Sunday, October 28, 2012

Books are a lot of.....The Internet, the Uk Ecomomy and De-Growth

"The invention of the printing press by Johannes Gutenberg around 1440 marks the entry of the book into the industrial age" as written in Wikepedia, but as many commentators point out, the reverse is actually true. It was the printing press with type-set which itself laid the foundation for the industrial age by enabling the mass reproduction and dissemination of knowledge, the printed word, yet also by the very nature of the scalability and standardisation of the machinery.

Today we have lived with the internet and social media for less than two decades. We are in effect still learning to be comfortable with the medium before it has more profound effects on our way of life, for the better ends than tweets and purile FB posts. The type-set, printing press also took time to influence our culture, science and economy while also its effects lasted centuries.

There is in fact an underlying principle in an enabling, scalable and reproducible technology here which Gutenberg by no means stumbled upon: The wood cut printing press had already been invented but was economically limited by materials and skills, and in fact due to this was probably easy for the authorities of church and monarchy to stifle. What Gutenberg invented was actually a machine tooling system for the more durable metal type face, which could then make a standard "machine tool" ie the type-face-printing-press, and a mass produced end product. Quite uniquely and most probably for the first time in modern, western history and this marks the turning point towards the renaissance.

The key machine tool or rather set of tools, were the punches made to stamp the soft copper face-dies used then as molds for the casting of soft tin-lead alloy which made the type face characters. This was a combination of two previous technologies- punch forming ,as for coins, and die-casting.

Taking an immediate parallel to modern technology: we had the personal computer and we had the digital telephone network*. It was the integration of the two on a simple, scalable set of technologies which enabled the explosion of a new media which is sweeping away the old.

 As a gold smith and maker of religious mirrors, Gutenberg had the skills to hand-make these punches, which took time , maybe a year per set, but also he had the savez to understand the principle of scalability. Thus from one investment in labour to create a standard system, he had scalability that would reward that investment many times over.

However for the world this had a quantum impact on western culture. For western societies it marks the paradigm shift from religion as the media and feudalism as the economic system, to the freedom of the secular society and the eventual development of  free market economics.

Gutenberg was politically astute if not actually a cynical parasite as some Roman Catholic commentators have proposed. A gold smith in the 14th and 15th pre-renaissance society was a supplier to the church and to the wealthy. His first printing project was of course, what else, the Holy Bible. Within a hundred years political figures such as Martin Luther were able to disseminate their message in an economic format to a new market made literate by printed books and pamphlets.

It is then really the englishman Tim Berners Lee who gave us this new type face , HTML, which was simple, light on processing and band width, open source and therefore fully scalable.

Part II The UK High Employment Rate Stagnant Economy and Degrowth

The largest irony that the traditional media has now stumbled over, often such being avoided in it's own partisan view of all strong governance, is that the UK economy has never had so many people in employment, and never so many of them in full time employment.

I contest that this marks a new era for western societies and how the economy is viewed. I think that this marks the successful evolution of the tertiary economy: and it shows that we can enjoy high employment and a relatively affluent average standard of living without growth.

It shows that a modern tertiary economy can lock value creation and flow of that value, into enough local cyclic elements that such societies can learn to move towards sustainability.

The recession since 2008 is a "correction" which is going to actually take a decade and more to effect our tertiary, post heavy-industrial societies and return them to national and local democracy and personal involvement with society. It is a correction on many levels: a correction in corruption as a possible driver of wealth; a correction in the expectations and greed of people at all levels of society; a correction in the creep towards total "laisez faire" attitude of governance and castration of democracy; and most of all a correction in our view of consumerism and what sustainability can mean for our lives.

The Internet and the Next Paradigm Shifts in Society

So here we are now, two decades into the internet revolution and we are still just getting comfortable with it. Just as Gutenberg first published the Bible in print, so have we had a first epoch of brochure, social media and news-bite habituation. We have re-evolved meta societal networks, which mirror our social behaviour and to some extent, realinged expectations of personal interaction and interaction to organisations.

As  individuals we have avoided contentious discussions by-in-large on the internet. Also avoided both large and tedious purchases. We will move more quickly now into an era where we, as a majority of consumers,  challenge traditional thinking and methods of supply and consumption.

So far trade is drifiting over to the internet rapdily (quotes abound from different statistical bodies and economists on the rate of this and proportion now and.) We shop progressively more via the internet and this although not reducing price on most items, this has helped to peg retail inflation. The current young adult often called generation X who grew up 1996-2006,  are fully confident in not only shopping via the internet, but also replacing some services and experiences with cyber interaction.

However the great irony I propose is that the internet will be the key enabling factor in the principle of de-growth: it will become an interface to the local economy and sustainable life styles. Local markets will be able to evolve in a demand cloud where the economies of scale and the saving in transport in the supply chain facilitate the rapid  growth of sustainable, carbon neutral and high perceived value suppliers.

Local entrepreneurs, cooperatives and social enterprises will be able to carry out feasability studies in the demand cloud. They will be able to determine how large the "local" market has to be for a product or service and then they will also be able to evolve very quickly in responding to consumers.

Another factor which I believe we will lead to sustainability over expansionist-consumerism is the imediacy of financial transparency, planning and control available via the internet and the personal data machine. This will be an important tool for consumers to right-size, either in  a conscious movement to personal sustainability, or (and) by market forces or infact by credit enforcement.

The link between personal financial planning, getting value for money ie shopping around, assessing the purchase objectively in terms of impact, transparency in spending relative to budget, income and discretionary income and finally the outright limitation of finite credit by authority, work together to help consumers behave more rationally in their purchasing: This is the greatest threat to the current materialistic and wasteful consumer markets. Super markets and branded wares are inextricably dependent on our physical presence and disconnection as individuals from local social values, in order to exploit on the one side our wasteful impulse shopping and lack of price comparability when locked into hypermarket shopping, and on the side of branding that we require to send out social signals by conspicious consumption to replace the older sharing of values in local societies and collective organisations.

Currently people spend enormous amounts of their spare time, and indeed time when they should be working, on social media. This is a forerunner to people extracting more value through societal interactions than by conspicuous consumption. This has already come full circle in several forms : tweetmeets (twitter virtual friends and intellectual networks meet  up in person) , actions of democractic petition, local charities, the rise of the used market for qaulity wares, and even just appeals for help.

The sustainability movement's principles of reduction, recycling and replacement become more apparent and realisable in a medium which creates  pico markets. By enabling "tiny thin economic interaction" this provides supply in the market with very low thresholds to entry in a given that market and those markets can be  perishable or totally transient: in other words, individuals can communicate in ways which facilitate less travel and transport, shorter distances, local matching of expectations to latent or emergent demand, and services delivered in sustainable ways which we subsitute more wasteful practices and products to experience sustainably.



In this essay I have explored the concepts of how new media is a catalyst for positive societal change. There is a direct parallel to be drawn between Gutenberg's invention of the "type set" printing press as a reproducible, scalable, dissemable system and the development of the internet, in particular the foundation of HTML and http.

We have seen that the lack of growth in countries which did not totally over expose themselves to public and private debt has in fact not been catastrophic and is not as dire a situation as the media and political circus will have us percieve and experience.

These two discussions are very much linked to the expansion of sustainability, de-growth, as a force in society which has now the means to establish itself as in "guerilla" economic systems via the medium of the internet enabling the very contradiction of globalisation.



*  It can be argued that the internet existed since the 1960s as a military datanetwork. However this on the one hand utilised phone lines ( probably with analogue pulse bit data), while on the other was from a controlled, closed source computer system. The same can be said for Acnet, where academia had closed systems and networks. It was the synthesis of the digital telephone network, the personal- home computer and the software, languages, protocols and connectivity hardware which then allowed the internet and world wide web to explode. This is somewhat analagous to book production prior to print presses; then the wooden print press, restricted by lack of scalability and undoubted political control; then the printed word from metal type set crept out in academic circles and later became the main media in society, taking over from verbal and labourous handwritten communications and the media organ of the church network.

Tuesday, October 23, 2012

Cars More Efficient than the Train ?

This was of course a bit of a wheeze of academia.

I wonder very much if Univ. Lancs wanted to attract some wonga from the car industry?

The ground breaking iMECHe paper is strangely not available on google now, probably because as a it did not stand up to scrutiny as a published academic work. In other words they seem to have got their sums wrong and not thought at all about the apples and the pairs, the swings and the roundabouts as we mere mortals love to laugh at : a lack of common sense and a lot of finding what you want to.

Firstly the measure is wrong actually, a completely wrong calculation in terms of benefit: the measure is fuel per seat per mile. It is apples and oranges- the car takes 8 to 10 hours, the 225km train half that, the 350  train would then be about 30% faster (with limited stops), 20% faster with the current stops. The actual calculation then which is the cost-benefit ratio is fuel per seat per hour: or just fuel by hour.

Example Table CO2 emissions 2011  which shows the IC 225 on its sub 5 hour journey being only slightly poorer than the 9 hour bus run. The plane is pretty awful compared to a Prius or a Polo blue motion, but is actually much better than anything Jeremy Clarkson would choose to drive in a traffic jam at 6.30 am to get to the beeb.

So train and plane get you there faster: the collective transport versus car comparison is then either bus or non super-express train ( ie 140 kmh). Then you have a like to like comparison, and in fact I find modern busses about as comfy as DMU/EMU trains and in fact given me as the driver can snooze, read, face book and even stretch legs at driver swaps. Buses weigh between 14 and 20 tonnes, and at an occupancy of even 50% than means they are taking more passenger per tonne of vehicle than cars. Bus fuel consumption varies. So does that of cars.

Averages for per mile were based on published mpg for the car, on a track at the most economic constant speed,  and in fact not an average based on constant, artificial speed, but was that a total consumption kwh for the trains as measured on the actual journey? So it is likely to be a theoretical car versus an actual consumption IC 225 train, or an average per real 100km in use on say the ECML (east cost main line) - the plane seems to be this too: ignoring the large amounts used on take off and landing and idle on say, Edinburgh - London: 15mins idle, 20mins climb, 10 minute descent, 10 minutes idle. The IC 225 and its replacement use small amounts while ideling at rest or deccelerating as mentioned below, less per the whole stock than supplying say the motorway service stations, over head lights and the airport air conditioning that are all part of the cars system.

The load factor is the next interesting qausi statistic: firstly you have to take the above into account: the car does not get 56mpg on the M1 at 85mph max and an average of about 60mph without stops, 45 with stops. With load 25% that is one passenger per 1.2 tonnes approx. At load 25% a 450 seat train has then 125 people which is then worse at 3 to 5 tonnes per passenger depending on train. However the train is then lighter and uses below average consumption. As loading goes up the car decreases fuel economy because the magical 56mpg is with 1.0 test driver with 0.0 luggage on a barmed track for 100 miles, or the metric equivalent. The train does not decrease in efficiency as much at 100% because relative to rolling resistance it increases its energy requirement less. The IC225 train has a peak of about 7000hp but continuous averaging about 2.4 kw / 3000hp. So that is the same hp per tonne per passenger as a car but comes from a source of energy which on the ECML is electricity and therefore open for increasingly renewable sources or CO2 bore well storage. Weight in a plane is far more prominent an issue in fuel consumption that pilots must calculate in to determine safe range, safe stacking time over destination, and when to refuel.

The train actually needs to be heavier per 25% loading which is  and the need in fact for  momemntun due to the way electrical gearing works ( the train must essentially roll on momentum to "change gear" it must roll through the slight pause of the electrical shift in volt/ amps) Also the train per tonne will coast very much further without making power and electric locomotives actually have had recirculant (rheostatic) electrical breaking where the motors act like generators and supply power to the system when decreasing speed.

Also the car occupancy is in fact 1.6 per car on average in the uk, in peak times, when most people want the benefit of fast, efficient travel. When public/ collective transport is over 100% per seat due to standing room.

So if you left London in peak time to make Edinburgh for dinner time in a car, even non stop, you would be leaving at rush hour or meeting a rush hour somewhere on the M1 or if you left later, you would meet Newcastle or Edinburgh rush hour.  Then your very ambitious, steady driving passat 56mpg can be forgotten. You go down and down as you sit keeping the motor warm in the rush hour. Trains are in fact little affected by the rush hour because their advertised, and actually very dependable timetable aka "diagrams" are fixed and there are procedures and sidings used in clearing conjestion which have evolved with the railway capacity at peak hours.

It is very frustrating when a train or signal or points fails. But on an express you can most often get up and buy a coffee. Outside the M6 RAC building north of Wolverhampton you will have had your coffee and be in need of a urologist by the time you reach spagetti junction.

Of course London to Edinburgh is some imperialist hangover of a yardstick: Manchester /NW to London SE is a more likely journey and as Jeremy Clarkson knows his v12 merc will be using gallons per mile as he even hits the RAC building at 0645. The 0710 train from Manchester glides out as you sit and look at the RAC building, and continue looking at it. I have sat outside its 1km vista and thought of the Irony that it lies before the motor cars worst. Or Bristol to London. Or anywhere to anywhere big which already has good collective transport solutions, and most of the key employment centres outside Slough, Swindon and Basingstoke, have excellent public transport links.

Both Jeremy Clarkson and "The Temporarily Smug blue motion Passat driver" with other half and two kids would be very pleased then that more people chose the train, because then they who choose the car get to destination, Edina -the shortbread tin capital- with less ques. But the passat driver in using 8 hours saves himself and family a lot over the price of intercity rail faires, capital costs of the car excluded.

Friday, October 12, 2012

Overhaul for Democratic Socialism 2. The Next New Left

As a follow on to the last essay on the fertile ground for the new left to grow back stregnth, I write here more about how family values must be the area for democratic socialists to focus.

The new Left of the 90s were liberal govrnements who rode the back of the market liberalisation while helping stimulate the economy by creeping public spending ever upwards.

The Next New Left are confronted with a completely opposite scenario. Market liberalisation which has lead to anarchy and a loss of faith in investing in companies. Hence a western recession with potential to grow to being a global catastrophe of faith.

It may take another round of now Old Right 80s thinking and implemenation of more anarchy and more power to the wealthiest echelons before the system collapses enough that even the Davos attendees realise the time has come for stronger governance of the markets, and a Keynsian lead recovery.

What should the family unit oriented goals of the Next New Left be though ?

1) job security

2) overtime payment

3)  RIght to family freindly working hours. Right to maternity / paternity leave and reduced working hours as desired

4) access to training on the job

5) flexibility in access to life long education

6) an errosion of the high cost of tertiary education for the children of average income families

7) tax breaks to make longer commuting and relocation more attractive to unemployed families

8) conversely to 7, better access to life-long-learning at two or more start semesters per year will aloow for fleibility for workers to respond themselves to local market conditions and reduce the current need for continent wide migration and localised skill gaps.

As you see from several of my points, this is both a return to workers power to decide their working hours, while also it is a marketisation of education. Both proto liberal economic points in there along with traditional values unions and labour parties had previously had success in acheiving.

The fact is I write this from some bitter experience of the "flexible, competitive labour market" . Basically I have spent about 20-30% of my post graduate adult life in unemployment or fill-in jobs due to the flexible labour market allowing employers to be non committal when it suits them best. So I know what the heck is going on for ordinany people. There is the stress of short term contracts and short notice periods. People cure this by gaining new skills or going to fairer employers who offer permanency. It is an oxymoron- employers who do not offer fair contracts become less and less attractive in retaining skills and either end up operating in a lower value segment of the market, or paying higher wages to enough managers, consultant and hired in skilled staff to try and sort out their quality and income issues,  that they end up not being able to see the wood for the trees.

This is a phenonmenon not only limited to semi skilled workers or areas of the labour market with over-supply. Take two acquaintances who are city analysts who have kept their jobs the last four years somehow. They have been on fixed yearly contracts for over ten years now, and cannot get mortgaged despite having an impressive take-home. This has affected their decision on when to have family and they have let this slip so that now, in their mid to late thirties, they have fertility problems. A perfect example of the market liberalism interfering with family life.

Western companies can no longer compete with the east: can't beat em, use them as your sub supplier of OEM and own lable wares. There is no point in trying to compete in some labour intensive, semi skilled sectors unless you have a patriarchal view on business and a wad of technology in your products which make render high end consumer products. Take also defence products and services for that matter, attractive and premium and to some degree protectionist by nation or cultural branding.

 The other side of the western economy is of course service. There is a fundamental fact that a chinese worker in china cannot deliver a freshly grilled big-mac to a New Yorker.

Further to this point on services: they rely to a large extnetn on geography: localistion to population areas on the one hand, and nice places to go on vacation on the other. Within reason these then do not need to compete on a global basis. They are linked into the local- dollar market or the tourist-dollar spend market. So why should workers be stressed out on temporary contracts (ingoring obvious seasonality glady taken up by under graduates and the poorly education attentive!) and delivering undermotivated services, based purely on fear of being sacked ?Why should they too not enjoy most of the conditions that their better payed customers do in their technocratic jobs ?

 The answer is purely that the rich have paid for this flexible labour market to deliver low paid workers and therefore high margins. This is however at the expense of the government who are then expected to raise these people out of poverty with wage subsidies, wage related benefits, public health care and of course unemployment benefits for the periods they are laid off in.

The dogmatism and absolute hypocrisy is evident.

Apart from a basic living minimum wage, we are not talking about fixed , stiffled market conditions. We are  raising the economic per week cost of workers but raising their perception of conditions. They may still get laid off, but if they get three months notice then they have time to look for work rather than be an immediate burden on the state, to the profit of the owners who have not successfully subsidised their operation through a seasonal or cyclic economic down turn or just plain bad selling!

If maternity/ paternity costs are covered by tax credits - payed by a combination of those built up from before and later in arrears  to cover this familial eventuality then this is an area which has a neutral cost to the employer. If a mother chooses to resign  work part time  to cope with pregnancy, birth and infants then they have to cover her anyway with a temp or new employee. Far better to have an experienced employee take time out and come back ( as i mentioned in an earlier blog, I am all for reducing employer "on cost" social contributions in all lands they exist such that employment and training of employees becomes more atttractive and less costly when the top line goes down)

Other improvements in family related conditions for workers will often also have a pretty neutral effect on employers who wish to be desirable to new staff and retain staff. Who are these companies who need armies of temporary workers ready to dispose of their skills and instutional memory at the drop of a dollar from the top line ? Are these the types of companies likely to survive in the western economy? Or are we subsidising poverty by allowing companies to endlessly outsouce through agencies who take a margin which could have gone to the employee? Are we directly subsidising these conditions by allowing benefits to soak up periods of unemployment and low income? woudl be be in fact better, in a true free-market situation, that workers whold knives literally to their managers throats to keep them in employment or turn up on the company door step with their four starving kids ? No, that would be inhumane and mean that there is a high possibility that our employee we could have grabbed back when the top line went ujp a bit, voted with their feet and moved out the area.

Thatcher was right when she identified the family unit as the key to the modern, western economy. If you can win them away from the unions and labour movement by offering a better family economy and more importantly, selling the dream of a wealthier life in front of them, then you can win elections. The Next New Left must also embrace this and reward qaulity of life for families in order to regain moral and ideological ground on the exhuasted free-market 80's mind set of the now old right wing.

Claiming Back the Lost Ground for Social Democracy as a Current and Fervent Ideology

More on overhauling social democracy and democratic socialism.

The real core of appeal to voters was captured by in particular Thatcher. She could appeal to the family economy and life style of those married with 2.4 children. This is because there was an appeal there to be had. Democratic socialism, as practiced for many of the post war years by her own party, had as I decribed earlier, picked up so many bugs in executing it's ideals and allowed too much power to be centred in governance and trade unions.

Government controls, heavy beurocracy and distant democratic influence influenced enough of the collective "family life" voting sector that the left were by in large voted out.

Democratic socialists now stand to be in an ideal position to reclaim working family values.

The anarchic market economy and oligarchical oil powers have erroded so much of family life for ordinary working people that there is an opportunity to swing in and regain ground.

I am stopping short of pointing to the hyprocracy of the New Right on the one side exploding defence spending while on the  other paying increasingly large amounts of public money to the rich while allowing low wages and a temporary employment market  to be subsidised . This is the topic of many other analyses, essays and observations.

What the New Right have done is placed the average western family in jeopardy. They have reduced their job security, their access to education, their access to health services and most of all, their time spent at home with their families.

Job insecurity is a blunt weapon for management. In many large, successful corporates the concept for the skilled working class and middle class administration is virtually dead. Being able to be competitive in the west relies on skilled, motivated workers not fear of the next man in the line taking your day's pay.  High value employees as individuals or union / association lead bodies, can still negotiate better deals than unskilled labour. Unskilled or semi skilled labour cannot compete in western economies with the far east. Where they get employed is in the local service industries and privatised public services.

Now however, the bar is raised higher than the unskilled. The average skilled administration and managerial worker has for a long time been the new working class. Graduates with business, computing and some specialist technical or analytical skills abound and have become the new drudges. This generation is growing older, sprouting family and getting to realise that they are not going to get very much better off. Also they are worrying about keeping their jobs.

Here then we find the ground for the left wing to sweep in and establish a better deal in terms of working conditions relating to family life. The new right cannot go there, because they are in the pay of the owners. They cannot disappoint their paymasters with ideologically incorrect policies which enhance conditions for this mass of the modern western population.

The New Left 1 . A back ground to a new epoch of democratic socialism

Now we are in another cycle where at the end of the series of economic wheels we come back to a point where we are told that we need more of the same, but in fact the very opposite is inevitable.

In the 70s we finally became tired of governments planning and unions controlling our working lives. It was time for  a reversal. The pendulum had to swing to more liberal freedom in how things organise themselves without government interference. Yet the left at the time said we needed more of the same, just a little different.

The economic wheels we have been through have worked somewhat like ripples in ponds rather than connected cogs, but the wealth creation and distribution effects were quite astonishing, especially where liberal left governance could harness liberal right economic growth.

The internet bubble and the biotech lifeboat bubble showed that the west did not really create enough true value in what it did. It did not make mud into houses and steel in to cars at a margin which would allow for growth in valuatoion and capitalisation or dividends to investors. The internet bubble was an act of faith - a bull market - created by plain bad business judgement dressed up in scenario building and regression analysis.

We should have learnt these lessons before : what could we do though? From the Darien scheme which technically bankrupted Scotland, through the railway companies, the gold rush etc there have been many examples of just this: the rush to invest in something dressed up as high potential. Sections of those industries survived, while industries like metals and petrochemicals delivered steadier value creation by having a more reasonably comprehensible relationshipp between the value added and the margin won out.

However we did not : very few people saw this finance catastrophe coming, nor the inevtiability of a recession of course. This is for one reason: capitalism has become the new church. These investments were acts of faith, and as with selling absolution for money, they errode confidence in the church and undermine their own religous fervence.

Capitalism in the west had run out of ideas by the mid 2000s. It had liberalised most of what it could and paid itself to a level of freedom which prove to be tantamount to anarchy. When it ran out of ideas, as with the internet bubble and the railways and the Darien project, it invented some fluffy stuff people might believe in. Unfortunetly the whole capital market system pivoted on the sub prime pyramid. Detailed analyses of how this happened abound, but the common thread above the economics and mathematics was that everyone lied to everyone else. The bigger the lie.....and the basis of this was criminal. The effect acrued was  on faith.

So anarchy created this farce yet the faith continues in the German chancellor and Mitt Romney. They are at the alter, prepared to sacrifice entire national economies for their dreams and replace democracy with a federal europe and an oligarchical end point in the USA.

The stage is set for a further catastrophal spiralling of negativity emenating of Greece, Spain and the inevitable Romney lead war against Iran and invasions of "Arabietnam".

Just as more social democracy and planning, or more communism for that matter, did not fix 1970s crises of economy and faith, so more anarchy and pandering to the rich will not fix this widening recession. Germany and china are next. US and UK are showing only weak signs and likely to regress once spending cuts come into reduce the cash supply. It is inevitable that more anarchy will result in a basic human need to organise societies for the people, by the people, not by pandering to a faith of get-rich-stay-rich.

The first wheel was the liberalisation of markets, the opening of the first steps to wider trade agreements, and most of all the IT revolution which enabled the flow of capital on the stock market like never before in time. Then came a rather inevitable boom and bust in the late 80s, followed by a war lead recovery in the 90s.

The Kuwait campaign as some call it, was a massive exercise in public spending and lead to hightened defence spending rather than a new-right lead reduction of defence to more economic levels in terms of ratio/ % to GDP, growth and weapon and personnel inflation.

The economy in many countries languished or suffered from a lack of capital moving into markets but soon economies grew again based on the liberal underlying conditions established in the Reagan / Thatcher years.  PFI came in as a way to appease the adam smith fundamentalists, outsourcing management and production, but still under pegged, bank rolled and given safety nets of public money at the end of the day. PFI interest rates, penalities and fees are in a way subsidies. PFI does most to appease free-market-ideologists because it masquerades behind privatisation and market but ties up technocrats and consultancies. It has often delivered on quality, but so did many public programmes of earlier years.

World trade grew and then came the internet. In 1995 it was still a semi academic and publically subsidised entity. Many saw the potential, but not many realised the necessity for branding in the brave new world. Some brands were planned, most from google to eventually the bubble's biggest after comer, facebook got lucky and achieved a critical mass based on a good simple packages with universal appeal. So what the bubble burst with over hope?  But that set the scene for the crisis ten years later which is far deeper.

The big emerging phenomenon of world trade from the eighties forward was moving to low cost countries in mainly the far east. This became a model for major US corporates in particular with Nike and Apple being just a couple of the biggest who sent production to the east, while the brains were kept in the USA. For a while Europe were still exploring having a functional common market with european norms and CE marking helping companies sell to each other and consumers cross border. But manufacturing in many sectors started to become unpopular in the EU too, so they started to outsource to the far east. Recently I bought some industrial equipment from a "German Quality Engineering Firm" : it was precisely made in Taiwan by a sub supplier who worked on cad cam and had their own QA. The germans were just some lazy engineers with a warehouse.

 Western Europe gave up most of what couldnt be protected, like the car market, the defence market, the transport market and of course that which could not be delivered from the far east- a big mac with fries to go.

What is most suprising from the internet bubble is that we didnt learn. Neither did we learn from many fake communication industries in the past: the Railways in the 19th Century for eample, and to top them all, the technical bankrupting of Scotland as a nation under joint crown, by the ill fated Darien project.

Other industries thrived though because they could deliver sustainable results to investors, and delivered enough value adding creation to give ROI and dividends. Like the petrochemicals and metal industries. Each level is sustainable. It all attracts long term investment. Often companies do not perform so meteroically as the bubble industry

The stage is set for a further catastrophe spiralling of negativity emenatiout of Greece, Spain and the inevitable Romney lead war against Iran and invasions of "Arabietnam".

The stage is set for a further catastrophe spiralling of negativity emenating out of Greece, Spain, Ireland and the inevitable Romney lead war against Iran and invasions of "Arabietnam".

Thursday, October 11, 2012

On Social Enterprises and Public Money Being Used With them

The term social enterprise has for better or for worse been inexorably linked to rich bright things who do not need a wage, but rather would use good business principles in starting grass routes organisations for delivery of charity vis a vis public services. This has become a stereotype of rich young thing bares the guilt of entire dynasties by going to Africa and doing some good doing.

However the concept of the non-profit-organisation as a social enterprise is a strong force for democracy and societal values which will in future in both the tertiary economies in the west and the 3rd world, come to be a new model for delivery of public services.

Why should we who support democracy over oligarchy (Obama vs Romney and Putin) embrace what is still outsourcing and de-unionising?

With this full blown recession of the non oil economies, private companies are pleased about national and state  governmentstrying to balance their books and are looking for opportunities for private contracting of more public services. However they will find that this will often sting them in the tail.

In future the tactic of suicide tenders to oust otherwise efficient public services and monopolies may fall on its face as more social enterprises, organised by charities and trade unions ( at both local and national even international level)   take the mantel of the tender process.

 This is in fact the best way for labour to organise now  because NPO's are able to work for slimmer margins and deliver higher quality.

 Also they need less marketing and middle management because they do not conform to what private investors would expect and larger organisations impose upon their public supply divisions and projects. In marketing they are near customer, at point of care already. They know the business because they are the business: These are skilled, motivated people who have quality as the goal, not income and profit.

One thing that charities and locally organised union group suppliers need is  access to a central technocracy to share on a national level. This needs to be non political and although receiving public funds by some route, it should not be under political control. Larger charities and Unions can evolve and offer this centrally, as some have in terms of HSE and legal advice. They just need to change tack to include quality management.

they will be able to outcompete the spivs and the cheating multinationals.

Overhaul for Democratic Socialism

In stark contrast to the media rhetoric, from a media  which by the way has been paid to extract the very terminology in any positive context, democratic socialist values are alive and thriving amongst euorpean populations.

However it is time for a major engine overhaul in left wing politics as we saw before in the successful Blairite and Clinton years, and in the revival of France in the 1980s. Socialism became a dirty word, and below the right wing owned media, at grass roots level so has capitalism become a dirty word. The truth is that market economics and social democracy are yin and yang.

The papers and the politicians have been bought out, the message is "market economics must rule every part of our lives".  But by the very freedoms that democracy inholds, and by the very same market mechanisms for ideas, socialist values are on the rise again as an antedote to the capitalist cure for the capitalist failure caused by the sub prime collapse.

Just as capitalism has now shown it's shortcomings when let run too wild,   so  had democratic socialism hit it's own buffers previously, especially at the end of the 1970s.  Post sub prime scandal and the western recession, raw capitalism has shown aslo that it can't " keep most of the people happy, most of the time " any more.

Both systems picked up enough bugs and lack of sensibility in control, checks-and-balances if you like. As the new-right comes to a rather inevitable end of what can be privatised, marketised and otherwise pseudo liberalised then it will be time for the left to not just appeal to voters, but to have a realistic agenda of policies for change which move society forward.

So below I outline some overhaul points or actually modernisation to tap into the societal, community values as a synthesis to household-, micro- and macro economics. There are many other societal benefits to be found in rejecting the individualistic, small-weak government, laisez-faire politics the media have been hood winked into expousing. In fact the reverse is often true, that in some areas of politics there has been more public spending and less choice

In France, Germany and Scandinavia, social democracy grew out of the harder line socialist planned economics and allowed freedoms which made it possible to keep enough of the people very happy most of the time, that the media could be bought out and the ideology of the church of capital rammed home to new worshipers and previous disbelievers. In the UK and USA, this went much further, exacerbating poverty.

Here I come to my first point about the overhaul that democratic socialism needs to bring it back to the popular centre stage, and in so doing, swing social democracy away from being so bought-a-bed-fellow to capitalism.

Overhaul Point 1 : That some people become richer and prosper should not be a contradiction or a counter-target in a democractic society. On the contrary. Taxing the rich more per se does not solve poverty or address inequality. Taxing the rich effectively in terms of raising net revenues for national budget, is what Obama, Hollande, Labour and the Liberal Democrats aim to do.

The point is that the rich have done very well out of social democracy and the 14 years or more of public spending tracking economic growth, and now they can afford to pay their share to balance the books stop western economies declining further into recession. This should not be punative, but rather to a level which does not make it realistically worth moving assets and income sources.

Rasing new net tax income is sensible right now to help circulate money down through the economy and slow up the recession fueling decline in public spend in the national markets. The wealthy are accessible through their property as suggested in the mansion tax, but also through making personal share dividends subject to effective income taxation levels, which raise net revenues.

Higher net revenue from the top 12% of society can be acheived by engaging to the principle of just-noticeable-difference over several income and wealth points. This will be more effective than setting an arbitary level of say 33% on all banked income, or by calculating how much you want to earn based on x% more on top rate tax. In essence as the UK tories have done with the consumer society, you use stealth tax rises : Luxury goods  Luxury Services VAT at 33%; 2% on personal dividend income; 2.5% on income tax; remove tax loop holes and control money coming into personal bank accounts - another 2%.

Every major recession including in part the western decline in the late 70s, has been reversed by keynsian economics. Post 1979 the right wing government in the USA and UK used massive spends on weapons, policing and the space programme while being able to liberalise financial markets at the same time that data technology allowed for an explosion in trading on these markets fortuitously to the righ. In Europe, emerging center-left and left wing governments modernised infrastructure and industry.

This said, however,  the connection between wealth creation and poverty creation should be severed. this links to point 2. Sound like double think and oxymoron? Think about it.

Overhaul point 2 : Public money should not be used to support private profit by indirect means by subsidising poverty. Too much government money goes on wage subsidies ( including housing benefit which we will come back to)  and low value job creation.  In other words, government should focus on fixing the skills people have and the help make better general market conditions, not create possibilities for profit by supplying cheap, subsidised labour.

Overhaul point 3: Remove false, distorted  artificial markets created by governments. Come back to some inflation limits nad outright market controls where public money is used and virtual monopolies or price parity in amenities reigns.  More can be subject to price control to protect the public from excessive profiteering and inflation. For instance housing benefit. Rather than build housing or buying and freeing up land for "location subsidised" private housing, states have moved towards subsidising segments of the house market, particularily unsuccessful apparment blocks, by the back door. This is through housing benefit pouring into private captial. A lack of ceilings on housing benefit has made this a huge budget in many countries, coupled to laws which require local authorities house people in the "free market".  Market controls for for example energy exist in many lands. Limits to housing benefit exist in many lands. Countries without housing benefit have often lower housing costs, which can be then covered by fixed social benefits and by lower wages rather than inflation  prone housing benefits. 

Overhaul point 4. Taking directly from three: plan the housing market and free up planning permission for the type of housing most needed, not that which is most profitable. To appeal to the middle classes, let planning take into account loss of light, loss of amenity and loss of value. Let local communities in more modern, spacious areas take democratic decisions to lock the area into limited "garden " development and same type of architectural houses. Let local populations in dense housing areas decide on free spaces and use of public money.

Overahaul Point 5: shift away from employer contributions for social costs: remove these for new employees placed in permanent contracts (after 3 to six months trial) ; give greater tax incentives for training

Overhaul Point 6: Liberalise Education More and ALSO Plan Education more. Make education a more employer market and less of a 17 year old decision maker market. This includes state as an employer. Encourage planning. Reduce places when there is large amount of unemployed graduates in a discipline. Make vocational courses have two starts each year, august and february. Ecourage day release and summer school learning. Reduce the number studying academic and low employment rate societal and political studies. Increase access to business skills and tools on all courses

Overhaul point 7: encourage development and use of express public transport to key employment areas and the use of short journey to park-and-ride facilities. Plan all new industrial areas and  business parks must have collectively organised or public transport plan or in fact be built preferentially with walking distance access to major arterial transport routes. Encourage collectively organised maxi taxi as a tax break for employers of more than 10 employees.

Overhaul point 8: reduce tax on the basics of life and enjoyment. Conversely increase taxes on luxuries. Simplify tax to different levels of applicable VAT instead of "extra tenner taxes". Continue to reduce taxes for the lower part of income and increase accessibility to pensions

Overhaul Point 9: bring back in tax breaks for businesses which involve spending money in the local service economy and investing in people. This includes yes, wining and dining customers and suppliers in your own nation: it includes training; it includes acts and actions of charity; it includes a better,safer, more enjoyable work environment; It includes pensions; it includes relocation and even housing for workers. Increase also access for personal tax breaks on much of the above!

Point 10: Encourage employers to employ full time, permanent. Make part time and temporary employment hour-for-hour the same "on-cost" including immediate pension contributions as . Have a european  wide minimum on job security but also a maximum. In effect the government as above, subsidises a flexible labour market by paying for benefits when temporary employees are laid off, and also for social housing in many countries where they will never get a foothold on the housing market. This even applies to six figure salary paid London consultants I have met who get annual contracts, take it or leave it, and through the last ten years have not been able to get mortgages.

Point 11:  Enforce laws which mean bad employees cannot be supported by unions and technical legalities : but ensure that dismissal is on proven sound economic reasoning, people are not replaced by cheaper labour, or other grounds for dismissal are well documented and actually go through an ombudsman and union even if the person is non unionised.

Point 12: Bring in quality assurance into public services and private/charity NPO provision in the public sector spend. ISO, new EN's, new local and national standards, quality checking. By all means employ private consultancies, as the BSI, DNV, Price Coopers etc to advise, accredit, police and even lead implementation.

When Projects Go Bad..... part I

Why do projects "go bad"? If we take the classic triangle of managing projects then ask the following questions with "the best made plans" in mind :

1) Why do costs escalate ?

2) Why do delays occur?

3) How do quality deviations happen ?

This blogg comes about from an off hand comment from a senior defence project manager, talking about the number of managers on a project.  I know to which I replied " Fannagers". Too many cheifs and not enough indians.

A top heavy project team on both client and supplier side is a recipie for disaster because it emplies that there are more MBA qualified non technical experts and of those technical experts on the team with authority, the majority have actually lost the currency in their skills being out of date.

Teams may not appear top heavy though! Top heavyness comes with the idea of being a manager often associated to having an MBA. The divine right to rule, to plan over for to execute, and to avoid detail at all costs. ( From most curriculums I have read and units I have undergone in MBA and eMBA, I do not see that the qualification engenders people with so much authority as they presume. The same with PHd.  They can in many cases be a license to be arrogant and manage accordingly with aggression and defensive poltical tactics. If you are a technical manager or operative confronted with such an idiot, and there are many who pop up in new, significant projects and take overs in particular, then start to ask what they actually specialised in or took as case studies in their MBA or PHd. This often cracks them down and takes away the smoke-and-mirrors act. This is an important aside probably undeserving of italics)

The last point , before I digressed into how to tackle the blue shirt and slacks crowd, is the crux of the matter. Attention to detail and unresponsive execution.

I have actually now about 10 years experience in managing pretty small projects on a "space programme" scale of things, but still it has the gravity of just what is lacking on many project management line ups. It is not that PM's and their over lords and MBA lackeys are inexperienced. No,  it is the double edged hara-kiri sword they weild unkowingly in not being RIGHT-EXPERIENCED or as mentioned, current enough, and on the other edge being PRESUMPTIVE and having a REMOTE management style.

Basically there can be a lot of managers who are blind to detail and will just not roll up their sleeves and delve into detail and work on the shop floor in solving problems and gathering information. I am sure somewhere, at some time, a multi million dollar/pound/ € project was significantly delayed because a single bolt could not be purchased due to clumsy and obstructive administration and lines of communications.

( I must also say that at the moment I work with some very good PMs who do roll their sleeves up by actually being able to pose pertinent questions at more or less the right time, and by listening to information and warnings they get and acting upon them towards internal resources and the customer of course!)

So this is a key thing in my experience: management don't know what they are actually doing apart from making plans and asking pushy questions or if they do know what should be going on, they get sucked into the whole plan and project reporting whirl pool and ignore what is going on.

Another key BAD in what companies do now is as follows and quite blunt: while they pay the world for the PM's and for the top technical people, they scrimp on employing engineers and key functional administrators. They get good people, but under experienced. These keen newbies  often ride the wave, sometimes plunge under it but then very often when companies admit they need more competance, they employ over their heads and the now experienced folk leave thus the company loose institutional memory and continuity.

Another big problem in organisational structure for new projects or for demanding delivery times is that Project has Sales as internal customer. The customer should be the customer. Sales promise the world. Project raise an eye brow and breath in deep. Engineering and purchasing are then set in motion with a one way military order: hope is not a strategy nor a detailed list of tactics to achieve delivery date.

tbc part II