Posts Tagged ‘business’

The End of an Error

March 10, 2018 Leave a comment

About 4 years ago my wife decided she would leave teaching (mainly because the school she taught at was managed by a bunch of incompetents, and the roll had reduced so much that some of the teachers were made redundant) and open a business of her own, in this case a cafe. Now, anyone who has been involved in owning or managing a cafe at this point is probably already thinking “bad idea”, and in many ways they would be right.

Why? Because it seems to be almost impossible to make any money from that kind of business, plus for the privilege of making little, if any money, the owner/manager has to work 12 hours a day – starting at 5 in the morning – 6 days a week.

But that’s not the worst of it either, because maybe an even more overwhelmingly soul-sapping aspect of owning a small business is the excess of mindless bureaucracy involved which results in very little of any value.

Of course, Inland Revenue is probably the worst offender, closely followed by other organisations like the local City Council. Then there are a collection of lesser parasites like insurance agents, body corporates, various health and safety organisations, lawyers, business experts, and advertisers.

I have a “real” job but also helped with running the cafe, especially with administration and accounting. Yes, you read that right: I helped with the tasks I most despise. While I felt as if most of them were a waste of time, at least I did gain a few skills in that area – but skills I hope I never have to use again!

On the other hand I did learn some more interesting stuff too. For example, at one point I was doing some baking and managed to make some pretty decent batches of scones and muffins. I never quite perfected making consistently good coffee though – that is a lot harder than you might think!

But getting back to the admin tasks. I had some major issues with those, so let me list a few of them here.

First, tax. Now I know that the two most onerous tax activities – GST and PAYE – are not actually costing me anything because I am just collecting tax for the government by adding an extra amount to prices and wages, but I do object to the amount of effort involved in doing that work. If the Inland Revenue Department (IRD) want to collect tax on sales of goods and services and on wages why don’t they do the work and collect the money themselves?

If I took the amount of time people spend on tax gathering activities (on behalf of the IRD) and multiplied by the number of businesses in New Zealand, it must come to a truly horrendous amount of time. How does IRD get away with this travesty of bureaucratic time wasting? Because they can. They can make whatever rules they like – whether they are fair or not – and impose them on whoever they want.

Note that I am not against tax, in fact far from it. It’s not paying the tax that worries me, it is the amount of time a person like myself, who is talented in many areas, wastes on doing IRD’s work for them.

And other government agencies are maybe even worse. We had to collect a payment from one employee, who had been incorrectly paid a benefit, and process the payment for the department involved. If we didn’t do this – even though it was nothing to do with us and had happened before we even employed the person – we would be fined. Again, this is an arbitrary and unfair law which was created simply because it could be.

Then there are the other forms of bureaucracy. The local council’s hygiene regulations are particularly silly. My wife took that very seriously and she maintained high standards, but I know that the inspection is more to do with paperwork being filled in correctly rather than any real measures designed to optimise food safety. I know other cafe owners who had terrible standards but kept the paper work up to date and achieved the top rating as a result.

My advice is to ignore the hygiene rating you see displayed at food premises, because that is just a measure of how well the person does documentation. Instead, have a look around any place you visit and search for signs of neglect.

It might seem to many people that running a small business is a truly worthwhile undertaking. Small businesses employee a lot of people and contribute significantly to the economy. And the government spends a lot of time talking about how important small businesses are, and how they want to encourage people to start one.

But they sure have a strange way of showing their enthusiasm. If they really wanted people to start a small business, why can’t the government and other authorities make the whole process a lot easier?

I’m sure that people running a cafe would rather make use of their talents in areas like baking, cooking, and hospitality instead of wasting hours every week on meaningless paper work. And I’m sure a struggling business where the owner is effectively making less than the minimum wage while working 70 hours a week would appreciate not having to pay provisional taxes on money which hasn’t even been earned yet.

I am contemplating becoming self-employed myself in the near future, but the advantages of being free of the stupidity of ignorant and dogmatic management decisions are at least partly negated by the dread I have of processing GST and other time-wasting accounting.

People might say that spending that time on tax calculations is just part of their “civic duty” as a citizen, but is it really? Would it not be better for the country if people spent their time doing what they’re good at? Why is accounting considered something everyone has to do, or pay an exorbitant fee to some accountant to do for them.

So yes, the end of our cafe means the end of processing payrolls, GST returns, tax payments, employer returns, hygiene certificates, building safety checks, and various other nonsense I can’t even bear to contemplate right now. It’s like the end of an era… or should that be end of an error?


A Better West

March 3, 2018 Leave a comment

In my last blog post I talked about how most economic and social indicators show the superiority of Western civilisation, but I also mentioned that I recognise that it has real problems. Today I want to talk about one of the biggest problems: our work environment.

This seems to be a major flaw in our society because the majority of people feel disillusioned with their work, and because work is still the most important part of many people’s lives, this seems to be an immediate issue which we should be paying attention to.

As I have said in previous posts, there will probably be no need for most people to work at some point in the not too distant future, so the problem might go away then, but no doubt that will introduce a whole pile of new problems as a result. But that aside, what can be done about work dissatisfaction until then?

Before I answer that I should mention another significant issue with modern society: inequality of pay. It is not unusual to find situations where CEOs, and other high ranking position, are paid at a rate which is hundreds of times more than the median rate for the company they are in charge of. I would say this is unjustified because I see no reason to think that most CEOs are doing a lot more than what any reasonably intelligent person could do, but even if it was justified from that perspective, would it be desirable anyway?

Also there are the biggest barriers to people enjoying their work, according to many surveys: lack of autonomy, incompetent and excessively authoritarian management, and micromanagement and unwarranted bureaucracy and paper work. Note that many studies indicate these factors not only prevent people from enjoying their work, but they prevent the organisation working efficiently as well.

Finally, there is a common situation in many companies (and other types of organisations) where the staff are not motivated to put in extra effort to make the company work better, and this is often related to the other points I have made above. If a person is dissatisfied with their work and is being paid poorly, what motivation do they have to put extra effort into their work?

As you will probably have guessed by now: I have an answer for all of these issues.

Every person in an organisation should take ownership of the day to day operations. Yes, I know that word “ownership” is often used as a business bullshit buzz word and has lost most of its meaning as a result, but I am using it here in a more literal sense.

What I propose is that every person’s pay should be made up from a base rate, plus a bonus depending on how well the organisation is doing. That would encourage people to work more enthusiastically because they would be motivated by their own best interests. They would literally have ownership of the organisation and its profits.

And, of course, because jobs will become increasingly unnecessary, people will get the base amount whether they work or not.

Many companies complain that they cannot afford to pay their workers the minimum wage, especially when there is a call to increase that basic amount. This idea would remove that barrier because everyone would get paid according to what the organisation can actually afford. There would be no false stories about how little is available for pay increases, because they would just naturally occur as a result of the company being successful. And if there was a genuine case of hardship that is allowed for as well, because the everyones’ pay will decrease to compensate.

And decisions could be made based on this system as well. No managers would be necessary because all the parties involved in a decision could be part of it. The vote could be biased towards the higher paid members (because they got that pay through being more highly valued), or to those who have worked there the longest, or maybe towards those who have made successful decisions in the past. Of couse, this would be a computerised voting system so all the details would be accounted for automatically.

Note that there are a few of issues which need to be tackled to make this system work.

One difficulty with this idea comes when the organisation might be (perhaps temporarily) running at a loss. Should the staff then have their part of the loss deducted from the base? I think not, but maybe they should have it deducted from future gains, so that no one ever gets less than the base amount.

Second, the financial position of the company needs to be made known to all interested parties, including the employees. The secrecy which surrounds this stuff nowadays is unnecessary and can too easily be used for dishonest purposes, so I think it should be dispensed with anyway.

Additionally, organisations which are not primarily driven by profit, such as charities, government services, etc, would need to find a different way to evaluate their success. And financial success should not be the only measure of success, even for private companies.

Third, there needs to be agreement on what the minimum base is for everyone and what percentage of profits each member of staff gets. I would suggest a vote amongst all members of the staff assigning value to each position.

You might think that everyone will want to give themsleves all the extra pay but I doubt whether that would happen, because people to have an innate sense of fairness, plus they know that id certain key staff leave as a result of low wages the company will fail.

Fourth, how can his fit in with the current model we have where part of the companies profits are distributed to shareholders? Well, I would like to dispense with that aspect of capitalism completely, because I think the people working at the company should be the only shareholders. Obviously this cannot be done too quickly or suddenly but it should be a long-term aim.

Needless to say, these requirements, especially the second one, present a few difficulties, but every system has difficulties, and I think we need to try new ways of managing work, despite the risks involved.

If everyone is part of the same team, and everyone can gain or lose in the same way that should fix, or at least significantly improve, the problems I listed above. It wouldn’t be easy to do, because the current power elite have a lot to lose, but it’s something which must be done.

Random Comments 9

January 23, 2018 Leave a comment

Here in New Zealand the summer break is a quiet time for controversial news stories so I thought it might be time to bring back one of my posts where I briefly comment on a number of items of lesser immediate importance. Therefore I present random comments 9…

Item 1: Jacinda is Pregnant!

The questions about our new prime minister, Jacinda Ardern’s, family plans seem more relevant than ever now that she has announced her pregnancy. When the question about this possibility was originally asked many people thought it seemed totally inappropriate, yet it really wasn’t.

I think the assumption was that the question was asked so that she could be condemned in some way if her wish to have children conflicted with her duties as prime minister, but the exact opposite has happened, because there has been almost universally positive reaction.

And I think this is a good thing. Our culture puts far too much emphasis on work, and if the PM can show that our family and personal lives are also important then that must be a good thing. And it’s nothing to do really with anti-woman sentiment, or misogyny, or glass ceilings, it’s just about a better deal for everyone.

Maybe this discussion will be an opportunity to de-emphasise work in our lives, reduce the number of hours everyone works, and to make taking time off for non-work related activities more acceptable.

Item 2: Kim Dotcom Strikes Again!

Kim Dotcom says he will initiate a lawsuit against the New Zealand government for its illegal (and in my opinion grossly immoral) attack on him six years ago. At that time his mansion was attacked by armed police in helicopters, his assets were seized, and his business was destroyed. All because of political pressure by big business in the US influencing the government there, then pressure from the FBI who demanded the NZ police raid his home.

Few people would claim that Dotcom is the most innocent citizen on the planet, but I hope that even fewer would say a violent (and no doubt expensive) raid of that type, and the continued persecution afterwards, was justified given his relatively minor alleged transgressions.

On this one I take Dotcom’s side. The reaction of police (and their political masters) was grossly out of proportion with what was necessary, if anything. While you could say that Dotcom represents the rich and powerful, I would say he more represents a reaction to those with far too much power and wealth. I give him credit for standing up to the corporate elite.

Item 3: The Wealth Gap Again

A recent report revealed more obscene facts about the richest members of society in New Zealand, and how much of the wealth they control in contrast to how little the rest of us do. There’s nothing surprising about this, of course, because it is a topic I have ranted about on several occasions in the past. Also, the gap isn’t as great here as it is in some other countries – but it’s still inexcusable.

An interviewer (I think it was the annoying Guyon Espiner, surely one of the worst on RNZ) asked what harm it did to have some people with so much wealth. How does that disadvantage the rest? Well, money is a placeholder for resources and power, and those two commodities are in limited supply. The more one person has, the less is available for the rest of us. So even if we ignore the obvious moral philosophical point about gross inequities in wealth there is also a practical point here. Effectively the super rich are stealing resources and power from everyone else.

Item 4: Confidence and Lack Of

The latest business confidence survey indicates a reduction in confidence, yet the general feeling is that the new government is doing a good job, although it is admittedly very early in their term. The consensus seems to be that business confidence is a rather meaningless measure of the overall economic situation and it seems to be mainly ignored.

Some commentators think that the National Party is unlikely to regain power with their current leadership. It might be that a more progressive (despite the inclusion of NZ First) coalition, lead by Labour, could run the country for the next 2 or 3 election cycles. These sorts of predictions are extremely difficult so I will reserve judgement on that.

So there it is, a few items of just moderate interest from a relatively boring period. I guess I’ll just have to hope that something more controversial happens soon. Or maybe I should comment on American politics instead!

Is Apple Doomed?

December 20, 2017 5 comments

I’m a big Apple fanboy. As I sit here writing this blog post (flying at 10,000 meters on my way to Auckland, because I always write blog posts when I fly) I am actively using 4 Apple products: a MacBook Pro computer, an iPad Pro tablet, an iPhone 6S Plus smartphone, and an Apple Watch. At home I have many Apple computers, phones, and other devices. I also have one Windows PC but I very rarely use that.

So the general state of Apple’s “empire” is pretty important to me. Many of the skills I have (such as general trouble-shooting, web programming, scripting, configuration, and general software use) could be transferred to Windows, but I just don’t want to. I really like the elegance of Apple’s devices on the surface, combined with the power of Unix in the background.

But despite my enthusiasm for their products I have developed an increasing air of concern with Apple’s direction. There is the indistinct idea that they have stopped innovating to the extent they did in the past. Then there is the observation that the quality control of both hardware and software isn’t what it was. Then there is just a general perception that Apple are getting too greedy by selling products at too high a price and not offering adequate support for the users of their products.

These opinions are nothing new, but what is new is that people who both know a lot about the subject, and would normally be more positive about Apple, are starting to join in the criticism. Sometimes this is through a slight sense of general concern, and other times through quite strident direct criticism.

I would belong to the former class of critics. I think I have noticed an increase in the number of errors Apple is making, at the same time as I notice an apparent general decrease in the overall reliability of their products, and to make matters worse, these are accompanied by what seems to be higher prices.

You will notice I used a lot of qualifiers in the sentence above. I did this deliberately because I have no real data or objective statistics to demonstrate any of these trends. They might not be real because it is very easy to start seeing problems when you look for them, and negative events often “clump” into groups. Sometimes there might be a series of bad things which happen after a long period with no problems, but that doesn’t mean there is any general trend involved.

But now is the time for anecdotes! These don’t mean much, of course, but I want to list a few just to give an idea of where my concern is coming from.

Recently I set up two new Mac laptop computers in a department where there was a certain amount of pressure from management to switch to Microsoft Surface laptops. The Surface has a really poor reputation for reliability and is quite expensive, so it shouldn’t be difficult to demonstrate the superiority of Apple products in this area, right?

Well, no. Wrong, actually. At least in this case. Both laptops had to go for service twice within the first few weeks. I have worked with Apple hardware for decades and have never seen anything remotely as bad as this. And the fact that it was in a situation where Apple was under increased scrutiny didn’t help!

In addition, the laptops had inadequate storage, because even though these are marketed as “pro” devices the basic model still has only 128G of SSD storage. That wasn’t Apple’s fault, because the person doing the purchasing should have got it right, but it didn’t help!

Also recently Apple has suffered from some really embarrassing security flaws. One allowed root access to a Mac without a password, and the other allowed malicious control of automated home-control devices. There were also a few other lesser issues in the same time period. As far as I now none of these were exploited to any great extent, but it is still a bad look.

Another issue which seems to be becoming more prominent recently is their repair and replacement service. In general I have had fairly good service from Apple repair centers, but I have heard of several people who aren’t as happy.

When you buy a premium device at the premium price Apple demands I don’t think it is unreasonable to expect a little bit of extra help if things go wrong. So unless there is clear evidence of fraud, repairs and replacements should be done without the customer having to resort to threats and demands for the intervention of higher levels of staff.

And even if a device only has one year of official warranty (which seems ridiculous to begin with), Apple should offer a similar level of support for a reasonable period without the customer having to resort to quoting consumer law.

Even if Apple wasn’t interested in doing what was morally right they should be able to see that providing superior service for what they claim is a superior product at a superior price is just good business because it maintains a positive relationship with the customer.

My final complaint regards Apple’s design direction. This is critical because whatever else they stand for, surely good design is their primary advantage over the opposition. But some Apple software recently has been obscure at best and incomprehensibly bizarre at worst, and iTunes has become a “gold standard” for cluttered, confusing user interfaces.

When I started programming Macs in the 1980s there was a large section in the programming documentation about user interface design. The rules were really strict, but resulted in consistent and clear software which came from many different developers, including Apple. I don’t do that sort of programming any more but if a similar section exists in current programming manuals there is little sign that people – even Apple themselves – are taking much notice!

So is Apple doomed? Well probably not. They are (by some measures) the world’s biggest, richest, and most innovative company. They are vying with a few others to become the first trillion dollar company. And, in many ways they still define the standard against which all others are judged. For example, every new smart phone which appears on the market is framed by some people as an “iPhone killer”. They never are, but the fact that products aspire to be that, instead of a Samsung or Huawei killer says a lot about the iPhone.

But despite the fact that Apple isn’t likely to disappear in the immediate future, I still think they need to be more aware of their real and perceived weaknesses. If they aren’t there is likely to be an extended period of slow decline and reduced relevance. And a slow slide into mediocrity is, in many ways, worse than a sudden collapse.

So, Tim Cook, if you are reading this blog post (and why wouldn’t you), please take notice. Here’s just one suggestion: when your company releases a new laptop with connections that are unusable without dongles, throw a few in with the computer, and keep the price the same as the model it replaces, and please, try to make them reliable, and if they aren’t, make sure the service and replacement process is quick and easy.

It’s really not that hard to avoid doom.

Is This Paradise?

November 8, 2017 Leave a comment

It seems that there has been a continuous stream of leaks showing the greed, dishonesty, and utter lack of moral values of the rich elite in society. The latest leak, the so-called “Paradise Papers” is the biggest yet, and although it doesn’t show anything technically illegal (at least not when this post was written), it does show us yet another loathsome exhibition of self-centered and cynical greed.

It’s not the people or organisations who are only just surviving and cannot afford to pay any more tax who make use of these tax havens, it is more those who have so much already that they could afford to pay out far more tax and barely even notice. Yes, too much is never enough for these people. They always want more, no matter what the consequences.

And there are consequences. All around the world people are dying by the thousands every day because health systems are failing. Education standards are dropping because schools are increasingly under-funded. Infrastructure in even the richest countries is failing. And at the same time the Queen of England, Apple, Microsoft, Google, and all the other usual suspects have so much spare cash they barely know what to do with it.

Is this what we signed up for when we gave tacit approval for modern capitalism to control our lives? I don’t think so.

When we are told that people are dying on waiting lists because there is no money to treat them in hospitals, I say that is a lie. The money exists but it is tied up in dodgy deals in Bermuda. The rich are almost literally murdering people every day because of their grossly offensive need to have more. No matter how much they have it is never enough, and no price is too much to pay for more, as long as it is not them who has to pay it.

It is a truly immoral and disgusting system we have in place. But to add insult to injury, it is even worse when we acknowledge how widely supported this is, even by those who are the most disadvantaged. Because as well as being skilled in the fine art of greed the ruling elite are also masters of propaganda!

So let’s have a look at some of the arguments they use to justify the situation we find ourselves in.

1. The rich earned their money and they deserve to keep it.

It is rare for any rich person to have actually done anything to earn their wealth. Most wealth is generated by investing in profitable deals. This might be currency trading, investing in a new company which has become successful through its creator’s hard work, buying property then gathering rent. Do these sound like worthwhile activities which should be rewarded with millions or even billions of dollars per year? If you think so then you really should reconsider your moral standards.

2. The rich pay taxes according to the rules, just like everyone else.

Everyone, the rich included, must know that the rules are easy to avoid if you can afford to pay for enough expensive but unethical lawyers and accountants. Even if it is possible to bypass tax laws the rich don’t have to do that. They go to extraordinary lengths to avoid paying tax and they must know that it is bordering on illegal. If they have so much already what would be the harm in paying a bit more tax and making a fair contribution to society?

3. Big business must be encouraged because it provides a lot of jobs.

But does it? Let’s look at an example. A new branch of McDonalds opens in my street and provides work for 5 to 10 people. Isn’t that good? Well, superficially it is, but what is the overall effect of big companies like McDonalds? How many small food outlets close because they cannot compete with the big multinational? I suspect that over the long term far more people lose work than gain. The same applies to big retailers, and every other form of business.

4. Without big business we would have no innovation.

This is clearly untrue. There are certainly some examples where real innovation has come from private business (Xerox and IBM come to mind) but only in a tiny minority of cases. The real progress on the cutting edge of science and technology is coming mostly from universities. Sure, companies like Apple are very good at taking the new technology and turning it into sometimes quite spectacular products, but this isn’t true innovation. Big companies seem to gain new technology more through acquiring new, small startups than doing anything genuinely new themselves.

5. Anyone can join the rich if they just put in the effort.

Well this obviously isn’t true because there is only a certain amount of wealth to be distributed. And when the top few percent have more than everyone else put together, there will obviously always be an inequitable distribution. There are people in all modern countries working far longer hours than most CEOs yet making barely enough to survive. Effort has very little to do with it.

6. The current situation is the natural result of free markets and we can’t change it.

Well markets aren’t free, they are creations of governments. If you think a system where the vast majority of people who are poor pay for an infrastructure that the rich then exploit is an example fo a free market then I think you need to re-evaluate the meaning of the word “free”. And even if the market was free, so what? If it brings the gross inequity we see today I say we should forget about free.

7. Since the world adopted a market economy the majority of people are better off.

This is a difficult one to evaluate but I would say that many people actually aren’t better off compared with how they were under the less extreme economic system of 50 years ago. Also, most of the improvements in life today – such as longer lifespan, better communications, better treatment for disease, etc – comes from science and technology, not business. Again, it’s not as simple as saying the corporate world has had no positive effects on society, it’s more that the benefits often quoted are deliberately over-stated.

But why am I bothering? There should be no surprises in this latest leak. Most people already know how the world works: how the poor subsidise the rich, how the rich are immune to the rules which control the rest of us, how politicians are “owned” by corporations. We all know this, but still it continues, in fact it gets worse.

Well, changes do happen and often quite unexpectedly. I don’t remember the fall of the Soviet Union (another grossly corrupt, yet powerful entity) being predicted by too many people, yet it happened suddenly and rapidly. The same can happen to the current extreme form of global capitalism.

And even if nothing happens I still need to blog about it. It is sort of a cathartic mechanism for me. The indignation and disgust I feel when I hear about the latest excesses of the ultra-rich must be assuaged in some way, no matter how ineffective it might ultimately be.

As I have said in past blog posts: bring on the revolution!

Forget About Growth

August 23, 2017 Leave a comment

I recently read a brief report on how an individual could make the greatest contribution to minimising climate change. This has been a controversial subject for many years now but the need to act is now more accepted.

So it seems that the world is gradually coming around to the idea that climate change is real and – even more gradually – to the idea that we need to do something about it. Even Donald Trump’s latest opinion is that is something that needs to be acted on, but he would prefer not to it through Paris Agreement.

So people who don’t accept climate change as real are probably increasingly irrelevant, and the discussion on what to do about it is where the real conflict now happens. Unfortunately it is now too late to fix the problem relatively painlessly and only difficult options remain. So the people who refused to accept reality in the past have now got us to the point where they now don’t want to act because it is too hard, but that is only because of their past obstructiveness.

But this post isn’t primarily yet another lecture on climate change. I like to tackle the really big subjects so this goes beyond the biggest problem facing modern society and looks at the cause of it, and most of the other major problems we have.

Getting back to the report: it listed several actions an individual could take and showed how many tonnes of CO2 emissions per year that would save. Upgrading to low energy light bulbs would save 0.1 tonnes, recycling would save about 0.2, going vegetarian about 0.5, buying only green energy 1.5, avoiding a trans-Atlantic air trip 1.6, and having one fewer child 60 tonnes.

The methodology used to generate these numbers could be debated, but the overall message is still relevant: that the real source of most of our problems is that there are too many people! When having one less person in the world saves six times more CO2 than all the usual energy saving efforts combined this should be obvious.

There is nothing inherently wrong with burning fossil fuels, we are just burning too much. A certain amount of rain forest clearance is sustainable but it is just happening too quickly. The environment can cope with some level of pollution but not the levels we generate now. Famine primarily happens because there are too many people for what the land can produce in food. Many conflicts happen because populations exceed the levels a country can cope with.

I can remember that a few decades back population control was one of the most commonly discussed issues in environmentalism but now it is hardly heard. What has changed?

That’s hard to know, for sure, but I think a major factor is capitalism’s constant need for growth. We have seen this everywhere. Unless business is growing we have a recession. The idea that the economy might have reached a point where is it sufficiently healthy and we don’t need any further growth just seems impossible to contemplate.

Growth in itself isn’t always problematic – although it often is – but the way that growth often happens is. Here in New Zealand it has mainly been achieved through increased population . We keep hearing that our economy is healthy and growing but, of course, it isn’t. Measures, such as per capita GDP, which calculate the economic contribution for each person, have not changed, and some have actually gone backwards.

So there is no growth except in population, and increased population is causing many social and environmental problems, including poverty, homelessness, and traffic congestion.

New Zealand has a small enough population that even quite significant percentage increases can be absorbed without causing a total disaster, but the same phenomenon in other countries which already have large populations is a bigger problem, and each country affects all the others.

Water pollution is a major issue in New Zealand. Why do we have that? Because we have too many dairy cows, and the reason we have those is that there is a good market for milk powder to feed all the Chinese people who are suddenly participating in the global economy. And the effects of overpopulation is much worse in India and some other countries.

We have too many cows because farmers can make more money by cramming more cows into land which previously was not used for dairying. They are prepared to do this while destroying our environment because, in capitalism, too much is never enough.

There are other causes of overpopulation, of course. I have already blamed capitalism so you might not be surprised to hear the next culprit I will accuse is religion! There is no doubt that religious beliefs such as an aversion to birth control and a need to have large families to increase the number of members of your particular church are a problem (yes, I’m talking about you Catholicism and Islam).

And to make matters even worse, the increased birth rate because of this is often in exactly the countries which are already struggling with famine, civil war, and other significant issues.

We need a bit more rationality in this world. I don’t mean I want to have everyone walking around like robots or Mr Spock, I just mean we could do without the more extreme cases of irrationality which cause a lot of harm to society in general. And the pursuit of growth for no good reason would be a great place to start.

A Ponzi Scheme

August 14, 2017 Leave a comment

Everyone has heard of Ponzi schemes, right? If not, here’s the dictionary definition: a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. It is named after Charles Ponzi who set up elaborate money-making ventures based on the system in the early 1900s.

Typically the first few people involved in the scheme promise to pay huge returns to the “investors” and when these are demanded they are paid from the initial investments made from other investors. It can never last, of course, but the original perpetrators usually try to get out before it all turns bad.

A related scheme is known as a “pyramid scheme”. In these the early “investors” are paid a fee by those they recruit and a lesser amount by those the recruiters recruit, etc. It works as long as new people are recruited, but the “deeper” into the scheme you are the less you will get and the more you will be paying those at the peak.

A unique feature of these schemes is that the organisation or individual running the scheme doesn’t actually need to do anything apart from run the scheme. They don’t need to sell anything or provide any service, for example. The scheme is entirely about shuffling money from one place to another (generally from the “suckers” who sign up late to those who were involved in the initial setup of the scheme).

As we all know, there are some pyramid schemes which also sell products (I’m sure we can all name some) but that is more or less just a cover for the dishonest underlying structure.

I was thinking about this recently and realised that there are many aspects of our modern economic system which make it look like just another Ponzi scheme. The economy only works well while there is “growth” or “increased efficiency or productivity”, yet these aims are totally unsustainable in the long term, and even during the short period that they are sustainable they are often undesirable.

In New Zealand a major election issue is immigration. New Zealand allegedly has a healthy and growing economy – and some stats support this view – yet the vast majority of people don’t feel as if they are doing well. How is this possible? Well basically it gets back to the fact that this alleged “growth” we see in our “rock star economy” is all fake. It is primarily due to increased population, provided by immigration, and no real progress has been made at all.

Unfortunately for the politicians supporting this scheme, it cannot last. Like most rock stars our economy will crash and burn when the excesses of its existence overtake any worthwhile contribution it is making. Eventually everyone will realise they are just being ripped off by a giant Ponzi scheme. But by that time the people in government who have created this situation will probably be gone.

Of course I should point out two things here. First, a pyramid scheme is probably a better description that a Ponzi for the economy, but Ponzi just sounds cooler so it better serves my rhetorical narrative; and second, the economy isn’t a pure Ponzi or pyramid scheme and almost everyone would admit that it works well in some ways.

Despite the obvious and numerous faults in capitalism, for example, it does produce the goods and services the First World needs to maintain its lavish lifestyle. As I have pointed out many times in the past, the system is grossly inefficient, poorly focussed, and generally corrupt, but I would never claim it doesn’t have some good points as well, especially for the original investors in the Ponzi or the people at the top of the pyramid (AKA the 1%).

But it will fail because indefinite growth is impossible and because the 99% who support the people at the top of the pyramid will eventually catch on to what’s really happening and rebel. It’s not a matter of if, but when. Like all Ponzi schemes it will fail and it will probably happen through catastrophic collapse rather than a careful restructuring.

When it happens it won’t be pretty, just like poor old Charles Ponzi’s slow and painful decline and death after all his wonderful and elaborate schemes failed.