Appreciating Business

Trowbridge, William P. “The Economy of Single-Acting Expansion Engines.” Transactions of the American Society of Mechanical Engineers 3 (1882):254-261. cited in Knoedler, Janet T., “Veblen and technical efficiency.” Journal of Economic Issues, Dec97, Vol. 31 Issue 4, p1012, 16p

There cannot be, from the nature of finance and pure mechanics, any exact mechanical relation between abstract mechanical laws and financial operations. The former are invariable and immutable, the latter dependent upon bargain and sale.

             SELF-ANALYSIS
                      by DAVID IGNATOW

I am not writing because I feel as though
I am standing in my grave, looking out
upon the poetic excitement among the poets,
the businessmen stashing it away,
the lovers exuberant, the executives fierce
in their vision of efficiency.  Each
has life by the hair.

Yet each will stand dumb, the poetry of their lives
will have come to a standstill.  It will not occur
to them that they have carried the burden
of their charge to its limits, the poem taking over
and writing itself on their faces
as puzzlement and anguish.  The poem will have become
the ruler of their lives to shape them
as it seems fit, as objects in the universe
of charged particles.  They will end their lives
standing in an open grave and looking about them
at the crowds poetically mad with themselves,
in actions fit to their desires and singing.
We will hear their singing of money, of power,
of love, of success, and we will see it wind down
to their puzzlement and frustration and disbelief,
victims of their dreams.

Corporations Need Treatment Documentary Argues Published on Tuesday, January 20, 2004 by the Inter Press Service   <http://www.ips.org>,   by Stephen Leahy

TORONTO – Corporations are not only the most powerful institutions in the world, they are also psychopathic, a new Canadian documentary on globalization elegantly argues. While the corporation has the rights and responsibilities of “a legal person”, its owners and shareholders are not liable for its actions.  Moreover, the film explains, a corporation’s directors are legally required to do what is best for the company, regardless of the harm created. What kind of person would a corporation be” A clinical psychopath, answers the documentary, which is now playing in four Canadian theatres.

“Everything we do in the world is touched by corporations in some way,” says ‘The Corporation <http://www.thecorporation.tv/>’ writer Joel Bakan. Six years ago he was researching a book on the subject and teamed up with documentary makers Mark Achbar and Jennifer Abbott, and then set out to drum up enough money to make the film and to do more than 40 interviews.

“Corporations are the most dominant institutions on the planet today. We thought it was worth taking a close look at what that means,” Bakan told IPS. In law, today’s corporations are treated like a person: they can buy and sell property, have the right to free expression and most other rights that individuals have.  This legal creativity came as a result of U.S. businesses using the Fourteenth Amendment to the U.S. Constitution—designed to protect blacks in the U.S. South after the Civil War—to proclaim that corporations should be treated as “persons”.

The filmmakers show four examples of corporations at work—including garment sweatshops in Honduras and Indonesia—to demonstrate that this “legal person” is inherently amoral, callous and deceitful. The corporation, the film points out, ignores any social and legal standards to get its way, and does not suffer from guilt while mimicking the human qualities of empathy, caring and altruism.

A person with those character traits would be categorized as a psychopath, based on diagnostic criteria from the World Health Organization (WHO), points out the film. Unlike ‘Bowling for Columbine’—to which it has been compared—‘The Corporation <http://www.thecorporation.tv/>’ does not follow a shambling yet crusading interviewer (Michael Moore) into corporate head offices to ask tough questions.

Instead the filmmakers use simple but beautifully lit head and shoulder shots of its subjects against a black background. The interviewer is never seen or heard; the corporate chiefs, professors and activists speak directly to the viewer. The technique is so compelling that not listening or turning away would seem impolite.  The interviews are interspersed with archival footage from many sources, including scenes from sweatshops and news conferences. It also includes some ironic and darkly humorous excerpts from corporate ad campaigns and training films from the 1940s and ‘50s.

But the film is not a rant. It gives ample time to corporate chief executive officers (CEOs) and representatives of right-wing organizations, like Canada’s Fraser Institute. Fraser’s Michael Walker tells viewers that hungry people in the developing world are better off when a sweatshop pays them 10 cents an hour to make brand name goods that sell for hundreds of dollars. And it is just good business sense that a corporation moves to seek out more hungry people when its workers demand higher wages and better working conditions, Walker argues.

Many others are less ruthless. Sir Mark Moody-Stuart, former chairman of Royal Dutch Shell, is honestly concerned about protecting the environment. Under his guidance, Shell adopted many green initiatives and a commitment to developing renewable energy.

At the same time, Ken Saro Wiwa and eight other activists were hung in Nigeria for protesting Shell Oil’s pollution of the Niger Delta. Social critic and linguist Noam Chomsky—the subject of Achbar’s 1992 award-winning ‘Manufacturing Consent’—carefully points out that people who work for corporations, and even those who run them, are often very nice people.

The same could have been said about many slave owners, he observes. The institution—not the people—is the problem, Chomsky argues.  Eminent economist Milton Friedman sums up the role of the corporation succinctly: it creates jobs and wealth but is inherently incapable of dealing with the social consequences of its actions.

‘The Corporation’ documents a bewildering array of these consequences— including the deaths of citizens who protest corporate ownership of their water in Cochabamba, Bolivia—that demonstrate the extent and power of today’s corporations.

It looks at the often-cozy relationships between corporations and fascist regimes, such as that of IBM and Nazi leader Adolph Hitler.  It demonstrates the power of advertising to create desires for luxury items, as well as how corporations can suppress information. The documentary shows agribusiness corporation Monsanto successfully preventing the news media from airing a story about the potential health hazards of a genetically engineered drug given to many U.S. diary cows.

‘The Corporation’ also tells a number of success stories, including activists’ successful fight to overturn corporate patents on the neem tree and basmati rice. Bolivia’s Oscar Olivera describes how citizens of Cochabamba city re-took control of their water. The lesson, he explains, is the people’s capacity for “reflection, rage and rebellion” as an effective counter to corporate globalization

That is one of the film’s messages, says Bakan. “We want people to understand that they can change things.” “Everyone keeps thanking us for making the film,” says Mark Achbar, from the Sundance festival of independent films in Utah state.  “People are fed up with being talked down to and enjoy being intellectually engaged,” he adds, trying to explain the documentary’s popularity and several international festival awards.

Despite its current limited distribution in Canada, ‘The Corporation’ has been sold as a three-part, one-hour TV series to international markets, and Achbar is hoping it will be translated into Spanish. Of course, there will not be a multi-million marketing campaign. The number of people who will see it will depend on those who have, spreading the word. That is just one way to take back the power that corporations have usurped.

Federal Workers Score a Victory – Study Says They Outperform Private Contractors in 89% of Cases by Christopher Lee  Washington Post Staff Writer    Wednesday, May 26, 2004; Page A25

Federal civil servants proved they could do their work better and more cheaply than private contractors nearly 90 percent of the time in job competitions last year, according to the Office of Management and Budget.

An OMB report released yesterday found that such competitions, the cornerstone of President Bush’s “competitive sourcing” initiative, cost federal agencies $88 million in fiscal 2003. But they are projected to bring savings of $1.1 billion in reduced personnel costs and overhead during the next five years, the report said. Clay Johnson III, OMB’s deputy director for management, said the report confirms Bush’s belief that requiring federal employees to compete for their jobs promotes government efficiency, even when the work stays in-house. Congress this year required agencies to report annually on competitive sourcing efforts amid concerns that the initiative was taking money away from programs.

“The real savings comes because of competition, because of the challenge of finding the most effective way of doing it,” Johnson said in an interview. “ . . . You ought to always be looking for the most efficient
and effective way to do something.”

Federal employee union leaders dismissed claims of savings as inaccurate and unrealistic. They renewed their criticism of the Bush initiative as an unproductive effort that wastes resources, scares employees and rewards contractors for supporting the administration. “Anytime there is anything close to a fair competition, we do well,” said John Gage, president of the American Federation of Government Employees, the largest federal employee union. Gage also said there should be an independent review of projected savings.

Colleen M. Kelley, president of the National Treasury Employees Union, called such projections “fiction.” That’s because agencies, at the direction of OMB, do not include the costs of diverting workers from their regular duties to work on preparing the in-house bid, she said.  Costs incurred before the announcement of a competition, such as assessing workloads and evaluating how offices could be reorganized, also are not counted.

Also, many in-house teams win only by agreeing to trim the workforce, limiting services, Kelley said.
“After a public-private competition for federal work, there often simply aren’t enough agency employees left to provide the service at the level the public wants, needs and expects,” she said in a statement.

Contractor groups also objected to the report, saying the high win rate by federal employees raises concerns that the competitions were not fair. Several earlier government studies found that federal workers typically win public-private competitions about 60 percent of the time.  Stan Z. Soloway, president of the Professional Services Council, said savings would be even greater with “real competition.”

“When you have a 90 percent rate for either side, you have a process that’s clearly out of balance,” Soloway said. “In the private sector there is tremendous concern about the credibility of the process and the program, since very little real competition seems to be taking place.”

Chris Jahn, president of Contract Services Association of America, said, “The deck is being stacked against private companies.” “At some point, if these competitions continue to be drastically one-sided, the private sector will stop playing,” Jahn said in a statement. “The taxpayer will be the loser in the long run.”

Of 17,595 federal jobs studied in competitions last year, 15,660 jobs, or 89 percent, were found to be best-performed by federal civil servants, the OMB report said. Agencies determined that the work done by 1,935 federal employees could be handled more efficiently by private contractors. Moreover, agencies transferred work done by 4,309 more federal employees to the private sector without even conducting competitions. Such “direct conversions” are being discouraged and phased out, Johnson said, and were not included in computing the 89 percent win figure for federal employees.

Johnson noted that employees do not automatically lose their jobs when work is moved to the private sector. Some are reassigned within agencies, while others may be offered jobs with contractors and some may be offered buyouts.

“This is not anti-employee,” Johnson said of the initiative. The experience of agencies varied widely, according to the report. The Defense Department, the government’s largest, completed competitions
involving more than 9,200 positions last year, with 81 percent of the jobs staying in-house. Meanwhile, no competitions were completed at such agencies as the Department of Labor, the Department of Homeland Security, the Smithsonian and OMB.

Several agencies that ran job competitions reported a net loss of money, including the Agriculture Department ($3.6 million), the Social Security Administration ($78,000) and the Environmental Protection Agency ($7,100).

Johnson said such deficits are less likely to happen as agencies gain experience with the process. “We now have a base of information to continue to discuss this with Congress and with the agencies,” he said, “and a base of best practices and worst practices and real solid experience—as opposed to anecdotes to build upon to get even better about it as we go forward. . . .It’s a very positive sign for the taxpayers and it’s a very positive sign for what the federal employees are capable of doing.

 

It Didn’t Succeed, So Iwate Prefecture Decided to Give Up Unprosperous Japanese State, Egged On by Its Governor, Goes Slow and Likes It    By SEBASTIAN MOFFETT  Staff Reporter of THE WALL STREET JOURNAL  June 30, 2004; Page A1

MORIOKA, Japan—Nothing was going right for the residents of northern Iwate prefecture. Try as they might, the people of Iwate seemed stuck in a poor backwater, with factories closing, shaky state finances and few prospects. So, three years ago, Gov. Hiroya Masuda sent out a bold new message: Just give up. “We don’t make an effort in Iwate,” Mr. Masuda declared in a nationwide ad campaign that has run annually since 2001. Iwate should build traditional wooden houses rather than modern buildings, he said. Instead of striving like the big cities for economic growth, people should take pride in their forests.

“In Tokyo, people are chased by speed, and life consists of working, eating and sleeping,” says the 52-year-old Mr. Masuda, who has local government employees print the we-don’t make-an-effort slogan on their business cards.“Here, I want people to go home early in the evening, take a walk with their family, and talk to the neighbors.”

The wacky ads have been a hit. They boosted Mr. Masuda’s standing in Iwate, helping him get elected for a third time last year, with 88% of votes cast. They also struck a chord with Japanese nationwide. Opposing effort in Japan is as bizarre as disparaging freedom in America. But since their economy slowed in the 1990s, many Japanese have started to question whether their hard work was really worth it.

In the past, even average Japanese workers who devoted their lives to a corporation could prosper. “If you graduated from college and worked solidly, you would reach an annual salary of ¥10 million,” about $90,000, says economist Takuro Morinaga, author of a shelf of downshifting bestsellers with titles such as “It’s Cool to Be Poor.” But now that not everyone gets rich, “They think, why should they work themselves to death for their company?” he says.

The same logic applies to regional economies. Poorer areas used to believe they could catch up with Tokyo living standards, and the central government helped with generous handouts. But this aid has been slashed, and while the urban economies are taking off again, many provinces remain stalled. Iwate people earn less than 60% of what people in Tokyo do, and the prefecture has debts of about $9,000 per citizen.

Far from being derided, the four annual ad campaigns attracted a total of 23,816 overwhelmingly favorable e-mails—mainly from women tired of trying to cope with the strain of work and family. “Iwate is great for
daring to renounce effort,” wrote one 42-year-old woman. “This really takes a weight off my shoulders.”
Actually, the most enthusiastic anti-effort people are former city-dwellers who have rushed to Iwate to lead the slow life—people like the governor himself who used to work for the national government in Tokyo.

Tetsuya Watanabe, a former publishing company employee, now grows flowers and vegetables on a picturesque 2.5-acre farm surrounded by mountains, woods and rice paddies. Mr. Watanabe, a philosophy graduate, says “no effort” means living a more fulfilling life, closer to nature and away from the economic pressures of the city. “We don’t make an effort in a normal way, but we’re very busy,” says the 41-year-old over a lunch of fish, rice and home-grown vegetables. “It’s just not the kind of busyness where you feel stressed.

Tokyo native Nobuo Yoshinari is spreading the no-effort message to the younger generation. He used to work so hard for an event-promotion company that his wife complained he talked only about business. A few years ago, he quit and moved to Iwate.

Mr. Yoshinari is also building a nature retreat deep in the Iwate mountains. Urban Japanese use high-tech electronic toilets, and throw out perfectly good TV sets. At the “Forest and Wind School,” toilet users
sprinkle wood shavings over waste, which is then applied to the school’s vegetable patch or fermented to produce “biogas,” fuel for the center’s cafe.

Such projects have turned Iwate into a mecca for Japan’s nascent slow-life movement. Small towns are promoting green tourism, where urban visitors come to work on a farm, search the mountains for wild vegetables, and make traditional paper. Iwate’s standout industrial complex? Japan’s biggest wind farm.

Traditionalists think this has all gone too far. Toshio Sasaki, a 73-year-old local assemblyman who used to run a fishing business, says he has been striving to drag local living standards closer to those of Tokyo. Mr. Sasaki says it is crazy to waste nearly $400,000 each year on ads that make the prefecture appear lazy. He says Iwate, with its harsh winters, rugged mountains and struggling fishing villages, was built on effort—and needs plenty more in the future. Protesting the no-effort campaign in November 2002, he told the Iwate Prefecture Assembly: “Our elders were like oxen, who said nothing but made an effort.”

What really bugs him is urbanites who patronize the region as a quaint backwater. “One woman wrote the prefecture to say she was trying hard to raise her children and wanted Iwate’s nature to be preserved so she could eventually come here to relax. I thought, ‘What about us in Iwate? Are we supposed just to remain backward for the sake of these people from Tokyo?’ “

The counterattack widened in June when Iwate management consultant Ken Miya gave a speech at a conference in Morioka, the prefecture capital, titled, “Let’s Make an Effort, Iwate!” His small-business clients would collapse if they didn’t make an effort, he told 100 local officials and businessmen. He wanted Mr. Masuda to make an effort to pay off Iwate’s public debt, which recently triggered a 4% pay cut for public employees. But instead, “the governor is sweating and making an effort to explain the no-effort declaration,” he said. “Hasn’t he got anything better to do?”

But many locals back Mr. Masuda. Hiroko Fujisawa, a 34-year-old baker, says that people were long used to the slow life in Iwate but the governor helped them see this as good. “Masuda gives us hope for the future,” she says.

Mr. Masuda says that instead of just goofing off, the “no effort” is about rethinking values. He thinks the no-effort campaign has given locals confidence in the things they have—pleasant scenery, traditional pottery and natural foods—so they focus less on the things they lack. “There is more pride in the region and its culture and history,” he says. “Young people’s thinking will change, and they will stop yearning for Tokyo.”

As for going slow, Gov. Masuda doesn’t always heed his own advice. He gets up at 6 a.m. and starts work at 7:30. He works in the prefecture office until 6 or 7 in the evening. He also works Saturdays and Sundays, and says: “I don’t have so much free time.”       Write to:  Sebastian Moffett    sebastian.moffett@wsj.com

WHAT AILS US by James Surowiecki on THE FINANCAIL PAGE, The New Yorker, July 7, 2003  —  Page 27

Forgive American consumers if they feel a bit perplexed. Policy makers and pundits have been warning them about the prospect of deflation (a prolonged and widespread decline in prices), but there’s no sign of any decline in many of the prices that people pay every day. Car insurance premiums jumped more than nine per cent last year. Health-insurance costs are soaring, to say nothing of the cost of a haircut. Cable-TV prices have risen sixteen per cent since 2000. And then there’s college: tuitions at private colleges have jumped 5.6 per cent annually over the past three years, according to the College Board, and public colleges are even worse. In times like these, it’s hard to get worked up about deflation. Why the divergence? It may have something to do with Mozart. When Mozart composed his String Quintet in G Minor (K. 516), in 1787, you needed five people to perform it-two violinists, two violists, and a cellist.  Today, you still need five people, and, unless they play really fast, they take about as long to perform it as musicians did two centuries ago. So much for progress.

An economist would say that the productivity of classical musicians has not improved over time, and in this regard the musicians aren’t alone. In a number of industries, workers produce about as much per hour as they did a decade or two ago. The average college professor can’t grade papers or give lectures any faster today than he did in the early nineties. It takes a waiter just as long to serve a meal, and a car-repair guy just as long to fix a radiator hose.

The rest of the American economy functions differently. In most businesses, workers are continually getting more productive and can produce a lot more per hour than they could ten or twenty years ago. In 1979, workers at G.M. needed forty-one hours to assemble a car. Today, they need just twenty-four. In the nineties, according to the consulting firm McKinsey &Company, retailers boosted r sales per hour by sixty per cent, and that was nothing compared with computer makers, whose productivity since 1995 has gone up sixty per cent each year.

Because companies arc producing more for less, they can hold down costs, and when times arc good they can raise wages without hiking prices. So, in the late nineties, as productivity rose, wages did, too, though inflation lay dormant.

Generally, productivity growth is a boon, but it creates problems for nonproductive enterprises like classical music, education, and car repair: to keep luring talent, they have to increase wages, or else people eventually migrate to businesses that pay better. Instead of becoming nurses or mechanics, they become telecom engineers or machinists. That’s why teachers are getting paid a lot more than they were twenty years ago. (The average salary for an associate college professor has risen almost seventy per cent since the early eighties, and that’s if you adjust for inflation.) To pay those wages, schools and hospitals have to raise prices. The result is that in industries where productivity is flat costs and prices keep going up. Economists call this phenomenon “Baumol’s cost disease,” after William Baumol, the N.Y.U. economist who first made the diagnosis, using the Mozart analogy, in the sixties. As anyone with kids knows, cost disease is alive and well. A recent study by the economists Jack Triplett and Barry Bosworth demonstrates that among the service businesses that have been least productive in recent years you’ll find education, insurance, health care, and entertainment. These arethe ones that have seen steep price hikes.

There are really two American economies: one that’s getting more productive and one that’s not. In the first-the economy of Dell, Toyota, and Wal-Mart consumers have grown accustomed to paying less for more. In the second-the economy of Harvard, the Yankees, and Bob’s Body Shop-they pay more for the same. The first economy has policy nakers worried about deflation. The second has consumers worried about paying their bills.

Cost disease isn’t anyone’s fault. (That’s why it’s called a disease.) It’s just endemic to businesses that are labor-intensive. Colleges, for example, could do many things more efficiently, but, since their biggest expense is labor, the only way to reduce costs is either to increase the number of students each professor teaches or to outsource the work to poorly paid adjuncts. The same goes for health care: you can control drug costs and limit expensive new procedures, but, when it comes to, say, hospital care and doctor visits, the only way to improve productivity is to shrink the size of the staff and have doctors spend less time with patients (or treat several patients at once). Thus the Hobson’s choice: to lower prices you have to lower quality.

Once upon a time, economists worried that cost disease would wreck the economy, as services started to eat up more and more of people’s budgets. But the evidence now suggests that it can be contained. As long as the productive industries keep growing quickly enough to offset the sluggards, the economy as a whole can stay in good shape. The most significant consequence of Baumol’s cost disease, in fact, may be political, rather than economic. Some of the most important services that the government provides-education, law enforcement, health care-are the hardest to make more productive.  To keep providing the same quality of services, then, government has to get more expensive. People pay more in taxes and don’t get more in return, which makes it look as though the public sector, at least compared with the private sector, is inept and bloated. But it could be that the government is merely stuck in inherently low-productivity growth businesses. It’s not inefficient.  It’s just got a bad case of Baumol’s.

 

DANIEL GROSS “KEYS TO SUCCESS AUTOMATION AND INCREASED EFFICIENCY ARE THE GOALS OF MOST MANUFACTURERS. FOR A FEW, THE OPPOSITE IS TRUE” in US Airways’ Attache, November, 2003. Pages 13-14.

STEINWAY AND SONS, the venerable piano maker celebrating its one-hundred-fiftieth anniversary this year, still makes expensive instruments the old-fashioned way-literally. Most of the methods and many of the tools used at the factory in a gritty sector of Queens, hard by the East River, date to the late nineteenth century. From the laminated wood rims to the cast-iron frames, many components closely resemble those invented in the 1870s by various members of the Steinway family, which has dominated the high-end-piano trade the way Shaquille O’Neal dominates the paint.

“While Steinway didn’t invent the piano, it certainly perfected it to where its name and the word `piano’ are almost synonymous,” says David Liebeskind, who teaches a course at New York University’s Stern School of Business using Steinway as a study.

Steinway is more than a study in survival and devotion to tradition. It also stands as proof that greater automation, standardization, and efficiency-the great desiderata of all manufacturers-isn’t always better, or more profitable.
Heinrich Engelhard Steinweg, born in Lower Saxony in 1797, was a first-class survivor. Before turning 20, he had toughed out a brutal winter (that took the lives of his mother and several siblings), avoided a vicious lightning strike (that killed his father and three brothers), and kept his head down at the Battle of Waterloo (where he served as a bugler).

Steinweg ultimately settled into a comfortable trade-making organs, and eventually pianos. But famines and the turmoil wrought by the failed revolution of 1848 impelled him to cast his lot elsewhere. In 1850, Steinweg, his wife, three daughters, and five sons moved to New York City. The eldest son, Theodor, remained in Germany. In Manhattan, a center of piano manufacturing, Heinrich Steinweg Americanized his name to Henry E. Steinway, and took a job making piano soundboards for $6 per week.

In 1853, Steinway and his sons formed their own company. The first piano they made (serial number 483) was sold for the princely sum of $500. And in 1854, a Steinway won a prize at the Metropolitan Mechanics Institute Fair in Washington.

Between 1857 and the late 1890s, the Steinways took out 58 patents for innovations in piano design. The result was a bigger, better, and richer sound-ideal for the larger concert halls being built.

His son William, a marketing genius, advertised aggressively. In 1866, he worked to open Steinway Hall on 14th Street in New York. With an auditorium of 2,000 seats, it was the destination of choice until Carnegie Hall opened in 1891. Recognizing the value of prominent product endorsers, William courted royalty of the financial and political kind (Baroness de Rothschild and Queen Victoria) and, most successfully, of the musical kind. In 1871, the Steinway company sponsored a 239day 215-performance U.S. concert tour by virtuoso Anton Rubinstein, and then worked to make Steinways the pianos of choice for composers and performers the world over. The publicity and patronage created a powerful mystique. In 1890, Thomas Edison coveted a Steinway and later used one to make the first successful sound recording.

Outgrowing its quarters in Manhattan, the company bought 400 acres of farmland in Queens in 1870. There it built a lumber mill, a foundry, a factory, and a company town, Steinway Village. The site has remained the center of operations.

Under the leadership of a third generation of Steinways, the company hit its peak in the 1920s, when it produced more than 8,000 pianos annually and built a new showroom near Carnegie Hall. In the past 70 years, however, a host of economic trends (the Depression and World War II) and technological trends (radio, TV, synthesizers, the Internet) conspired against the manufacture and sale of expensive pianos. And yet Steinway has endured.

The company is no longer controlled by the Steinway family-Henry Z. Steinway, the great-grandson of the company founder, retired in the early 1970s and, with no heir apparent, sold the company to CBS in 1972. And there have been several changes of ownership in the past 30 years. In 1995, Steinway was sold to Selmer Industries. The parent company now trades under the stock symbol LVB-Beethoven’s initials.
But the new owners have remained faithful to Steinway’s traditions. At the factory, in a process the company’s manufacturing director calls “antimanufacturing,” some 450 workers make about 3,000 pianos a year much the same way they did in the 1850s. To better maintain quality, the company refuses to subcontract major work to outside workers. Most of the 12,000-odd components are lovingly and painstakingly crafted and assembled on site. And the work force-which hails from 25 different countries-learn not from manuals but from those who preceded them.

To a striking degree, in fact, Steinway’s value proposition is the same as it was 1 years ago. Steinways aren’t cheap – new grands cost up to $90,000. But you don’t buy one unless you’re as serious about your ivories as Steinway is about making them. Each piano has its own personality. “All Steinways are made the same way by the same people in the same factory, yet each is different,” as James Barron put it in a lyrical New York Times series that traced the painstaking nine-month-long transformation of wood and steel into a 9-foot concert grand piano.

Steinway still relies heavily on associating its products with high-profile users. But in an era when companies shell out millions to have institutions and performers endorse products, Steinway manages to get its endorsers to pay top dollar. Under the company’s longstanding All Steinway Schools, prestigious music conservatories like Juilliard and the Yale School of Music purchase only Steinways. Some 1,300 artists – from Billy Joel to Van Cliburn – perform almost exclusively on Steinways. To ensure that these musician can have access to Steinways while on the road, the company maintains piano banks in cities throughout the world. (Musicians must own a Steinway to use the service.)

Last June, as Steinway and Sons celebrated its anniversary with a series of concerts at Carnegie Hall, the company held a contest to see who owned the oldest Steinway. (The winner was No. 2162, a grand made in June 1859.) As a manufacturer in New York City, and with its devotion to its own storied history, Steinway may seem an anachronism. But going down Steinway Street isn’t just a trip down memory lane. The pianos it makes are immensely profitable products-regardless of the state of the economy. The company enjoys 98 percent of the concert-grand market. And, as company president Bruce Stevens told Fortune: “We have 2 percent of all keyboard unit sales in the U.S. But we have 25 percent of the sales dollars and about 35 percent of the profits.” Music to the ears of any manager.

DANIEL GR0SS writes from his home in Westport, Connecticut.   For Steinway Sons piano info, company history, and factory tours, go to steinway.com on the Web.

 

Daniel Mcginn, “No PC Required,” Newsweek, April 21, 2003.

Page E-16

But when it’s time to prepare his clients’ 1040s each spring, Larson turns to a different technology: a Pentel 0.5  Twist-Erase graphite pencil and an old-school Texas Instruments calculator.  In the age of TurboTax, he powers through 200 or so tax returns each year by hand.  Larson, 59, has looked at tax software, but he’s not convinced they’d make him more efficient.  By doing returns the old-fashioned way, he believes he’s paying closer attention.  “I feel I’m giving clients more of their money’s worth,” Larson says.
48-Hour Internet Outage Plunges Nation Into Productivity          The Onion   10/1/2003

BOSTON—An Internet worm that disabled networks across the U.S. Monday and Tuesday temporarily thrust the nation into its most severe maelstrom of productivity since 1992.

“In all my years, I’ve never seen anything like this,” said Price Stern Sloan system administrator Andrew Walton, whose effort to restore web service to his company’s network was repeatedly hampered by employees busily working at their computers. “The local-access network is functioning, so people can transfer work projects to one another, but there’s no e-mail, no eBay, no flaminglips.com. It’s pretty much every office worker’s worst nightmare.”

 

According to Samuel Kessler, senior director at Symantec, which makes the popular Norton Antivirus software, the Internet “basically collapsed” Monday at 8:34 a.m. EST.

The Gibe-F worm, an e-mail-transmittable virus, initiated cascading server failures. Within an hour, Internet service to more than 90 percent of the U.S. was disabled, either by the worm or by network firewalls that initiated security protocols.

“Unlike SoBig or Blaster, this worm didn’t harm individual computers; it just used them as a gate to attack the Internet at the ISP level,” Kessler said. “Computer technicians at most offices couldn’t do anything but sit by helplessly as people worked through stacks of filing, wrote business-related letters they’d put off for months, and sold record amounts of goods and services over the phone.”

Shortly after office workers found their web, e-mail, and instant-messaging capabilities disabled, reports of torrential productivity began to reach corporate offices nationwide.

“My first thought was ‘My God, this has to be some kind of mistake,'” said Prudential Insurance executive vice-president Shane Mullins of San Francisco.

“My e-mail wasn’t working. Nerve.com wasn’t working. I eventually found out that the company web site wasn’t working, either. But by that time, my inbox was filling up like you wouldn’t believe.”

“My actual physical inbox,” Mullins added. “It’s this gray plastic thing on my desktop—the top of the desk I sit at.”

With workers denied access to ESPN.com, Salon, Fark.com, and Friendster, employers struggled to keep up with the sudden increase in efficiency.

“Our office was working at roughly 95 percent efficiency,” said Steven Glover, an advertising executive and creative team leader at Rae Jaynes Houser. “It’s problematic to have the rate jump like that—it sets a precedent that will be impossible to maintain once the Internet comes back.”

Glover said his department failed to reach 100 percent productivity only because employees stopped work every few minutes throughout the outage to see if Internet service had been restored.

“This is terrible,” said Miami resident Ron Lewison, an employee at Gladstone Finance and an Amazon.com Top 500 Reviewer. “For two days, I’ve been denied access to the vital information I need to go about my workday. In the absence of that information, I’ve been forced to go about my job.”

According to Labor Department statistics, companies affected by the Internet outage generated an estimated $4 to $6 billion in extra revenue.

“Losses to online retail companies will be considerable, ” said Jae Miles, senior financial economist at Banc One Capital Markets in Chicago.

“Nevertheless, the outage’s overall impact on the national economy will be a positive one. The losses should be easily offset by the gains to companies that depend primarily on people finishing actual work.”

As of press time, many administrators had begun to apply a patch that combats the Gibe-F worm.

“Thank God, Earthlink service is back, and with it, online shopping and entertainment news,” office worker Emily Jaynes said at 7 p.m. Tuesday. “I’m ready to head home now. I couldn’t bear to spend another evening repainting furniture and using my pool.”

Financial experts say they hope to have detailed data on the economic impact of the outage within the next 24 hours.

“When American office workers are denied access to vast, complex streams of ever-fluctuating and evolving information, they tend to get a lot done,” said Nicole Dansby, a business-information analyst employed by the New York Stock Exchange. “The extended Internet outage may or may not have had something to do with the Dow’s 278-point jump Tuesday. I’ll have to, you know, check the web for a few hours and get back to you.”

 

Douthwaite, Richard.  Strengthening Local Economies for Security in an Unstable World  England:  1996. ISBN 1870098641

Page  34

In current conditions, then, selling things outside our immediate areas to earn the money to buy the goods and services we must have to survive cannot be considered the basis for a sustainable, stable local community.  What we must do instead is look at the resources of our areas and see how they can be used to meet our communities’ vital needs directly rather than via the conventional, indirect, produce-for-someone-else-and-buy-one’s-requirements-in route.

I know we have been taught that this latter indirect route is more efficient because it takes more resources to grow bananas in Ennis, Essex or Essen than in Ecuador.  My response to this is threefold.  One answer is that the much-touted efficiency of the world trade system is a grotesque myth, as I will demonstrate shortly.  For the moment, we only need ask ourselves how a system that condemns so many people to spend their lives in involuntary idleness and uses so many scarce resources to do the simplest things can still be regarded as efficient, particularly as we saw in the previous chapter that as some countries’ output increases, their citizens are actually receiving a smaller amount of economic welfare year by year.
Secondly, even if the indirect system was more efficient, we ought to at least discuss how much inefficiency we would tolerate from the direct route in order to reduce the risk of our lives being blighted and our livelihoods  disrupted by instabilities in the external world.  Most of us pay premiums for house or car insurance every year, accepting the certainty of a small loss in exchange for avoiding the risk of a big one.  As communities we should also be prepared to pay for insurance, in this case against economic disruption, particularly as local economies that  boast a wide range of activities are not only more stable but provide much more scope for their members to find niches within which they can fulfill themselves.

Page 35

Thirdly, bananas are non-essentials, and if they were imported as a direct exchange for some non-essential we grew, the fact we relied on other people to produce them would not matter:  either party to the trade would be able to terminate it whenever they wished without seriously harming the other.  Our goal should be to minimize our dependence on external trade, not to phase it out altogether.  Trading outside our communities should become something we can engage in if we choose, and then on our own terms, not something that is vital for our survival.

World prices must not determine what we produce. Existing levels of prices or profits cannot be allowed to determine whether or not we should make or grow something in our communities.  This is because there is no connection between an item’s value to our community and the price our neighbours pay for it in normal times.  True, most economists and right-wing politicians believe that market prices should determine what is produced, in what quantity, by what method, and where, because it is ‘uneconomic’ and ‘inefficient’ to take other factors into consideration.  But this is because they believe that the market price of something is equal to its value and because all their thinking is in terms of the industrial system.   Efficiency, however, can only be measured in relation to one’s objectives; and if we have objectives that those running the industrial system do not share — such as satisfying work, stability, sustainability and fairness rather than the maximization of returns to investors’ capital — our success or failure must be measured with respect to our  targets and not theirs.

From the point of view of progress towards community goals, local production for local use can be much more efficient than production for outside markets.  This is because a community is interested in a much wider range of benefits than merely the profit a business makes.  It is, for example, interested in the total income — the wages, the profits, the  payments for local materials — that the business brings into or keeps in the community’s area.   Investors, on the other hand, are usually only concerned with the tiny fraction of a business’s total income flow that  ends up in their hands, an outlook that, from a community’s point of view, leads to the tail waging the dog.

Page 36

Moreover, because a community needs its income for long-term tasks, such as raising children, it wants to be sure  that the activity will continue for many years.  Investors, on the other hand, tend to have very short time horizons  and frequently give up valuable future benefits to get more immediate returns.  In a 1994 survey by the  Confederation of British Industry, two-thirds of the companies that responded required investment projects to pay for themselves in three years or less.  What is efficient for our communities is therefore very different from what is efficient for investors in the wider world.

Page 45

In a goldmine of a book, The Market Experience, Professor Emeritus Robert Lane of Yale University describes an experiment in which students were paid to do a boring task and got more pleasure from it than a control group that was unpaid.  However, when another batch of students was paid to do interesting work, they found it less rewarding than those who had done the same task for nothing.  In fact the paid group doing the interesting job got even less   enjoyment than those who had been happy to do the boring task unpaid because they thought it was useful.  In  another test, unpaid volunteers showed more commitment than paid workers; they were more likely to continue with their tasks when their supervisors left the room.
Lane quotes from a study by F. Thomas Juster that shows that, almost regardless of the nature of their work or their social class, people prefer their jobs to most of their leisure activities:

People do not work for ‘nothing’ but what they do work for is often not just the pay they receive …  They may work because meeting the challenges of work increases their sense of personal control, or out of a sense of duty, or because of a pressing need to achieve some high standard of excellence.  [Whatever] their motives may be, people  evade the market’s focus on exchange, for these motives are satisfied by internal rewards that do not depend upon exchanging money for work.

In my view, the internal rewards Lane mentions are best provided by firms owned and controlled by those working in them, which see their role as serving their communities and regard work not only as a source of income but as one of the main ways people fulfil themselves.  I also think that unless we can construct environments that foster such firms, cut-throat international competition will ensure that in a few years’ time, highly paid jobs will be available only to a fortunate few, and the choice for many of the rest of us will b e between unemployment and a low-paid job in a large, highly pressured firm scrambling for its place in the world market, a firm to which we can rarely make an individual contribution and matter as people not at all.

Page 338

Competition forces firms to don a commercial straitjacket and to act in a very particular way.  It is more effectively totalitarian than ever a Soviet central planner was able to be, which is exactly what its supporters like about it because they believe that only one way of operating a company or an economy is ‘efficient’.  They are happy to admit that their definition of efficiency is entirely commercial and excludes social objectives because they think that  non-commercial objectives should be tackled separately once maximum profits have been made.  However, as these profits are likely to be made at the expense of social objectives, the ultra-competitive, maximize-profits-first-and-then-use-some-of-them-for-social- ends-later approach is a highly inefficient way of achieving them.  What our communities need is a form of economy that gives the producers within it sufficient protection from outside competition for them to meet social objectives as well as their own.

 

Twitchell, James B.  Lead Us Into Temptation.   New York: 1999.  ISBN 023111518

Page 12

What sets American culture of the late twentieth century apart is not avarice, but a surfeit of machine-made things.  What is clear is that most of these things in and of themselves simply do not mean enough.  So we have developed very powerful ways to add meaning to goods.  This is a chicken-and-egg situation, to be sure.  For it is American production and marketing techniques (advertising, packaging, branding, fashion, and the like) and our eagerness to embrace them that have produced surplus.  Consumption of things and their meanings is how most Western young people cope in a world that science has pretty much bled of traditional religious meanings.

Page 53

Machines do two things with amazing ease.  They produce identical objects and they tend to produce them in mass quantities.  As a way to work off those surpluses, as well as differentiating what are essentially interchangeable objects, capitalist had to create a new signifying system or they would glut themselves on their own overproduction.  Advertising was that system.

Page 54

This interpretation is true enough.  Think only of how consumer debt was merchandised until it became an accepted habit, not an abhorred practice.  Think only of how shame was transformed from consuming too much to consuming too little.  Think only of how the concept of shine and “new and improved” replaced the previous value of patina and heirloom.  Naming something differently was often a prima facie case for renewed consumption.  You never questioned whether this merited buying more, just as you supposedly never questioned if Jumbo was larger than Giant, or exactly what Premium or Super meant.  Creating a massive consumer class with semantic aphasia was the necessary accomplishment of supply-side capitalism.

Page 286

It would be nice to think that greater material comforts will release us from racism, sexism, and ethnocentricism, and that the apocalypse will come as it did at the end of romanticism in Shelley’s Prometheus Unbound, leaving us “Sceptreless, free, uncircumscribed…  Equal, unclassed, tribeless, and nationless…  Pinnacled dim in the intense inane.”

But it is more likely that the globalization of capitalism will result in the banalities of an ever-increasing, worldwide consumerist culture.  Recall that Athens ceased to be a world power around 400 B.C., yet for the next three hundred years Greek culture was the culture of the world.  The Age of European Exposition ended in the mid-twentieth century; the Age of American Markets — Yankee imperialism — is just starting to gather force.  The French don’t stand a chance.  The Middle East is collapsing under the weight of dish antennas and Golden Arches.  The untranscendent, repetitive, sensational, democratic, immediate, tribalizing, and unifying force of what Irving Kristol calls the American Imperium need not result in a Bronze Age of culture, however.  In fact, who knows what this Pax Americana will result in?  But it certainly will not produce what Shelly had in mind.

We have been in the global marketplace a short time, and it is an often scary and melancholy place.  A butterfly flapping its wings in China may not cause storm clouds over Miami, but a few lines of computer code written by some kid in Palo Alto may indeed change the lives of all the inhabitants of Shanghai.
We have not been led into this world of material closeness against our better judgment.  For many of us, especially when young, consumerism is our better judgment.  And this is true regardless of class or culture.  We have not just asked to go this way, we have demanded.  Now most of the world is lining up, pushing and shoving, eager to elbow into the mall.  Woe to the government or religion that say no.
Getting and spending has been the most passionate, and often the most imaginative, endeavor of modern life.  We have done more than acknowledge that the good life start with the material life, as the ancients did.  We have made stuff the dominant prerequisite of organized society.  Things “R” Us.   Consumption has become production.  While this is dreary and depressing to some, as doubtless it should be, it is liberating and democratic to many more.

 

Peters, Tom in Anthony Sampson’s  Company Man, New York:  1995 ISBN 0812926315 Page 2

Read more novels and fewer business books.

 

“People Who Need People Are New Hampshire People” Philadelphia Inquirer, Page A3

Score one for humans.  New Hampshire officials have replaced toll-taking machines on the state’s most traveled thruway with—now get this—people.   For the first time, people are working all 16 booths at the Hampton toll on I-95, the direct route from Boston to New Hampshire.  They’re also being phased in at other tolls.  With human toll-takers, 600 to 700 drivers an hour breeze through, compared with the machines’ average of 400.  Nice to know that we as a people are making a comeback.

 

Brilliant, Ashleigh, From .sig Quotes  November 16, 1997, Page 46

To be sure of hitting the target, shoot first, and call whatever you hit the target.”

 

Inoue, Shinichi.  Putting Buddhism to Work.  New York: 1977.  ISBN 4770020240 Pages 20-1

One Zen proverb runs:  “The way to Enlightenment is easy—just avoid picking and choosing.” Picking and choosing reveals the human tendency to prefer one thing over another for oneself alone, often at the expense of other people and other living things.  This tendency is a manifestation of the ego-mind.  In Buddhism, release and freedom from this process is called Enlightenment.

Archetypically, we can trace this development in the human psyche from the Genesis account of Adam and Eve eating from the tree of knowledge.  In that act they discovered the distinction between their own bodies (myself) and the bodies of others (things not myself).  This awareness of self exerted a great deal of power over humans and was, in a certain sense, useful for making distinctions and decisions.  However, this development of the human psyche also brought with it an enormous disadvantage, for it resulted in human beings feeling cut off from the larger web of life.

 

Denning, Peter J.  Beyond Calculation, New York:  1997.  ISBN 0387949321 Page 113

The Machine-Centered View
————————————

PEOPLE

MACHINES

Vauge

Precise

Disorganized

Orderly

Distractible

Undistractible

Emotional

Unemotional

Illogical

Logical

The Human Centered View
————————————

PEOPLE

MACHINES

Creative

Dumb

Compliant

Rigid

Attentive to change

Insensitive to change

Resourceful

Unimaginative

 

Shuman, Michael.  Going Local.  New York:  1998. ISBN 0684830124, Page 199

A self-reliant community might ultimately strive to trade only with other communities committed to adhering to this global grading system.  Global trade would continue, but only among partners committed to a community-centered vision of commerce.  One consequence of this strategy could be the emergence of two global blocs of communities, each following different economic paradigms and each doing business with different corporations.  The “neoliberal bloc” of communities might benefit from cheaper goods and higher rates of return off their investments, but also would have to endure deteriorating working conditions, environmental collapse, and community instability.  The “socially responsible bloc” might wind up paying higher prices, but would enjoy a higher quality of life.

 

Even though the communities and corporations in the latter bloc would start out in the minority, over time—as more workers in the neoliberal bloc lost jobs and pay; as problems from pollution and unsafe products multiplied; as ecology, labor, and social-change organizations emerged to respond to these problems more and more neoliberal  communities and corporations would probably begin to choose a better quality of life over obsolete notions of  economic efficiency.   The mere existence of an alternative bloc would give politicians and activists committed to a new economics of place a concrete goal for organizing.

 

Ritzer, George.  The McDonaldization of Society:  an Investigation into the Changing Character of Contemporary Social Life.  United States:  1990.  ISBN 0803990766, Pages 199 through 203

Avoid daily routing as much as possible.  Try to do as many things as possible in a different way from one day to the next.

More generally, do as many things as you can for yourself.  If you must use services, frequent nonrationalized, nonfranchised establishments.  For example, lubricate your own car.  If you are willing or unable to do so, have it done at your local, independent gasoline station.

To really shake up the clerk at the department store, use cash rather than your credit card.

Send back to the post office all junk mail, especially that addressed to “occupant” or “resident.”

When dialing a business, always choose the “voice mail” option that permits you to speak to a real person.
Seek out restaurants that use real china and metal utensils; avoid those that use materials such as styrofoam that adversely affect the environment.

Read The New York Times rather than USA TODAY once a week.  Similarly, watch PBS news once a week with its three long stories rather than the network news shows with their numerous snippets.

More generally, watch as little television as possible. If you must watch TV, choose PBS.  If you must watch one of the networks, turn off the sound and avert your eyes during commercials.  After all, most commercials are sponsored by enterprises that tout the virtues of rationalization.

Avoid most finger foods.  If you must eat finger foods, make them homemade sandwiches and fresh fruits and vegetables.

 

On your next vacation, go to only one locale and get to know it and its inhabitants well.

Never enter a domed stadium or one with artificial grass; make periodic pilgrimages to Fenway Park in Boston and Wrigley Field in Chicago.

 

Luttwak, Edward N.  Consumption, Culture, and the Pursuit of Happiness.   Washington, DC:  1999.  ISBN 1559635355,  Pages 62-3

The great claim that is made for the flexibility of Americans and hence of the U.S. labor market — that is, the willingness of Americans to move from place to place, to change their trade or even their profession, and to accept lower wages in order to keep working — is, of course, its economic efficiency.   Nobody pretends that the personal and social consequences of so much mobility and adaptability are positively desirable in themselves.
However, when the chain of repercussions is followed step by step, from an economic system that achieves efficiency by imposing constant structural change, to the fragmentation of family life that is thereby caused, to the resulting psychological consequences, to the consumption habits these consequences induce, and then to the effect of those habits on the economic system by way of low savings and baroque consumer preferences, it may be concluded that a more rigid but more stable economy could be even more efficient.  Labor costs would be higher, but so would savings rates because less mobile, more secure employees would be more likely to plan ahead and to sustain reassuring family ties, reducing their emotionally motivated consumption expenditures.  A higher savings rate would increase the supply of capital, which would in turn increase the productivity of labor, offsetting higher labor costs.

At a time when the dynamic “turbo-capitalism” of today’s deregulated, globalized U.S. economy is greatly celebrated, one may recall that until the late 1970s, the U.S. economy was more rigid and much more stable.  This was because a great many industries, from airlines to natural gas companies to savings and loan associations, were subject to detailed regulation and thus were stabilized, as were their labor forces.  At the time, needless to say, consumption spending of all kinds absorbed a lower proportion of incomes.  Thus savings rates were higher –and so was growth, for all the supposed inefficiencies of regulation.  There were fewer opportunities for financial acrobats to accumulate enormous wealth (the chief executive officers of regulated airlines earned the miserable pittance of only $1 million per year), and employees at large were economically secure because stable industries meant stable jobs.  Judging by the lower voluptuary spending of the period, Americans were also happier.

 

[Source and Author unknown]

A corporation has no soul, no mortals.  It cannot feel love or pain or remorse. You cannot argue with it.  A corporation is nothing but a process—an efficient way of generating revenue.

We demonize corporations for their unwavering pursuit of growth, power and wealth.  Yet let’s face it:  they are simply carrying out genetic orders.  This is exactly what corporations were designed—by us—to do. Trying to rehabilitate a corporation, urging it to behave responsibly, is a fool’s game.

The only way to change the behavior of a corporation is to recode it; rewrite its charter; reprogram it.
In 1886, the US Supreme Court brought down a decision that changed the course of American history.  In Santa Clara county vs. Southern Pacific Railroad, a dispute over a railbed route, the judge ruled that a private corporation was a “natural person” under the US constitution and therefore entitled to protection under the Bill of Rights.  The judgment was one of the great legal blunders of the century.  Sixty years after it was inked, Supreme court Justice William O. Douglas said of Santa Clara that it “could not be supported by history, logic or reason.” With Santa Clara we granted corporations “personhood” and the same rights and privileges as private citizens.  But given their vast financial resources, corporations now had far more rights and powers than any private citizen.  In a single legal stroke, the whole intent of the constitution—that all citizens have one vote and exercise an equal voice in public debates—had been undermined.  In 1882, we, the people, lost control of our affairs and sowed the seeds of the Corporate State we now live in. There is only one way to regain control.  We must challenge the corporate “I” in the courts, and ultimately reverse Santa Clara.

 

Gates, Jeffrey R.  The Ownership Solution.  United States of America:  1998.  ISBN 0201328089
Page xx

There as a time when economic decisions were informed by conscience and made with sensitivity to the community.  That was most obviously the case when village elders held sway or when close-knit communities were the rule rather than the rarity.  That richly textured, multilayered, multiple-agenda decision-making has gradually been replaced by a cool financial efficiency engineered with but one goal in mind: money-denominated returns.  On that score, global capitalism displays an undeniable genius for detached reckoning in its capacity to ferret out financial returns worldwide.  But that process also fosters grotesque inequities and environmental travesties.  By my calculation, it is demonstrably unsustainable—socially, politically, fiscally, culturally and environmentally.

Page xx1

The human element that Adam Smith saw at the heart of self design has been allowed to atrophy as return-seeking capital has been granted deference, even dominance.  We are all now buffeted by a global economy in which key actors are encouraged, even mandated, to maximize financial returns in a worldwide auction of sorts in which financial values have become a substitute for the values of ethics, religion and community.  At any given hour of the day, somewhere a capital market is operating.  The securities traded often belong to huge, virtually stateless multinational corporations that, in turn, take their cues from the detached concerns of investment managers intent on reaping short-term financial returns.  Money, not man, is fast becoming the measure of the public good. Graffiti spotted on a wall in Warsaw captures this very modern dilemma:  “We wanted democracy, but we ended up with the bond market.”  As we’ll see, the real enemy here is our own bad habits, epitomized by our now institutionalized indifference to the common good.  The new field of struggle will be in the domain of finance because it is there that mankind has lost his place as the measure of things.
Instead, both man and his environment are being made to measure for this impersonal and all-pervasive force of his own creation.

Page 23

Let’s recap three of the four reasons why capital ownership is largely closed to outsiders.  First, earnings and profits generated by a company belong to those who presently own the company.  Second, assets qualify for depreciation only after those owners put the assets to use, because only then do they become subject to wear, tear and obsolescence.  Third, debt is most accessible to those who are already “inside” this closed system, because only they have access to the collateral and the cash flow required to secure and service that debt.

The fourth and final source of funds i s the sale of the newly issued shares.  New equity has long been a relatively insignificant source of funds.  Not since the turn of the century has the sale of the new equities accounted for more than 3 to 5 percent of overall funds raised in any year.  Initial public offerings of shares (IPOs) for 1991 totaled only $46 billion (692 offerings), surpassing the record $34 billion in 1993.  Those new equities are purchased largely by the well-to-do or by institutional investors.

Policymakers routinely claim that capitalism is an “open” system because anyone can purchase shares.  It’s a free market—anyone (i.e., anyone with money) can buy those new equities.

Expecting a broad base of wage earning to buy their way into significant ownership (i.e., from their already stretched paychecks) is what I call “Marie Antoinette Capitalism”— only instead of urging “Let them eat cake,” the modern refrain is “Let them buy shares.”  Today’s closed system of finance has much the same economic effect as the enclosure movement of the eighteenth century—creating pools of people who, deprived of any realistic chance to own, find, themselves competing against each other for an ever dwindling number of well-paid jobs.

 

Mander, Jerry, and Edward Goldsmith.  The Case Against The Global Economy.  San Francisco:  1996.  ISBN 0871563525, Pages 404-14

“Buy-local” campaigns help local businesses survive even when pitted against heavily subsidized corporate competitors.  The campaigns not only help keep money from leaking out of the local economy but also help educate people about the hidden costs to the environment and to the community in purchasing less expensive but distantly produced products.

Another idea is the creation of local “tool lending libraries,” whereby people can share tools on a community level.  By reducing the need for everyone to have their own agricultural or forestry equipment, gardening implements, or home repair tools, people can keep money within the local economy while simultaneously fostering the sense of neighborly cooperation that is a central feature of real community.
One of the most exciting grass-roots efforts is the Community Supported Agriculture (CSA) movement, in which consumers link up directly with a nearby farmer.  significantly, in a country where small farmers linked to the industrial system continue to fail every year at an alarming rate, not a single CSA in the United States has failed for economic reasons.  [See chapter by Daniel Imhoff]….

If the members of a local community wanted their community to cohere, to flourish, and to last, these are some of the things they would do:

1. Always ask of any proposed change or innovation: What will this do to our community? How will this affect our common wealth?

2. Always include local nature—the land, the water, the air, the native creatures—within the membership of the community.

3. Always ask how local needs might be supplied from local sources, including the mutual help of neighbors.

4. Always supply local needs first (and only then think of exporting products first to nearby cities, then to others).

5. Understand the ultimate unsoundness of the industrial doctrine of “labor saving” if that implies poor work, unemployment, or any kind of pollution or contamination.

6. Develop properly scaled value-adding industries for local products to ensure that the community does not become merely a colony of the national or global economy.

7. Develop small-scale industries and businesses to support the local farm and/or forest economy.

8. Strive to produce as much of the community’s own energy as possible.

9. Strive to increase earning (in whatever form) within the community for as long as possible before they are paid out.

10. Make sure that money paid into the local economy circulates within the community and decrease expenditures outside the community.

11.Make the community able to invest in itself by maintaining its properties, keeping itself clean (without dirtying some other place), caring for its old people, and teaching its children.

12. See that the old and the young take care of one another.  The young must learn from the old, not necessarily and not always in school.  There must be no institutionalized childcare and no homes for the aged.  The community knows and remembers itself by the association of old and young.

13. Account for costs now conventionally hidden or externalized.  Whenever possible, these must be debited against monetary income.

14. Look into the possible uses of local currency, community-funded loan programs, systems of barter, and the like.

15. Always be aware of the economic value of neighborhood, which leaves people to face their calamities alone.

16. A rural community should always be acquainted and interconnected with community-minded people in nearby towns and cities.

17. A sustainable rural economy will depend on urban consumers loyal to local products.  Therefore, we are talking about an economy that will always be more cooperative than competitive.

 

Seligman, Martin E. P.  Learned Optimism.  New York: Knopf, 1990. ISBN 0394579151, Page 289

Put aside 5 percent of the last year’s taxable income to give away, not to charities like United Way, which do the work for you; you must give the money away yourself, personally.  Among potential recipients in the charitable field you are interested in, you must advertise that you are giving away $3,000 (or whatever) and for what general purposes.  You must interview prospective grantees and decide among requests.  You give out the money and follow its use to a successful conclusion.

Give up some activity which you do regularly for your own pleasure—eating out once a week, watching a rented movie on Tuesday night, hunting on fall weekends playing video games when you come home from work, shopping for new shoes.  Spend this time (the equivalent of an evening a week) in an activity devoted to the well-being of others or of the community at large:  helping in a soup kitchen or a school-board campaign, visiting AIDS patients, cleaning the public park, fund-raising for your alma mater.  Use the money you saved by canceling the pleasurable activity to further that cause.

When asked by a homeless person for money, talk to him.  Judge as well as you can if he will use the money for nondestructive purposes.  If you think he will, give it to him (give no less than five dollars).  Frequent areas where you will find beggars, talking to the homeless and giving money to the ones in true need.  Spend three hours per week doing this.

When you read of particularly heroic or despicable acts, write letters:  fan letters to people who could use your praise and mend-your-ways letters to people and organizations you detest.  Follow up with letters to politicians and others who can act directly.  Spend three hours per week at this.  Do it slowly.  Compose the letters every bit as carefully as you would a crucial report for your company.

Teach your children how to give things away.  Have them set aside one-fourth of their allowance to give away.  They should discover a needy person or project to give this money to, personally.

 

Sarewitz, Daniel R.  Frontiers of Illusion. 1996.  ISBN 1566394155, Page 137

If the developing nations were setting research priorities for the world, they might emphasize such problems as:  improving the efficiency, productivity, and environmental soundness of subsistence and production farming and low-technology manufacturing; devising energy-efficient “end-use” technologies for basic needs such as cooking, lighting, and transport; creating small-scale, nonpolluting, decentralized energy-supply technologies; preventing tropical diseases, such as malaria and cholera, and developing better diagnostics and treatments for respiratory infections; reducing the consequences of natural disasters such as floods and typhoons; increasing the effectiveness of reforestation.  But developing nations, with less than 15 percent of the world’s scientists and engineers and less than 5 percent of the world’s total research and development funding, do not have the resources to maintain major programs in areas such as these, while industrialized nations lack the economic and political motivation to pursue aggressively such research goals.

 

Kimbrell, Andrew.  “Breaking The Job Lock.”  Utne Reader January-February 1999.  Page 48

Even though we are supposed to be living in the postindustrial era—many of our jobs are now dictated by the demands of computers instead of assembly lines — our lives at work are really not much different from those of 19th-century factory workers.  We are still seen as replaceable spare parts for the great machines of production.  From the checkout person at the grocery store to the highly trained engineer, we are all expected to work faster, waste less time, produce more.

We are not machines, of course, and the drive for ever greater efficiency in the competitive global economy is taking its toll.  More than 80 percent of Americans say their lives are more stressful now than they were five years ago; pressures at work are cited as the primary reason.  More and more of us need to be medicated just to get through the workday.  More than 45 million American adults are taking prescription psychotropic medications.  The largest increase is not in the use of the much publicized antidepressant Prozac, but rather in a variety of drugs used to treat anxiety and stress disorders.

As a society we continue to honor the virtues of caring and empathy in our personal lives, and these must become the cornerstones of a new kind of work ethic.  Empathy for the physical and mental needs of workers must replace efficiency as the paramount value of the workplace.  After all, no one in their right mind evaluates the importance of their family, friends, or even pets on a strict efficiency basis.

 

Thomas Moore. The Care of the Soul—A guide for cultivating depth and sacredness in everyday life. New York: Harper Collins, 1992, Page 178

Certainly we allow the workplace to be dominated by function and efficiency,  thereby leaving us open to the complaints of neglected soul.  We could benefit psychologically from a heightened consciousness about the poetry of work—its style, tools, timing, and environment.

 

Kahlil Gibran,  The Prophet

For to be idle is to become a stranger unto the seasons, and to step out of life’s procession, that
marches in majesty and proud submission towards the infinite.
When you work you are a flute whose heart the whispering of the hours turns to music.
Which of you would be a reed, dumb and silent, when all else sings together in unison?…
And all work is empty save when there is love;
And when you work with love you bind yourself to yourself, and to one another, and to God.
And what is it to work with love?
It is to weave the cloth with threads drawn from your heart, even as if your beloved were to wear
that cloth.
It is to build a house with affection, even as if your beloved were to dwell in that house.
It is to sow seeds with tenderness and reap the harvest with joy, even as if your beloved were to
eat the fruit.
It is to charge all things you fashion with a breath of your own spirit,
And to know that all the blessed dead are standing about you and watching….
Work is love made visible.

 

Andrei Codrescu, Workaholish Zombification, 1994

But one day, someone bought one of his do-nothing ideas, and asked him for another.  After a few weeks, he started to do nothing on purpose, that is, he did nothing deliberately in order to get one of his great (and profitable) do-nothing ideas.  He now had enough money to stop doing nothing.  His walk to the cafe became brisker, less noticing of the verdant brilliance.  The coffee was indifferent, and he started actually reading the newspaper he had merely enjoyed for its smell before.  Even his friends, instead of conversation companions, became sounding boards.  And his dreams got grim and apocalyptic.
At the bar, he got into fights.  And that’s the story of how this man became a workaholic.  Instead of doing nothing he was always doing something.  If you are like this man, my friend, if you like doing nothing, beware of those who’d pay you for it.

 

Baker, Russ.  “Pulp Fiction.”  Small Business Computing & Communications  April 1998: Pages 82-3

Computers aren’t everything.  Even some computer-related tasks lend themselves better to paper. Paper’s better for comprehension.  Studies show that people absorb information 25 percent slower when they’re reading it on a computer screen.  “The more paperless your business is, the more paranoid you must be about your technology.”

 

Brower, Grayson Cathy.  “Timesaving Tools.”  Small Business Computing & Communications May 1998, Page 12

I have a confession to make. I don’t always take the high-tech road.  At the office, I’ve got technology coming out of the walls.  But in my personal life, I’m still a Luddite.  For example, when I jot down notes, it’s usually with an ink pen on any piece of paper I can find.  Depending on where I am, that includes napkins, Post-its, used envelopes, and occasionally an actual pad.  I keep my schedules, to-do- lists, and contact information in a leather-bound book.  Outside the office, I’ve been pretty much in the Dark Ages.  I’m basically a creature of habit and I feel quite confident that I’m not the only one out there.

 

David Wann,  Environmental Protection  Turtle Island, 1990  ISBN 1555660487

Page 112

The backpacker cleans up as he goes, leaving a campsite in just as good a condition as when he arrived.  He or she packs out everything that was packed in, minus the food consumed.  If our culture cleansed things up as we progressed, we wouldn’t have to resort to “extra-strength” technologies in our manufacturing processes and Superfund sites.

Page 154

We want our products to evolve so that they have a crafty symbiosis with other natural and human-made designs.  Ideally, the “genetic” instructions we put into our products will include self-propagation—just like cow manure in a pasture happens to be in precisely the right place to become cow manure again.
The point is, we need long-distance runners in our designs.  to bring those kinds of designs into our world, we’ll have to make some cognitive leaps of faith, just as track athletes did when they broke the four-minute mile.

Page 155

Another strategy we need to keep in mind is the Goldilocks strategy—finding just the right size and just the right fit for each of our creations, or not creating them to begin with.

Page 157

The strategy of compost counsels, “Off-white’s all right,”  In the same spirit, it reminds us that it’s okay if the fruit has a slight visual flaw: taste buds and stomaches don’t have eyes anyway.  And that dent in your car just gives it character.  “Relax,” it tells us, “you belong here.”

Page 165

Can humans understand the product, maintain it, and feel satisfied with it?
Does the product increase rather than limit our choices and options?
Does the product enhance self-reliance and self-worth, as opposed to creating dependency and insecurity?
Does it make maximum use of existing infrastructure and recyclable resources?
Is it safe to make, use, reuse, and recycle, not requiring barriers and gas masks during and after use?
If and when it needs to be discarded, will it fit into natural processes like decomposition and nutrient cycles?
Does it leave room for imagination and creativity?  (Can these qualities be a human “output” rather than a pre-molded “input”?)

 

Jensen, Rolf.  “Dream Society.”  The Futurist  October 1999, Page 84

Companies will thrive on the basis of their stories and myths — on their ability to create products and services that evoke emotion.  Consumers will engage in emotional jogging.  They’ll give their feelings a workout by using products and services that satisfy their desire to feel and display emotion.  In Denmark, for example, eggs from free-range chickens have captured more than half the market.  That’s because the story behind them — the ethical treatment of animals, rustic romanticism — is so emotionally resonant.  Meanwhile, ideas like quality, efficiency, and reliability will no longer sell products.   In the end, I’ll buy a phone because of its color, if that’s what moves me.”

 

Kelly, Kevin.  New Rules For the New Economy.  New York: 1998.  ISBN 0670881112

Page 113

This is where life lives, between the rigid death of planned order and the degeneration of chaos.  Too much change can get out of hand, and too many rules — even new rules can lead to paralysis.  The best systems have this living quality of few rules and near chaos.  There is enough binding agreement between member that they don’t fall into anarchy, yet redundancy, waste, incomplete communications, and inefficiency are rife.

Page 110
Skate to the edge of chaos.  Pay the price of radical churn: endorse redundancy, inefficiency, and set the neatniks up in arms.  If people are not complaining about how chaotic the place is, you’ve got a problem.

Page 147

There is more to be gained by producing more opportunities than by optimizing existing ones. Optimization and efficiency die hard.  In the past, better tools made our work more efficient.  So economists reasonably expected that the coming information age would be awash in superior productivity.  That’s what better tools gave us in the past.  But, surprisingly, the technology of computers and networks have not yet led to measurable increases in productivity.

Increasing efficiency brought us our modern economy.  By producing more output per labor input, we had more goods at cheaper prices.  That raised living standards.  The productivity factor is so fundamental to economic growth that it became the central economic measurement tracked and perfected by governments.  As economist Paul Krugman once said, “Productivity isn’t everything, but in the long run it is almost everything.”

Page 148

The problem with trying to measure productivity is that it measures only how well people can do the wrong jobs.  Any jobs that can be measured for productivity probably should be eliminated from the list of jobs that people
do.

The task for each worker in the industrial age was to discover how to do his job better:  that’s productivity.  Frederick Taylor revolutionized industry by using his scientific method to optimize mechanical work.  But in the network economy, where machines do most of the inhumane work of manufacturing, the question for each worker is not “How do I do this job right?”  but “What is the right job to do?”

Answering this question is, of course, extremely hard to do.  It’s called an executive function.  In the past, only the top 10% of the workforce was expected to make such decisions.  Now, everyone, not just executives, must decide what is the right next thing to do.

 

Arthur G. Gish,   Beyond The Rat Race, Philadelphia: 1975 0836117247 Page 121

With the coming of modern technology has come the deification of technique.   How something is done is more important than what is done or why.  We devise ingenious and efficient means to arrive at an insignificant end.

 

Charles A. Reich, The Greening of America, New York:  1970 71117689 Pages 305

In the Middle Ages, when a very different consciousness prevailed, neither technology nor the market was permitted to dominate other social values, no matter how great the “logic” of technology.  The most efficient or economic way of doing something was often ignored for religious or social reasons. Thus, in a longrun sense, technology represents a choice (not an inevitability, as Ellul suggests), and we can make a new choice whenever we are ready to do so.  We can end or modify the age of science and we can abandon the Protestant ethic.  In this sense, it has been a long, long time since we made any real choices; since the end of the Middle Ages, technology and the market have made our choices for us.  Perhaps the culture just now being developed by the new generation—the new emphasis on imagination, the senses, community, and the self—is the first real choice made by any Western people since the end of the Middle Ages.

 

Crispin Sartwell, The Art Of Living, New York:  1995 ISBN 0791423603 Page 139

I am going to offer a “solution” to the “problem” of technology, a solution which I draw from the ancient texts of Chinese Taoism, and which is in some respects Heideggerian in spirit.  The solution is this:  there is no solution.

We are not going to transform technology into something we could come to regard as wholesome, and we are not going to transform ourselves away from technological thinking.  These things are inescapable.  Or perhaps the matter should be put this way: any attempt to escape them only ensnares us in them more thoroughly.  So what I am claiming amounts to this:  we ought to stop trying to evade or escape technology; we should see if we cannot find acceptance of the fact that technology is what we do and how we think.

If we could stop trying to transform technology, we would have transformed technology once and for all.  For example, if we could enjoy technology for its own sake (and we ought to admit that we often do!), then we would have transformed mere instrumentality into an artistic devotion to means.  There is only one way to enter into a non-technological relation to technology; simply to abide with satisfaction within technology itself.  To do this would be to transform our relationship to ourselves and our world by renouncing transformation.

 

Fodor, Eben.  Better Not Bigger.  Canada:  1999. ISBN 0865713863, Page 28

Like the Victorians who spoke of love but not of sex, many planners and policy-makers talk about reducing the impacts of growth, but not about slowing it down.  An assumption is being made that we can keep on growing, if we just do it right.  But no matter how you dress it up, growth is still growth.  Even the best-looking, best-planned growth can still have a predominantly negative impact on a community and long-term ecological consequences.  Complete reliance on planned-growth strategies is based on teh false premise that you can have your cake and develop it too.

With planned, or “Smart” growth, farmland and open space may disappear a little slower and urban spread may be a little less ugly, chaotic, and costly.  But the bottom line is that we will continue to grow until we overburden our
environment.  As Colorado University Professor Albert Bartlett said, “Smart growth ultimately gets you to exactly the same place as dumb growth—you just get there first class.”

While good planning can mitigate many of the problems of urban growth, planned growth is not the ultimate solution.  We must learn to integrate the ecological principles of sustainability into public policies for managing growth.  New and innovative approaches to slowing growth are emerging.  As these growth controls evolve and we gain more experience with them, communities will be empowered to truly take charge of their future.

 

Alfino, Mark., John S. Caputo, and Robin Wynyard.  Critical Essays on Consumer Culture.   U.S.A.:  1998.  ISBN 0275958191

Page xx1

To quote Weber from The Theory of Social and Economic Organization: Experience tends purely to show that the purely bureaucratic type of administrative organization—that is, the monocratic variety—is, from a purely technical point of view, capable of attaining the highest degree of efficiency and is in this sense formally the most rational known means of carrying our imperative control over human beings.  It is superior to any other form in precision, in stability, in the stringency of its discipline and in its reliability.  It thus makes possible a particularly high degree of calculability of results for the heads of the organization and for those acting in relation to it.  (quoted in Merton, 1952, p. 24)

Albert Camus
http://www.cyber-nation.com/victory/quotations/subjects/quotes_production.html

The myth of unlimited production brings war in its train as inevitably as clouds announce a storm.

              THE OLD MILL
                      by FORREST BENJAMIN ELLIOTT
A groaning din of broken-down machines,
Still labor from a century of abuse,
While time relentlessly disrupts and schemes
To overtake with age their further use;
The memories locked within that shoddy shack,
The meal, the flour, conditioned by the ton,
Would fill up many volumes back to back
With farmers’ fortunes and misfortunes run;
The modern mill that grew to take its place
Now overshadows such an ancient one;
With fresh efficiency the new mill race
Redoubles all the work that’s to be done;
Through years of hardship, labouring for gain,
A tombstone landmark is the brief remain.