Showing posts with label Century of DIY. Show all posts
Showing posts with label Century of DIY. Show all posts

Monday, 14 July 2014

The Century of DIY part 4

How governments are realising that by privatising their obligations to you they can employ a freemium model letting social entrepreneurs take up the slack so they can prop up the private sector.


Every few years we get to exercise our democratic right to elect the government, the suits who will relentlessly appear on terribly dull news programmes talking about GDP, unemployment and who they feel we should feel we need to wage war on. Every few years, they tour round the country, kissing our grandmas and babies, get chummy with rock stars and actors and appeal to our good sense to give them our vote. Politicians are our representatives; they look after our needs and the needs of our nation. A democratically elected government is the management team, responsible for making sure our needs are met and we are cared for. This mammoth organisation is funded and its (our) employees are paid through the taxes. So why are they slowly but surely passing these obligations to private industry who charge us again for the same services? This is the century of DIY


Everyone knows that the Greeks invented democracy, the word itself means rule of the people. Around 6th century BC some clever Athenians decided that every citizen of the state should have a say in how the state was run and taxes were levied on the people for the defence of democracy. This model was used by subsequent republics for millennia and the taxes were collected by monarchs and autocrats to keep them in palaces and armies.

It wasn’t until the 1850s when Otto von Bismarck, the first elected chancellor of Germany, expanded the remit of the government to the welfare of the people by taking over and consolidating the role of charitable organisations.

It was the British who really threw themselves into social welfare, maybe in a bid to stem the tide of communism or maybe because they were just really good people but liberal prime ministers Herbert Asquith and David Lloyd George furthered the reach of the government with state pensions, unemployment benefits and health cover.

This was the beginning of governments taking responsibility of the people they were expecting to keep them in a job. Under the guidance of John Maynard Keynes and the findings of the 1942 Beveridge report Britain established the welfare state to tackle what William Beveridge called the “five Giant evils” of squalor, ignorance, want, idleness and disease.  To this end, the people of Britain made contribution to a system of national insurance and in return received housing, schooling, unemployment and disability benefits, work and health care. This idea quickly spread and some countries, such as Sweden are famed for their high levels of taxation and exemplary public services while others lag behind with the bare minimum of welfare such as USA. The one thing is universal, we have become used to looking to our governments to provide for our needs and this justifies our payment of taxes. 

And the payoff was that it enabled the state to manipulate the populous and thus the economy more efficiently.


In the 70s, attitudes changed and a new age of neoclassical, laissez-faire economics came to the fore under the influence of Milton Friedman and Friedrich Hayek (Margaret Thatcher’s mentor). Hayek’s “Road to Serfdom”, written around the time of the Beveridge report, warned of the dangers of government intervention in welfare and Friedman openly spoke out against social welfare. Critics of the walfare state argue that if you provide for peoples’ needs you encourage them to develop their needs over their abilities. In fact, revered author and philosopher, Ayn Rands’ magnus opus, “Atlas Shrugged” tells the story of a world gone mad due to a society of need rather than giving the reigns to super dynamic industrialists.

By the 80s, many governments were beginning to devolve their welfare systems, sell public industries, sell public housing and encourage private industry to run free and proliferate. The result was a boom time for many. Wages rose, bonuses swelled and credit made almost everything attainable to almost everyone. But it wasn't to be for long; the boom went bang.  

The 90s were spent trying to balance the books after the bust. The main strategy was to deregulate banking and finance and allow laissez-faire economics to drive a new era of wealth and then when things were looking good, it all collapsed around our ears.  

Now governments are trying to rake back the losses made from propping up the private sector, a new welfare state, for the welfare of industry.

As for Sir William Beveridge’s “five Giant evils”

Squalor: Public housing has been sold off leaving private landlords to turn any cupboard into a “studio flat”.

Ignorance: Higher education is now the privilege of those able to take on huge student loans to have the possibility to get  a job that will enable you to pay it off.

Want: Pensions and unemployment benefits have had the goal-post moved so far that private pensions and zero-hour contracts are now the base line.

Idleness: With unemployment and under-employment across the western world at historic highs, especially amongst the young and old, entire generations are dispossessed and not contributing to the community.     

Disease: National health services are crumbling under the pressure. Britain’s NHS is being propped up by the private medical insurance despite the fact that the recession has ensured that less people can afford it. Greece’s system has changed names and protocols so many times recently that even those working in it are unsure of what advice to give patients. France’s system is hanging in but costs are spiralling.

You can still vote, you can still pay taxes but make no mistake, you are on your own.  

The state is adopting the freemium business model. You can have basic services from the state, but in order to get anything more, private industry is on hand to provide supplementary services. The private sector is expected to provide the same, if not better services than a non-profit institution like the state while still keeping an eye on the profit margins.

Social entrepreurism is the new way with individuals encouraged to take up the slack. Set up an NGO and plug the gaps in the state. While the state props up the private sector, with your money.


For what was, in reality, a short period of history, governments made an admirable effort to care for the people who put them there in the first place. Then came the civil war of public versus private and private won. Now you are on your own again, governments and industry are washing their hands of any public responsibility with taxes, once again, collected to fund the wars on the global markets.  


Wednesday, 20 November 2013

The Century of DIY part 3

How Crowdfunding and allowing you to invest in the world's financial markets is funnelling your money into the biggest hedge fund. 


Not since the industrial revolution has the world seen such a tsunami of technological change. A change that affects each and every one on the planet, in fact many maintain that the industrial revolution was but a blip compared to what we are living through now. The big difference now is who is paying for it. The steam revolution was bankrolled by the new middle classes and industrialists and built on the backs of the new factory workers. The tech revolution is being paid from your pockets and history has taught us some important lessons about betting on the wrong horse when you know nothing of the stables.


Don't panic...SELL!
Toward the end of 1929 Wall street was looking shaky, the Dow Jones had taken a tumble in the spring but rallied again after the National City  Bank had propped it up with a $25 million injection but those in the know knew that it was time to cash their chips and move to another table. By the end of October chips were being cashed quicker than the market to sustain and “Black Tuesday” signalled the beginning of a world depression. The Rockefellers and Billy Durant made a brave attempt to save their investments but with over $30 billion (when $30 billion was a sum of money) wiped off the markets in a matter of days, even they could not stem the tide .

There have been many market crashes throughout history, most bizarrely the  Tulip mania crash of 1637, and more recently “Black Wednesday” in the early 90s, the dot-com bubble at the end of the millennium and the one that we are still reeling from now that seems to have begun when Lehman brothers fell in 2008. The nature of markets is boom and bust, when speculators see a chance at massive returns they will do what speculators do; speculate, and when the nuts and bolts of the stock will no longer support the market value the bears move in and the prices fall.

Tulip Mania - Middle-ages dot.com
The issue is now who loses when the markets slump. In 1929, as the new middle classes and industrialists lost fortunes on the markets, the working classes lost their work.  We also need to understand what happens in a bear market. A bear market, as defined by Investopedia  is more than 20% downturn in multiple stock indexes in a 2 month period and in the crashes this happens in a matter of days but those who are close to the market react quickly and sell their stock before losses bite too hard, leaving those outside the loop to take the brunt. Around the end of the 90s, when Charles Schwab and E Trade introduced online trading, the markets became available to all. The flipside of this is that it made $billions of private funds available to the markets. Many of the these services allow individuals to trade with a credit account, in other words they allow you to speculate much more than you may have to lose. Speculation drives prices, speculation by individuals without the same access to information or understanding of company values as professional traders. This is a fantastic democratisation of the markets but when it goes wrong it is the inner circle that gets out first drawing the profits up the food chain and the losses to the little fish.

Crowdfunding is seen as the new way for the common man to get in on the investment ladder; services like Kickstarter and Crowdcube allow anyone to become a venture capitalist by investing in start-ups and expanding businesses. In a world where the banks are becoming all too reluctant to invest in new and uncertain ventures, the householders have come to the rescue once again. Mark Shuttleworth’s recent Ubuntu Edge campaign, while unsuccessful in raising its target $32 million, did reach and unprecedented $12 million, proving that if you have the right concept you can get people to buy a product that is still on the drawing board. This gives many commercial venture capitalists the opportunity to sit back and allow ventures to fly or flop before they get their hands dirty.  

Stop grumbling and build an app!
The democratisation of investment would be a huge opportunity for us to build a nest egg from our disposable income but in an age of austerity and credit crunch more of us are speculating on credit with a dream of joining the ranks of the steadily growing number of superstar billionaires. It seems that, not satisfied with consuming commercial products at an unprecedented rate we are now expected to dig deep to facilitate the financing of more stuff for us to buy. The message is clear, with pension and equity funds managed by professionals losing our money in toxic investments and flawed strategy, building that retirement nest egg is another DIY responsibility. 

Part 4: How, after a brief flirtation with social welfare, government has put your welfare back in your hands    

Tuesday, 15 October 2013

The Century of DIY part 2

How entrepreneurs are taking the risks for other peoples' businesses and how Tupperware made it possible. 


You may be sitting at your desk, well before your time, making sure the boss sees the commitment you have to the company. You may be an entrepreneur, sitting at home coding the next big app for the app-store or calling your friends to sell them some dish soap, a sandwich box or a vibrator. You may be sat in front of a camera talking about the latest ephemeral star’s dress sense. You are doing it for yourself. Or are you doing it for someone else. The contrivance of a global recession has set the scene for Go-Get-It enterprise, the internet has given you the global reach but are you really getting it.



tupperware
In 1948, Earl Silas Tupper developed a new kind of container for keeping food fresh, but it was Brownie Wise who began a movement that would change the way we work. Brownie Wise began network marketing when she discovered that the best people to sell domestic products were the same people who used them. After WWII, many women who had been working on aluminium drives in the community and in munitions factories for the war effort were returned to the kitchen, for some this must have been a relief but for others it was an unwelcome return to domestic hum-drum and they missed the extra income for the little pleasures of the new consumer life. Brownie gave them some new purpose, selling Tupper’s plastic containers to their friends through party plans. And, while they were becoming new age entrepreneurs they were also turning their friends into Tupperware’s customers.

It didn’t take long for other brands to realise the potential of this business model and soon Avon began using the model for their range of cosmetics and the Avon Ladies were born. Now it is possible to buy anything from baby clothes and jewellery to sex toys at an invariably women-only party.

This use of social networks to act as the shop front for companies was taken to a new level when companies like Amway developed the model further by encouraging individuals to become their own boss and make huge incomes selling their products. Anyone who has attended an Amway meeting will find it difficult to remain unaffected by the hype of success. Amway and its peers focus on internal marketing to make sales of their products, their network of “independent business owners” (IBOs) are sold on the dream that they can make fortunes by selling to their social network and recruiting more to do the same. Anyone who has been approached to join this network will be familiar with their techniques, an experience that I share. Super successful evangelists will tell you of how they were once builders or bank clerks but now live a life of plenty with huge incomes thanks to taking matters into their own hands. What Amway have done though, is to put the execution of their marketing plan into the hands of credible sales people with their own marketing budget; Amway makes  the products while you do the marketing, sales and accounting for them from your own pocket.

The tech revolution seems to have democratised the marketplace and now anyone can become a successful ebayer, Amazon marketplace holder or sell your crafts on Etsy. This shift has reversed the Amway model by selling the network to enterprising individuals to market their wares and it is this global reach that gives them the power to make the rules.


Once Apple released the first iPhone the game would change again. Apps, small

programs that could be developed by individuals or small groups would be sold to smart phone users. Now the R&D department had been outsourced. Google now sell other peoples products in the name of entrepreneurship. The poster-boys of tech are selling their creations for millions. Young people are now being sold on the idea that in order to make it big they must make it for Google, while Google are making it hand over fist.

This year’s Forbes list boasts 210 new billionaires with an increase of nearly a trillion dollars aggregate wealth over the previous year.     

Youtube has “democratised” programme production by giving everyone the ability to create content for their advertising platform.

Recent advances in 3D printing means that we will soon be able to “print” products in our own home. This has already begun to bring with it huge opportunities for enterprising people to begin designing and producing goods to sell through online marketplaces. As the complexity of these products progresses it will be possible to download plans from the major tech companies to print your own phone or tablet and thus lower production and distribution costs while reducing the reliance on staffed retail outlets. But, just as with IKEA's self-assembly it will also outsource the accountability of build quality.    

The responsibility to staff has already begun wither as so-called “Zero-hour” contracts have hit the news recently in UK. The controversial employment contract means that employees are not guaranteed any fixed hours of work and must be on-call for when they are needed by the company. They are not just used by fast-food chains and supermarkets but Universities and energy companies have also realised the benefits of making salaries a more variable expense. And it is not just the UK; a recent protest to the president of MacDonalds in the US by a lone employee highlights the emphasis on self-reliance even in the employment relationship.


The contrived world recession is laying the ground for an environment of resourceful self-reliance; UNION is now a dirty word and employers are developing commitment issues. And we are in danger of going back to the work-houses with one difference, we will have to buy the tech, the access and build the machines that will run it.  




Friday, 4 October 2013

The century of DIY part 1

How IKEA has become the template for modern democracy.


Stand up now, look around, do it! You may be in a room full of people, you may be in a busy street, you may be having coffee with a friend but know this; you are alone. We are on the tipping point of a society that completely defers all responsibility to the individual to the point where a social modularism replaces democracy.  


Mankind, like many animals, has an innate ability to create communities.  And, like so many other things we do, we feel superior to the animals in this ability; we create Democracies. We, again like many animals, create hierarchies, a chain of command and responsibility where everyone has their place and duty. This is a structure of interdependencies that break down the complicated mechanisms necessary to maintain civilisation into manageable tasks. This democratic spread of obligations meant that we could specialise in particular skills and disciplines according to our abilities. The quid pro quo is that we take a share of the profits and get to choose those who manage the system.

Karl Marx predicted that this interdependence would develop into a society that would eliminate need and cement communities into a society of equality through socialism. As Marx’s theories were beginning to be put into practice in one of the biggest social experiments ever undertaken, Sigmund Freud focused his attention on the individual.

Do it yourself
Do it yourself
Then came a subtle shift. In America, Edward Bernays, began to develop ways to study consumers’ habits and drives using his uncle, Sigmund Freud’s studies. He discovered that the potency of his uncle’s research allowed him to not just understand individual behaviour but to influence it. According to Adam Curtis, this began a systematic movement from community to the “Century of the Self”. He proposes that the knowledge obtained through Freud’s development of psychoanalysis has been used to manipulate society. As early as 1927, Paul Mazur, a top banker from the now defunct Lehman brothers wrote "We must shift America from a needs- to a desires-culture. People must be trained to desire, to want new things, even before the old have been entirely consumed." By tapping into these newly nurtured desires marketeers have managed to make us desire their never ending stream of life-enhancing devices and services.  Now, it is not the enterprise of this that is of most concern, it is the side-effect. In the beginning advertising focused on peer acceptance and being a good member of the mass democracy. Then, after the dust of WWII had settled the sense of self became the target. People were told that it was their right to have whatever they wanted and the more they acquired, the better people they were. People became judged by their appetites and their ability to satisfy them. Conspicuous consumption replaced the satisfaction of needs and those who consumed most conspicuously became the billboards of commerce. By the end of the last century it was every man for himself.

We are now leaving the “century of self” and entering the “century of do-it-yourself”.   

IKEA democracy
Cheaper than China
1943, In Sweden, a young Ingvar Kamprad founded IKEA and soon discovered that there was one place where labour could be sourced cheaper than China. By entrusting the consumer to assemble their own purchase, significant savings could be made on production. Now most of us routinely assemble our own furniture and think nothing of it. If anything we are proud of our achievement and attach more value to the item we have built. The knock-on effect for IKEA is that we not only make more impulse furniture purchases due to the convenience of buying a box that fits in the car but that they have deferred the build-quality responsibility from the manufacturer to us.

Driven by the desire culture and the systematic devolution of obligation, civilisation has begun to outsource responsibility to the individual.

Rhonda Byrne’s 2006 best-seller “The secret”  declares that we are all capable of being and having what we want so long as we project the idea strongly enough. More importantly, it maintains that our lack of wealth and success is our own fault. Ok, now I agree that if you sit on your arse and expect everyone else to do the running you will get what you deserve but on the subject of human tragedy such as Indonesia’s tsunami, 9/11 or even cancer, Byrne declares that they only befall people who are “on the same frequency as the event”.  So we are now accountable for epidemics and natural disasters.

Smile or die
Keep Calm and avert disaster
Barbara Ehrenreich’s book “Smile or Die” investigates the self-help culture and its apportioning of blame to the sufferer for not being ‘bright’ enough. Her experiences with breast cancer and the support groups that she turned to for help are indicative of our new “keep calm and carry on” society where you are welcome to lean on a friend as long as you don’t make a fuss about it.

The current swathe of motivational speakers and self-help books are pushing the philosophy of individualism and self-support. None of them suggest that you should turn to friends, family or society to share. None advocate building support networks, that may just hit their sales. You are on your own and you better get used to it.

Governments around the western world are reducing state health care and pensions and the message is clear; you have to work through your waking hours until you are no longer able, pay your taxes and insurances but if you haven't made adequate provision for your retirement then just don't retire (the DIY government is coming in another part). The years of double-shifts or building your own business have already weakened your bonds with your kids enough that they have little desire to care for you, even if they weren't too busy doing the same thing and more. The current resistance to Obama's health care plans highlights the attitude of "pay your own way and get what you are given". 

I'll close on my own piece of self-help advice. There is no shame in needing help from others and if you don't need it, offer it. 
      


The next part of this observational study will explore how the IKEA philosophy is being applied to the workplace and how new technology will put us back in the workhouse with one main difference – we will buy the machines.



From Under Dark Clouds

The Century of DIY