A Generative Economy

[Phi for All]

I've been reading a really excellent article in Yes! magazine about ways to relax the stranglehold corporations have on our economy, our politics and our lives. Being in business my whole life, I fully recognize the need for corporate charters, but I feel they have become far too influential in the legislative process that's designed to regulate them and assure proper checks and balances.

 

My biggest concern is that when profit is the single motivating drive for corporate existence, all the other reasons for loving a capitalist economy are jeopardized. Job security, stability, compensation, environmental concerns, efficiency, quality, long-term goals, emotional and personal investment, all these important considerations fall off the table when stockholders and corporate boards are looking only at the bottom line.

 

It's not enough to simply tighten regulations. That's just another opportunity for slick lawyers and special interest groups to influence legislators in their favor. To truly flourish as a society, what we need is to realize businesses that focus solely on profit are not generative enough for successful modern economies. We can't sustain positive growth when so many jobs are destroyed each year, even if they're replaced. We need to start asking ourselves if our own investments in time, loyalty, hard work, happiness, social structure, health and well-being -- what some would call real wealth -- are equal or greater than the money that Wall Street financiers solely (and soullessly) worship.

 

I encourage you to read this article and let me know what you think. I'll highlight my favorite bit:

 

http://www.yesmagazi...1d-corporations

We can't get where we need to go by starting with corporations and asking how to restrain them, regulate them, or rein them in. We need to start with life, with human life and the life of the planet, and ask: How do we generate the conditions for life's flourishing? Will we continue to rely on ownership architectures organized around growth and maximum income for the few? Or can we shift to new ownership models organized around keeping this planet and all its inhabitants thriving?

[Xittenn]

I disagree that this new model somehow undermines the concept of a free market and the drive for firms to make profits. Firms by definition are owned by households and not the other way round. This internal restructuring however is a phenomenal idea and one that I believe would prove very profitable for firms. I believe the concept would set the free market at the optimal point of social and private benefit minimizing social and private costs. The only barrier I see to this approach is proving to households that they have this power in them, the power to succeed as a unified body in commerce. To accomplish this optimism there is need for a strong sense of community and/or a structuring mechanism that will bring households together towards a common goal. Stride towards this model would have to remain unregulated and be accelerated into this direction by means of economic forces and not by legislation or other.

[Phi for All]

Oh, I don't think it undermines free market concepts either, nor does it preclude the quest for profit. I think this new paradigm simply incorporates more of the people who make up the businesses, and empowers them in a way they aren't being empowered in standard corporations. Let's face it, when we have a vested interest that goes beyond protecting a job by working so the company is successful, when we actually have a quantifiable reason to reach down and do our absolute best, people are motivated in ways standard employers only dream of.

[Xittenn]

Sounds like heresy to me! But in all seriousness what is taking the people so long? If this is so beneficial to them why haven't they gotten wind of it already? What barrier is there to such an infrastructure? The move to such an infrastructure can not be interfered with by government or it will fail regardless.

[Joatmon]

Seems to have a lot in common with this link:- http://en.wikipedia.org/wiki/From_each_according_to_his_ability,_to_each_according_to_his_need

 

By the way, my father who died in 1949 was a much respected member of the community noted for his efforts to improve the lives of many people. He was also Secretary of his local branch of the Communist Party.

 

 

 

[zapatos]

How are these companies any different from, say, Google? Is it really a new kind of company of just those that happen to be good to their employees?

 

Some of the benefits at Google:

 

Vacation

•1st year: 15 days

•4th year: 20 days

•6th year: 25 days

 

Holidays

12 paid holidays (sick days taken as necessary)

 

Maternity Benefits

Up to 12 weeks off at approximately 100% pay, eligible for an additional 6 weeks if employed at Google for more than 1 year.

 

Parental Leave (for non-primary caregivers)

Up to 7 weeks off at approximately 100% take-home pay

 

Take-Out Benefit

To help make things easier, new moms and dads are able to expense up to $500 for take-out meals during the first 3 months that they are home with their new baby.

 

Tuition Reimbursement

We’ll help you pursue further education that’s relevant to what you do. You must receive grades of “B” or better. Why a “B” or better? Because we said so. Tuition reimbursement is up to $12,000 per calendar year.

 

Emergency Back-Up Child Care

As a US employee, when your regularly scheduled child care falls through Google will provide you with up to 5 free days of child care and up to 10 subsidized days of child care per year through Bright Horizons. There are locations throughout the US serving infants to school age (13 year old) children.

 

Gift Matching Program

Google matches contributions of up to $12,000 per year from eligible employees to approved non-profit organizations. Bolstering employee contributions to worthy causes with matching gifts doesn't just mean helping hundreds of organizations, both locally and globally; it’s also a tangible expression. We want Googlers to get involved – and the company is right behind you.

 

Food

Hungry? Check out our free lunch and dinner – our gourmet chefs create a wide variety of healthy and delicious meals every day. Got the munchies? Google also offers snacks to help satisfy you in between meals.

 

On-site Doctor

At Google headquarters in Mountain View, California you have the convenience of seeing a doctor on-site. Physical therapy and chiropractic services are also available.

 

Shuttle Service

Google is pleased to provide its Mountain View employees with free shuttles to several San Francisco, East Bay and South Bay locations.

 

Financial Planning Classes

Google provides objective and conflict-free financial education classes. The courses are comprehensive and cover a variety of financial topics.

 

Other On-Site Services

At Google headquarters in Mountain View, you'll find on-site oil change and car wash services, dry cleaning, massage therapy, gym, hair stylist, fitness classes and bike repair.

http://www.google.com/jobs/lifeatgoogle/benefits/

 

I picked Google as my example because it was an easy pick, but there are plenty of good companies to work for. I'm trying to understand how those you describe are different or better.

[Phi for All]

How are these companies any different from, say, Google? Is it really a new kind of company of just those that happen to be good to their employees?

I think Google is a great example of a company that's breaking with corporate trends of the past fifty years or so. Not only in the way they empower their employees, but also the way they approach their business dealings. Small profits per deal attract an enormous amount of clients. You don't have to gouge your customers when everybody wants to use you.

[Phi for All]

I'd love to see some startup companies centered around the old concept of "built to last" products. We've become such a disposable society, but most disposable products are insanely expensive in the long run (which is better for the business than the consumer). I can understand one-time use products in the medical sector where they reduce the risk of infection enormously, but many product types are made to be replaced often and we ignore the costs because they're spread out over time.

 

I'm thinking back to the old AT&T telephones. They were leased to their users, and if anything went wrong with them, anything at all, the company fixed or replaced them. They were actually designed to survive being thrown against the wall (frustrations over line static, party lines and long-distance charges were higher back then ). The outer shells were easily changeable for color choice variation, but were made from a plastic that retained its luster, didn't scratch and had a smooth surface for easy cleaning.

 

Hypothesis: If a (very) limited number of companies were given a charter to design and build a common household appliance like a toaster, with enough features to satisfy the vast majority of toaster users, including superior performance (the settings would consistently give you toast just the way you want it), with the provision that fixing any failures, whether through defect or general use, were the responsibility of the manufacturer, the result would be a product that would be extremely cost-effective in its lifetime. I predict further that such a toaster would reduce waste in materials. Also, because of its superior quality, the consumer would gain the satisfaction inherent in using an extremely well-made product. If some kind of provision were made (subsidization? leasing? government mandate?) so that all toasters sold were made to these specifications, mass-production would reduce costs tremendously.

 

I use toasters strictly as an example. There may be better products to start out with. But in the above scenario, wouldn't it all come down to choosing between high quality with limited variety in design and limited quality with high variety in design?

[Xittenn]

There are plenty of companies that make quality appliances or other goods, people just have to choose to buy them. I only buy things that are quality or whose quality is adequate to the amount of use I will be requiring from the product. I buy things that will last because I want to decrease my carbon footprint, as well as see to it that the workforce is employed efficiently and not repeating tasks unnecessarily. Should we be restricted to buying only quality items? I don't think this is something that can be mandated, it literally goes against the concept of a free market and so we are bound to create externalities and the system will fail or create a social cost.

 

What could be done is something like the Carbon Tax implemented here in BC; implement a pigovian tax to adjust consumption and offset any social cost.

[Phi for All]

There are plenty of companies that make quality appliances or other goods, people just have to choose to buy them. I only buy things that are quality or whose quality is adequate to the amount of use I will be requiring from the product. I buy things that will last because I want to decrease my carbon footprint, as well as see to it that the workforce is employed efficiently and not repeating tasks unnecessarily. Should we be restricted to buying only quality items? I don't think this is something that can be mandated, it literally goes against the concept of a free market and so we are bound to create externalities and the system will fail or create a social cost.

 

What could be done is something like the Carbon Tax implemented here in BC; implement a pigovian tax to adjust consumption and offset any social cost.

I think it would be more difficult to implement an effective tax on cheap goods. While I can appreciate the efficacy of pigovian taxes, I was hoping to make high-quality goods more affordable through mass-production of a superior design. I stop short of suggesting a mandate, however I personally think our love affair with unlimited choice has turned free market concepts against us. Some things just need to be made to serve us as long and as well as possible.

[Xittenn]

I totally agree, which is why I am very selective about what I buy. I make a point of researching every product, before I purchase it, thoroughly, and I only buy what I need. I avoid buying cheap novel goods that have limited use and value, and that ignore concepts such as sustainability. Mass production of these garbage products is in my opinion the main reason why so many people are stuck in factories getting their souls sucked out of them for no reason other than to pollute the world with more garbage.

 

I like a market that is more open and where products are made locally by crafts people who enjoy what they do. I wish we could organize our economy in such a way that these types of practices would become feasible. I don't necessarily feel though, that for people to do their craft respectably, sustainably, and with quality, that this somehow requires every person be in business for themselves. I believe there are other solutions such as firms who oversee trades people and ensure the effectiveness of their distribution of product--without grossly and negligently profiteering off of them. I see the last point here that I've made as a near future step toward innovation that is waiting to be realized. Large firms are about to be overtaken by a lot of little guys who understand the benefits of maximizing both social and private benefit, and global sustainability.

Edited April 13, 2012 by Xittenn