Doing Well In Business

If you want to do well in business have a friend in government. Evidently Exxon-Mobil is short of friends.

Unfortunately, Exxon has discovered firsthand what it’s like to deal with what Investors Business Daily calls “regulatory pirates” in the Gulf of Mexico:

ExxonMobil, and its Norwegian partner Statoil made the biggest discovery of all — a field worth a billion barrels of oil — 7,000 feet below sea level in its “Julia” field in 2007.

Exxon tried to keep its discovery secret to keep marauders away. Sadly, the pirates in this instance are U.S. regulators — and their aim is to stop them.

That’s right: Instead of marvel at the continuing treasures of the New World, or hail the human ingenuity that made retrieval of so much oil possible, or simply quantify how this discovery will boost U.S. energy security, Interior Department bureaucrats moved instead to snatch Exxon’s permits and shut the whole thing down.

They may not have paid enough to the right party.

Here is a group that paid plenty and is unhappy with their ROI (yes it is a pun using a foreign language - the nominal meaning is Return On Investment)

Let’s see. Obama has lost Wall Street, the progressive grassroots, and even a few unions. Now it looks like another funding source for his re-election bid might fade as well — high-tech Silicon Valley. Politico reports that the innovation center once celebrated the fact that they had backed a President who uses a Blackberry, but now think he’s just another middle-aged man with some ubiquitous personal technology...

Let us not forget that he is a middle-aged BLACK man. That still counts for something. Not as much as it used to. In any case if you make efforts to strangle the electrical supply - which the boys in the valley totally depend on to make their products and make them useful - people interested generally take notice. Making oil more expensive isn't helping either.

Go to the "paid plenty" article for a multitude of links.

A Change In Policy

Suppose you have a bad experience with a company. What can you do?

Stop buying their product.

Suppose you have a bad experience with government. ....

Buying And Selling

In a comment on a post about why we need more oil production in the USA a commenter said:

PROTECTIONISM IS BAD BUT OUTSOURCING IS WORSE AND WE MUST PROTECT AGAINST SUCH.

OUTSOURCING IS WORSE?

Because buy high and sell higher is a viable economic strategy?

The world economy is rationalizing. Yeah. It sucks. The wages of some are rising and that of others is falling. Think farm labor post 1929. Machines had ruined a whole way of life in what amounts to a blink of an eye.

We are hitting another of those walls. Back then it was gasoline engines, electricity, and radio (free music? the record business will never be the same).

Now it is computers, telecommunications (terabit pipes), and industrial controls. And free music. And we have added the fillip of free porn. The prices of things are changing. The value of things is changing. It will take a while to get things sorted. The worst thing we can do is to implement policies to avoid the pain now. Because when the pain has to be faced (it always does) it will be worse.

H/T Instapundit

Triangle Of Greed

Tim Pawlenty has coined a phrase. I like it.

...growing government, powerful unions and bailed-out businesses make up "a royal triangle of greed" in America.

Define the enemy. And in most libertarian terms too.

Cross Posted at Classical Values

Purchasing Magazine Closing

Purchasing Magazine is ceasing publication.

Reed Elsevier, parent company of Purchasing, announced today that it is closing Purchasing and the magazine's website, purchasing.com, as well as most of its other U.S. publications, effective immediately.

The closing is part of a broad divestiture that itself is part of a restructuring of the London-based Reed Elsevier.

The magazine has published for almost 95 years and has been the leading magazine in the supply chain sector of the economy.

This is so doubly sad. It is not just the loss of future publications that will hurt but also the loss of older issues for research purposes. The technical magazine sector of publishing is under severe pressure. It is only a matter of time before more publishing companies throw in the towel one way or another. Either going out of business altogether or going with a www only format.

Also closing:

Manufacturing Business Technology
Industrial Distribution
Logistics Management Magazine
Material Handling Product News Magazine
Plant Engineering Magazine
Control Engineering Magazine
Semiconductor International Magazine

The Wiki reports that at least 23 magazines (including the above mentioned) are being closed. Obviously this is an opportunity.

Cross Posted at Classical Values

Rockford Is Improving

According to our local paper, fondly called The Red Star, only 25% of house sales in the area are foreclosure sales. Except that I know for a fact that the banks are putting off foreclosure as long as possible so as to avoid as long as they can booking the losses.

In Boone, Ogle and Winnebago counties in February, just 62 of the 243 recorded sales were from bank, mortgage or government agencies such as the Department of Veterans Affairs.

That was the lowest number of bank-owned property sales in a month since December 2008.

The flood of foreclosures in the country has been largely to blame for falling prices, because the homes are usually sold at steep discounts. Real estate experts think prices won’t rise with any regularity again until we cycle through the millions of distressed properties in the U.S.

Unfortunately, February’s decline in foreclosure sales is most likely an anomaly. The number of new foreclosure cases being filed continues to rise.

And we haven't even started to tear into the commercial real estate bubble. It is only a matter of time. And then the housing market will re-collapse.

Good times? Only if you like breaking records. Take unemployment in the area.

Local economists weren’t the only ones shocked by the jump to the Rockford area’s January unemployment rate.

It was the highest year-over-year increase in the nation.

The metro area’s unemployment rate was 19.7 percent, a 5.8 percentage point increase, higher than all 372 metro areas in the country, according to an analysis released today by the Bureau of Labor Statistics. Two other Illinois metros made the list of top five biggest increases: Peoria tied for second with a 5.5 percentage point increase, and Decatur was close behind with a 5.2 percentage point increase.

Rockford also had the fifth-highest unemployment rate of all metro areas, outpacing rust belt mainstays such as Flint, Mich., Elkhart-Goshen, Ind., and Detroit.

As far as the statistics go I'm not counted. I'm retired on Social Security. And my mate? She works for the school system so her job will be one of the last to go.

And what is one of the biggest problems our city faces? Public employee pensions.

The debate over how to balance the city budget without cutting services has now zeroed in on the budget’s ticking time bomb: pensions.

Mayor Larry Morrissey, in his State of the City address earlier this month, got everybody’s attention with one example:

A 25-year-old police officer hired today at base pay and receiving an annual 3 percent wage increase and required step and longevity increases, with no promotions, will pay $304,506.25 toward his or her pension throughout a 30-year career. If the officer or the officer’s spouse lives 30 years after retirement, he or she will receive a total of $5.8 million, from employee and city contributions and investment returns to the pension fund.

Now, multiply that by the number of police officers and firefighters the city expects to employ in the next 30 years. Right now the number is 549.

The city’s annual pension obligation — the amount the state says it must pay into three separate state-mandated retirement systems for its union employees — jumped from $11.3 million in 2009 to $12.8 million this year to a projected $16.3 million in 2011.

But at the same time, money coming into the city’s general fund fell from $112.4 million in 2009 to $110.1 million in 2010.

Let me do the multiplication for you. And to make it easy we will say the obligation is $5 million for 550 people. That would be around $90 million a year in a city whose budget is $110 million a year. A total 30 year obligation of $2.75 billion. Roughly.

That is unsustainable. And that which can not be sustained will not be sustained. I see bankruptcy in the city's future. Some improvement.

Cross Posted at Classical Values

The Living Dead

It looks like the Grateful Dead will live on in business schools.

Oddly enough, the Dead’s influence on the business world may turn out to be a significant part of its legacy. Without intending to—while intending, in fact, to do just the opposite—the band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get tickets—and you could get really good tickets, without even camping out. “The Dead were masters of creating and delivering superior customer value,” Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me. Treating customers well may sound like common sense. But it represented a break from the top-down ethos of many organizations in the 1960s and ’70s. Only in the 1980s, faced with competition from Japan, did American CEOs and management theorists widely adopt a customer-first orientation.

As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren’t greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.

It’s precisely this flexibility that Barnes believes holds the greatest lessons for business—he calls it “strategic improvisation.” It isn’t hard to spot a few of its recent applications. Giving something away and earning money on the periphery is the same idea proffered by Wired editor Chris Anderson in his recent best-selling book, Free: The Future of a Radical Price. Voluntarily or otherwise, it is becoming the blueprint for more and more companies doing business on the Internet.

Sound's good to me.

Cross Posted at Classical Values

Pulling Economics

Reuters has pulled a story on how the Obama Administration intends to short circuit any incipient American economic recovery by stealth tax raises.

NEW YORK (Reuters.com) –The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.

The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.

There are other tax hikes as well. Read the whole thing.

And why was the story pulled? Instapundit says it was due to pressure from Obama who claims the story is in error - at least in part.

- Our budget explicitly calls for permanently extending the Bush tax cuts for households making less than $250,000. - Our budget explicitly calls for allowing the top rate on dividends to increase to 20% for households making over $250,000. - Our budget accounts for the cost of continuing the AMT "Patch". The last administration's budgets ignored these costs, but we explicitly account for them. - Our budget extends expiring tax provisions through 2011.

So let me see if I can get a handle on this: high earners who are investors in our economy are going to be punished. Investment creates jobs. So by punishing high earners Obama will be punishing people who are out of a job.

Brilliant.

Perhaps Obama needs to read a book. This book: The Forgotten Man: A New History of the Great Depression.

I like what one reviewer had to say when discussing what he learned from reading the book.

3. The struggle over economic policy in the 1930's was really an episode in the long, historical conflict between business participants in the market and anti-business academics. Roosevelt gave free rein to the professors, until the start of the Second World War led him to realize that he would need the tycoons to help mobilize to defeat Hitler. I suspect that one reason that Roosevelt and the New Deal come off so well in the conventional wisdom is that history books are written by professors, not by entrepreneurs.

Say. Don't we have an anti-business academic for President? Yes we do.

Cross Posted at Classical Values

Business Idea

A Palin detractor in the comments at Althouse has this to say:

But I don't know how a book can be the number one best seller before a single reader has his hands on one.

To which I responded:

The left will NEVER understand business.

They will always be failures in America. Which is why they need government.

I wonder why more businesses don't cater to that market though. There is obviously a need for TP with instructions written on every sheet. Perhaps Sheryl Crow could be induced to write them. For a fee.

It could be a best seller.

Cross Posted at Classical Values

A Seat At The Table

Tom Donohue of the US Chamber of Commerce has a few things to say about the Obama Administration not offering them a seat at the table.

"I did an interview a couple of week ago, and somebody said, 'Well, the White House says that you've become Dr. No and you are going to lose your seat at the table.' And I said, 'The White House doesn't give out the seats at the table. The seats at the table go to the people who have a rational policy, who have strong people to advance that policy, that have a strong grass-roots system, that have the assets to support their program, and that are willing to play in the political process," Mr. Donohue remarks, sitting in his office, which looks across Lafayette Park to the White House.

I note that Sarah Palin has no seat at any table and yet a word from her on Facebook moves political mountains.

Mr. Obama is losing his clout. And there is no worse debility for a Chicago politician than losing your clout.

Cross Posted at Classical Values

Dollar Down Exports Up

Here is a headline I never expected to see in my lifetime. U.S. Steel Exports Surpass Imports. So far it is only for the month of August. Still.

A steel industry trade group said the United States exported more steel than it imported in August for the first time in more than 50 years. But another group said that assessment was based on a selective reading of government data.

The American Institute for International Steel said late Monday that government data indicated U.S. steel exports totaled 800,000 tons while imports amounted to 975,000 tons during the month.

But the group, which advocates for free trade and opposes tariffs, subtracted imports of 156,000 tons of semifinished steel and 30,000 tons of hot-rolled steel because that metal is turned into other steel mill products that are considered domestic, the group's president, David Phelps, said Tuesday.

OK. So it looks like they are cooking the books in search of a headline. They got one from me. So I guess it is working - for them.

Some people think corporate America worries about the shrinkage of the US dollar.

Chief executives from the biggest U.S. corporations worry that the slumping dollar could sap U.S. credibility around the globe, spur inflation and ultimately undermine the economy.

The dollar has fallen to a 14-month low; and while a weaker dollar makes U.S. products cheaper overseas, chief executives gathered for the Business Council meeting in Cary, North Carolina, expressed deep concern that the anemic dollar signals serious jitters.

"The issue is currency devaluation, and the worry is that it essentially lowers our credibility in the world," said Office Depot Inc (ODP.N) CEO Steve Odland in an interview with Reuters on the sidelines of the conference.

CEOs say that a slew of government spending programs on health care and other priorities could undercut economic recovery.

And all that is true.

But let us take a look at the numbers. US imports have exceeded exports for a very long time. This is balanced by loans and other investments, thus more or less balancing the books. It does argue that at least on a materials basis the dollar is overpriced. But I got to tell you that a 14 month low is not exactly panic city. My worry is not about the amount but the continued direction.

One thing that does happen in a market system when costs are rising is that the people in the markets work very hard to reduce costs. No one wants to be the first to raise prices. It is bad for business. It is the usual: the greed of the honest businessman leads to a better deal for the consumer.

Of course not all businessmen are honest.

Raj Rajaratnam, a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to use insider information to trade securities in several publicly traded companies, including Google Inc.

U.S. Magistrate Judge Douglas F. Eaton set bail at $100 million to be secured by $20 million in collateral despite a request by prosecutors to deny bail. He also ordered Rajaratnam, who has both U.S. and Sri Lankan citizenship, to stay within 110 miles of New York City.

A guy like that has to know who his friends are.

Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world's wealthiest billionaires, with a $1.3 billion net worth.

According to the Federal Election Commission, he is a generous contributor to Democratic candidates and causes. The FEC said he made over $87,000 in contributions to President Barack Obama's campaign, the Democratic National Committee and various campaigns on behalf of Hillary Rodham Clinton, U.S. Sen. Charles Schumer and New Jersey U.S. Sen. Robert Menendez in the past five years. The Center for Responsive Politics, a watchdog group, said he has given a total of $118,000 since 2004 -- all but one contribution, for $5,000, to Democrats.

And it seems that he was interested in some rather unsavory characters.

...even before his arrest, Rajaratnam was under scrutiny for helping bankroll Sri Lankan militants notorious for suicide bombings.

Now why would a guy friendly to suicide bombers also be friendly to Democrats? Let me think. It will come to me soon I'm sure.

Did some one say economics? All I can say is that the Democrats are moving in the wrong direction. A slide in the dollar may be a good thing for some and a bad thing for others (gasoline prices say - and didn't Sarah Palin have a word or two recently about developing more domestic supplies? Yes she did.) But a cratering of the dollar would be a disaster. Time for a new direction? You betcha!

Cross Posted at Classical Values

Pot Goes Legit

I remember when the micro-computer trade shows started. A few years after the first ones we had an industry. I think hemp/marijuana will follow a similar track.

This video was put out by the same folks who put out the It Gave Me Hope video. If you want to grow your own hope this book might be helpful:

Marijuana Horticulture: The Indoor/Outdoor Medical Grower's Bible

H/T Drug Policy Forum of Texas

Cross Posted at Classical Values

A Saab Story

GM's Saab division has gone into bankruptcy.

STOCKHOLM (AP) -- General Motors Corp.'s Swedish-based subsidiary Saab went into court protection from creditors Friday so the unit can be spun off or sold by its struggling U.S. parent, officials said.

The move is a last-ditch effort to get Saab in order for sale, but the danger of a collapse still hovers over the ailing brand because neither GM nor the Swedish government appears ready to provide enough money to keep it going as a freestanding entity.

An application to reorganize the brand was filed at a district court in Vanersborg, in southwestern Sweden, Saab spokeswoman Margareta Hogstrom said. It was approved later Friday.

GM, which is seeking help from the U.S. government to avoid bankruptcy at home, hopes the three-month reorganization process will put the Swedish brand into shape for a sale, GM spokesman Chris Preuss said. "We fully intend to be out of Saab by the end of the year," he said.

I wonder why the Swedes don't recognize their patriotic duty to save the American/Swedish car industry? Oh, well. There is always the American Congress.

Makers Vs Takers

I just learned from Duane J. Oldsen about a book by Jane Jacobs, Systems of Survival: A Dialogue on the Moral Foundations of Commerce and Politicswhich was published in 1992. It is a fascinating look at the two major systems of morality that we find in the world. Commercial Morality and Guardian (Political) Morality. Or what I like to call Makers vs Takers. The two are complimentary (neither does well without the other) and yet stand in opposition to each other. Things get really nasty when the spheres of influence are mixed without consideration for consequences.

Let me start with a couple of references. First The Wiki which provides a short look at the major points. Second is this pdf which is much more detailed with many excerpts from the book. However, I must caution that it is somewhat hard to read due to the many typos.

I want to start first with a table of contrasting moral precepts. Which I have modified slightly from the wiki to make the contrasts a little clearer.

Moral Precepts for Systems of Survival

Guardian System	Commercial System
Shun trading	Shun force
Take	Earn
Be obedient and disciplined	Be efficient
Adhere to tradition	Be open to inventiveness and novelty
Respect hierarchy	Use initiative and enterprise
Be loyal	Come to voluntary agreements
Take vengeance	Respect contracts
Deceive for the sake of the task	Dissent for the sake of the task
Make rich use of leisure	Be industrious
Be ostentatious	Be thrifty
Dispense largess	Invest for productive purposes
Be exclusive	Collaborate easily with strangers and aliens
Show fortitude	Promote comfort and convenience
Be fatalistic	Be optimistic
Treasure honor	Be honest

I think the commercial class is rather self explanatory but the political/guardian class needs some explanation. In the American system the political class is supposed to provide oversight to the warrior class in order that those in the warrior class are kept within their proper bounds and operate with the maximum of efficiency and the minimum of corruption in their own sphere. This is their prime function. Their motives are most closely aligned with the warrior class since the political class are by definition takers. However, they are also entrusted with seeing that the commercial class is kept honest as well. This explains why we have two systems of courts. The check on the political class is that they are watched by the civilian courts and civilian prosecutors. They are also checked by being elected by the civilian population.

Science and its handmaiden engineering are inherently a commercial endeavors only more so. They depend on a level of honesty not often found in ordinary commerce. They must not be just accommodating of truth but ruthless about it. The check on science and engineering is replication of the work. It is not true science until some one can repeat the experiment and get the same result within the margin of error. Of course there is continuous effort to reduce the margin of error. That leads to economy both in engineering and science.

Well that is a nice short over view. Let's look at how the systems can fail. The number one failure within the warrior class is a failure of loyalty. In the true warrior loyalty is bidirectional. It comprises loyalty to subordinates, equals, and superiors. The reason loyalty is so important is that all warfare is based on deception. Commerce is dependent on honesty above all. Honest measures, truth in advertising, and the fitness of the goods for the purposes contracted. The good working of both systems is most ensured by promoting excellence, in people, in goods, and in services. And to make it all work the two systems must be kept as separate as possible. The peace keepers (soldiers, police) will demand loyalty from the political class and the businessmen will demand honesty from the political class and each must be satisfied in its own sphere.

I have been going on and on and you can probably see for yourself many avenues for corruption and the misuse of one system by the other and most easily the misuse of both systems by the political class who are in charge of keeping both honest. So let me end with a number of quotes from the Jacobs book extracted from the above pdf.

On Agriculture

...agriculture can be operated under either guardian or commercial ways. Wherever in the world a clamor arises for land to be divided and given to its workers, the system being attacked is the guardian type of agriculture. {But}...it's basically a commercial activity.... ...when agriculture is operated in accordance with commercial precepts, placing value on voluntary agreement, thrift, productive investment, efficiency, and openness to innovations, it is much more productive than guardian-run agriculture. worker for worker, it supports its people better. Guardian ways are a drag on agriculture. ...the work's natural demands..for commercial morality. It innately requires thrift: the farmer must deliberately set seeds and breeding stock aside, even if it means going on short rations. It also requires industriousness, much unremitting drudgery day after day after day, especially before machines lightened the work. ...trading or bartering is almost invariably associated with agriculture and animal breeding. Farm households everywhere struggle to get something to market if they possibly can. This is true even when members of the household spin, weave, and practice other crafts. For a household to produce food and fibers for itself and for nobody else, and therefore by definition also supply itself with all its other needs, too -- since it isn't buying or bartering -- is so impractical it's uncommon. So impractical it's a guaranteed recipe for poverty. [Agriculture is]...an economic activity that is functionally and morally commercial [and] has historically been skewed to conform to the contradictory values and morals of guardian landowners. Rulers long ago became preoccupied with agriculture because it meshed with their preoccupations with territory. Tradition has perpetuated the fixation. Any ostensible reason for maintaining the tradition will do. ...once guardian largesse and controls are in place, any attempt to abandon them becomes disruptive.... ...nobody knows what agriculture would be like if it were restored fully and truly to the commercial syndrome and its workings, and everybody is afraid to find out.

Casts of Mind

...we're qualitatively different from other animals as ecological presences. But why? ... Trade! Trade pays no attention to ecosystem unit boundaries. It skips over them as it pleases, transferring surplus energy from this and that ecosystem unit into other ecosystem units. ...it's logical for guardian-minded people to identify a given territorial unit by the range of its top predator -- its prince. However, in the real ecosystems of the real world, obscure creatures can identify ecological units more tellingly than animals at the top of the food chain. ... If you care about putting scientific learning to constructive use...then you need guardian-minded ecologists.... And you have to take them with their habits -- fixation on territories and territorial princes, bureaucratic ways of bringing order to reality, and all. ... If something is a large, important truth, many entirely different avenues should lead to it.... Education does not guarantee a cast of mind appropriate to the training. [Referring to a team of researchers] At the institute, [they]...no doubt sincerely thought they were engaging in free intellectual inquiry. Yet their guardian assumptions, their guardian cast of mind, governed the root questions they were putting to themselves.

Military Engineers vs Civilian Engineers

Engineers working in the military-industrial complex are skillful at designing ingenious products but...they fail to combine this skill with thrift of means. ...trained incompetence...it has corrupted the abilities of most of the country's best and brightest engineers over the span of the past forty years. ...lack of cost discipline...has side effects outside the military-industrial complex. ...between 1980 and 1988, our share of machine tool markets dropped from eighteen percent to seven percent. ... American engineers have...remained marvelous at inventing in fields that can afford to support such work. ...the trouble comes from inability to produce the inventions at affordable costs and with competitive efficiency. then, even though invention has given us a head start, we lose out to Italians, Germans, Japanese, and others.... ... Pentagon contracts in the aggregate are enormous. ...engineers laid off from military work will have a 'lethal effect' in civilian production because of their lopsided experience in disregarding costs.

Mixing Guardian Work and Work for Commerce

Plato said mingling kinds of work or meddling with other people's tasks was 'the greatest wickedness,' did the ,most harm' to the community, and was the very incarnation of injustice.

Fair Competition

Fair and square competition is moral in the commercial syndrome. Not in the guardian syndrome, where largesse and loyalty take priority.

The Great Misunderstanding

Francis Bacon: The increase of any state must be upon the foreigner (for whatever is somewhere gained is somewhere lost). ... People with guardian casts of mind tend to carry zero-sum thinking with them into their attempts to understand all kinds of gains and losses.

Kind of opens the mind and shakes out the cobwebs don't it?

Cross Posted at Classical Values

Roots

In the last month or so I have posted a couple of pieces on government interference with industry. One post contained this quote from Thomas Edison:

"Any extension of the Government into business affairs -- no matter what the pretense and no matter how the extension is labeled -- will be bound to promote waste and put a curb on our prosperity and progress." --Thomas Alva Edison

The other post (Its Taxing To Make A Buck) was about GE and other companies trying to get coal fired electrical plants banned in order to profit from the ban. Now what is so ironic about all this is that Edison founded General Electric. What is even more ironic about all this is that Edison was at war with Westinghouse to determine if AC or DC distribution of electricity was to be the favored standard.

Edison carried out a campaign to discourage the use of alternating current, including spreading information on fatal AC accidents, killing animals, and lobbying against the use of AC in state legislatures. Edison directed his technicians, primarily Arthur Kennelly and Harold P. Brown, to preside over several AC-driven executions of animals, primarily stray cats and dogs but also unwanted cattle and horses. Acting on these directives, they were to demonstrate to the press that alternating current was more dangerous than Edison's system of direct current. Edison's series of animal executions peaked with the electrocution of Topsy the Elephant. He also tried to popularize the term for being electrocuted as being "Westinghoused".

Edison opposed capital punishment, but his desire to disparage the system of alternating current led to the invention of the electric chair. Harold P. Brown, who was at this time being secretly paid by Edison, constructed the first electric chair for the state of New York in order to promote the idea that alternating current was deadlier than DC.

When the chair was first used, on August 6, 1890, the technicians on hand misjudged the voltage needed to kill the condemned prisoner, William Kemmler. The first jolt of electricity was not enough to kill Kemmler, and left him only badly injured. The procedure had to be repeated and a reporter on hand described it as "an awful spectacle, far worse than hanging." George Westinghouse commented: "They would have done better using an axe."

So despite Edison's great rhetoric, I think he really meant that he was against government interference in his business. He was not against using it against his competitors.

You have to keep an eye on these boys.

We are lucky Westinghouse won the battle because the AC system was technically better. Just think of how much it would have delayed progress if Edison had been able to get a national ban on AC electrical transmission.

In a way we are faced with the same prospect. GE wants to get its cheaper competitors banned (fossil fuels) so it can profit from the sales of its higher cost production methods. They aren't doing anything unusual here. Just reverting to their roots.

Cross Posted at Classical Values