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zondag 14 december 2014

Modern Economy 1.01 The Economic System Failure of Cheap Products!

The downward spiral of cheap products

Cutting costs costs! You want to buy stuff. You want it cheap. So companies, have to produce cheaper. That puts pressure somewhere along the line. Management decides where. Well, it won't be with them, so it has to come from the work and resources. For once efficiency and productivity can't be raised only bad options are left. Then with each price reduction things get worse for workers:
  • from lay offs due to automatization to off shoring to robotics.
  • from lower quality food to food that's no longer food, let alone healthy.
  • from less good social conditions to the point of (almost) slavery.
  • From working in accordance with, to working at the cost of (nature, customers, relationships, communities, society, etc).
At the same time, the people at the top, both shareholders and CEO's, decide where profits go. Well, they go to fewer and fewer people. 

Right from the start of the Industrial revolution, we saw industrialists seek to squeeze profits out of everyone. Child labour, dangerous work conditions for very poor pay was normal at the end of the 19th century. Then unions and communism were a valid answer in stopping them. Now the corporations have been learning new tricks: send the work to countries that (seem to) validate unfair squeezing of workers, make consumers demand lower prices for plastic that after a very short life cycle is thrown away so they keep on buying new stuff. And then there is tax evasion, lobby pressure on governments and unfair trade agreements like the TTIP that mostly benefit the big corporations. And now platforms like Uber that offer cheap rides. The small staff of Uber can have thousands of drivers work for under minimum wages, while they themselves make millions. 

So the real result of our consumer society, and our own buying patterns, is that we, more and more, can't trust our food, need to work harder and harder for less quality of life, food and environment. And what do we (the poorer people) do with our lower incomes? We pressure for even lower prices, amongst the last few competitors. Yet, for example, each time we use Uber, Airnb we make life for all of us cheaper and help lower wages, while the big profits only serve those who run the platforms.

The disconnectedness of multinationals

We have to deal with a big system failure. The system of shareholders makes companies work for results that benefit mostly the shareholders. The assumption that to do so, you'll have to make better and better products for happier and happier consumers is not true. In fact the long term result of pure profit driven business is forests gone, communities poor, millions of new homeless people (hardly shown on TV) even in the USA, the great home of the big corporations. We need to see and act on the insight work and production isn't there for the owners. That is the big mistake. 
A healthy society works for its own sustenance as a whole. Factories that were once build to provide towns with work, should stay there, although they might alter character, way of working and products. The current fact that a few people in offices far from a town, can render this town, or even a region, unemployed at a heart beat by outsourcing work to another country, is insane.

Any government allowing these practices does not have the interest of its people at heart. Any people voting for governments that talk growth and profit over healthy cycles of sustenance in their own community are as insane as those governments. Because of this downward spiral, we see all across the globe tensions rise. Mostly because we are led to believe in scarcity, while currently there is food, water, enough for everyone. Since the believe is that if we compete the shit out of each other, everyone will have a better life we sustain shortages for untold millions. If we would show compassion, apply inclusiveness and seek to grow the whole of society around us then things would be very different. For now the real abundance won't be for long any more, because the businesses profit from scarcity and the law of diminishing returns, like keeping on hacking away forests with very little replanting. This means that rather than work for the health of us all, they deplete natural resources without caring for the long term of us all, because profits now, give us cheaper products and them bigger bonuses.
We feel convictions that block access to the abundance that is there and that do not respect and protect their long term existence, and are not healthy for us all and are blocking the way ahead. In the end "Earth is a spaceship and we are all crew." That our captains are heading for the rocks, and we let them, is the biggest worry of our times. 


During the Second World War the effect of an essential difference at work here could be observed sharply. The Nazis fought for Hitler and his ideas. The Allies fought for liberation of his reign. The difference is we should never work for a who (not even the likes of people as Steve Jobs, Richard Branson or Bill Gates, in short CEO's, owners or shareholders of businesses), always for a what. We should work for a healthy society on all levels, from working conditions, fair value exchange, to nature.

How to break the cycle? Easy: buy local. Buy from local producers, preferably not owned by shareholders elsewhere. Buy less, but better. Makes you feel poorer, maybe you need to wait half a year, or longer, to buy a new closet, or more than two for a new car. Hell, that used to be the daily reality of millions in the seventies. Makes you care more for what you do buy.

Shift from consumer stuff attitude to an experience driven lifestyle. Many people are shifting their focus to having experiences like festivals, personal workshops, dancing, yoga and meditation and it benefits them well. It also makes them more in touch with their bodies and intuition. Intuitive awakened people are harder to trick into lies, distortions and doing what's bad for us all. So wake up, by being become experience orientated.

And for governments: tax multinationals as much as locals. Yes, when they run away you fear loss of jobs. No, in fact that will create more business that do pay tax in your country and more local jobs that stay. For many people have to, and will do so, step into the gap. Everything will be a bit more expensive, but much more healthy, and with a local outlook and more local production, these businesses are here to stay, as part of their community. This is the best way to insure they'll also work for fair conditions.

And for workers inside big corporations and military in the field, don't just follow orders, ask about the bigger context in which things take place. Let it be known that you have morals, that the state of the planet worries you. Incite dialogue with everyone, because many share your worries, about the planet, the future of their children and the future of their society.

And the War against Terrorism you might ask? Much of the anger and violence in the world is not seeded in religion but in the trauma's of earlier wars and lack of future perspective (compare IS to gang life in Mexico and the mess in the Heart of Africa). Rather than fight people, seek to enrich them. It worked for the Marshall plan after WWII, it should work for all of us. And if we do this, based on fair work, green (cradle to cradle) principles we may, by turning our whole economy around, have a new Global Economic and Green Renaissance in our hands. For the rising middle classes of China, Brazil, India, Indonesia, Africa may seem good for business, but they can only have what we had, if it's cleaner, healthier for our planet than the stuff we use. That is, if we want to benefit from their rise, and not speed up Global Warming with every % of profit we make on their growth. Hence all companies need a huge transformation. That work is the profit of the future. If we don't do it, it will be our demise, with the guys in their palaces watching from afar, until it comes over the fence or their grand children drown in boiling seas with no fish at all. The choice may not feel that distinct or pressing, but, speaking as an unwilling prophet, I think it is.

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