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

Saturday, 3 June 2017

Do we understand work anymore?

WORK: for many a four-letter word, for others the epicentre of their existence but for most of us just another necessary evil. Work is how we get the stuff we need to buy stuff and keep the kids in fidget spinners (replace with current craze). For some, it is in all too short supply and barely covers the basics for others it absorbs all our waking hours. It affords us prestige and position, for most a source of frustration. But do we really understand what work is any more. I say not.
Twitshot
Now, my old favourite, Plato (I always put him in, it makes me look smart… is it working?) suggested the principle of specialisation. This means that each of us should stick to what we are good at, traders trade, farmers farm and philosophers sit around telling everyone what to think. Du Monceau in his riveting work The art of the pin-maker used pins to explain how Plato’s ideas could be taken even further. Adam Smith continued the pin-making motif (It was nails, actually but I like continuity) in The Wealth of Nations to show how these jobs could be split up to make great improvements in productivity, Henry Ford used this to create the production line so he could employ less and less skilled people at much lower cost to produce a very complicated product. In other words, give someone something very simple to do over and over and he will be good at it while not having enough scope to demand more money.
In the 1970s mechanisation had reach a point where many foresaw a time when machines would take over the pin-making and we would all enjoy unprecedented leisure time. A logical progression considering that the 1938 Holiday and pay act had provided the first paid holidays for workers. Very soon the idea of being paid even on days when one does not work became a standard. So, the concept of working a 3 or 4 day week while still being able to support a family did not seem to be an unreasonable progression. The computer age should have accelerated this but it didn’t.
It was realised that just as Plato had suggested, everyone should stick to what they did best. And as Adam Smith had concluded, that this was good for the wealth of the nation. So, workers work, employers supply this work, education keeps pace with the supply of the workers that the employers need and the government keep the whole machine oiled with taxes.
Work is a simple exchange of time for money, the more valued your time, in other words, the rarity and desirability of your time, the more money you get. But, we also had a system that would ensure that our needs were catered for and the 5 evils of society under control. This means that everyone contributes what they can to the nation to ensure that everyone’s needs are catered for and amongst those needs are healthcare, security and leisure. Leisure is important to keep the balance right, each part of the machine should contribute, not dominate. At its heart a society which progresses human development and evolution.
Meanwhile a lady called Brownie Wise would change the way we would work for ever. She realised that Tupperware could be sold more effectively through direct marketing. She gave women the opportunity to earn some pin-money (pins again) by monetising their friends, but also these ladies were self-employed, outside the machine. A straight line can be drawn from there to app-builders today. So, now if you don’t have a job it is not because the employers are failing to provide it or the education system is failing to prepare you for it, it is because you are just not enterprising enough. Plato and Smith had agreed that you really should stick to what you are good at and we are not all entrepreneurs. This new ideology also absolves the government from the position it had worked so hard to establish of taking care of its population’s needs. Globalisation had allowed it to supply employers with workers by simply importing them as they would washing machines. They no longer needed to produce and you’ll see that most advanced nations have a skills deficit which they are happy to maintain because it is cheaper to import.
Here is the shift. Governments are now working to the needs of the employers, not its population. They continually tell the population that it must tighten its belts and forgo some of the luxuries of the so recent past, free higher education, healthcare and leisure time. They should continue to pay the taxes to support the system but should expect less for it. Business should be above all else. If we accept this we can all return to times of plenty for all. But expectations are being slowly readjusted. You must take on more of the responsibilities that were once provided by the nation. You need to do many of the things you are not so good at or pay someone to do them, if you can.
Now, businesses have discovered a new way to make money. Instead of making and selling pins, they can make money through the markets. Their stock value is the real route to success and all resources should be focused on maintaining a healthy market value. The pin-making is just a utility to this end. To increase the market value companies must make more money and this means higher efficiency which depends on cheaper labour expenses.
Workhouses 21st century
We live in the tech age and as the industrial revolution mechanised production, the tech age will automate almost all areas of the company’s operations. Artificial intelligence is rapidly out-pacing the abilities of the lesser educated and their jobs are in imminent danger. When was the last time you interacted with ebay or amazon, did you get the feeling that you were not talking to a person, interactive chat services are passing the Turin test on a daily basis and they are getting better every day. Call-centres were outsourced to India and other cheaper countries and it is one of the biggest industries in the Philippines but many returned because customers complained of the lack of communication, AI will do better and cheaper. Many of us shop online. We go to shops to try on the clothes and then order the same product, cheaper through the net. Some retailers have realised this and use their stores to close the sale and give customers incentives to order from them online after trying on the garments. As more and more of us get used to buying stuff without any interaction with a shop assistant, the retail fronts could be booths where you try on and order for delivery to home. No more shop assistants or call centre workers, next. Autonomous vehicles will soon be able to get us back from the pub after a skin-full, safely and legally. They may also have been serving our pint. They will also be able to drive our Uber, black cab, bus, train or truck they are even working on drone deliveries that will make postmen and pizza delivery boys obsolete.
Online education courses will increase the abilities of educators to be decentralised to begin with but will soon be surpassed. There are also robots that allow surgeons to operate on patients from thousands of miles away. These too may be surpassed by AI. Technology in conjunction with our diminished reliance on personal, human interaction will make all this seem quite normal. Just imagine, many of your facebook friends could be replaced with AIs and you wouldn't know the difference.
So, a whole bunch of menial jobs will disappear, so what? This could be great. The same thing happened after the industrial revolution and that saw rise to the welfare state. More leisure, more education, more interesting jobs. However, in order to develop the skills necessary to do these jobs, you need education and skills are a supply and demand market. To stem the flow of capable people, education costs and a great education costs a great deal. People are going into careers with a huge debt around their necks and to make the payments that are working harder. The information age makes them more available, more of the time. And those who don’t make the grade, well they’ll be left outside the wall and there will be no workhouses to ‘save’ them, no busses to drive, no call centres to man.
Work has always been a way to provide. First we worked our patch of land, hunted in the forests to feed our families. Then with the division of labour, it became a team effort and we evolved into a species that lived more and better. Work is a medium of distributing the wealth of nations. Each getting on with what they do best, no matter how little or how much. Each paying into society and communities to benefit from its prosperity. Work is not the reason for living. We hold ourselves superior to the ants and the bees. Quality of life is progress, servitude is devolution. Without it, children are not parented properly, communities do not have cohesion, we open ourselves to exploitation from those who would take from us, whether they be corporations or gangs of muggers.
“I’m working” is a phrase too often heard, it means I am being productive, useful, I have purpose. The same should be true of “I’m taking the kids for a ramble” or “I’m going to the neighbours for a drink.” Work is part of the equation, not the sum.

Wednesday, 31 May 2017

Back to a very dark age

So much progress was made in the last century. Huge leaps in technology, great advances in equality, despite what many believe, education and health care for great swathes of the population. We put men on the moon, connected the world’s peoples with voice, video and written word, put eons of knowledge in the public domain and put computers that would have dwarfed NASA in the pockets of the same people that would have been bought and sold in the 1800s. So what’s gone wrong. We are on the cusp (and I’m being charitable here) of going full circle. Let me explain.
Twitshot
I will take my native Britain as case study but I also hope to explain why Trump happened, why BREXIT happened and why I believe we are in danger of finding ourselves back in an 18th century with touch-screens.
Looks like a call centre, doesn't it?
Around the end of the 18th century many worked in agriculture on tied farms owned by the lords and landowners. They paid to live in a little cottage and work the land to keep their family alive. There was no time for leisure and even less for culture. This was the domain of the aristocracy. They filled their days with lofty conversation, art and literature. Some made great advances in science and exploration due to their brilliance and wealth but mostly due to their wealth. Then came the industrial revolution which invented the middle classes, smart, driven men who took the dispossessed and orphans to work in their factories. They had no rights and were expected to work hard and show gratitude. Education was a luxury and so all doors were closed to betterment. They were all governed by the aristocracy who had the education and hubris to assume their rightful position at the helm of the nation. Some of the new middle classes aspired to these positions as they realised it was leverage to more profitable business.
The workers had no such aspirations and even believed that they had no right to even consider such positions. The upper classes were the men for the job, no questions. They could not envisage people like themselves having the qualifications necessary to make decisions on such a scale. Here we will see the beginning of the loop, be patient.
So after nearly a hundred years of industrialisation work had become a little more technical and there was a need to educate the masses to deal with the advances in technology. It was The elementary education act of 1870 that allowed local governments to set up schools for the less privileged. They were still fee paying schools but they were a little more accessible than private schools and more numerous. More kids were learning the 3Rs (Reading, wRiting and aRithmetic, maybe in itself an indication of literacy levels in those days) than ever before. In 1902 secondary schools were given the same treatment and just after the Great War in 1918 fees for elementary schools were abolished. This was also the year that some women got the vote.
The Liberals (Back when this wasn’t a bad word) pushed for universal free healthcare under Herbert Asquith and David Lloyd George. The masses were learning but still grateful. The British labour party had taken over as the main opposition but many would not vote for them as they were seen as not as qualified for such positions as the ruling classes. People still felt that those in the upper echelons were there for good reason and Joe Blow would never have the wherewithal to handle such responsibility, after all they were just like the blokes they spent their time with down the pub. Some may have been great orators and even pretty smart but they still got pissed and tried to shag the barmaid!
After WWII the Beveridge report introduced the welfare state, the NHS, the largest employer in Europe. John Maynard Keynes found the money and the war on the 5 evils of society (squalor, ignorance, want, idleness, and disease) was declared. People were put to work, educated to better themselves and their health and retirement was taken care of. Without the pressures of survival, people made huge bounds in progress and it is because of that era that we are where we are now. Microprocessors, the INTERNET, telecommunications, science, not to mention the arts would still be in the dark ages if these initiatives had failed. You can forget The Beatles and the Stones (Maybe even Radiohead… Gasp!).
Now, by the 70s things had gotten a bit strained and sectors of society that had always existed started to proliferate, those who were OK to kick back and let others take the strain and those who could make a buck from the toil of others. Neither the prior nor the latter were anything new but the prior were aided and abetted by the welfare state and the latter were waiting for the right conditions and they didn’t have to wait long. Productivity had fallen and the only way to keep the economy liquid was to allow people to spend the money they hadn’t earned yet. Credit was a way to give people spending power without upping their wages while giving bankers a way to make money that, they hoped, would trickle down to the masses. And, it did but not for long.
So now you have a people who had smelt the honey and they wanted more. You have the bankers who had enjoyed real power and they liked it. And you have a system that cannot support either.
The age we live in is characterised by technology but also by celebrity. Education allowed many to fast-track themselves and their kids to positions. Many of the Indians who fled Kenya in 1968 put their kids through medical school while working all hours in their own convenience stores. Many of the natives dreamed of getting on the telly or becoming rock stars, I know I did!
You see, the line, for most, between multimillionaire celebrity and themselves is comprehensible. Everyone can see the boy/girl next door in the people who compare game-shows or sing their favourite song. But, to run an international company or even country is tough and as education works so hard to rationalise their ambitions. Celebrity is far more attainable. The west has a huge deficit in skills production. With the exception of Germany, the US and UK have year on year chipped away at their education systems and health systems with the result of kicking people into survival mode. This results in people closing their circle of aspiration while still maintaining a level of desire for stuff and thus spending ahead of their years, keeping them focused on the job at hand.
Then along comes someone like Trump. He has built a multi-million international empire but still wants to shag the barmaid. He talks in the same simplistic terms as their buddies down at the bar but he has realised their dreams. He is the man for the job. He may be stupid but he is the kind of stupid they can relate to. The product of the education system. He is the perfect amalgam of celebrity and aristocracy, he even had a TV show.
But he will fail. He will be brought down by the incumbent aristocracy, in league with the academics and social media. He will be shown to be incompetent and his brand of bar-room politics to be unworthy. Not that it isn’t but the message is clear. Don’t get above your station. At the moment Britain is coming up for a general election where the winner is clear. Teresa May and the Tories, the same who had their power slip at the beginning of the 1900s, the same who wish those days to return, the same who feel a righteous purpose to privatise a system that tried to deal with the 5 evils of society, the same who will need to rely on imports of educated people to support innovative business or risk it going to the producers of educated people. And the only way they will be able to keep them will be to direct cash away from those services to reducing their tax and wages bills. We will be back in the industrial revolution and we will have come full circle.
The people will no longer feel adequate to aspire to anything more than surviving the week. Anyone like Jeremy Corbyn will be seen as a hapless student union dreamer despite having their needs at heart. And, those who say that in order to float the economy we need to run some teachers, doctors and nurses into the ground will seem most credible. But, education and health care is where this all began, it is what got us here. Don’t get me wrong, this is not a cycle that will come back round. The next phase will putting up fences that prevent it ever happening again.

You have been warned…

Friday, 12 December 2014

Why Austerity IS Working


Ok, let’s start with a revelation. Austerity doesn’t work, that’s a no-brainer. Economists have been saying this for centuries and anyone living at the thin edge of the wedge in Europe will be living its failure. Incomes have been slashed, debts become unmanageable and few see any sign of improvement on the horizon. The amount of people without any health insurance is at an unprecedented high and the government telling us the same old story.


We must help bail out an economy that we were complicit in scuppering. 

Twitshot
retail wrecklessness
Oh! those heady days
Austerity purports to tackle the world recession caused by credit-happy shoppers like you and me consuming beyond our means. It is sold on the micro-economic understanding that if a household cuts spending on non-essentials for a while it can pay off its debts thus reducing expenditure and bring its outgoings below income. It is the credit-binge hangover that we are told we all need to take responsibility for. The belief is that by cutting back on the state’s expenditure and increasing taxation they will be able to wrestle the public debt back to a manageable level where we can all breathe a sigh of relief and get back to business as usual. This is not happening. The lack of investment is causing widespread unemployment and even more widespread underemployment. This in turn, is making it more difficult for the government to collect taxes while simultaneously putting increased pressure on social benefit systems. The result is that while we are paying and suffering for our sins.


That said, unless you have had your TV repossessed and your Internet cut, we all know that that is just a tiny piece of the story. Due to systematic deregulation of the markets by governments giving more power over sovereign currencies than the national banks themselves, they went ape-shit inventing new and more toxic ways to make profit from the movement of capital (read debt). Their abuse of their new-found freedom with currencies made them a systemic risk to national economies and thus “too big to fail”. And so, their private debts, far larger than any kitchen refit or big-screen TV have been transferred to the public balance sheet. However, yet again we are reminded that these same banks loaned us money and helped us buy our beautiful houses that cost more than we could earn in ten years plus interest. So, once again we are complicit. Incidentally, these houses could not have reached such prices were it not for the freely available credit in the market. We are also told that if we did let these banks loose, we would be in the middle of a zombie apocalypse and would die a horrible death. Tell that to the Icelanders.  

Maybe we are all looking at the problem from the wrong angle. 

Let’s consider firstly that this strategy was not implemented by my mum, it was devised by some of the most proficient macro-economists on the planet with access to the studies of the greatest economists of history from Adam Smith through Locke to Keynes and Hayek. They also had great social experiments such as Soviet Russia, Hitler’s Germany, New Deal USA, Thatcher’s Britain and more recently Iceland. In fact, to give any credence to the “Ooops!” factor would be to believe that the people running the world economy are less competent than my Mum when baking a pie. No, austerity is working if you consider that

Its goals may have very little to do with relieving public debt. 

The economy at the centre of the euro-zone and one of the main architects of the current austerity strategy, the German has become strong due to exports. It has learnt that you become powerful by making stuff and selling it to the world. It was busy during the credit-binge selling the world and those naughty Greeks Mercedes, BMWs and Volkswagens, helping them to get in debt. It has worked hard to build a reputation for reliability and prestige and most of us will make a b-line for a German product from stationary to power-tools to supercars, given the choice. But, on the world stage they cannot support the whole of the euro-zone with their premium commodities. They have diversified, buying Skoda and other budget brands but this is not enough. If the EU is to be successful in the world economy. 

It needs to make impact in the mass consumptions markets. 

Depression
Discount dignity
In order for the Euro-zone to compete with the huge production centres of China, India and the Far East, they need one more element. Traditionally, in order for a nation to increase the mass saleability of its exports it has devalued its currency making its products cheaper and more attractive. This is not so easy in the Euro-zone, not to mention the fact that when one currency does it so do others igniting a currency war with all currencies finding a similar equilibrium to where it started. There is one other factor which will allow this relative price index for exports; cheap labour. And it is here that austerity is doing the business. The highly educated, highly skilled workforce of Europe is now on sale. But in order to truly compete they will have to get a little cheaper. 

Austerity is working. 

It is producing a more cost-effective workforce by lowering the expectations of this and generations to come.  This is not a conspiracy theory, it is a business plan. My conclusions are based on the evidence that we are living and take into consideration the business model of the central economy of the Eurozone. If it was a company, it would need to position its product line in the open market. Seeing as the premium market is not large enough to support the 350 million people of the EU, it would definitely need to reposition, at least some of is portfolio to high-volume markets.  

In my next article I'll explore the next step of a strategy that could put Europe back at the centre of world production and how the current fall in oil prices could be the lever to expand the Eurozone.
       
If you liked this, don't forget to subscribe through the cheeky MailChimp and link up on social.  Also check out my series The Century of DIY A Crop Of... More to come!

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.

Twitshot

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. 

Twitshot

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. 

Twitshot

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.  

Twitshot

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.

American Psycho
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.



Twitshot

From Under Dark Clouds

The Century of DIY