| On Organisation |
June 11, 2009 - February 23, 2012
Author: Bart klein Ikink
| Introduction |
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We can have a good life
Production has been mechanised and automated to such an extent that it must be possible for people to work not more than 20 to 30 hours a week to support a family. Despite that it seems that more and more people have to work longer and harder to make a living, while the fruits of all this labour ends up in the pockets of a few wealthy people. In the Western world real wages have not risen for decades. In the United States often both the husband and the wife have to work and sometimes they have to take more than one job, while many other people are without a job [+]. How can this be?
In 2005 Bloomberg Businessweek had a cover story identifying a number of causes for the pressure at work [+]. The article only scratches the surface of the issue. Many people feel uneasy about their working and living conditions. It seems that we have become serfs in a system of production and consumption that controls our lives. It seems that there is no escape from working harder and becoming poorer by producing and consuming unnecessary products and services. Is there no alternative?
Rush is not a natural phenomenon, but arises under the influence of the monetary system. Cutting a tree instantly and depositing the proceeds into a bank account with interest, yields more than harvesting wood in a durable way. Shops need to be open seven days a week, but this gives small shopowners no rest. Rush, and the unnatural living conditions arising from it, are caused by interest on money. Economic growth is not beatific. The economy has grown in the past decades. But have we become happier because of this? Have our conditions of life improved? Do we live more comfortable and more pleasant? Apparently people in the West today are not happier than people sixty years ago [+].
During the Great Depression an experiment was done in Wörgl Austria with a type of money similar to Natural Money. The local money in Wörgl circulated many times faster than the Austrian Schillings, while the local currency units had the same value. This meant that the economy in Wörgl florished while the rest of the Austrian economy was in a depression. It turns out that a local economy without usury can be more efficient. How this is possible?
The Natural Economy with local currencies organises an economy and a society in a different way. In the Natural Economy money is not scarce but abundant. There is always employment for people who are willing and able to work. Local currencies end the worldwide competition of everybody against everybody that keeps the wages of workers down. The absence of usury in the Natural Economy assures that people do not have to pay interest on their loans and cannot go into excessive debt.
Interest on money leads to increased competition between people [+]. Currently the ever increasing demands on workers create unnatural working conditions, resulting in alienation and stress. More and more people are not able to join the workforce. In welfare states those people often receive unemployment or disability benefits. On the other hand more and more people end up in intellectual jobs that do not produce a product or a service someone needs. If those people did something useful then less work will result in the same level of wealth. Consequently everyone can work less and work will be less demanding and less people will be on benefits.
Some observations give more insight in this matter and they can be an outline of new views on organisation. The analysis shows that the causes of long working hours identified in the Bloomberg Businessweek article are symptoms of inefficiencies in the economic system that can be eliminated. In the Natural Economy with local currencies less people are rewarded for senseless activities and exploitation of others, so less work can produce the same. Consequently it is possible to work less and to achieve the same.
Inefficiencies in the current system
For analytical purposes, the current system is split up into economy and politics. The economy is the area of producing and consuming, which is creating and using economic power, while politics occupies itself among others, with dividing money and therefore economic power. For a large part, politicians try to find solutions for failures in the political and economic system, such as wealth inequality, social dislocations, resource depletion and environmental degradation. If the political and economic system did fulfill the needs of people better, there would be less need for politics.
Furthermore, politics often does not effectively address issues that are important. Elections are often a popularity contest so voters tend to elect politicians that make a good impression on television and promises they cannot keep. The political debate is guided by the media that often serve business or political agendas. The political debate itself distracts the attention from solutions. Problems cannot be solved because people tend to take sides.
The economy is inefficient because irreplaceable natural resources are squandered while the needs of society are not addressed. For example, there is crime while there is also unemployment. If more police officers were hired, crime and unemployment could be reduced. Many people do not produce something but they use scarce resources when performing their jobs. Roads and offices have been built for them. People with intellectual jobs often have the highest salaries as they can use the complexity of society to their advantage.
Mechanisation and automation appear to have made business operations more efficient, but there are a number of downsides:
- Business processes have become more complex, creating the need for people that analyse and manage complexity.
- Large organisations dehumanise people as there is little sense of purpose and cohesion. This has a negative impact on output.
- Many people are employed in jobs that do not create a product or a service someone needs, increasing the cost of economic output.
- Mechanised and automated processes consume a lot of energy, while energy constraints will dominate the economy of the future.
- A sedentary lifestyle has made many people obese [+] and has become the second cause of death in western world [+].
Possible causes
Specialisation and complexity
Division of labour empowers humans to create great works at the risk of people becoming too specialised. The result is that people working on the same project or working in the same organisation do not understand each other any more or have different objectives. Often nobody oversees the complete picture. This undermines the effectivity of the organisation as a whole. Many organisations rely on advisors and specialists, such as lawyers, IT specialists and market analysts while managers do not always understand the work they do and the advise they give.
Many humans do not understand that there is a limit to what they are capable of managing. They think that the sky is the limit and that something should be done only because it is possible. Common sense does not always prevail, especially when complex solutions are chosen where simple solutions suffice. Currently nobody can oversee the financial system and the risks hidden in it because the system is too complex. Consequently there are plenty opportunities for smart people make money at the expense of others. This is one of the reasons why the financial system is failing.
The Tower of Babel
The Biblical story of the Tower of Babel warns us for the division of labour gone too far. After becoming specialised, people have become dependent on each other, while they do not understand each other any more. In this way a society disintegrates and therefore the story of the Tower of Babel is reflecting the situation we live in today.
Because many people are managing complexity and making a living out of it, complexity has become a burden on society. Government officials, managers, consultants and traders often do no contribute to the real output of the economy. If society was less complex, the labour of those people could be redirected to useful production and real needs such as improving the infrastructure, education, care, police work and cleaning up the environment.
The usury economic cycle
In the current usury economic system many jobs seem to make sense because over time labour has been divided into specialisms. The division of labour is a consequence of the usury economic system that favours large scale operations [+]. This caused the division of labour to go further than otherwise would have been possible. As a consequence our society has become more complex than it otherwise would have been.
The complexity introduced the need for bureaucrats to implement regulation, managers to distribute tasks, specialists for communication, consultants for advice and technology specialists to operate the technological infrastructure. Information has become more and more important to stay ahead of the competition because everybody competes against everybody on a worldwide scale.
Uneconomies of scale
Large organisations have a number of downsides. On average larger organisations are less efficient than smaller ones. The only reason why they appear to be more efficient is because the usury financial system favours them. Therefore an economy with smaller organisations on average will probably be more efficient. In the future reduced available energy will make smaller scale operations even more efficient relative to large scale operations as they often use less energy and more labour.
Large organisations tend to dehumanise people as there is little sense of purpose and cohesion. The actual outcome of many management theories brought into practice is that organisations often resemble those in Dilbert comics. The natural condition for humans is to live and work in small groups. Therefore many people currently work under conditions that are not natural. Stress and psychological disorders related to alienation are just a few of the consequences. Lack of purpose and cohesion in large organisations can have a negative impact on moral values. This also has a negative impact on the efficiency of large organisations.
| The political process |
Introduction
The political process is often ineffective in solving issues. Democracy seems to be failing because the right course of action is too unpopular [+]. The political debate, which appears to be about ideology and values, is in reality often about distributing money to interest groups. As the economies of Western nations are heading towards a collapse, solutions that remained out of the political debate for long, will need to take the centre stage.
The following conditions make the political system ineffective in solving problems:
- people tend to give disproportionate attention to trivial issues;
- propaganda and and thought control;
- the political debate itself that is distracting the attention from important problems;
- trigger words that make people react irrationally;
- political parties being linked to specific interests and ideologies.
Because the political system is failing, more and more issues are decided outside the realm of politics in an undemocratic way. Consequently a global governance of the elites or New World Order is emerging.
People give disproportionate attention to trivial issues
Because humans are social animals, important issues are rarely discussed because they are often boring, complex or intimidating. People who show interest in complex problems, and are not interested in small talk, sports and celebreties, are often considered to be dorks. Consequently humans have a natural tendency to remain uninformed and to accept propaganda. A solution to this problem is making societies less complex so less information is needed to get a comprehensive picture of all relevant issues.
Parkinson formulated this principle in the Parkinson's Law of Triviality. He demonstrated the law by contrasting the triviality of a bike shed to a nuclear reactor. In an imaginary tale in a firm's executives meet to discuss two new projects: an atomic reactor and a company bike shed. The reactor is complex and expensive, and non-experts risk embarrassment if they speak up, so it gets approved in two and a half minutes. But everyone knows about bikes and bike sheds, and everyone has an opinion.
In the tale the bike shed was debated for an hour and a quarter, then deferred for decision to the next meeting, pending the gathering of more information. Parkinson's point, which applies to politics and the media too, is not only that smaller matters are less intimidating to deal with. Politicians and people in the media often know little about the issues they are dealing with. Because people want to contribute to a group process the focus is often kept on the inconsequential. With complex subjects about which they are ignorant, people risk humiliation.
Propaganda and thought control
Money is power more than anything else. Money commands states, armies and people. As long as the power of money remains out of sight, people will not question the power of banks, governments and the special interest groups surrounding them. To divert attention away from the powers behind the scenes, methods of thought control have been implemented. Aldous Huxley envisioned that propaganda and the suppression of the truth, particularly in democratic societies, will bring upon an age of enslavement where instead of yokes and chains, people in celebrated free societies like America will be bound by the soft restraints of ignorance, incuriousness, distraction and irrationality.
Some of those methods of thought control are:
- Diversion: Attention can be diverted by coverage of non-essential issues like sports and celebrities. The American media have spent much time on topics like O.J. Simpson, Paris Hilton, Michael Jackson and Tiger Woods.
- Selective presentation: A selective presentation of facts can be used to create a certain picture. Nearly every viewpoint has facts supporting it. There is a selective presentation of facts when only facts supporting the viewpoint are mentioned while facts contradicting the viewpoint are ignored.
- Labeling: Labeling can be used to create a certain picture. For example: Palestinians attacking Israel can be labeled as terrorists or as people resisting occupation. Israel can be depicted as a terrorist state but Israel can also been seen as a nation under threat surrounded by enemies.
- Airtime: By giving certain opinions more attention than other opinions, the media can create a certain picture. For example: if the Democratic viewpoint is aired more often than the Republican viewpoint, most people tend to believe the Democratic viewpoint. In this case factual evidence is not needed to create a certain picture.
- Hoaxes: A hoax is a false story. Hoaxes can be presented as news or as facts. For example: the existence of Iraqi weapons of mass destruction was a hoax.
- Propaganda: Propaganda is showing only one viewpoint and presenting this as truth. For example: Fox News is a clear example of a propaganda channel [+].
The methods of thought control mentioned above are well-known. Many people see through these methods and can identify them in situations where they are used.
All mainstream media are owned by large corporations and promote the corporate agenda of the ruling oligachy in some way or another. However the most important method of thought control escapes the attention of most people. It is the political debate and the use of trigger words. By creating and maintaining opposing opinions, and playing on the emotions of voters, attention can be driven away from essential issues so solutions remain out of sight. In this way the political debate and trigger words can be used to make people react in a frenzy on situations without clear observation and thought.
Dialectic and the political debate
Introduction
According to Wikipedia dialectic (also called dialectics or the dialectical method) is a method of argument, which has been central to both Eastern and Western philosophy since ancient times. The word dialectic originates in Ancient Greece, and was made popular by Plato's Socratic dialogues. Dialectic is rooted in the ordinary practice of a dialogue between two or more people who hold different ideas and wish to persuade each other. The presupposition of a dialectical argument is that the participants, even if they do not agree, share at least some meanings and principles of inference.
Our political debate is shaped by Hegelian dialectic. The basic idea behind Hegelian dialectic is that solving a conflict of opposing sides will lead to progress. Hegelian dialectic, usually presented in a three-fold manner, was stated by Heinrich Moritz Chalybäus as comprising three dialectical stages of development: a thesis, giving rise to its reaction, an antithesis, which contradicts or negates the thesis, and the tension between the two being resolved by means of a synthesis.
The conflict of Capitalism versus Socialism or free market versus government intervention was the fundamental theme in most of our political debate for over a century because wealth is not distributed based on need or economic achievement. Both ideologies state that they have the best intentions for mankind. However only understanding the underlying cause of a conflict can solve the conflict if both sides share the same basic principles. The underlying cause of the conflict between Capitalism and Socialism is usury, which is the charging of interest on money [+].
Usury results in a distribution of wealth that is not based on need or economic achievement. Socialists mistakenly believed that return on capital and therefore Capitalism was the cause of the exploitation of workers. The Capitalists had to defend themselves against those allegations. In this way the thesis Socialism as an ideology gave rise to the antithesis Capitalism as an ideology. This resulted in a fierce and emotional political debate that lasted for more than a century. However the political debate was not resolved in a synthesis but only resulted in people taking sides.
The use of Hegelian dialectic
On the site Newworldrhinos.blogspot.com the following observation has been made:
In 1847 the London Communist League (Karl Marx and Frederick Engels) used Hegel’s theory of the dialectic to back up their economic theory of Communism. Now, in the 21st century, Hegelian-Marxist thinking affects our entire social and political structure. The Hegelian dialectic is the framework for guiding our thoughts and actions into conflicts that lead us to a predetermined solution. If we do not understand how the Hegelian dialectic shapes our perceptions of the world, then we do not know how we are helping to implement the vision. When we remain locked into dialectical thinking, we cannot see out of the box. |
Karl Marx thought of class struggle as a dialectic conflict with a predetermined outcome. However the use of Hegelian dialectic will not necessarily promote the Communist agenda. It can also be used to create a corporate police state ruled by oligarchs. Under the rule of President Bush the United States progressed into this direction. Because the police state was not an issue of debate between the left wing liberals and the right wing conservatives, it could be implemented with the consent of the majority of both sides. Essential issues are decided without much debate because the political debate is not concentrated on them. The Hegelian dialectic controls our thought and actions by focussing the attention of the public on non essential issues. Because this dynamic is not correctly understood, this trend is not effectively countered. Glen Greenwald noted [+]:
The 9/11 attack happened more than a decade ago; Osama bin Laden is dead; the U.S. Government claims it has killed virtually all of Al Qaeda’s leadership and the group is “operationally ineffective” in the Afghan-Pakistan region; and many commentators insisted that these developments would mean that the War on Terror would finally begin to recede. And yet here we have the Congress, on a fully bipartisan basis, acting not only to re-affirm the war but to expand it even further: by formally declaring that the entire world (including the U.S.) is a battlefield and the war will essentially go on forever. |
Smear campaings also undermine the credibility of the political system. It distracts the attention from relevant issues. In 2008 Fox affiliates ran an infomercial suggesting that Obama was funded by Hamas [+]. Political games like blaming Sarah Palin for the shooting that occurred in Tucson, Arizona, have the same effect. When people remain stuck in playing political games, politics will not solve the problems of society. As a consequence the population of a democratic country may become alienated of the political system, making it susceptible for dictatorship.
Trigger words
Introduction
The result of Hegelian dialectic and politicians playing on emotions of voters is that the use of trigger words can activate predetermined responses from individuals depending on their political or religious views. The responses are based on belief systems that generate emotions like this is good or this is evil. Some of those trigger words are: free markets, government intervention, Capitalism, Socialism, Nazism, racism, Anti-Semitism, Jews, whites, blacks, gay marriage, abortion, Islam, Zionism, intelligent design, evolution theory, liberals and conservatives.
The limits of the political debate are determined by political correctness. Political correctness has the effect of creating an illusory reality which is eligible for debate. In the Netherlands the problems of different cultures living together were not discussed for a long time because the political elite was affraid that it could lead to civil strife. In the United States it is not possible to discuss the stranglehold of Jews on the politics, the intelligence services and the financial system. Everybody loves Israel like everybody loves Big Brother in George Orwell's 1984.
Adjustment problems of Muslim immigrants
In Western Europe the adjustment problems of Muslim imigrants have not been seriously debated for a long time because people raising the issue were often labeled as racists. Racism was a trigger word that blocked a rational discussion of the situation. For example, in the Netherlands the trouble caused by groups of young men from Moroccan descent had become a significant problem [+]. After the terrorist attacks of September 11 the situation changed. Right wing populists started to link the problematic behavior of specific groups to Islam. Their reasoning was based on the Clash of Civilisations of Huntington, which stated that there is a conflict between Islam and the Western values.
Curiously criminal Moroccan boys and their parents on average were better educated and more oriented to the Dutch society than Moroccan boys and their parents on average [+]. Apparently the crime rates are caused by adjustment problems and not by Islam itself, as the people that held on to traditional values caused less problems. Furthermore Chinese and Turks cause less trouble but they also stick together. Turks have a strong sense of nationalism and Chinese remain invisible in Dutch society. Consequently, integrating cultures that are completely different, appears to be the cause of many problems.
Right wing populism created new myths and so the political debate became a blame game in which new lies and falsehoods replaced the old ones [+]. Sensationalist media were adding to this by stressing incidents and sometimes inventing incidents or even trying to create them [+]. On the other hand minorities often underestimate or deny the problems that exist in their communities. As a consequence the issue is still not discussed in rational way.
Fiscal responsibility
The political debate in the United States is effective in directing money away from the people to the oligarchs. The debate on fiscal responsibility concentrates on whether or not the United States can afford to have a universal health care system or social security, which are items that benefit the people. The spending on the military, the police state and the wars that benefit the oligarchs seem to escape attention. Before September 11, 2001 an estimated $ 2.3 trillion has been wasted [+]. The wars in Iraq and Afghanistan at least costed $ 1 trillion [+] but may have costed an $ 4 trillion [+].
The working class in the United States has paid taxes for retirement in Social Security. This money has not been saved but it has been used to finance budget deficits while at the same time there had been tax cuts for the rich [+]. Now the Social Security Trust Fund has insufficient funds. Some politicians label Social Security an entitlement program to create the impression that people living on Social Security have not paid taxes for it.
Likewise estate taxes are sometimes labeled death taxes to create the impression that the government is profiting from death and taking away money from hard working people while in reality people receiving large inheritances almost never have worked for it. Large estates create a class of indolent rich that live of the work of others. As estates often increase over generations this threatens democracy as large corporations can buy politicians. According a Pew survey, the issue of class conflict has captured a growing share of the national consciousness. 46 percent of the 2,048 adults questioned believe that the wealthy only got that way because they know the right people or were born into wealthy families [+].
Health care
The debate about health care reform in the United States is dragging on for 60 years now [+]. After World War II, President Truman proposed a government insurance plan that would cover everyone. Republicans and the American Medical Association labeled the plan as socialistic.
Socialism was used as a trigger word to generate negative responses, which was enough to defeat Truman's plan. The introduction of a public health care system based on a European model could bring down health care costs with 40%, while assuring basic healthcare for everyone [+].
Terrorism
Islamic terrorism did get much attention because in a number of high profile attacks many people were killed. Despite that terrorism is not a significant cause of death in the United States, while Islamic terrorism makes up only 6% of terrorist attacks [+]. The threat of terrorism may have been exaggerated because the oligarchs are the main beneficiaries of the spending on the military, the police state and the wars [+].
Trigger words like softness on terrorism generate emotions that block a rational discussion of the money spent on the military, the police state and the wars. Much of the spending on the military does not contribute to the security of the United States [+]. Furthermore, the military is a place where criminal gangs are trained [+], which further increases the need for security spending.
The War on Terror appears to be a hoax as most terror plots are made up by the FBI duping deranged individuals [+]. Also the Iranian terror plot has the appearance of such a scheme [+]. With a constant atmosphere of war on the background, the parallels with George Orwell’s 1984 are too obvious to ignore. While travelers are subjected to body scans and pat-downs, an Al Qaeda leader dined at the Pentagon just months after September 11, 2001 [+].
Socialism and Capitalism
Socialism has long been a negative trigger word as it was associated with unfreedom and poorly led economies. Recently the Occupy Movement became successful in stressing the negative consequences of Capitalism. A Republican party strategist therefore suggested that Republicans should not use the word Capitalism any more. According the word generates negative feelings. He advised to use the words economic freedom instead [+].
Fascism, Nazism and Anti-Semitism
Zionists use Anti-Semitism as a trigger word to gain the moral high ground by linking criticism on Israel to Anti-Semitism [+]. Labeling criticism on Israel as Anti-Semitism is their method to end any serious debate on the issue. Because of the Holocaust the word Anti-Semitism has a strong sense of evil surrounding it. The exploitation of the word Anti-Semitism and the Holocaust by Zionists for their political purposes is remarkable because Zionism and Nazism are similar ideologies [+].
After World War II Fascism and Nazism have been the ultimate trigger words. Those words are used to label all kinds of situations depending on the the political agenda of the people using the word. According to Franklin Delano Roosevelt Fascism is the ownership of the government by private interests. Stephen Schwartz defines fascism as a violent totalitarian ideology to underpin the theory of Islamofascism. People opposing Zionism often see it as a form of Nazism.
Political parties
A failed concept
Political parties are institutions that need the political debate to justify their existence while the political debate itself distracts the attention away from important issues. Political parties often identify themselves with ideologies that have failed and try to generate emotional responses by the use of trigger words to forward their political agendas.
Power politics of politicians harm the interests of a country and in the United States the Republican Party is often not cooperative or even operating in a destructive way [+]. Such issues are more likely to arise in a two party system than in situations with more parties that have to cooperate. Political parties can be corrupted by special interest groups and corporations. In this way corruption becomes institutionalised.
When the institution is corrupted, all people that want to have a career within the institution need to engage in bribery and corruption. Because corruption is often legal in the form of lobbying and representatives getting lucrative private sector jobs after their term, corruption in the political system is often far more pervasive than research of Transparency International suggests.
The Tea Party is no exception to this rule [+]. Tea Party is essentially promoting a corporate agenda by directing the anger of the impoverished populace at the government to serve multinational corporations. Major funders like the Koch Brothers want the government not to interfere when they extract more billions out of the general public [+] or deal with countries like Iran [+].
Western Europe
In Western European countries the role of money in political parties is less predominant than in the United States. Despite that also in Western Europe business interests influence political decisions in a significant way. There is a network of captains of industry and politicians called the Old Boys Network that runs the affairs in the Netherlands [+]. Part of the Old Boys Network is the former union leader and Social Democrat Prime Minister Wim Kok, who once opposed high bonuses and called them exhibitionistic self enrichment. He became a strong supporter of high bonuses after he was appointed as a member of the Supervisory Board of the Dutch banking giant ING.
His successor Prime Minister Jan Peter Balkenende specifically praised the mentality of the Dutch East India Company VOC of the Seventeenth Century. The VOC was a government mandated private enterprise that combined trade with wars [+]. The VOC was the first multinational corporation in history. The same model of government mandated private enterprises is now applied in Iraq and Afghanistan.
It may therefore not be a coincidence that the Netherlands supported the wars in Iraq and Afghanistan and has sent troops to those countries. Royal Dutch Shell, which is partly a Dutch company, did benefit enormously from the Iraq war. Shell succeeded in acquiring a large stake in the Iraqi oil assets [+]. Wim Kok and Jan Peter Balkenende are only examples of how business interests dominate political decisions. These practices are widespread at all political levels within the mainstream political parties.
Politicians do not solve problems
Elections resemble beauty contests. Politicians do have to make a good impression on television. However their appearance on television is irrelevant for their performance as a leader. Consequently many politicians are not capable of handling the issues they are facing. They often have to rely on advisors. For this reason Martin Armstrong noted [+]:
The most important aspect is the economy. Screw that up and you get war, depression, and starvation. We elect a whole bunch of people to posts and automatically assume these people have the (1) real intelligence above average to comprehend such complex subjects, and (2) they understand the right thing to do. Where did we ever get these ideas? Most of the staff members employed by politicians are smarter than the people they work for. |
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The Democratic party has committed itself to the Israel lobby, making it difficult for the United States to regain its independence. It may therefore not be surprising that U.S. Democrats and pro-Israel lobbies slammed on comments made Republican Senator Rand Paul who suggested that the United States should halt all foreign aid and its financial aid to Israel [+]. As the top 1% is living off the labour of the rest of the population using a corrupted political and financial system, it was not helpful that Republicans accused president Barack Obama of class warfare when he was preparing to unveil plans to increase taxes for millionaires [+].
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Introducing a public health care system (savings: 6% of GDP), combined with a reduction of 75% on military spending (savings: 5% of GDP) could slash the budget deficit and may even create a surplus, while at the same time improving medical care [+] and security [+]. The issue of unfunded liabilities [+] cannot be solved without new ways of thinking. Apart from cuts in entitlements and tax increases, this may require a new financial system and taxing the wealthy. The top 1-10% has effectively stolen money from the working class by lobbying and bribing politicians, so there are good grounds to impose significant taxes on the wealth of millionaires.
| The economic process |
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Introduction
Not only people on the dole are a burden to others. There are many people in jobs that do not create a product or a service someone needs, and in many cases those jobs are not useful. Sometimes they undo the productive work of others and by doing so they become destructive. Those people may work hard and they may find it difficult to accept that their work is useless. They should realise that cleaning ladies and carpenters have to work long hours to make a living because there are so many people trading, pushing papers, attending meetings, writing reports and playing with toys. Everybody can work less if the useless activities in the economy are eliminated and are replaced by productive work and enterprise.
Unproductive and destructive jobs can be found in the following main categories:
- policy making, welfare and bureaucracy;
- management;
- law and consultancy;
- communication, information and media;
- finance and trade;
- technology, computers and software.
Policy making, welfare and bureaucracy
Introduction
Laws are made to be cheated upon. Unintended consequences always come from laws and government intervention. The intended effect is often not achieved. This is an eternal law. Already around 600 BC the writer of the Tao observed this. He advised leaders not to have ambitions and to let things go. The natural order of things is often the best. In Chapter 57 of the Tao it is written [+]:
The more restrictions and prohibitions there are, the poorer the people become. |
Usury causes government intervention
The current usury economic system stands in the way of achieving the natural order of things or Natural World Order. Usury results in a distribution of wealth that is not based on need or economic achievement. Usury enables rich people to become even richer by using money as a tool to exploit other people. Money travels freely around the world, resulting in unemployment, alienation and stress, unraveling of social structures and mass migration. Usury gives the economy a short term bias as money in the future is valued less than money in the present. This results in environmental pollution, squandering of natural resources and the destruction of nature. Therefore many people expect the government to intervene.
People want to be protected from the adverse consequences of the current economic system. For this reason policies are formulated, laws are introduced and bureaucrats are hired to enforce those laws. But government intervention only makes things worse. Creative people allways find a way to get around rules and they make huge profits by doing this. Legislation often results in the need for considerable investments, which further favours large scale operations. Large corporations can also lobby with politicians to make regulations more suitable to their needs. Social benefits increase wage cost and large corporations have the advantage that they can outsource operations to low wage countries. Therefore in reality policy making, welfare and bureaucracy reinforce the adverse effects of usury.
Over the years the percentage of government expenditures as percentage of the economy has increased. Because the rich often do not pay taxes, the middle class had to pay for the expansion of government and welfare. The increased cost of government is one of the main reasons why the government has become increasingly hated by working people [+]. The government in the United States appears to be more hated than in Europe, but also in Europe there is a growing sense of dissatisfaction with the government.
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Welfare
Usury makes the economy unstable with recessions and unemployment. This introduced the demand for unemployment benefits. Because of the increased scale of operations and the worldwide competition of everybody against everybody, demands on workers increased, so less people became fit to join the workforce. To bring some relief disability benefits were introduced, together with doctors and social workers to guide people back to work. Many people on disability benefits did not go back to work. In welfare states the number of people on benefits rose over the years.
The following causes for this development can be identified:
- People who had demanding jobs and were confronted with stress symptoms or burn out will find it difficult to return to their job.
- People who had uninteresting jobs may prefer to stay on benefits.
- Bureaucratic organisations and procedures are used to determine who are eligible for benefits. People working in those organisations have little incentive to put people back to work.
Welfare has unintended consequences as there are always people that will exploit opportunities to get money for nothing. This is rational economic behaviour that can be seen in any market. This conduct is natural and also supported by the Capitalist morality, which promotes that people should pursue economic gain without regard for the consequences. Corporations often do the same. In most cases the people exploiting welfare do not break laws and therefore they do nothing wrong in a legal sense. Furthermore, in the usury economic system there is always unemployment, so welfare is needed to give poor people an acceptable living standard.
If jobs were less demanding, and if people had to work less to make a living, less people need to be on disability benefits. If there was full employment then there would be less need for unemployment benefits. In the Natural Economic Order this will happen. If local governments decide on who is eligible for benefits, and if those local governments also pay a significant part of the cost, then the local communities will try to get as many people to work as possible.
People are less inclined to live at the expense of their own community. People who abuse benefits will be confronted with their neighbours who pay for them. Most people are reasonable and do not mind paying benefits for people who need them. If the money on benefits is spent well, it is less likely that working people will bear a grudge against people on benefits. For this situation to emerge in the Natural Economic Order, the central government may not need to do more than to define a minimum wage and a minimum income.
Local communities should contribute the same percentage for all benefits, otherwise they will put people on the benefits that cost them the least. It may be a needed to supplement the salaries of disabled employees with an additional payment from the government, so employers can employ them competitively. Because local communities issue their own currencies, they have an economic base that is independent from the central government and can contribute to benefits.
Government services versus guidance
Neoliberal economists consider government intervention in the economy as ineffective. A government intervenes in the economy in two ways: by providing public services and by guidance. Most economists do not make a proper distinction between those functions. Public services often make an economy more efficient, while guidance and the resulting policy making, regulations, welfare and bureaucracy increase business cost. In most cases government guidance is perceived as needed for a variety of reasons, but they undermine the competitiveness of a country as long as it is closely interconnected with the international markets. Local currencies and currencies with a holding tax could alter this siutation.
Many small businesses feel being choked by government regulations [+], but many others do not feel the same [+]. According to a study recently released by the SBA’s Office of Advocacy in the United States, small firms spend $2,830 more annually per employee than do larger firms on complying with government regulations. Most notably compliance costs per employee for small manufacturers are more than double the costs for midsized and large firms. As manufacturers have to compete internationally, the cost of government regulation can be problematic.
Public services were introduced because the private sector was less efficient in providing services like education, police, emergency services, water, electricity, roads, prisons, sewage and public transport. Having a profit motive, or having two or more networks, is often not efficient or it creates unwanted side effects. For example, industry deregulation of electric utilities in the United States has cut utility investment in energy saving programmes by 45 percent (Reuters, 10/02/98). Also the privatisation of the British railroad system had dismal results [+].
Neoliberalism resulted in the privatisation of public services but not in the reduction of government bureaucracy. In this way we ended up with the worst of two worlds. The privatised public services often make minimal investments in the public infrastructure and consequently the infrastructure is degrading over time. Making public services private can also been harmful when the profit motive conflicts with the public interest. For example, privatised prisons contribute to higher numbers of people in jail because prison corporations lobby with politicians and bribe judges to make harsh laws and to punish harshly.
Policy making, welfare and bureaucracy have increased in recent years. It may not be a coincidence that the oligarchs did profit from both developments as they took over the public services, while the increased welfare and bureaucracy favoured big businesses because they could outsource operations to low wage countries. In the Natural Economy things will be organised differently. The adverse consequences of usury on society and nature will disappear so there will be less need for policy making, welfare and bureaucracy.
Impact of government on the economy
In many countries where taxes on labour are high, people planning to renovate their homes can make money by renovating their homes themselves instead of doing their regular job. The math is as follows: if your salary is € 20 an hour then you receive only € 12 after taxes. A contractor takes € 40 an hour unless you exploit cheap labour from Eastern Europe or hire someone who does not pay taxes. Even if the contractor works twice as efficient as you, then you can still earn more money by doing the renovation job yourself than by performing your regular job.
The consequences of this are underestimated by politicians and government bureaucrats. Many people do reconstruction and other jobs themselves with friends or hire people that do not pay taxes. If taxes on labour were reduced then the math would be different and therefore it is a good idea to reduce taxes on labour. This will reduce unemployment and illegal work. It will also improve the efficiency of the economy as less efficient labour is replaced by more efficient labour.
Markets can smell a rat but bureaucrats cannot. When a government invents a tax or a subsidy, it often has a goal in mind that most people appreciate. However there are always unintended consequences such as black markets, people and corporations abusing subsidies and behavioral changes that undo much of the intended effects of the government plan. For example if a government increases taxes on petrol to save the environment, people that live near a border will drive extra kilometres to buy cheaper petrol abroad.
Example: housing market of the Netherlands
The Dutch government has made interest on mortgages tax deductible. As a result people in the Netherlands took larger mortgages and went further into debt than otherwise would have been possible. House prices rose more than they otherwise would have done. Therefore rents rose more so the Dutch government is spending more money on rent assistance for people with low incomes. The rent assistance itself also results in higher rents as it creates artificial purchasing power for tenants.
In the Netherlands you had to pay a tax of 6% on the sale price of a house and the total costs including those of the mortgage and the real estate agent amounted to 10% of the sale price. When buying a house of € 200,000 the cost of buying the house was € 20,000. If you have an average wage then you will have to work a year just to pay for those costs. If you can save 10% of your salary this is 10 years of savings. This may be one of the reasons why many Dutch are not inclined to look for jobs far away from home. It may also explain why many Dutch are not moving closer to their job location. They often drive long hours to their work and end up in traffic jams.
The Dutch Building Societies facilitate low income housing but there is no effective legislation to support their role. It may be better to make rents of building societies depend on income, so people with high incomes do not occupy affordable houses or support low income housing by paying high rents. In this way more affordable housing will be available for people with low incomes.
It takes courage to end the practice of deducting interest on mortgages from income taxes and to stop subsidising rents. Many people may have to move to a house with a lower rent and house prices will fall but in the end most people will be better off when income taxes are lowered and the tax on buying a house is ended. If house prices fall then rents can fall. A number of people will then move to locations closer to their jobs and the number of traffic congestions may be reduced. If this happens then less roads may have to be built and taxes can be lowered again. If tax levels are lower, then less people may make use of illegal labour. Tax income may rise and so tax levels can be lowered again.
Bureaucracy
Bureaucrats try to solve problems by inventing new procedures or introducing new officials. Policies and procedures often reduce organisational effectiveness as they tend to replace awareness and thinking. Solving an issue often involves taking risk and making your hands dirty. The incompetent can hide behind procedures and if something goes wrong, they cannot be blamed when they have followed the proper procedures. This may explain why bureacratic organisations seem to foster incompetence.
A government organisation I have worked for hired a Security Officer. He started to attend meetings, write policy documents and sometimes he obstructed the work of others with awkward requirements such as a clean desk policy. We had to store our documents in closets and the keys had to be stored in a key locker with a pincode at the porter's room next to the exit. In this way software manuals that everyone could download from the internet were protected from the cleaning ladies who do not understand them. |
Bureaucracy decouples the action from the outcome. The action is not evaluated against the outcome itself but against the procedure or the stated goal. Bureaucratic methods are often introduced to handle complexity but they often do not cope with change very well.
Management
Introduction
Why are many managers incompetent? Investigative minds have pondered upon this question. The first question should be: Is this true? Humans are difficult to manage and the qualities of managers are more difficult to measure than those of other employees. The apparent incompetence of managers may be caused by high expectations or because managers do not always know the business process they are managing. Another issue may be that managers are often career oriented and focussed on creating a good impression instead of doing their work.
My first employer was a software consultancy firm and my first assignment was a project at their office. It turned out that there were no computers and that there was no work. For weeks we had nothing to do. The project manager wanted to advance his career so he was busy organising project meetings. He asked us to write progress reports that he could present to his seniors. A few weeks later computers and work started to come in. The project manager occupied himself with organising our work and he regularly demanded progress information. |
Good leadership may be knowledge dependent. If you have the appropriate knowledge then you have the best chance of making the right choice. Most managers lack practical experience in the fields of the people they manage. The Dutch researcher Jos Verveen investigated management effectiveness and came up with a comprehensive theory, that may one day supersede all previous theories on management. According to him management is bullshit [+].
Possible causes for incompetence
Managers often seem to have a negative influence on performance. If you want to advance your career then the impression you make is more important than the work you do. Therefore career oriented people tend to become well paid and useless for the organisations that employ them because they are often driven by money and status and not by the work they do.
Commonly known is the Peter Principle. According to Wikipedia the Peter Principle is the principle that in a hierarchy every employee tends to rise to his level of incompetence. It was formulated by Dr. Laurence J. Peter and Raymond Hull in their book The Peter Principle. The Peter Principle is a special case of anything that works will be used in progressively more challenging applications until it fails.
In reality competence is often not a reason to promote someone to a management position. People who want to be a manager need to position themselves by keeping a high profile so they will get noticed. The impression they make is more important than the work they do. Because many managers are motivated by status and money and not by the work itself, they may be better in creating impressions and less good at their job than people who choose a job because they like the work.
Managers are not entrepreneurs otherwise they would have started a business themselves. Therefore in general less competent people end up in management positions. Managers select each other using social networks. They bond by reading books and attending seminars of management gurus about leadership and organisational effectiveness. In management the people you know are often more important than the skills you have. This is why so many people play golf.
Procedures and quality assurance
Procedures are intended to improve organisational performance. In large organisations procedures have often become a burden, because there are so many of them, but they are perceived as needed because work is divided into small tasks and responsibilities while nobody oversees the complete picture. Many organisations have implemented procedures such as quality assurance systems like ISO to improve the quality of their organisational processes.
For software development and system administration quality assurance methods such as CMMI and ITIL have been devised. Those methods have been introduced because products, systems and organisations have become complex and employees have a limited field of expertise and responsibility which can lead to communication errors.
The result is often that people depend on procedures and feel no responsibility for their work and therefore do not think for themselves. Organisations can become big and dumb as a consequence [+]. Because of this managers often start to work on mission statements, team spirit, social skills and organisational culture using books and theories of management gurus. However these occupations do not fix the structural problems of an organisation that make people disinterested in their work.
Procedures cannot replace human judgement. It may be better to split up large organisations instead of introducing more procedures. The Dutch management guru Eckart Wintzen implemented this idea in a Dutch software company. When a branch of his company grew big, it was split up. His ideas did not get much attention during his lifetime because the usury financial system favours large scale enterprises [+], but after the implementation of Natural Money with local currencies, his vision may become more widely accepted.
Management information and accounting
Managers demand reports and they have an appetite for irrelevant data. It takes significant time and resources to satisfy the information requirements of managers. Data warehouses and accounting systems are established to answer every possible question managers may have. The benefits of accounting and management information are often overvalued. The available data in accounting and management information systems is often used in creative ways to fit the political purposes of the people that are reporting.
Once a Dutch telecom company hired me to build reports on the projects and accounting system of their real estate department. Managers of the real estate department wanted those reports because they were not satisfied with the standard reports from the system. Often a manager needed the report right away. Many times the need for the information disappeared faster than I could build the report, which was only a few hours most of the times. It turned out that most reports were not important at all. Only the availability of the information created the need for it. |
Accounting is often used to maximise management bonuses. Fraud is difficult to detect as the truth is difficult to establish and therefore data in management information and accounting systems is often irrelevant. This is one of the reasons why managers can take in high bonuses while the company turns out to be bankrupt a short time later. Complex accounting systems increase opportunities for fraud. Some successful enterpreneurs like Henry Ford did not rely on accountants and their reports [+]. If business models and accounting rules were more straightforward then accounting would be more simple.
The cost of ambition
If workers know what they have to do and when the workload is manageable, then less employees and only a few managers are needed, and the operation would be more efficient. When tasks change often or when a company is ambitious then workers and workload have to be managed. Managers often have a tendency to reorganise to create the impression that they are busy achieving something. In many cases the cost outstrips the value of the reorganisation. However this is often not visible because accounting can be used to create a different impression.
At a government agency I have worked as a database administrator there were at first three database administrators. We could do our jobs with ease. Then a systems renewal project was started that resulted in the introduction of a range of new technologies. New developments went fast, so there was no time to standardise and optimise our systems. Even if we had the time, then our work would often be undone by newer developments. The new developments also increased the workload. Consequently the number of database administrators rose to twelve. |
The effect of managers on society and the economy
Managers are costly for an organisation to maintain because they decide about their own pay and in this way acquire high salaries and extravagant bonuses. They declare expenses that other employees have to pay for themselves, such as cars, mobile phones and diners. During the last decades the pay of the top 100 chief executives increased from 45 times the salary of an average worker in 1970 to 1723 times the salary of an average worker in 2006 [+]. In 2010 the top chief executives in the United States enjoyed a 36% jump in pay [+]. As the cost of management increases, less money is available for other employees. They have to work harder for less pay while their jobs often are outsourced to low wage countries [+]. According to George Monbiot [+]:
Chief executives now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they've captured than oil sheikhs. |
Scientists believe that about 1 per cent of the general population is psychopathic. There is emerging evidence that this frequency increases within the upper management of modern corporations. This is not surprising since personal ruthlessness and fixation on personal power have become seen as strong assets to large publicly traded corporations. However, appearance and performance are two different things. While psychopaths are often outwardly charming and excellent self-promoters, they are also typically terrible managers [+].
Clive R. Boddy, a professor at the Nottingham Business School at Nottingham Trent University, thinks that psychopaths take advantage of the relative chaotic nature of the modern corporations, including rapid change, constant renewal and high turnover of key personnel [+]. For the society and economy at large, managers have become a destructive force. Reorganising the economy in such a way that less managers are needed will most likely improve social and economic conditions.
Consultancy and law
Consultants
Many issues appear to be of a complex nature and consultants are hired for advice. Consultants are often university graduates dressed up in a suit without practical experience on the matters they advise on. Information technology consultants rarely ever have significant programming or system administration experience. Management consultants rarely ever have management experience. Consultants rarely ever have to implement or work with the solutions they advocate, so their advice is often impractical. Many consultants suffer from Weiler's Law, which states:
Nothing is impossible for the man who does not have to do it himself. |
The advice of consultants is often valued higher than that of experienced people. A reason for this may be that managers prefer to listen to people who tell them that nothing is impossible. Another reason for this may be high consultancy rates [+]. It is often considered wasteful to spend money on advice that is not used. In this way high consultancy rates create commitment. Furthermore managers seem to think that if something is valuable then it is often expensive, so if something is expensive then it probably is valuable. Most managers are incompentent and have no way of differentiating between good and bad advice. Rates for consultants are high and consultants are good at giving presentations. Therefore consultants are able to impress managers by high rates, suits and incomprehensible language [+]. For this reason Terminology Mixer is a popular office joke in the Netherlands:
Terminology Mixer is easy to use. Choose a three digit number. Each of these numbers corresponds to one column. As an example you may take number 430. You then choose term 4 from column 1, term 3 from column 2 and finally term 0 from column 3. The result is "multidisciplinary approach to change processes". This expression will satisfy everyone. It does not matter that you do not know what it means and that your interlocutor does not know it either. He or she will not ask questions in order not to appear uninformed. The terms "normative guidance of management techniques" (503) and "integrated technological aspects of authority" (146) will make a good impression in any consultancy report or management meeting as will "objectified relational behavior alternatives" (852). Terminology Mixer offers you a thousand terms to include in your conversations and reports. This gives you the authority needed in the field of management and consultancy. |
Lawyers
Lawyers are a specific type of consultants. Society has become complex and therefore law has become increasingly important. This situation tends to favour the ruling class and the rich because they have the best information or the best advisors and lawyers. The complexity of society creates opportunities for lawyers. They often give people the impression that they can get a better deal by hiring a lawyer to look after their interests. When lawyers enter the scene a large part of the disputed amount of money ends up in the pockets of the lawyers. Law is complex so lawyers are often indispensible because the smartest always win.
Most lawyers are dedicated to giving a good service to their clients but many lawyers have a questionable sense of morality. Providing a good service to a client often means providing a bad service to the other party or society at large. Other people may face this issue from time to time in their job, but for many lawyers this is part of their profession. If a lawyer succeeds in keeping a criminal out of jail then he or she considers this a job well done. Lawyers tend to put the blame on the police and the judiciary if they get a murderer or a child molester out of prison. During an interview in the Dutch newspaper Spits on June 7, 2011, the Dutch lawyer Tjalling van der Goot explained his role:
My role is not to protect society, others have to do that. Sometimes this can have unpleasant consequences. But you should not blame the lawyer but the
police and the judiciary. They did something wrong. |
Mr. Van der Goot also said that the accused have rights as they are often considered guilty in the eyes of the public. This is certainly true, but the law should be there to achieve justice. If a criminal escapes justice or an innocent person ends up in prison, then everyone involved is to blame. Many lawyers have distanced themselves from moral issues in a way in order to perform well in their profession. It can be the beginning of something more troubling. In 2002 Lisa G. Lerman researched the dishonesty of lawyers in her research named "The slippery slope from ambtion to greed to dishonesty: lawyers, money and professional integrity" [+]. Some of her findings are:
For some lawyers, income is the clearest measure of their status. Preoccupation with money tends to have a corrosive effect on integrity. For some people, the desire for wealth leads to dishonesty because it’s easier to expand your income more quickly if you don't bother about legal niceties. |
In the Netherlands there are serious indications that criminal lawyers pay criminals to bring in customers [+]. Criminal lawyers are the most vulnerable as they deal with criminals on a daily basis. It has become publicly known that the Dutch Procecution suspected that a prominent lawyer had become friendly with one of the country's most notorious criminals.
The issue of greed degrading professional ethics can be found in other professions. In Capitalism greed is considered to be good. This is especially damaging in medical professions. Some docters prescribe pharmaceuticals because this will deliver them a bonus from the pharmaceutical company. Some dentists push for unneccesary treatments to increase profits [+]. Some surgeons do the same [+].
Copyright and patents
Limiting copyright and patent laws will reduce the cost of available ideas. It will also reduce the profitability of research into Frankenstein technologies, such as genetic modification, that require heavy investments. Biotech corporations even have found a way to use patent laws to exploit the poor by making them pay for their own inventions [+]. If there is a public desire for specific research, such as for example research into better treatments for cancer, people or governments can donate money to perform that research. This will assert a democratic control over technology development. The whole idea of copyright is questionable as it creates a monopoly on ideas [+]. Professor Lawrence Lessig of Harvard Law School noted that:
“As we’ve seen, our constitutional system requires limits on copyright as a way to assure that copyright holders do not to heavily influence the development and distribution of our culture.” |
In the age of Internet, copyrights have increasingly become an infringement on liberty. It harms the freedom of expression and it is easy to become an offender unknowingly. The entertainment industry has lobbied for the Stop Online Piracy Act (SOPA) that intended to bring the responsibility for policing the internet from law enforcement agencies to websites and the internet providers. SOPA has raised concerns among the boards of websites such as Google, Facebook, Twitter and Wikipedia [+]. If piracy harms the multibillion entertainment industry, this does not need to be a bad thing, as there will be more room for small players that make movies for smaller budgets. It may also force the entertainment industry to create a competitive low cost solution that is a real alternative to piracy sites [+].
However it is also not a good idea that commercial players make money out of piracy. Facebook has been planning a $10 billion stock offering, valuing the company at $100 billion [+]. Facebook Chief Executive Mark Zuckerberg will then become a multi billionare, partially because of facilitating piracy on his website. Non profit public domain websites like Wikipedia should be allowed to link to copyrighted material. Apart from big websites, there are many smaller players that make money out of piracy. It may be better to offer low cost legal alternatives as combating piracy is fighting economic laws, which will not work like the Prohibition and the War on Drugs.
Limiting copyright laws and extending the principle of fair use will not only harm the entertainment industry but also artists and actors. Some of them are extremely rich and they can still make a living without copyrights. Less known artists make most of their money by doing performances and copyrights only generate a marginal income for them. The vast bulk of the artists and actors cannot make a living out of their work. They have to take a job on the side to make ends meet or they have to find a wage-earner who will provide for them. The bulk of the artists will need to work less after the economy has been reorganised to the Natural Economy. Consequently, they will have more time to spend on their hobby, which can be music, singing, doing fashion shows, acting or making art.
Communication, information and media
Introduction
Until a few decades ago communication means were costly and therefore they were only used for relevant communication and data. New communication tools that can process large amounts of data at low cost open new possibilities but can also reduce the effectiveness of organisations because the capacity of people to process data does not increase. Irrelevant communication and data distract the attention away from relevant issues. This is not efficient so the situation may change in the future, and the current era may be named peak bullshit in the future.
Reducing irrelevant communication and data will increase the effectiveness of an organisation. Many organisations do the opposite and invest in data communication and communication skills of people. Often this will only increase the number of meetings, emails and documents, resulting in additional cost. This situation is sometimes called information overload and organisational effectiveness may decrease because of this.
Advertising is a type of communication that spreads irrelevant data and increases cost. Advertisements also have the potential of creating a negative self image for people that cannot live up to the standards promoted in the advertisements. Most advertising consist of lies and falsehoods so the quality of information about products would increase if there was less advertising. If all corporations would agree to stop spending money on advertising then products and services could become much cheaper. Within the current economic system this is not possible because there is a worldwide competition of everybody against everybody.
Efficiency
Additional communication may reduce organisational performance. This can be illustrated by the following example. Assume that there is a grid of computers that work together to perform a task. The computers in the grid communicate with each other to coordinate their activities. Assume that communicating with another computer in the grid costs 10% of the resources of a computer. If we have two computers in the grid, they both can allocate 90% of their time to their original task, so the effective outcome for a grid of two computers is 1.8 computers.
Effectivity decreases as communication increases and at some point adding resources degrades the capacity of the system. This is illustrated in the table below:
| gridsize | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 |
| effective % | n/a | 100% | 90% | 80% | 70% | 60% | 50% | 40% | 30% | 20% | 10% | 0% |
| effective # | 0 | 1 | 1.8 | 2.4 | 2.8 | 3 | 3 | 2.8 | 2.4 | 1.8 | 1 | 0 |
This problem can be alleviated by adding managers to the system that distribute tasks and coordinate activity. When tasks are clearly defined this will work well. If tasks are not clearly defined then additional communication between the computers in the grid is needed, otherwise communication will overwelm the managers. Increasing organisational efficiency may therefore mean reducing communication.
If all computers in the grid have clearly defined tasks, requiring minimal communication with the other computers in the grid then the performance of the grid would increase dramatically. When only 5% of the resources of the computer are needed for communicating with another computer in the grid, 7 computers in the grid would have an effective outcome of 4.9 computers. Without communication the effective outcome would be 7 computers. From this the following conclusion can be drawn:
The theoretical optimal organisation size is one person because then there will be no internal communication. In this situation all communication is external to support essential business operations such as serving the customer. |
Another issue is that incompetent people can survive more easily in large organisations. Small organisations will go bankrupt if they hire them. When the average organisation size is smaller, incompetent people will be forced to become more competent to remain employed or to find a more suitable employment. Incompetence drags down economic performance and therefore most people will benefit from reducing the average organisation size.
The theoretical optimal organisation size is not always feasible because in many cases different people with different abilities have to cooperate for a common goal and therefore larger organisations are often more suitable. However the example shows that in general smaller organisations are more efficient and effective than larger organisations. Many people already suspected that larger government institutions and corporations on average offer lower service levels to their citizens and customers than smaller organisations.
The main obstacles to increasing organisational effectiveness by communication reduction are complexity and change. Complexity and change require communication by default. If the situation was easy to understand and does not change then everybody knows what he or she must do. Communication is less needed in such a situation. The complexity of the environment of organisations as well as the pace of change have escalated in recent decades. Complexity is the consequence of the usury economic cycle favouring large scale operations while the world wide competition of everybody against everybody is a driver for constant change.
Communication errors
In communication there always is a sender who wants to convey a message and one or more receivers to whom the message is addressed. The first step is the sender making the message. During this process the sender may not correctly express the intent. After the message has been sent, it can get lost or changed on its way to the receiver. Finally the receiver may interprete the message incorrectly. Communication errors are also caused by different backgrounds and ways of thinking. Sometimes people take words out of context to blackguard others and to serve political agendas. A word like democracy may have a different meaning depending on the person using the word. If two persons with different ways of thinking talk about the same subject, they both may have different views of what is said, and therefore they may not understand each other.
The number of communication errors can be reduced when people communicate in a blunt and honest way and do not communicate unneccesarily. Social codes are inefficient as they consume time, make people feel less free, depend on culture and are not allways correctly understood. Social codes may also lead to conflict when people do not adhere to them. Even though expressing thoughts honestly and bluntly reduces the possibility of being misunderstood, it is not a good idea to offend other people unneccessarily or to use abusive language. The adverse effects of social codes on organisational efficiency were already known to Jesus. When he appointed 72 men to act on his behalf Jesus told them: "Do not take a purse or bag or sandals; and do not greet anyone on the road." (Luke 10:4).
Division of labour
The division of labour introduces need for communication because specialists often need to work together to create a specific end result. Each specialism has its own language and specialists often do not understand each other. This will increase the potential for communication errors. Therefore reducing the number of specialisms needed may make organisations more efficient and effective. If people are less specialised then they also can take over each others tasks more easily when needed.
Policies, procedures and documents are often used to facilitate the division of labour but they do not create an organisation. People must know what their role is and what they have to do. Policies, procedures and documents may be helpful in achieving this. However if people rely to much on them and do not think for themselves then the level of organisation actualy reduces.
If there are too many policies, procedures and documents then people cannot find the information they need. Good work is largely the result of training and experience. It is often better to have a simple operation that all employees understand than to have a complex one that has to be formulated in policies, procedures and documents.
A small insurance company I worked for had organised its IT-department in such a way that it required a minimum of overhead. The department was divided into groups of people that serviced a specific division of the company. In this way resources were dedicated to the specific user department and could be directed to the priorities of the department. This increased organisational effectiveness because IT was directed to the priorities of the departments while at the same time it reduced organisational politics between departments. |
Social activity
According to an academic study social activities like blogging at work can pull employees closer to one another, build relationships, and over time, increase productivity [+]. Humans are social animals so they have a need to connect with others and people in an organisation need to trust each other in order to cooperate successfully. Especially in complex environments, where information sharing is imperative, social activity may enhance productivity. The same effect cannot be seen in farming and factory jobs where real goods are produced. In such jobs blogging at worktime will reduce output. While the Americans are blogging, the Germans and the Chinese are producing.
People who have no productive tasks make use of social networks to remain employed. If you produce nothing useful then the people you know are more important than the work you do, hence the importance of social networking. Social networking adds nothing to a product or a service, but it does increase costs. Many products and services could be cheaper if there was less social networking in organisations. Social networks can lead to inefficient behaviour like favouring certain people not for their skills but for their social background or pleasant manners. Social networking also takes a lot of time, which otherwise could be spent on productive work. In many cases it will lead to giving presents and corruption.
New communication tools like mobile phones and Ipads or social media like Facebook and Twitter therefore tend to reduce organisational effectiveness as they often make unproductive and destructive people more efficient. When more time is spent on social activities, less time is spent on thinking or working. Therefore social media can undermine organisational as well as personal effectiveness. Social networks and lobbying are important tools used by the inefficient ruling class to remain in power, to distribute jobs among their friends and to extract money from corporations and taxpayers for the benefit of their own businesses. Prices and taxes are higher because of social networking and lobbying. Organisations like political parties, the freemasonry, the rotary and golf clubs are places where social networkers gather.
Group think
Another reason why small organisations perform better than large organisations is that the performance of individuals is often dragged down by group think [+]. In weighing alternatives and making decisions, groups often perform worse than the average of the separate individiuals of the group. The reason for this is that an individual making a decision will start to think about the alternatives, weigh them and then make a decision. If a group has to make a decision then the members of the group start synchronising their opinions. As a consequence more time is spent on social activity and less time is spent on thinking. An example may illustrate this.
As a student I once was part of a group doing a management case study in which we assumed the role of the management of a corporation that had to decide about buying another corporation. Many group members had doubts about the deal, but the general feeling resulting from the group process was that we should do it. Opinion leaders in the group had an important role in the outcome. Only one group member opposed the plan until the end. We decided to buy the corporation but it turned out to be a bad decision. If each individual had decided for himself or herself without consulting others then more people would have opposed the deal. A referendum on the subject probably would have had a better outcome than the group process. |
In extreme cases the collective behavior of a group is less rational than that of nearly each single individual alone. One of the most influential books on collective irrational behaviour is Extraordinary Popular Delusions and the Madness of Crowds written by the Scottish journalist Charles Mackay [+]. Essential in creating group think is communication and information sharing. If there was less communication and information sharing, then the performance of crowds may improve significantly [+]. Crowds are often more smarter than experts, provided that there is no process of communication and information sharing that causes group think.
Group think can also explain why politicians often seem ineffective and inefficient in making decisions. The political game of bargaining and compromising takes a lot of time and the outcome of the process is often of poor quality and not reflecting the will of the electorate. Politicians want to generate publicity and score points. Therefore much of their time and effort is put in irrelevant issues and social activity. Politicians can also be corrupted to represent corporations and special interests. It may therefore better to have a referendum and give a less prominent role for the parliament. In this way the voters are in charge while the executive branch of the government can handle affairs more effectively and efficiently.
Most politicians are good communicators but their analytical talent tends to be poor. Politicians often promote alternatives that a rational human being would not consider. In the Netherlands politicians introduced a plan to tax car driving per kilometre driven with different tax levels for different roads and driving times. A complex information system was devised, including boxes in cars that track driving. Building the system would cost billions of Euros and the yearly cost of operating the system would be hundreds of millions of Euros. Dutch politicians consulted the Dutch car lobby ANWB during the decision making process and in doing so they created a situation of group think. Under normal circumstances the car lobbyists would oppose such a costly system, but they had become part of the decision making process, and therefore the car lobby favoured the plan.
Reorganisations
Reorganisations and the changing of tasks increase the need for communication because people have to adapt to the new situation and communicate with others about their new requirements and expectations. It may not be a surprise that reorganisations often cause stress. In many cases reorganisations do not have the benefits that managers anticipated and the costs are often higher than expected. This is rarely ever reported as accounting is often adapted to the needs of the managers in order to create a positive picture about their activities.
Reorganisations are costly because consultants are hired to advise on the issue and managers are needed to execute the reorganisation. In many cases reorganisations are in effect outsourcing operations that redistribute tasks from higher paid employees to lower paid employees. As a consequence often more management and oversight is needed. Therefore the cost benefits of outsourcing are often marginal. Avoiding reorganisations as much as possible may therefore increase organisational performance.
Advertising and media
Advertising is a type of communication that adds cost to a product but does not enhance the product itself. In many cases products are made in China or India for only a few percent of the sale price in Europe. In such cases nothing is produced in Europe and only a so called value is added. The added value is often not more than a brandname and advertising. Advertising and packaging have become an important part of a product. In many cases the package adds significant cost while the ecological consequences of packages are unfavourable. Many corporations also have communication plans and magazines for their customers. Ultimately the customer is paying for it all.
Advertising degrades the quality of information in the media. Magazines and television programs often feature sponsored items presented as news. This creates an obscure situation that makes any media output suspect by default [+]. Advertisements can also create a negative self image. Sunny Bergman's documentary The People Versus the Beauty Industry investigates the unattainable beauty ideal that many women want to meet because of photoshopped images of women in magazines. In her documentary The Sunny Side of Sex, Sunny Bergman discovered that women in Cuba have a high self esteem, most likely because there is no advertising there [+].
The amount of money spent on advertising is a consequence of large scale centralised production operations where everybody competes against everybody. Creating a brandname makes an operation more profitable because margins for branded products are better. It may therefore not be surprising that products without a brandname may cost 30% or less. Creating a brandname is about becoming known to the public so celebreties can make a living without doing something useful. In this way even Paris Hilton could accomplish something. In an interview with E-Online she said: "The thing I feel most accomplished about is the brand that I've built. I have 17 different product lines."
In the Natural Economy with local currencies advertising and packaging will be reduced to a minimum. There will be no world wide competition of everybody against everybody and local products will be preferred. As advertising diminishes there will be less need for large media enterprises. The media empires may cease to exist because advertisements are their primary source of income. Subscription based media may replace media paid by advertisements. This may create new opportunities for small scale media organisations.
Another benefit of reduced spending on advertising will be that consumer profiling is less profitable. The intrusion of the privacy of consumers by large advertisement and media conglomerates now seems unstoppable [+]. Recently Google changed its privacy policy so it can track user activity across all its sites [+]. This will end in the Natural Economy with local currencies because many advertising business models will no longer be viable. The business models of websites like Google and Facebook largely depend on advertising, their market value most likely will crumble in the Natural Economy.
Finance and trade
Introduction
Currently a producer only fetches a small part of the price a product costs in a shop. Often the chain of finance, trade and distribution adds significant cost to a product. Large supermarket chains have strong bargaining power while small farmers and producers do not. Small independent shop owners can barely survive. Trade and finance can be useful and the primary function of trade and finance is to match supply and demand of goods and money as there is often a mismatch between them. The following types of mismatch between supply and demand exist:
- Location: A product is often produced at another location than where it is consumed. Trade moves products from the location where they are produced to the location where they are consumed.
- Time: There is often a time difference between the moment of production and the moment of consumption. Trade fills in the gap by storing the goods until they are consumed.
- Quantity: A producer often produces in large quantities while the consumer requires small quantities. Trade fills in the gap between the producer and the consumer by buying goods large quantities and distributing them in smaller quantities.
The difference between trading and stealing is often obscure. Honest trade is a difficult issue, as trade itself implies dishonesty. In trade it is better not to be honest about what you know about the product, what you want to buy, what you want to pay for it, or what you are able to pay, because it undermines your bargaining position. Most people that have bought a car or a house can recognise this [+]. Traders tend to stretch their moral values to maximise profits and thus moral values come under pressure. This issue is less predominant with shop owners and merchants who have lasting relationships with their customers. It is more likely to occur where trade is anonymous or occasional, such as car salesmen, real estate agents and traders in dealing rooms of banks.
Profit maximalisation often conflicts with fair trade, while fair is also a subjective measure, creating room for reconciliating immoral behaviour with moral values. The argument is often that the other party is to blame for making errors or being uninformed. The ultimate goal of traders is to get things for nothing like thieves do. The ancient Greeks already recognised the inverse relationship between trade and honesty. Hermes was the god of Commerce and the Market and patron of traders, merchants and thieves. Jesus was also aware of this when he cleansed the temple of the money changers. Trading often means outsmarting other people. Profits are made by using information advantages and differences, which is another phrase for swindling less informed people. Much time, effort and good brains are wasted on market forecasting and trading schemes. Those resources can be used in a more productive way, so less trade can make an economy more efficient.
Trade is a game of deception. The consequences of trade undermining morality are not understood by most people. Moral values are essential for humans to survive [+]. Capitalism and economic liberalism resulted in a segregation of ethical principles from economic affairs. Economic rationality is a mere cost-benefit calculation without regard for social or environmental consequences. It is often assumed that the common good is achieved by the uncontrolled egoism of individuals and corporations. This assumption helped the uncontrolled rise in trade [+]. Taxes on financial transactions have been annuled to create a freeway for speculative money. As trade is undermining the moral fabric of societies worldwide and helping to make the economic system suicidal, reducing trade will improve moral, economic and social conditions, while improving the prospects of survival for humanity.
Reward for destruction
Many banks have become busy beehives of fraud and theft. Wall Street Banks have corrupted the political system in the United States. Goldman Sachs is the most successful Wall Street institution because it has its own people in the government. Consequently the Wall Street bankers are in control of the United States so they can pillage the country as they please. As the government pumped tens of billions into the collapsing insurance firm AIG, a large amount was redistributed to Goldman Sachs' pockets. When Goldman Sachs settled with the SEC for $550 million in 2010, Newsweek called it their best trade ever.
Goldman Sachs is not the only criminal Wall Street bank. Wall Street is rife with crime. Only Goldman is unparallelled in its political connections and therefore it attracted the most attention. Goldman has its people in the United States government, but the tentacles of the giant vampire squid, as Goldman Sachs is often called, also have a firm grip on Europe. The head of the European Central Bank and a number of European nations are now led by former Goldman Sachs advisers [+]. By creating a government of unelected technocrats, Italy has suspended the normal rules of democracy and is sliding towards a dictatorship of bankers.
At Goldman there is always room for new initiatives to rip off the general public [+]. Matt Taibbi documented the criminal nature of Goldman Sachs and other Wall Street banks. According to Matt Taibbi Goldman Sachs has engineered every major market manipulation since the Great Depression [+]. A Senate committee has gathered the evidence for the criminal activity [+]. No real action has been taken until now and this will help to generate a new financial crisis [+]. Wall Street bankers are well paid for their activities [+], which may have included stealing money from pension funds [+].
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The West is not the only place where religious display often goes together with hypocrisy. In Saudi Arabia eight million foreign workers, mostly from Asian and African countries, work as slaves. According to a report from Human Rights Watch they face bad working conditions and exploitation [+].
A cornerstone in the fraud on Wall Street are the rating agencies. Their business model is corrupt as they are paid for by banks that bring securities to the market [+]. They make profits regardless of how accurate their ratings prove to be. The rating agencies gave top-grade ratings on mortgage-backed securities just before they plummeted in value. It seems that receiving a favourable rating for junk requires paying protection money to the agencies, which makes the rating agencies resemble a crime syndicate like the mafia.
It is therefore not surprising that a former senior analyst at Moody's has gone public with his story of how one of the country's most important rating agencies is corrupted to the core [+]. Not much is done about it [+]. In Europe the role of the American rating agencies is also questioned. Their rating models favour the Anglo-Saxon economic and financial model of printing money to bailout the banks or to finance economic stimulus [+]. Most notably France complained about losing its tripple A status [+].
The Creature from Jekyll Island
The FED operates in the interest of the bankers because the FED is not a public institution. It is owned by private banks. In his book The Creature from Jekyll Island G. Edward Griffin describes a meeting in November 1910 at Jekyll Island, Georgia, of seven bankers and economic policymakers, who represented the financial elite of the Western world. The meeting was recounted by Forbes founder B. C. Forbes in 1916, and recalled by participant Frank Vanderlip as the actual conception of what eventually became the Federal Reserve System. Griffin also described a framework of how bankers underwrite both sides of an ongoing war or revolution.
Currently the FED has loaned out billions of US Dollars to banks. The first ever Government Accountability Office audit of the Federal Reserve revealed that 1.2 trillion US Dollars ($1,200,000,000,000.00) had been secretly loaned out to US banks and corporations and foreign banks, in many cases at interest rates near 0% [+]. Bank profits from this loans may amount to $13 billion [+]. After the FED loans attracted too much attention, the FED started to use the ECB to distribute loans to foreign banks [+].
This FED activity may help to ignite a hyperinflation similar to the one Germany experienced in 1923. At the time of the hyperinflation in Germany, the German central bank also was privately owned like the FED. According to Hjalmar Schacht, a former head of the German central bank in Nazi-Germany, it was the government that ended the hyperinflation after taking control over the central bank [+]. In her book Web of Debt Ellen Brown wrote:
Hjalmar Schacht revealed that it was the privately-owned Reichsbank, not the German government, that was pumping new currency into the economy. Like the U.S. Federal Reserve, the Reichsbank was overseen by appointed government officials but was operated for private gain. The mark's dramatic devaluation began soon after the Reichsbank was privatized, or delivered to private investors. What drove the wartime inflation into hyperinflation, said Schacht, was speculation by foreign investors, who would sell the mark short, betting on its decreasing value. |
Financial crime
The nation's biggest banks have looted American cities with predatory deals [+]. Another consequence of banker's greed is the foreclosure crisis. Millions of people have been evicted from their homes [+]. This brings the banks in the same league with the raping and pillaging armies of Attila the Hun. About the foreclosure crisis, Matt Taibbi wrote the following:
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The moral angle to the foreclosure crisis — and, of course, in capitalism we're not supposed to be concerned with the moral stuff, but let's mention it anyway — shows a culture that is slowly giving in to a futuristic nightmare ideology of computerized greed and unchecked financial violence. The monster in the foreclosure crisis has no face and no brain. The mortgages that are being foreclosed upon have no real owners. The lawyers bringing the cases to evict the humans have no real clients. It is complete and absolute legal and economic chaos. No single limb of this vast man-eating thing knows what the other is doing, which makes it nearly impossible to combat — and scary as hell to watch. |
A Shadow Banking System, which is essentially repos based on securitisation, has not only increased the possiblities for fraud, but it has also made the financial system less stable [+]. The financial crimes of the banks have the tendency to undermine ethics as people may think that they have the right to get even on the banks. Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years [+].
The "robo-signing" of mortgage contracts made this possible. MERS (an acronym for Mortgage Electronic Registration Systems, Inc.) made this possible [+]. People that pay their mortgages may find themselves being disadvantaged. Banks may need to work harder to find solutions that allow delinquent borrowers who can afford to make reasonable mortgage payments to keep their homes.
It is also likely that organised crime has gained influence on the financial system. Between 2004 and 2007 Wachovia, which has been acquired by Wells Fargo during the 2008 crash, at least processed $378 billion of drug money [+]. Some banks may have become dependent on organised crime for their survival. The head of the UN Office on Drugs and Crime said he has seen evidence that the proceeds of organised crime saved a number of banks from collapse [+].
Financial terrorism
Warren Buffet named interest rate and other derivatives financial weapons of mass destruction [+] and in doing so he classified banks dealing with derivatives as terrorist organisations. Because the FED undermines the confidence in the US Dollar, the FED can also be considered as a terrorist organisation because U.S. Attorney Anne M. Tompkins stated in the von Nothaus trial on March 18, 2011:
Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. |
Financial activist blogger Max Keiser therefore called the bankers financial terrorists. Max Keiser is a pundit who regularly appears on Russian en Iranian propaganda channels to criticise the United States, but nevertheless there is a good argument for his position. To accommodate usury banking, a currency must be debased and, following this way of thinking, usury banking equals terrorism. But calling banks financial terrorists may be an understatement. Usury banks have proven to be far more destructive than terrorists. Former US President Thomas Jefferson understood the nature of the issue when he stated:
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. |
Speculation
Food speculation is another field where financial terrorists operate. Despite the facts that harvests were good and there was enough food on the markets, many people in developing countries went unexpectedly hungry. There were food riots in more than 20 countries and governments had to ban food exports and subsidise staples heavily. Banks are accused of taking advantage of the deregulation of global commodity markets and making billions from speculating on food, causing misery around the world [+].
Rising food prices are caused by increased demand, and the speculation is also driven by currency devaluation caused by usury banking and goverment money printing, but speculators aggrevate the food situation by destabilising markets. In the Netherlands the price of potatoes rose in 2010 after speculators took many potatoes of the market. Consequently more farmers started to grow potatoes in the next year in anticipation of higher prices. In 2011 the price of potatoes collapsed and many potatoes are rotting on the fields as the price was too low to harvest them.
Less trade may improve living conditions
Traders make money without producing a good or a service someone needs and they live at the expense of productive people. If those people did something useful then the general level of wealth would rise. Nazi-Germany demonstrated that it is possible to rebuild an economy on the national level while being partially cut off from the international economy. [+]. Germany rose from depression to the strongest economy in the world in five years time, which indicates that less trade makes an economy more efficient.
There are a number of ways to reduce trade and to increase the efficiency of an economy. The most important one is the introduction of local currencies. This will stimulate local trade at the expense of long distance trade. Local producers can sell directly to local consumers and both the producer and the consumer could benefit. Consequently there is less mismatch between the location and the quantity of supply and demand. A holding tax on money will stimulate consumers to store products themselves and in this way the time mismatch between supply and demand will reduce.
Technology, computers and software
Law of diminishing marginal usefulness
Household appliances have options that most people do not need or understand. Cars have been enhanced with features that make them more expensive and fuel inefficient. The electric toothbrush is something you do not need. A dishwasher does not make things really clean and arranging items in a dishwasher and taking them out again takes as much time as doing the dishes by hand. Then there is glass corrosion, a bug found in many dishwashers. It eats glasses. All those handy appliances take away physical work, so many people take their cars and go to the gym to do exercises. One can imagine the invention of a mouse trap with a wifi interface to signal that a mouse has been captured. The threadmill on wheels is a vision that has become a reality. Now you can keep your feet from the pavement while exercising.
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Many products are degenerating because of feature creep. Feature creep is the proliferation of features in a product such as computer software. Extra features go beyond the basic function of the product and can result in over-complication rather than simple, elegant design. Old cobol programs consume far less resources, such as memory and disk, than Java programs while doing the same. Experienced system users prefer character based terminals instead of graphical user interfaces. Websites have become slow and confusing because of advertisements and linked in services such as Twitter and Facebook.
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Productivity gains
If all meaningful activities in the economy are mechanised or automated then people must be employed in meaningless jobs to get an income. This is one of the reasons why currently so many are unemployed or in unproductive jobs. For a time this concept appeared to work, but in the end it is self defeating as income can only come from useful productive activities. A writer named CIGA Keith on JSMineset.com assessed the effect of productivity gains as follows:
The fewer people employed, the higher the productivity, that is, until you attain perfect productivity with a fully automated economic production. However a fully automated production means no employees. No employees means no wages paid which means no funds to pay for consumption. |
Information technology
Available computing power and disk space increased exponentially in recent decades [+]. However the extra capacitity seems to be absorbed by the increased inefficiency of programs and the perceived need to store and to transfer more and more data. As a consequence personal computers often do not resond faster than 15 years ago, despite computing power and speed having increased nearly a thousand times. At some offices disk space is still in short supply despite it has been increased in size a thousand times during this period.
If programs were as efficient in processing and storing data as they were 20 years ago, then it may be possible to bring down hardware costs by 90% or more. This is feasible because more data does not result in better decisions. The opposite may be true because most people do not use data wisely.
In information technology some new developments degrade the quality of systems. For example, users that process large amounts of data often like character based terminals best because they respond directly to user input and have shortcut function keys. Function keys greatly improve the efficiency of experienced users. Character based terminal systems are very reliable and almost never fail because there is only one layer in the system, which is the central computer.
Information technology costs are a significant part of the price of a product. Many organisations have information technology departments with specialised personnel. However it is possible that a team of a few people can build an accounting system, a banking system, an insurance system or any type of business system. All businesses of the same type could use the same systems and this would bring down information technology cost dramatically.
Currently this does not happen because many corporations are large while they are engaged in a worldwide competition of everybody against everybody. They are trying to add features to their products or services in order to have unique selling points. This often requires specialised IT solutions. In the Natural Economy with local currencies there is no need for adding useless features, because there will be no worldwide competition of everybody against everybody. Therefore a standard software system will do for most organisations.
Toys for boys
Expensive projects like the Large Hadron Collider and science fiction space projects are toys for boys funded with taxpayer money. People need food on the table and do not need frivolous scientific projects. In the Netherlands millions are spent on knowledge economy so grant gluttons can organise meetings and seminars on the subject, government bureaucrats can forward their pet projects and corporations can get money for unprofitable operations. It is known that governments can promote innovation best by not interfering with the process.
The military and secret services are other areas where boys can play with toys while the taxpayer is paying the bill [+]. Despite the fact that the United States spends by far the most on military equipment and arcane spy gadgets, it still cannot win the war in Afghanistan. All those advanced weapons did not stop a foreign nation from taking control of the country [+]. The weapons development is not in the interest of the citizens of the United States, but only in the interest of the military industrial complex [+].
Apart from technology, there are a number of other areas where people can be occupied with their hobby at the expense of the general public, such as sports, art, wildlife, archeology and broadcasting. Those occupations are not always useless. The preservation of nature is important and certain expressions of art are of significance. As a general rule government subsidised hobbies make it necessary for taxpayers to work longer. If those hobbies were not subsidised, then everybody has more leisure time to spend on hobbies.
Tools
Managers often think that tools, such as tools for information system development, testing and project management will solve problems that often are the result from a lack of skills or the use of too many different tools. Additional tools require additional skills and make matters only worse. System developers, testers and project managers that have the required skills, can often do their work adequately using a text editor.
A fool with a tool is still a fool. |
Technological change
It is often difficult to estimate costs and benefits of technological change. The consequences of new technologies are not well understood. Consultants and managers often assume that new technological developments have a positive value. The benefits of new technologies are often overestimated while costs and risks are often underestimated. In this way new technologies are introduced that are costly or dangerous and not needed. As a rule of thumb, the most simple solutions are often the best.
The introduction of new technologies may result in the destruction of human capital. If an organisation starts to use a new technologies, information systems or work methods, human capital in the form of experience is often destroyed. In many cases it took years to build this experience. This issue is often underestimated as software and consultancy firms profit from the perceived need for change. If the new technology will bring a significant improvement, this may be worthwile, but often there is a technology push and organisations have no option but to accept new technologies.
New technologies require specialists that know how to use them, making the organisation less manageable or the product more difficult to service. The organisational consequences of new technologies are not well understood by managers. Especially in information technology, new techologies often introduce new components, layers and structures that will become additional sources of failure.
The handling of technology is a craft. In essence there is no difference between the artisans in the Middle Ages and the people building and maintaining complex systems. In the Middle Ages artisans started as an apprentice of a master. After approximately seven years the apprentice could get a certificate and become a journeyman. A journeyman could not start a business of his own and he still had to work for a master. After he had succesfully completed a masterpiece, a journeyman could become a master himself and start his own business.
To become a master in a specific field of technology takes time. An artisan in technology should learn the systems that are used for the craft. In infomation technology those are often the development platform and the programming language. It will take at least five years for a gifted starter to become an efficient programmer. The artisan should become familiar with access paths and performance considerations. He or she must be able to test the system by defining test cases and executing them.
An artisan should also become familiar with the way users use the system so he or she can develop a user interface. The artisan should have knowledge of the business and the functional requirements of the business. The artisan must have knowledge of module design and data design. Only then it is possible translate business requirements into a system and build it. As the pace of technological change increases, humans often lag behind. For example, changing development platforms and programming languages destroys human capital that took years to build.
Risk
Murphy's law is an adage in Western culture stating that anything that can go wrong will go wrong [+]. Some people feel that the universe is perverse, which may block further technological development beyond a certain point. Murphy's law is especially active in complex technological environments. The reason for its existence is that over time all possibilities will come to pass. If the possibility for something going wrong exists, this possibility will become a reality over time.
For example: if there is a 1% chance that an accident will happen on a certain day, there is a 9.6% chance the accident will happen in a period of 10 days. In a period of 100 days, the chance of the accident happening is 63.4%. In a period of 1,000 days, the accident will almost certainly occur. Murphy's law is also a case for simplicity, as complexity heightens the chance for error. For example: if there is a 1% chance that a component will fail in a certain period, there is a 9.6% chance a component will fail if 10 components with the same chance of error are used. When 100 of those components are used, there is 63.4% chance of a component failing in this period. If 1,000 of those components are used, it is almost certain that a component will fail.
A problem with conventional risk calculation models is that it ignores unforeseen events such as black swan events, which are unpredictable events with a high impact [+]. This means that the chance of an accident happening is often higher than predicted. The Fukushima disaster has proven this point again. Therefore any risky technology, whether it is nuclear energy or genetic engineering, will certainly lead to catastrophic failures. Until now the risks were limited because the risky technologies required considerable investments. But this is about to change. In his essay Why the future doesn't need us Bil Joy elaborated on the escalating risk of new technologies [+]:
What was different in the 20th century? Certainly, the technologies underlying the weapons of mass destruction (WMD)—nuclear, biological, and chemical (NBC)—were powerful, and the weapons an enormous threat. But building nuclear weapons required, at least for a time, access to both rare—indeed, effectively unavailable—raw materials and highly protected information; biological and chemical weapons programs also tended to require large-scale activities. |
Humans may become obsolete in the future
In the future we may still shop, eat cereal, brush our teeth and watch TV but everything we do will win us points and benefits across a vast incentives network engineered by corporations and government entities. Or, more tersely: we will live in a game [+]. That may be disturbing, but guess what: we allready live in a game.
A more disturbing aspect of technological development is that humans may become obsolete in the future. For this reason the most risky technologies probably are information technology, genetic engineering and nanotechnology. In his essay Why the future doesn't need us Bil Joy describes some of those possibilities [+]. If technological development progresses as it does, then it is nearly certain that human life as we know it will end as one ore more of the following scenarios will unfold:
- Technology will become available that can monitor and control humans so society will turn in an Orwellian police state.
- Humans will become so dependent on machines that they will be unable to live without them. A major technological failure will then be fatal. Already many people have become addicted to technological gadgets and computers, especially children and young adults [+].
- Humans will become enhanced with genetic modification and information processing technologies and slowly turn into hybrids of humans animals and machines. More efficient enhanced humans may replace conventional humans as they cannot compete.
- Machines will acquire a conciousness and become more efficient than humans and then replace humans. Recent developments in artificial intelligence show that even human expert knowledge may soon become obsolete [+].
- An accident will happen that will make the planet uninhabitable and terminate human life as we know it.
There is a choice to be made. The choice is between making technology work for us or becoming slaves of technology. Technology may make human labour superfluous. In the current economic system of competition, this will make most people poor. Only when the fruits of technology are available to everyone, further technological development may be beneficial to humanity. There is also choice between a slow death of humanity by technology or accepting the laws of nature. Nature can be brutal but accepting the laws of nature will also increase the our prospects to survive as natural selection will keep the human race fit.