The Vicious Cycle of Laissez-Faire Capitalism

Our economy is in crisis and people are looking for someone to blame. A large segment of society blames the government and many now express the view that everything would be fine again if the government would just stop interfering in the markets and allow laissez-faire capitalism to work its magic.

In Laissez-Faire capitalism, people pursue their own interests with a profit motive.  If they're not getting paid, what's the point? When they do have resources, those resources are there to use as folk see fit.

Including Human Resources.  Employers can hire or fire as they choose; employees can take or not take jobs as they choose.  It's through negotiating selfish interest that balance and stability gets built in to our non-system of a Randian non-society on a contract-by-contract basis.  Equal pay for work of equal value, etc.

Of course, this structure implies that the employer values individual labour and will pay appropriately for it.  A smart employer won't want to perpetually hire and fire - they'll want the best talent from the get-go and will work to keep it. 

 

But what if that isn't the case? What if employers see employees as disposable widgets and figure really anybody can do the job, so why pay big bucks for it?  After all, that's why North America lost its manufacturing industry - too many benefits for employees, too many regulations, not enough profit.   

What if employers view employees as tools, not resources?  If you smack something with a hammer hard enough, you'll break it; you can use the back of a screwdriver the same way.  It's less the tool that accomplishes the work than it is the pressure applied by the user.  That's exactly what micromanagement is.

Yes, some employers treat their employees like human beings; the laissez-faire capitalists, however, will hire and fire as they please without worrying about support, training, etc.  Why should they?  Labour doesn't make products, the employers do.   They built that.

Cheaper labour, less expensive regulation in places like Bangladesh - no need to waste money by operating in countries like Canada.  It's the international equivalent of child labour (including actual child labour).

If the quality of the labour doesn't matter, then the employees have lost their key self-interest bargaining chip.   Work becomes less about getting stuff done and more about sucking up the boss, (creating that personal value) or undermining your fellows so that if the axe falls, it'll land on them, not you.  The product suffers - but it still gets made.  Maybe it's a cheaper product, but so what - you can just push your people to up productivity and sell more for less.

Rational consumers in a laissez-faire model want lowest dollar for value - more for less.   They can compete between sellers for the best quality of product, but again - do they really need the fanciest tool to accomplish what they want? Doesn't it make sense to get the cheapest product so they have more cash to get more stuff? I can buy one dish at The Kitchen Store, three at Wal-Mart and ten at the Dollar Store.  The lowest cost wins - just as it has with the manufacturing industry.

Buying more for less, hiring more for less and ultimately, working less for whatever you get.  If the boss wants you to do more, they've gotta pay for it.  If you know you're going to be stigmatized from finding work regardless, the incentive to go through the standard job-hunt process isn't there.  Money, not legacy, not accomplishment nor even pride becomes the prime motivator.  Paying for training when nothing is guaranteed makes no laissez-faire sense; it's a waste of resources.

So what if you have a populace that isn't going to invest time in training or all the legwork it takes to get to a position where they might get hired?  What if you have people who won't even think about issues unless someone is paying them to do so?  What if every action is expected to turn around rapid results and everything is to be gotten for as little investment as possible?

It's not hard to imagine - we are surrounded by examples both domestic and international.  The best ROI comes from crime - little effort or brief effort pays handsomely; all you need to do is invest in some security and not care about what happens to people not you, laissez-faire style.  Drug lords do this.  Warlords do this.  Abusers of interns are doing the same thing.  Not hiring to save on cash is hardly a crime, but it's hardly to the benefit of society, either.  But that's what you get from focusing solely on your bottom line.

Here's the picture we have right now - employers with money want to spend as little of it on labour as possible and are skirting the rules by moving overseas or turning to contract work and intern work as methods to keep their costs down.  The marginalized demographics in our society know that the system is stacked against them; there's little motivation to invest in the time, energy and training to compete for the chance to maybe possibly get an interview for a dead-end position against a host of higher qualified or under-employed candidates.  It just makes no sense.

 

We can do as Jason Kenney has done - turn to foreign labour to fill the gap, cheaply.  The problem with this approach is that it doesn't solve the structural problem and feeds into the bias that already stigmatizes New Canadians with low or non-transferable skills.  You can't force the work that nobody wants to do without leaning towards indentured servitude 'with those desperate for work getting trapped in cycles of internships/Joad-style style Labour Migrations at best and Concentration Camps at worst.  You can try to create more stable work through government, but again, that means greater taxation which people aren't in favour of - it's that more for less thing again.

 

The analogies here are deliberate, but they aren't the only ones available.  In a social system where the few with the greatest wealth benefit and growing majorities are seen as tools in an economy rather than as human beings, something's got to give; instability festers.  Indifference leads to frustration of the kind that can kindle into crime waves, war or revolution.  In any of these scenarios, it's the people with the most who have the most to lose.

 

“We need people who are going to take a stand,” he said.

 

Which is why it makes sense for the haves to be the ones giving back.  There is precedent - every pulse in the history of labour has led to greater investment in human resources, and each has resulted in greater prosperity.  There is also precedent for what happens when employers head in the other direction - that, too, is the history of labour.

 

At the end of the day, a democratic government can't force it's people to do right by each other, to invest in society - when it starts trying to do that, it ceases to be democratic.  It is always ultimately up to the people to commit to living together.  This, too, we will continue to do - reactively, in response to a World War II or a Great Depression if not a Syria or an Egypt - until we stop turning a blind eye to the woes of others and seek to blame them for our own problems.

 

There's more to this "forward together" business than just an inclusive slogan - society is a Commons that can only be sustained on common ground. 

 

And of course, despite what the laissez-faire capitalists will tell you, altruism is really just selfishness that plans ahead.

Life is Like a Box of Cheerios

“Being part of a biracial family, it’s just the reality,” said Christopher Colbert, the father of the six-year-old Grace, on MSNBC Tuesday. “We’re also part of the face of America.”

 

 

This is a powerful commercial that has sparked a huge swath of controversy.  Why?  Because it bursts the bubble of illusion many frightened people live in - the illusion that the world is stagnant and that traditions are inviolate.  Blame not these people for their fear - it is beyond their conscious control.  Until, that is, it isn't.

 

Meanwhile, Cheerios has done the right thing - reflecting the tone and resetting the conversation to address head-on the taboos that hold us back.  They will benefit from this, too, in the same way businesses that have taken a stand for gay marriage have.  It's a new form of conscious capitalism, with the private sector leading the way on social issues as a way to build market share, but doing the right thing at the same time.

 

Things have changed.  Diversity is slowly being viewed not as a threat to supremacy of one group over another, but as an opportunity for growth.

 

Diversity = strength.

 

Watch the video and the next generations comments on it here.

 

Idle No More - No, really!

 

 

We believe in healthy, just, equitable and sustainable communities and have a vision and plan of how to build them.

 

Ask pretty much anyone how they're doing these days, you're likely to hear the word "busy."  It's become a badge of honour, an excuse for not getting back to someone or a deer-in-headlights realization that the amount of expectation does not match the amount of time generally considered available for accomplishment.

 

My day today was busy, but no more so than any other day in that if I have a moment, I'm generally filling it up with a productive activity.  I try to do nothing that is of no use - sleep is regenerative, play is to refresh the body/mind or absorb new ideas and try out new conceptual combinations.  I'm always suspicious of the people who, when asked what they're thinking will say "nothing" because to me, non-thinking is about as feasible as non-breathing.  Multi-tasking is my normative state.

 

I'm hardly alone in this.  People walking down the street are texting or talking on the phone, or both, making deals or making plans at the same time as walking the dog and getting their daily dose of cardio.  I won't soon forget the young woman who went in search of a power source during the recent Toronto blackout in search of a power source, because she needed to plug in her phone - the concept of just being and not doing for a spell simply wasn't on her plate as an option.

 

We are an agitated people, reinforced by a society that wants us to be agitated.  If we're not working (to fuel the economy) we should be spending (to fuel the economy) - plunking down coin on goods or services, supporting our community, buying local, being good Samaritans or good citizens.  If we're not doing those things, or even while we're doing those things, we're on social media - tweeting while we write, blogging (or thinking about blogging) simultaneously with doing something else, composing the next instagram masterpiece as part of our daily ablutions.

 

There's a sidebar to this.  Since we're all engaged, all the time, we don't want to be missing out on something, particularly something that feels like we're being excluded from.  We equally have a hard time doing things that don't seem to have personal meaning (despite what the Andrew Keene's of the world tell us, this is nothing new - it just happens that concepts like King and Country have been diluted of their mass appeal through things like the Senate Scandal).  If political debate seems too much like inside baseball and we don't have the time to learn the signals, we're not interested.  That protest over there is much more interesting and gives a better chance to express oneself more personally.  The cause might be our own, or we might make it our own, but it's better than the alternative of waiting around while things get done to, not with us.

 

Idle no more, indeed. 

 

Branding Belfast

Hundreds of police reinforcements from Britain were deployed on Belfast's rubble-strewn streets Saturday after Protestant riots over a blocked march left 32 officers, a senior lawmaker and at least eight rioters wounded.

I'm looking at the pictures, I'm reading the words - those don't look like Protestant protesters to me.  The look like frustrated kids of the variety that have been told to get a job or fight for their country or eat cake over the centuries.

I do not write this frivolously; throughout history, attempts to lump problem groups under one brand have tended to create much larger problems (that will wreak havoc and then break down into disparate groups again, causing further chaos).  Of course, justifying the overlooking of marginalized communities through an "us" and "them" narrative doesn't work so well, either - that's what leads to the disenfranchisement in the first place.

It really comes down to this - people want to feel like they belong and that their lives have value.  This is the choice the leaders of any society ultimately needs to make - do you want to reach out to the people, or have them stand against you?  Guaranteed that, time and again, it will always come down to one or the other.

Presenteeism: Working 9 to 5 Isn't Getting Us Ahead

Tumble outta bed
And stumble to the kitchen
Pour myself a cup of ambition
Yawnin, stretchin, try to come to life
Jump in the shower
And the blood starts pumpin
Out on the streets
The traffic starts jumpin
And folks like me on the job from 9 to 5

The Industrious Age

 

The Industrial Revolution was a period of unparallelled productivity.  For that reason, it's been suggested that it would be more appropriately called "the industrious revolution." 

 

We didn't get to the peak of manufacturing capacity without some hiccoughs, however; the rise of the economic might of the manufactured economy was not a simple matter of a few Horatio Algers building the means of production and offering decent wages for decent work.  A whole host of other factors had to come into play to result in the ultimate widget-building system.

 

You can't have an industrial revolution in a sparsely populated, agrarian society.  No one can spend their day travelling from the farmstead to town to punch a clock nine-to-five, play the role of HR cog in a production line and then get home, milk the cows and till the yard.  Industry requires density, specialization and a complex economic system that makes people more reliant on each other.

 

Let's look at this from another angle.  If dad is out working the fields and mum is sewing clothes, doing dishes or tending to five children and every family follows more or less the same model, you have neither the ability to have an industrial economy nor the need to have an industrial economy.  There's little need for education, either; everything you need to learn to get ahead in life can be learned at home by folk who've been doing the exact same thing their whole lives, as have their parents.

 

A functioning industrial economy required a fundamental change the way we view not only work, but the way we define family.

 

Work in Agrarian Society:  That thing that you do to directly support the life and livelihood of your family.  When the work is done, or temporally done (can't harvest what's just been planted), you rest, spend time with family - relax.

 

Work in an Industrial Society:  That thing you do to earn money to buy the goods and services (food, made clothes, kitchen tools, furniture, lodging) you need to support your family.  When the work is done, you unwind - or, because there are manufactured goods and new services, you goods and services to supplement your life and add value to your day.

 

Family in an Agrarian Society: Larger, more complex, multi-generational.  Family is the thing that comes first and work is done to support it.

 

Family in an Industrial Society: 2.5 kids, so that the stay-at-home parent isn't overwhelmed.  The go-to-work parent is the "bread-winner" earning the coin needed to buy the goods and services needed for life.  There may be grandparents in the mix, but that changes the hierarchical structure (the workin' man deserves to be in charge, after all, not the enculturating stay-at-home grandparent).  Besides, isn't success defined by independent property ownership and copious consumption?  Grandma doing the knitting just messes that all up.

 

Well, to a degree.  More people working on the line means more people buying stuff; when this happens, costs starts to go up (because the end goal is profit, so if you have more people you can sell to, why not jack the prices?  The people will compete to have ownership of stuff and therefore portray themselves as better off than the Joneses) and the need for increased income rises.  There are only so many middle-management positions available so eventually, parent #2 needs to go to work, too.  Schools, not homes, become the depository for kids during the day - and an opportunity to learn more skills leading to a demand for more out of work than just the assembly line.  What's the point of spending all that time in school if you aren't going to get a job better than your unschooled parents had?

 

Then, there's the actual work itself.  For the most part, working on an assembly line sucks.  Simple, mind-numbing repetitive tasks aren't fun for most people and the end product isn't even something you're likely to enjoy yourself (doubt that, go live with the average factory worker in Brazil or Bangladesh for a couple of weeks).  What's the motivation to go through such an uncomfortable day when you could be on the farm, enjoying the fruits of your own labour?

 

The myth of Horatio Alger is good enough for some, at least for a while.  Over time, though, it will quickly become clear to many that the myth is just that; it's simply not true that anyone can be President or CEO.  Instead of striving to be the best, we satisfy ourselves with being better than someone else.  That, plus we need something to sweeten our mad existence.  There's a reason why sugar played such an important role in the industrial revolution - it made for an excellent carrot to motivate employees and played a hugely important role in shaping the evolution of the global economy.  Of course, it doesn't hurt that sugar makes an excellent sweetener for energy-nurturing beverages like tea and coffee, which surprise surprise, also play a big role in the development of a manufacturing-based industrial economy.  Keep your workers caffeinated so they work and through in some sugar at the end of the day; that, plus the threat of being replaced if you don't work fast enough are pretty good motivators for producing more widgets per hour.

 

That's not enough, though.  When you have workers coughing up lungs, losing fingers or generally being upset at the fact that they're busting their buns for meagre pickings while their bosses where fine suits and live in mansions, something has to give.  The 1% can and will tend to deny this fact for as long as possible, trying increasingly conflated confabulations to justify their fungal lifestyle but eventually, the aurora of entitlement wears off.

 

Whether by choice or by force, the playing field has to even out a bit.  Employers invest a bit more in their workers - training, benefits, vacation time, etc. - and lo and behold, productivity goes up.  Healthy, marginally happy workers with something to look forward to (even if it is just the TGIF roundup on the telly) are more productive than Concentration-Camp workers.

 

That's what it took for the perfection of the manufacturing economy - the empowering and properly motivating and stimulating of labour, the 9-to-5 workday, the breaks for tea and the odd week off to get away from the job.  Provide those things and you'll get the most bang for your buck.

 

The Manufactured Bleed

 

The rise of Western Society (best exemplified by the US) was build on the industrial revolution - whole populations grew, flourished and became more urban (and therefore more socially integrated and systematically dependent) and productive as a result.  It's taken a while and a few revolutions of the bloodier variety, plus some failed flirtations with communism for non-Western societies to fully embrace the industrial model.  And to be honest, in most cases, they haven't fully gotten there - poor infrastructure, low wages, little or no training or support have proven to be less of an impediment than it was to Western Countries because of much larger and more desperate population bases.

 

Products made in sweat shops in China, Brazil or Bangladesh might be cheaper made, but they're cheaper to buy, too. 

 

We Western folk, programmed by our own industrial revolution to want more of everything as recompense for our own labours tend not to pay so much attention to what happens behind the productive curtain - until, that is, we are exposed in thrilling fashion to horrors like the collapse of a factory in Bangladesh for which we, as consumers of the products made on that floor, are ultimately responsible.

 

This also brings us to the biggest flaw in the laissez-faire free market model favoured by the likes of Stephen Harper or Mitt Romney.  It's all well and good to suggest that, eventually, systems become balanced, wealth gets invested in labour and all the other top-down approach thoughts to economic growth, but this is a variant of the mentality that fuelled robber barons and czars.  The boss can be impatient and push for more production; they can even use labour employed as security and paid/resourced better than the masses to reinforce the point.  At the end of the day, though, there are always more ants than grasshoppers and the grassroots can always topple their leaders, if they become impatient enough for their own opportunity.

 

Yes, Western economies are suffering from the bleed of manufacturing jobs to countries like China, Bangladesh and Brazil, countries that have raced through industrialization.  At the same time, those countries are going to find themselves racing through the labour revolutionary process, putting them back where we were until the 90s.  Trying to scale back our economic evolution to the production equivalent of horses and bayonets won't only not get us ahead, it also won't fly - not with a populace that has been trained to expect more.

 

The Knowledge Economy

 

When you step back and line up the evolution of the manufacturing-based industrial revolution and the information/social-media tech-fueled Knowledge Economy revolution, all kinds of fun parallels line up.  The traditional definition of family doesn't mesh well with the labour requirements of the age - stay-at-home parenting is almost impossible for any family that wants to live comfortably.  More goods from Wal-Mart isn't making people happier.  The carrots, sticks and sugar model of labour motivation that worked so well for widget-making isn't keeping countries like Canada at the head of the innovation pack; heck, we can't even compete in pure knowledge productivity.  The 9 to - 5 workday, lived in one setting doing one task, no longer applies - we now need to have our heads all over the place and be multi-tasking, even innovating the work we're paid to do, yet the expectation is that will happen between 9 and 5 while sitting at one desk.

 

It's a bit ironic - while employers call for deregulation and an opportunity to keep more of their funds to themselves, somehow assuming that's all it takes for modern-day success, they don't see the value in freeing up their labour in the same way.  Especially in Canada, we are doing a terrible job of training and motivating our staff to produce the work/services/products we're demanding of them.  Across the board we're seeing average folk Occupying themselves with this imbalance; as the gap between their quality of life and that of their employers rises despite their clear importance to the production chain, the worker is Idle No More.

 

What has happened before shall happen again, etc.

 

Behavioural Economics, Social Evolution

Obviously a topic in which I am very interested.  There are two processes at play; biological evolution and social evolution.  Look at the birth and rise of civilization, which do you think will win out in the long run?

Revolutionizing Economics by Evolutionizing It

By Jag Bhalla |

 

Economics will soon be revolutionized, by being evolutionized, again. This time with fewer unnaturally selective ideas. Scholars, like those working with the Evolution Institute, are adapting the assumptions, methods, and goals of economics to better fit empirically observed humans. Our survival foreseeably requires it.

 

Economics and evolution have always been deeply related. Natural selection crystallized for Darwin because of a Thomas Malthus essay on economics. More recently Richard Dawkins overstretched gene selfishness—committing the fallacy of composition—to claim that everything that evolves “should be selfish,” thereby spuriously lending the shield of science to a “naturally” selfish economics.

 

Conventional economics presumes we’re rational and greedy, and that markets make optimal equilibria. These assumptions are empirically testable. And they’re often false. Daniel Kahneman says it’s “self evident that people are neither fully rational nor completely selfish,” and complains that economists model a “different species.” Kahneman created behavioral economics by using empirical psychology and more biologically coherent assumptions. But it mostly keeps the same “rationally” self-interested methods and goals as un-behavioral economics.

 

Self-interest in evolution is different from self-interest in economics. Lessons about limits and dependency from one can improve the other.

 

The appetites and capacities of everything in biology are physiologically limited. Beyond some satiety level, more isn’t better—it’s often unhealthy and counterproductive. By contrast, self-interest in economics is considered limitless. Every extra dollar gained is better. But that’s a numerical illusion. An extra dollar’s benefit varies by circumstances (an idea used only peripherally, e.g. in diminishing returns). Unlimitedness is deeply unnatural. It ignores the foreseeable capacities of systems we depend on.

 

Evolutionary self-interest is mostly dumb. It leads predators to overhunt their prey, destroying themselves (and their dumb self-interest-maximizing genes). Somehow economic self-interest has become equally unintelligent. It’s often self-undermining, as in Prisoner’s Dilemma games, and in the global climate “tragedy of the commons.”

 

Natural selection is dumb. It has no foresight. But we evolved to have intelligent foresight—and should see the logic of this universal principle of dependency: Nature ultimately eliminates anything that damages what it depends on.

 

Dawkins distinguished replicators—genes—from the vehicles—bodies—they need to survive. Despite his desire to see genes (and all built by them) as ruthlessly selfish, each gene must also cooperate with every other gene its vehicle depends on. Same goes for social animals and the others they depend on. We’ve been team survivors for 10,000 generations, since group hunting out-produced going solo. And team survival required punishing excessive self-interest that threatened group stability.

 

We are likely the first species to know all this. And we ignore it at our peril. Limits, intelligent foresight, self-deficiency, interdependent coordination, and relational rationality are in our nature. They should all be in our economics. And in our rational self-interest, rightly understood. Economics needn’t be as dumb as trees or as self-harming as over-hunters.

 

Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.

Communicating Change: Disruptive Leadership From the Grassroots Up

We can't be creative if we refuse to be confused. Change always starts with confusion." 

- Margaret Wheatley

Don't fire until you see the whites of their eyes.

To keep the blade sharp, you have to periodically walk along it.

Sound familiar?

Risk means doing things that are unpredictable, taking chances, walking the wire without a net.  We want the benefits that come from risk (new innovations, new policy solutions, the first place medal) but not the consequences of potential failure.  When it comes to teams, bosses are increasingly becoming risk-adverse; new investments and new ideas aren't being supported as they could be.  They're relying on more interns and contracts that can be let go of quickly if they mess up and no or little money lost.

What about those who do take risks, push the envelope, push buttons?  There are lots of those, but if you look carefully they aren't so much about taking risks as they are confident in their ability to avoid or download risk to others.  Look at the Senate Scandals; even now the likes of Duffy and Brazeau remain defiant.  Look at any of the other political scandals across the country - nobody is saying they took a risk and it didn't pay off as they thought it would, they're denying risk at all, or placing the blame for failure on others.

 

Look at Lehman Brothers.  Look at the polling industry.  Hell, look at our democratic malaise.  These folk aren't being bold or innovative; they're puffing up their plumage and trying to deflate criticism.  It's a huge difference; more and more energy is being spent on image, not accomplishment.  More and more blame is being placed on the staffer, the consumer, the voter.  When people are blamed for inaccurate polling results instead of methodology, we have an emperor's cloak problem write large.

To fix this, leaders need to be willing to take risks - not the self-serving kind, but the policy risks that may not have precedent and will need to be tested through pilots, revisited and worked through various iterations to get them right.  Look at the work Guardly is doing with Neighbourhood Watch as an example of what this looks like in practice.

 

Leaders need to equally be empowering, too - not looking for their team to fail so they can replace them with better people, but encouraging them to experiment and supporting them through the trial-and-error learning process.  Failure should never be the end of the road - instead, it should be a stepping stone to perfection.  What have we learned?  What can we avoid in the future?  What new horizons have been uncovered as we break down the walls of convention? 

 

At the same time, teams and constituents need to be equally willing to work with leaders at all levels.  We've got a bad habit in Canada of voting people and Parties out, rather than voting anything in.  "I will undo stuff the last guy did that you don't like" isn't a "why" and it's not leadership, but it what we keep asking for.  Ask you and you shall receive, etc. 

 

"What I stand for" is vastly different from "what I stand against" but we seem to have mixed the two up in the same way that we forget that "talking to" (messaging) isn't the same process as "talking with" (communication). 

 

Of course, communication isn't easy, nor is it common.  Most Comms positions these days are focused on messaging rather than a back-and-forth flow involving understanding and compromise.

 

I'd argue that true communication is the biggest challenge we face, and face poorly given the impact it has on our lives.  Communication requires all those soft skills we have trouble quantifying; empathy, lateral thinking, iterative thinking, design thinking.  It demands us to put something on the table first, freely, without the certainty of receiving anything in return; it means having a bit of faith in what the person opposite can do, given the right supports along the way.

 

True communication is a scary concept, a step into the unknown, a leap of faith.

 

Which leads me to one last quote to tie this up in a bow:

 

Do one thing every day that scares you.