Five Laws of Decline Every Leader Must Fight
Growth is not the default setting for any group of people you lead. Left alone, teams, companies, and marriages all drift toward decline, and the leaders who don’t understand why get blindsided by it every time. In this episode Dave Wood walks through five specific laws that explain that drift, from why 90 percent of what people produce is mediocre to why an object in motion stays in motion until somebody forces it to change direction, then ties it back to the night in 2009 he woke up homeless in a Dodge Caravan with a cop’s flashlight in his eyes. Here’s the episode.
As leaders, we have to overcome the degenerative tendencies inherent in all human communities, because decline is the natural state of any civilization, while growth is actually a leadership anomaly. A large part of this episode is about the forces of decline that work in the background, eroding civilizations, and how leaders have to creatively solve problems to reverse a current that’s working against us silently the whole time. I’d never thought about decline as a current before, but the metaphor holds up. I remember being a little kid, swimming in cold rivers in Fairbanks, Alaska, trying to see if I could swim upstream against the current, and how impossible it was to fight against it.
The Five Laws of Decline
In the book I recently finished, Resolve: 13 Resolutions for Life, Warren Woodward points out five laws of decline. Law number one is Sturgeon’s Law, which is similar to the Pareto Principle, commonly known as the 80-20 rule, except it divides people into a 90-10: 10 percent of the population fights against the natural decline in their environment, and 90 percent just go along with whichever way the current happens to be flowing. In 2013, the philosopher Daniel Tennant said of Sturgeon’s Law that 90 percent of everything is crap, whether you’re talking physics, chemistry, evolutionary psychology, sociology, medicine, rock music, or country western. I’ve found the same thing true of online education products, marketing processes, and even hotels. Ninety percent of it isn’t worth much.
Law number two is Bastiat’s Law. In an earlier post I talked about the law of the producer, which is that people either seek to produce fruits with their own hands or plunder the labor of others. Bastiat summarizes it this way: since men are naturally inclined to avoid pain, which is labor itself, it follows that they’ll resort to plunder whenever it’s easier than work. Much of history is a record of man’s plundering of his fellow man, and inside any large organization there’s a constant current of people who seek to profit by plundering others rather than producing.
Law number three is Gresham’s Law, an economic law stating that valueless money will drive real currency out of a country or civilization. As Wikipedia puts it, any circulating currency made up of both good and bad money, both required to be accepted at equal value under legal tender law, quickly becomes dominated by the bad money supply, because people hand over the bad coins and keep the good ones for themselves. I’ve talked before about the Federal Reserve and fiat currency, and I’ll save the rest of my thoughts on that for when I do a review of one of my favorite books on the subject, The Creature from Jekyll Island.
Law number four is the law of diminishing returns: after a certain amount of energy investment, you get diminishing returns on the expense of your energy. An easy example is the pendulum concept I first learned while studying a Russian martial art called Systema, and later in greater detail from my Kung Fu teacher, Sifu Fernandez. The pendulum principle works by pushing or pulling an opponent in one direction, and they respond by pushing back with the opposite directional force without even thinking about it, a natural response in the body that has to be trained out of most men. By giving someone a stimulus, you can almost exactly control their micro responses and set them up in a movement that traps, throws, locks, or strikes, but if you push instead of just stimulate the energy, you end up fighting the other person instead of setting the trap. That principle is the foundation of how judo throws work against larger, more aggressive opponents, and it’s also the foundation of my own art, Wing Chun Kung Fu.
Law number five is the law of inertia, described through Newton’s first law of motion: an object at rest stays at rest, and an object in motion stays in motion at the same speed and direction unless it’s acted on by an unbalanced force. It’s easier to maintain a current of energy in one direction than it is to reverse it or create a new one. I can tell you from firsthand experience that the ease of creating movement is directly related to the external energy current you’re working with, whether that’s your body or an organization. Going into an organization and changing its current expectations or habits is way harder than simply creating a whole new one, because of the same pendulum principle: when you fight against someone’s energy, they tend to fight back against yours, and the same thing applies across teams and organizations.
Order From Chaos: What Living Systems Do That Dead Ones Don’t
When I was 14 I started a daily meditation practice I’ve kept up for most of my life. I remember reading a book, I can’t recall the title, that covered a concept that mesmerized me as a kid: the theory of chaos and complexity. In dead systems, inanimate objects and mass, there’s always an increase in chaos, or entropy. Living systems operate the opposite way: they create more order out of the chaos in their environment. Your own central nervous system is designed to organize chaos and create meaning and sense out of what’s around you. An article from the U.S. National Library of Medicine puts it this way: complex systems often exhibit self-organization, which happens when systems spontaneously organize themselves in a more optimal or stable way without any external tuning or control parameter, a feature not found in chaotic systems, often called anti-chaos.
Back in 2005, at an event in an auditorium in Portland, Oregon, I heard a guy named Brad Duncan put it more simply: in your life, you’re either prospering or you’re perishing, there’s no other form of being. Prosperity is thriving, moving on, growing. Perishing is shrinking, dying, going backward. In any area of your life, you’re either growing or you’re dying, there’s nothing in between. I use this to compare a group of people to the central nervous system of the human body. What I learned from meditation is that the human nervous system, which runs our conscious and unconscious minds, has the capacity to spontaneously reorganize and function at a higher level of order when the chaos placed on it from the external environment increases. In other words, you can force yourself, under enough external pressure, to either break down or break out and change. The interesting thing about watching human beings is that a nervous breakdown and a breakthrough are essentially the exact same event, and the internal response depends entirely on the belief system of the person receiving the pressure.
Why Breakthrough Stories Are Always Dramatic
Why are there so many rags to riches stories? Have you ever wondered why breakthrough stories are almost always dramatic? It’s simple. In 2009 I was sleeping in a green 1996 Dodge Caravan. I was homeless. I’d lost everything. I had no money and no way to buy food. I was married, and I couldn’t sleep.
One night a cop woke me up in the middle of the night, shining a flashlight in my eyes while I slept. I was terrified. I woke up in a panic. Something inside me just snapped, and I changed spontaneously. If you ask me when I became successful, it was at that exact moment. The internal pressure on my nervous system, on my own identity, was so great that it forced a spontaneous change, and I created order out of chaos. I went on to do hundreds of millions of dollars in sales, and at that moment I was just starting out. Pressure is not a bad thing. Pressure creates diamonds.
How does this relate to the five laws of decline? For me it’s more personal than academic. I believe the pressures from the external environment are a good thing, because they force evolution into organizations, which essentially operate as a group mind. External pressure forces spontaneous reorganization and adaptation, or death and decline, and which response you show is going to depend on you. You have the power to change, and therefore to change your environment. My question is this: are you ready for that change now?
Full episode transcript
Lightly edited from the original recording — fillers removed, nothing added. Income disclaimer.
Hello everyone, it's Dave Wood, and I'm here now because there are actually powerful forces at work in the universe. I actually want to protect you. You see, as leaders, we must overcome the degenerative tendencies inherent in all human communities, for decline is the natural state of any civilization, while growth is actually a leadership anomaly. And we want to grow, don't we? A majority of today's episode will be focused around the forces of decline that are at work in the background, eroding civilizations and how leaders have to creatively solve problems in order to reverse the current of decline that's working against us silently in the background.
I thought the concept was interesting because I've never thought about decline as a current before, but the metaphor actually works. I remember when I was a little kid, in cold rivers, swimming in Fairbanks, Alaska, and I remember seeing if I could swim against the current upstream and how impossible it was to fight against it. Have you ever tried to swim upstream before? In the book I recently finished, which is Resolve, 13 Resolutions for Life, Warren Woodward points out the five laws of decline. Law number one is Sturgeon's Law.
Sturgeon's Law is similar to the Pareto Principle, which is commonly known as the 80-20 rule, but instead it divides people into a 90-10, that 10% of the population is fighting against the natural decline in their environment and 90% are just saying whatever and they're going with whichever way the current is currently flowing. In 2013, philosopher Daniel Tennant said of Sturgeon's Law, he said this, he said 90% of everything is crap. That's true. Whether you're talking about physics, chemistry, evolutionary, psychology, sociology, medicine, you name it, rock music, country western, 90% of it, it's crap. Well, I've found the same thing to be true with online education products, marketing processes, and even hotels.
90% of it ain't worth crap. Law number two, which is Bastiat's Law. In an earlier blog post, I talked about the law of the producer, which is that people either seek to produce fruits with their own hands or plunder with the labor of others. Bastiat summarizes Bastiat's Law as this, he says, since men are naturally inclined to avoid pain, which is labor itself, it follows that they will resort to plunder whenever it's easier than work. Much of history is a record of man's plundering of his fellow man.
In an organization of large groups of people, it's a constant current of nature that runs through percentages of people that seek to profit through plundering others rather than seeking to produce. Law number three, which is Gresham's Law. This is an economic law that basically states that valueless money will drive real currency out of a country or civilization. In a Wikipedia article on Gresham's Law, it states this. It states, Gresham's Law states that any circulating currency consists of both good and also bad money.
Both forms required to be acceptable at equal value under legal tender law quickly becomes dominated by the bad money supply. For a formal model of this, see Bernholtz and Greshbeck in 1992 work that they did that's referenced in the article. This is because people spending money will hand over the bad coins rather than the good ones, keeping the good ones for themselves. Legal tender laws act as a form of price control. In such a case, the artificially overvalued money is preferred by people in exchange because people prefer to save rather than exchange the artificially demoted currency, which is actually of higher value.
The other day, I made a video that briefly talked about the Federal Reserve banking system and fiat currency. But soon I'm actually going to do a book review of one of my favorite books on the subject, which is called The Creature from Jekyll Island that I've got downstairs and I've read several times. So I'll save my thoughts on currency for then. Law number four, the law of diminishing returns. The essence of this law is that after a certain amount of energy investment, there's a diminishing returns on the expense of your energy.
An easy example would be the pendulum concept that I originally had explained while studying a Russian martial art called Systema and later taught to me in great detail by my Kung Fu teacher, Sifu Fernandez. The pendulum principle operates by either pushing or pulling an opponent in one direction or the other, and they respond by actually pushing back with the opposite directional force without even thinking about it. It's actually a natural response in the body that has to be trained out by most men. So by giving someone a stimulus, you can almost exactly control their micro responses to you in response and set people up in a movement that actually traps, throws, locks, and also the ability to strike. However, if I push instead of just stimulate the energy, that won't work because what I'll do is I wind up being the one who's fighting the other person.
Rather than just constructing a stimulus trap, that principle is essentially the whole foundation of how judo throws work against larger, more aggressive opponents. And it's also the foundation of how my art, which is called Wing Chun Kung Fu, works as well. Law number five, which is the law of inertia. This law is described utilizing the first law of motion taking from Newtonian physics. And it states this.
It says an object that's at rest stays at rest. And an object in motion, it stays in motion. At the same speed and the same direction unless it's acted upon by an unbalanced force. Basically, it's easier to maintain a current of energy in one direction than it is to reverse or create a new current of energy. I can tell you from firsthand experience that the ease of creating movement of energy is directly related to the external energy current that you're working with when you're working with your body.
When you're working to create it. Going into an organization and changing the structure of their current expectations or habits is way more difficult, for example, than simply creating a whole new one because of the pendulum principle that's described earlier in this video. When you fight against someone's energy, they tend to fight back against yours. And the same principle applies across organizations and also teams of people. An increase in entropy versus living systems, creating order out of chaos.
When I was 14 years old, I started a daily meditation program that I've continued for a majority of my life. I remember reading a book and I can't remember the name, but it went over a concept that mesmerized me as a little kid. And that's the theory of chaos and complexity. I can best describe it like this. In dead systems, in like inanimate objects, mass, for example, there's always an increase in chaos or entropy.
Living systems, though, they actually operate in the opposite way. They actually create more order from the chaos in their environment. So, for example, your central nervous system is actually designed to organize chaos and create meaning and sense from the chaos around you. An article from the U.S. National Library of Medicine states this.
It says complex systems often exhibit self-organization, which actually happens when systems spontaneously organize themselves generally in an optimal or more stable way, without any sort of external tuning or control parameter. This feature is not found in chaotic systems and is often called anti-chaos. Back in 2005, I was in an event in an auditorium in Portland, Oregon, and I heard a guy named Brad Duncan say this. He said it more simply. He said, in your life, you're either prospering or you're perishing.
There's no other form of being. Prosperity is thriving, moving on, growing, and perishing is shrinking, dying, going backwards. In any area of your life, you're either growing or you're dying. There's nothing in between. So I use this to liken a group of people to the central nervous system of human body.
What I learned from meditation is that the human nervous system that operates our conscious and unconscious minds has an actual capacity to spontaneously reorganize to function at a higher level of order by increasing the chaos placed on it from the external environment from the outside. In other words, you can force a space on the outside, and you can force it avanz understand일 arrive claustrophobic. force yourself to either break down or to break out and change. The interesting thing about observing human beings is that a nervous breakdown and a breakthrough are actually and essentially the exact same thing, but the internal response depends on the internal belief system of the person who's actually receiving the external pressure. Why are there so many rags to riches stories?
Have you ever wondered why breakthrough stories are almost so always dramatic? Well, it's really simple. In 2009, I was sleeping in a green 1996 Dodge Caravan. I was homeless. I had lost everything and I had nothing.
I had no money. I had no way to buy food. I was married and I couldn't sleep. One night, I remember a cop waking me up in the middle of the night and shining a light on my eyes when I was sleeping, like this with a flashlight. I was terrified.
I woke up like in a panic. Something inside of me just snapped and I changed spontaneously. If you ask me when I became successful, it was at that moment. The... internal pressure into my nervous system, operating my personal identity was so great that it forced a spontaneous change and I created order out of chaos.
I went on to do hundreds of millions of dollars in sales and I'm just starting out. Pressure is not a bad thing. Pressure creates diamonds. How does this relate to the five laws of decline? Well, it's more of a personal concept for me.
I believe that the pressures from the external environment are a good thing. They force evolution into organizations, which essentially operates as a group mind. External pressure forces spontaneous reorganization and adaptation or death and decline. Which response you exhibit is going to depend on actually you. You have the power to change and therefore change your environment.
My question is this, are you ready for that change now? Leave me your thoughts go ahead in the comments and tell me what you learned in today's episode. I know these concepts were a little bit deep. What I want to encourage you to do is to change just a little bit every day and if you listen to this again and again, you are going to get it and these concepts and principles are going to transform you. Go ahead, leave your thoughtful comment below.
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