“capitalism”
42 posts under this tag.
William W. Lewis’s The Power of Productivity (PDF and HTML versions available), a summary of his same-titled bookAM, has only grown on me since I read it a month ago. It’s main thesis, that wealth hinges on productivity, has come to resonate inside me like few things have of late.
It was, for instance, what lead me to finally accept the possibilities of technology and, shortly thereafter, to naively proclaim I’d one day have a massively profitable company with less people than my then-age. The whimsical limit, I believe, will force such a company to be always awake, always flexible, always smart, always doing technological judo. It would force it to value people in a way we’ve barely explored at all.
Marketing MyopiaWP, from the recently deceased economist Theodore LevittWP is a fascinating article from 1960. Despite its now quaint and outdated examples, despite being wrong in several of its predictions, this is one of the classic articles of marketing and deservedly so. Perhaps the biggest surpise for me was to reread a sense of marvel and respect at business, a lucid and bracing criticism of capitalism, that I hadn’t seen since I read some Peter DruckerWP last year. The “intellectual” community, specially in Mexico, has so often made deriding business and its babbits its raison d’etre, that I find such cogent analysis incredibly refreshing.
Here two fragments:
The difference between marketing and selling is more than semantic.
Selling focuses on the needs of the seller, marketing on the needs of the
buyer. Selling is preoccupied with the seller’s need to convert his product
into cash; marketing with the idea of satisfying the needs of the customer by
means of the product and the whole cluster of things associated with creating,
delivering, and finally consuming it.
In a sense Ford was both the most brilliant and the most senseless marketer in American history. He was senseless
because he refused to give the customer anything but a black car. He was
brilliant because he fashioned a production system designed to fit market
needs. We habitually celebrate him for the wrong reason, his production genius.
His real genius was marketing. We think he was able to cut his selling price
and therefore sell millions of $500 cars because his invention of the assembly
line had reduced the costs. Actually he invented the assembly line because he
had concluded that at $500 he could sell millions of cars. Mass production was
the result, not the cause, of his low prices.
At the end of the article, there’s an equally engaging retrospective commentary fifteen years after. Levitt could write.
Of course, I’d do it again and in the same way, given
my purposes, even with what more I now know—the
good and the bad, the power of facts, and the limits
of rhetoric. If your mission is the moon, you don’t use
a car. Don Marquis’s cockroach, Archy, provides some
final consolation: “An idea is not responsible for who
believes in it.”
As a sidenote, this was an article originally published in the Harvard Business Review, which I’ve always dismissed on the base of its exorbitating price. I’ve been reading through online article abstracts from the current edition and I’m most impressed. I’ll be sure to buy it next time.
This is one of the many things I ended up pasting on my wall last week. Since it’s something of an important breakthrough for me, let me try to explain what I mean with it.
I have always marveled at rich people, particularly at how one could get rich, and it always seemed impossible to the verge of immoral how a single person could earn on the order of tens of thousands of dollars per month. There were very few things I could think of for me to do in an hour that would be worth the hundreds of dollars I would need.
That is completely the wrong way to go about it. There really are few such one-hour isolated things that will get you a couple hundred dollars and most of them involve decades of poorly paid specialization. There is a better, more productive way to think of the problem, and that’s what the equation above serves as a reminder of: If you get one thousand people to give you fifty dollars per month, you’ll make fifty thousand dollars per month.
Yes, I know it’s mind-numbingly stupid, but it’s true. And fifty dollars aren’t really that much money, and a month is quite a big chunk of time, and a thousand people doesn’t seem as much to me now as it used to—that’s about the daily traffic of Imagery a couple of weeks ago (and yes, I know the comparison is worth squat, but it still was a landmark in my life to realize how easily I could interest and benefit and touch thousands of people).
Of course that getting-people-to-give-you-money part is not at all about mind-washing or extortion, it’s about creating more than fifty dollars of wealth in a month for over a thousand people. And doesn’t it seem exciting and achievable put this way? At any rate, it has my mind reeling, because a couple of days ago I finally crystallized an idea of a website that could do just that and much more (codename: maki). And it promises to be a lot of work, and to be the greatest challenge I’ve yet undertaken, and it will take me out to the real world every day, and I’d meet thousands of people, and it’d get me walking, and… well, time’ll tell, won’t it?
A saint said “Let the perfect city rise.
Here needs no long debate on subtleties,
Means, end,
Let us intend
That all be clothed and fed; while one remains
Hungry our quarreling but mocks his pains.
So all will labor to the good
In one phalanx of brotherhood.”
A man cried out “I know the truth, I, I,
Perfect and whole. He who denies
My vision is a madman or a fool
Or seeks some base advantage in his lies.
All peoples are a tool that fits my hand
Cutting you each and all
Into my plan.”
They were one man.
Get this: I love the net. There are few human inventions I treasure more; damn, there are few things I treasure more. Consciousness predated the net only by a slight margin in my life, and I can’t help but be a part of the translucent generation it has engendered, the first generation whose values have been shaped by the net.
Yet, I fail to understand what all the brouhaha regarding net neutrality is all about. Of course I’m moved by all the calls to action and won’t-somebody-please-think-of-the-children threats of impending netdoom, but I fail to see the real problem, the “great injustice”. And beneath the obvious good intentions, the rhetoric with which this argument is being fought by “my side”, the side of prominent netheads (Google’s Vint Cerf for instance), reeks of governmentism, stasism, and don’t-let-walmart-wreck-your-downtown anti-capitalistic sentiment—not my cup of tea.
Frankly, it all seems to me as articulate special-interest groups arguing for the right to impose their vision of the net on telcoms. This may well be the net’s first reactionary upheaval of nostalgia and status quo1, the first symptom of the sclerosis that plagues every human institution. An end-to-end internet is one of the greatest accomplishments of modernity, a vision I personally cherish, and the one that has successfully guided the web up ‘til now—granted. But that doesn’t mean I want it imposed on others, it doesn’t mean that we shouldn’t allow others to experiment with new visions. If we really cherish it so much, shouldn’t we be willing2 to pay for it its true economic price? If it is truly the one best way, shouldn’t it be able to survive competition on its own merits? It seems like a particularly devious contradiction to call net intervention net neutrality.
With this in mind, it was a blow of fresh air to find T. J. Rogers recent opinion on the issue:
What do you think of Net neutrality?
This is where basically the Net is not allowed to discriminate? I think it’s an obscenity. I think people that have paid for the wires and cables should be able to charge whatever they want for their product. And for other people to come in and force companies to run their businesses and set their prices is absurd. If some of those companies came into being by virtue of a government monopoly—the old AT&T comes to mind—then fine. But to go and tell companies what they can and cannot charge money for—that’s un-American. It’s against freedom. It’s just bad news.
It was only later that I found out why Rodgers sounded so rational: he’s a libertarian. Also to treasure from that interview is this fragment:
Some claim they [CIGS, a type of non-silicon cell] are close to equal to silicon in terms of efficiency.
You go buy one. You know, that’s another problem we’ve got in the industry. There are a lot of con men in the solar industry who say a lot of things that are really, really, very wrong.
Every libertarian I’ve known of has had this respect for personal, boot-maker, contextual, decentralized knowledge, this hard social virtue of refraining from telling other people what to do (expressed even more clearly later in the interview: “I don’t want to second-guess the people that are trying—I’m not an expert—and they’ll surprise you when they do.”). They all recognize the world’s complexity and the great problems of our models of it. So yeah, I liked this guy. I googled him and I found out this most-interesting open letter from him and a book of his on Amazon, No-Excuses Management, that I promptly ordered.
Anyway, back on topic, what do you think on net neutrality? What am I failing to see from this tangle? Why do so many smart, visionary people oppose it?
But the strongest outrage was reserved for the film’s final scene, in which Gallo’s character finally meets up with his ex-lover (Chloë Sevigny), and she performs unsimulated fellatio upon him.. Sevigny, already known for taking on controversial roles, had been a real-life girlfriend of Gallo’s. Notably, after the film’s release, the William Morris Agency dropped her as a client, claiming the scene made her unmarketable; she quickly signed with another agency and has continued her acting career despite fears to the contrary.
The quiet last line of this paragraph is a pearl of capitalist freedom that could so easily pass unnoticed, taken-for-granted. If Chloë was able to do what she did was only because she wasn’t tied to prude William Morris, one of the largest talent agencies in the world; it was only because there were other agencies more than willing to take her in.
Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy.
Friedrich Hayek, The Road to Serfdom
What a wonderful world to live in, isn’t it? One in which puritans can be self-righteous while we enjoy watching a purdy gal blow her ex-boy.
This blog had been gone for quite a while, a while in which I never stopped writing, it’s just that I saved it to a local text file. You see, I wanted (and want) something quite different from this blog than what it is now and I was experimenting with new formats. I was close to figuring out what I wanted but then this whole wonderful Imagery media blitz got a hold of me and I’m focusing all my energies on it. So the new blog will be another while coming and I thought that it was pointless (and rude of my part) to not publish anything in the mean time.
Most of what I’ve been doing this past month or so has been reading my ass off. Oh boy, have I good taste or what:
Platicaba antier con Adolfo en el Starbucks cerca del TEC y como enseguida tenia el una conferencia sobre la pobreza, decidi acompañarlo. Me dio mucho gusto ver que la conferencia la organizaba y conducia Lalo, uno de los mejores maestros de mi prepa, pero la conferencia en si fue perfectamente olvidable: los mismos lugares comunes de siempre, el mismo rollo, el mismo izquierdismo self-righteous, los mismos rezagos ancestrales, las mismas discusiones bizantinas (Cuantos tipos de pobreza hay? Son mejores los programas universalistas que los focalizados? Como definimos indigena? Cuantos angeles caben en la cabeza de un alfiler?).
En medio del choro mareador de uno de los ponentes oi la gastadisima frase “inequidad en la distribucion de la riqueza” y alguna minuscula sinapsis debio unir a dos neuronas olvidadas, pues vi de repente la concepcion (en mi opinion erronea) de la riqueza que esa oracion implicaba. Ya en mi casa repase los ensayos de Paul Graham y, efectivamente, es un ensayo suyo, Mind The Gap, el que maravillosamente desenmascara y desacredita esta concepcion (que el llama el Modelo Papi de la Riqueza):
When I was five I thought electricity was created by electric sockets. I didn’t realize there were power plants out there generating it. Likewise, it doesn’t occur to most kids that wealth is something that has to be generated. It seems to be something that flows from parents.
Because of the circumstances in which they encounter it, children tend to misunderstand wealth. They confuse it with money. They think that there is a fixed amount of it. And they think of it as something that’s distributed by authorities (and so should be distributed equally), rather than something that has to be created (and might be created unequally).
En fin, se lo comente a Adolfo (rayandole su cuaderno) y el me contesto con su ya famoso “Ashh…”©, pero aun asi me motivo a hacerles el comentario a los ponentes (darle valor a otra gente es la cosa mas facil del mundo). Cuando (dei gratia) acabo la conferencia y llego la hora de las preguntas, dije lo siguiente (o algo muy parecido, el original quedo escrito en la libreta de Adolfo):
Que tal Lalo? ... Bueno, lo mio no es una pregunta sino un comentario breve. Se me hace curioso, y es algo tipico de los academicos, la forma en que articulan su pensamiento sobre la pobreza. Dicen cosas como “la inequidad en la distribucion de la riqueza”, como si la riqueza fuera un pastel que le toca a papa gobierno distribuir, y nunca “inequidad en la generacion de riqueza”. Bueno… eso es todo. Sobretodo para… que lo piensen.
Silencio. Mi corazon golpeteaba y yo solo agradecia no haber tartamudeado severamente. Creo que oi un “Uhhhhhh” de “Tomen eso!” de alguien del auditorio. Adolfo dice que oyo un aplauso aislado. Mas silencio. Lalo interviene, levantando por fin su mirada de mi y llevandola al punto de fuga, “Alguien mas tiene otra pregunta?”.
That Business: A Changing World textbook has been a lot of fun. It is still a textbook—overly commercial (specially at the beginning), tiresome, and repetitive (a needless box here, a redundant summary there, summaries of redundant summaries)—but it is interesting nonetheless.
Near the beginning, economic systems are dealed in a few pages and there were two things I noticed. The first one was that ubiquitous communism catchphrase:
[In Commnism] everyone contributes according to ability and receives benefits according to need.
I thought it was about time Capitalism (here ’s a wonderful definition) got it’s own catch-phrase. Here’s my stab at it:
In Capitalism everyone contributes according to need and receives benefits according to talent.
“What is honored in a country will be cultivated there,” is a quote frequently attributed to Plato, and I find it useful to compare both catch-phrases. It’s quite a dangerous thing to honor need in your country, to honor effort might sound as a step forward, but it’s still foolish—a farmer pulling the plough himself certainly puts more effort into his crop than a modern farmer with a tractor, is that to be rewarded? Rewarding talent may sound harsh or insensitive but it is the only truly humane thing to do.
The second thing is a simple question. For the life of me, I can’t understand the following sentence:
Socialists believe their system permits a higher standard of living than other economic systems, but the difference often applies to the nation as a whole rather than to its individual citizens.
How do you define the standard of living of a nation and how can it be different from that of its citizens? Can someone help me give this a coherent meaning?
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