Allende to be a stooge of the Soviet Union in their back yard, and they were going to kill that. It’s not that it’s true – it’s just what they saw. That’s why Kissinger denied that they had anything to do with the actual coup, but they were very pleased when it happened.

    It did look though, that in different circumstances, he could have used VSM to reorganise the economy of an entire country – quite a big one?

    And you’ve got to remember, he was trying to do that with one IBM mainframe in a country that’s 3000 miles from tip to tip, using nothing but telex, in 1971. That’s insanely ambitious. It was astonishing that he achieved as much as he did.

    We’ve got the tech to do it now.

    We certainly have. We’re in a far better position. Just going back to the point about co-ops and identity, the other thing to bear in mind is that our position is much better now, because the idea that neoliberal markets are going to look after us all, and we’ll all live happily ever after – that all blew up in 2008. It’s going to blow up again, which means we have a strong incentive to find another way to rescue ourselves from the mess that’s going to unfold. Part of the sense of identity comes from the necessity to survive in difficult circumstances. Our prospects are much better than they used to be, because the current system isn’t viable, and it’s destroying itself.

    So for a co-operative federation, is this right – individual co-ops, or sole traders, or co-operative networks of sole traders – will have to give up a little bit of their autonomy to the entire system, plus they’ll have to divert some resources into the metasystem, but the metasystem will give back more than it takes?

    If I think about me, my wife and my kids as a viable system. I’m edging towards retirement now, but when you’re bringing up kids, your focus is on paying the mortgage and keeping a roof over your head. So why did I go to work each day? I entered into a resource bargain with the people employing me – I’d give my time, attention, skills, and they’d pay me money. That’s how they got me to contribute to their higher purpose – by offering me enough of an incentive to make it worth my while to put that time in instead of spending it with the people I love. In the same way, if you want to create a federation of co-ops, they need to appreciate that there has to be a value proposition that federation offers to them, but there’s going to have to be some sort of resource bargain where they’re going to have to make their contribution in some form towards the viability of the federation, which means they have to offer something to it in exchange for the services it’s offering to them. It’s about getting the equation right.

    Yes. Jon Walker said that the important questions are 1. what are the expected advantages of the federation? 2. how will the requirements of the federation interfere with the member co-operatives? and 3. how will the money be raised to fund federation activities? And that’s exactly what potential members are going to want to know.

    Yes, exactly.

    So we have to spell out the benefits of federation very clearly. But I think lots of people these days say that they want system change, and they can’t see it coming via the ballot box, or by violent revolution or by divine intervention. So is VSM ‘it’ – especially in combination with mutual credit? Is that the answer?

    Put it this way. Trying to defy Ashby’s Law of Requisite Variety and the viable system model is like deciding that you’re free of the laws of gravity. The point about viability is that laws are operating, but if you know what they are, you can take advantage of them instead of being a victim of them.

    So what might first steps be? What tasks might attendees at the March meeting leave with, and what might anyone else interested in building a new economy do? What needs to happen and who needs to do it?

    We need to be working on that when we’re in the room. I’m only too happy, as long as my expenses are covered, to do this one-day course, for anyone who feels that they’d benefit from it, to give them a kick-start into this world – rapidly. We’re not talking about a course that takes weeks or months. We can get the process kick-started, and then we can support anything that follows through. People like Jon Walker – he’s as expert in this as me, and he knows the co-op movement better than me. I do think that we have to pay a lot of attention to the fact that we don’t have the requisite money – i.e. our forms of money don’t have the requisite variety for the job. So part of this business is to figure out how to create forms of money that can better serve us, to get us out of the trap of thinking that we have to run around begging for ordinary money (i.e. official currency) before we can get anything going. We’re beyond that now.

    Yes. And you know that we’re building a UK Mutual Credit Network.

    I do, and I’ve registered my expression of interest. I want to be part of that.

    Great. So we want to tie together the VSM model and the mutual credit network, which will mean giving ourselves credit, giving each other credit, rather than relying on banks’ debt money.


    I read something about Mondragon, which I thought was really interesting. If you think about it as a bus full of people, everybody on that bus has agreed on where the bus is going. If not, they wouldn’t be on the bus. So everybody on the bus has to agree. But then they give the authority to drive the bus to the driver. They don’t then look over the driver’s shoulder and say when to brake, overtake, turn right or left etc. They just leave it to the driver to take them to the destination.

    Yes, makes perfect sense.

    Here’s a question about Stafford Beer. Was he interested in the non-extractive economy, or was he just interested in cybernetics and increasing efficiency regardless of who for?

    He was a very interesting character, and I have been asked to give my personal reflections on what it was like to know him. He was extremely concerned about the issues you’re talking about. Jon Walker knew him at least as well as I did, and probably better. And Jon will confirm to you the commitment that Stafford had. For example, he was working with someone (whose name I’ve forgotten) who created the idea of world citizenship, and he also wanted scientists and engineers to sign the equivalent of a Hippocratic oath, to say that they would not use their skills in any way that was damaging to human life. So he was very concerned with these issues. It doesn’t mean that he knew what to do about them very effectively. The world has changed a lot since the 1970s, when we were trapped in a Cold War, with the threat of nuclear annihilation hanging over our heads. That hasn’t gone away entirely, but it doesn’t feel as horrible as it did.

    Although there are twice as many countries with nuclear weapons as when the Nuclear Non-proliferation Treaty was signed. That’s quite a worry.

    It is a worry. But it doesn’t feel as terrible somehow. I remember as a kid, during the Cuban Missile Crisis, going to bed and wondering whether the 4-minute warning would go off in the night, and whether we’d all be dead by the morning. That wasn’t nice. We don’t tend to have that thought hanging over us nowadays. Kissinger and Nixon were paranoid, and when people are paranoid, they do nasty things. Getting people out of their paranoia trap is an important part of the work of freeing people up to do more productive things.

    I’ll certainly promote your one-day courses, and maybe that’s a way for one representative of each organisation to go on a day course and get to the starting line with VSM. We can certainly talk more about that on March 9th. I also realise that we’re coming up to an hour, and we haven’t mentioned your Moral Modalities Framework (MMF). Do you just want to finish off for 5 minutes with that?

    Very briefly, I developed MMF, because it provides an explanatory framework for why people have had so much trouble getting the VSM to be used. In the one-day course I go through a crash course in the VSM as a kind of physics of this thing for 2 hours, and in the last 2 hours it’s about the MMF, which is like a 5-dimensional recursive moral philosophy built on the VSM. A lot of people find it more accessible, more comprehensible, and it aligns with what we know about social psychology, behavioural economics etc. The things that explain why we comply with things we shouldn’t be complying with. What I tried to do is derive this philosophy, which is really a set of tools that I think people find more helpful as a different way of thinking about the VSM, in a manner that is more connected with ordinary experience. So they’re intimately involved with each other. I hope it can be used to allow people to implement VSM in an easier way than has been possible.

    You did send me some notes about MMF, but I have to admit that the VSM notes were easier to follow for me.

    That’s because I haven’t written proper presenter notes for that presentation. I use that presentation on the one-day course, and at the moment I’m writing a book based on the VSM and MMF, using them as a diagnostic for everything we know about past civilisations, so I’m writing a history of civilisation through that lens, to see whether it illuminates why civilisations fall, and how we can avoid doing that again.

    That’s a nice little project as you’re coming up to retirement.

    Yes, its a little hobby I’ve got.

    So I’ll transcribe this interview, blog it, embed the video, and send it out to the attendees of the meeting, who can comment and ask you questions in the comments. Are you happy to answer specific queries?


    Then we can hit the ground running on March 9th. I’ll also interview Tom Greco and Dil Green about mutual credit and combining mutual credit and VSM.

    Dil’s actually done my one-day course.

    I think that’s it then Trevor. I’ll give you a shout when you’re back from India and we can maybe do it again?

    Yeah, cool.

    Here’s a link to Jon Walker’s guide to VSM. Here’s a review (written by Pat Conaty) of a book on VSM by Jon Walker and his partner Angela Espinosa.


    1. The VSM says that a fundamental, foundational purpose has to be there, and that is to remain viable in the environment you find yourself in.
    2. The model encapsulates the idea of recursion. You can think of recursion as Russian dolls nested inside each other.
    3. The viability rules are operating all the time, whether we’re conscious of it or not. But if we are conscious of it, we can do better than if we’re not.
    4. It’s pretty clear to anyone using these diagnostics, that the causes of the crash in 2007-8 have not been understood, so that the financial system itself is not a viable system. In other words, it’s going to crash again.
    5. VSM is a good match with mutual credit – a much more viable way of thinking about the money system than the one we’ve got at the moment.

    The views expressed in our blog are those of the author and not necessarily lowimpact.org's

    1 Comment

    • 1Dil Green January 20th, 2019

      “So everybody on the bus has to agree. But then they give the authority to drive the bus to the driver. They don’t then look over the driver’s shoulder and say when to brake, overtake, turn right or left etc. They just leave it to the driver to take them to the destination.”

      On the other hand, if the driver decides to go the wrong way, or starts driving dangerously, the passengers need to know that they can do something about it.

      One reason people may like cars more than public transport is that their car always does exactly what they want. And one reason people are frightened of flying is that there is little chance of influencing the pilot if you aren’t happy with the flight.

      So both the reality and our perception of the degree of flexibility and control over a collective vehicle make a big difference.

      Where these travel metaphors break down, of course, is in the character of ‘purpose’. Journeys have very simple purpose – a named destination. Everyone knows where they want to be, and if they arrive in a timely manner, still healthy, they are happy.

      With something like the Mutual Credit Network, there isn’t a defined ‘destination’. The clearest thing we can have is some sort of ‘experience descriptor’, such as “through participation your business will gain the capacity to grow as you wish it to”. Unlike ‘Cleethorpes’ or ‘Piccadilly Circus’, such statements mean different things to everyone (and to the same people at different times). This has implications for the degree of flexibility and control which participants will need to feel and experience.

      My feeling is that this will need to be provided by a greater access to ‘variety’ (in the sense discussed in the interview) in Systems 3 , 4 and 5 than might be expected. In other words, that these may need to be bodies with some dynamic democratic character, not simply ‘bus drivers’.

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