The shrinking economy
It turns out the UK economy has moved a lot more slowly in the past few months than the surrounding debate. 'Twas ever thus.
If the first estimate for growth in the second quarter is right, Britain's national output is still shrinking. And not by a little.
If this were the US, where GDP figures are presented on an annualised basis, we'd be talking about the economy declining at a rate of more than 3.2% in the second quarter. Perhaps it's just as well that we're not. But however you dice it, the 5.6% decline in GDP in 12 months is the worst since these records began in 1955.
Two points of perspective: first, though the 0.8% estimate is clearly at the very low end of independent forecasts, the sheer range of those forecasts in the lead-up to this announcement show quite how hard it is to call the economy right now. Some thought it would be even worse than this. Others were actually expecting a 0.4% rise.
The second point is that, as ever, this number is subject to revision. In the crucial service sector, the ONS only has actual figures up to May. The rest is largely estimated. Coverage of the production sector is better, but even there, the hard numbers often only extend to May.
If we thought the economy was gaining momentum over the course of the past three months, you might expect the figures to be revised up when the second set of figures for the second quarter come out on 28 August. (Or much later - remember it takes up to two years from the end of the quarter for the ONS to get all of the data it needs for the final GDP figure).
Research by economists at Goldman Sachs [see chart below from European Weekly Analyst 09/18 May 14, 2009] has found that later revisions to British GDP numbers are biased upwards - in other words, the ONS seems to err on the side of the under-estimating GDP rather than over-estimating it. They found the same to be true for the Eurozone economies. Whereas American GDP data tends, on average, to get revised down. More proof, perhaps, of Americans' greater optimism - or greater affinity for spin.
But it should be said, this research didn't go back far enough to cover GDP estimates during a recession (they didn't think it was worth it, given that they now measure GDP so differently). The revisions when GDP is falling could easily go the other way.
There's no getting round the fact that I said all of this when the first estimate for growth in the first quarter came out. And yes, the figures were revised. But not exactly in the direction the optimists expected. As you'll recall, the number went from minus 1.9 to minus 2.4.
Also, if we think back, the greatest talk of "green shoots" was actually in the first part of the quarter - April and May. If anything, the data for June has gone the other way (notwithstanding yesterday's strong retail sales figures for June).
Where does this news fit into the big picture? I would say that anyone who was worried about the momentum of the recovery before will be that much more concerned now. Not least, because the recovery has yet to actually show its face. With a modest, 0.2-0.3 % decline in the second quarter, you could say that a third quarter recovery was still on track. It could still happen. But the story is a lot harder to spin.
As I said yesterday, the MPC will be looking far beyond the here and now when it makes its decision on quantitative easing next month. Looking back at the May Inflation Report, the MPC appears to have been expecting GDP to fall by 2.9% in the first half of the year. If this figure is right, the decline will instead be 3.2%.
That's not a huge difference. But you'd have to say that this makes a continuation of the policy a little more likely, albeit in a more subdued form. As economists at Barclays Capital have pointed out, senior Bank officials - including one of the deputy governors, Charlie Bean - are on record saying the MPC was expecting a "small" contraction in the second quarter. This isn't small.
And, of course, it makes it that much less likely that the Treasury will hit its forecast for 2009 of a 3.5% decline overall. From where we are now, you would need growth of maybe 1.5% or more in both of the second quarters to make the numbers add up.
The forecasts for the public finances are pegged to a slightly more conservative forecast of a decline on 3.75%. But I'm reliably informed that in preparing the Budget in April, the Treasury civil servants wanted a gloomier forecast, to allow for the possibility of a 2% decline in GDP in the first quarter (they got that initial first quarter estimate, hours after the chancellor sat down).
No 10 had a different view, and in the end, the forecast was for a decline of 3.25-3.75% this year. For a while it looked as though the data were moving the prime minister's way. Not any more.
Update, 27 July: An earlier version of this post mistakenly said the service sector data extended only to April, not May, for which apologies.
~RS~q~RS~~RS~z~RS~32~RS~)
I'm 
© MMXI
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And let's not forget the long-term either. The longer and faster GDP declines, the worse will be the picture for GDP growth and the Government finances for the next decade and more.
The next Government will need to take an axe to public spending and we need an honest debate now on how bad the situation is and what should be cut. I nominate ID cards and Trident for starters.
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The problem with these sorts of figures is they take the economy as whole, rather than disecting it into it's various sectors. Given the state of the automotive and construction industries I suppose it's hardly surprising that the economy is still shrinking. However, looking at the sector in which I work (print and packaging) I can only say that since April business has improved, albeit from a very low base, month on month. June 2009 was actually better than June 2008, and July 2009 is significantly better than last month.
Talking to other people dealing with other sectors of the (non financial services) economy - where people actually buy and sell real things, for manufacture the picture is also much brighter.
The recession may not be over, but I really don't think it's as bad as the statistics and pundits want to paint it.
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So when is the emergency budget being called to revise Darling's nonsense 3.5% in 2011 'V' shaped recovery? That's the real story that isn't being covered here as tax revenues collapse.
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What a difference a couple of days make,early this week the treasury were "Spinning a way" stating that the budget deficit was as predicted in the budget.With today's figures the £175 billion is going to get blown out of the water by the end of the year.The ever increasing public sector borrowing has been a massive gamble which the good people of the UK will be paying back in the decades to come.A California type budget adjustment is surely on for the end of the year.
Hopefully someone is going to stand up and tell the country the truth..
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The figures more or less chime with our experience as a small engineering company. We, along with many others, were counting clouds for something to do up until into June. Then, oh boy! June was our best month this year and July has simply gone manic. And it's not just us-others in our field, though not all, are also very busy. Maybe it's a flash in the pan, but could it just be the turn around? After all, it's small businesses like ours that are the best barometer of UK plc. I certainly hope so. It'll certainly make a change from the beeb harping on about swine flu! Will it cover a recovery as screamingly as it did the recession? I doubt it- good news doesn't sell does it?
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There's an interesting reaction from Frances Crook of the Howard League who basically says that a cut in criminal justice funding would be a good thing. http://www.howardleague.org/francescrookblog/public-services-funding
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There is a slowing of the pace of the economy at which it is declining and you would think we are shortly to return to growth judging by the comments. It is not even a dawn that becomes false! Just what will the engine of growth? Exporting ten pound DVD players to China? Growing incomes and employment, rising public expenditure, increase capital investment by firms on their knees praying for green shoots!
The government will make it worse after the election and take out more purchasing power. Perhaps our credit card companies will double our credit limit and tell us to pay it back when we feel like it. The road to hell is paved by optimistic trending.
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Half full or half empty? You makes your choice.
Speaking as a half-empty person the fact that the economy is still shrinking remains cause for concern as nobody has yet found the magic bullet that turns it all around.
This should be the point at which the government steps in with a fiscal stimulus which does excatly that, however, as we know the government is broke and badly in need of a stimulus of its own let alone being able to stimulate anyone else.
For as long as the wider public seek to pay down debt then things will not improve and they have an awful lot of debt to pay down. For as long as businesses have to struggle for liquidity then things cannot improve. We are in for a long haul whatever happens.
There is a clear risk that if the government does not initiate some change to signal a desire to get a grip on public spending that our circumstances will take a further bad turn. It is touch-and-go.
Whilst I appreciate some of the optimism expressed by earlier posters - and good luck to them - one swallow does not make a summer.
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With the declining economy the size of the public sector becomes a big issue. Last time the economy was this size at the end of 2005 the public sector was 10% smaller - Can we have a situation where the total economy is 5.7% smaller but the public sector has not shrunk at all? Presumably this is what is being played out in the budget deficit projections and it seems doubtful that increased taxation could ever make up the shortfall given how much smaller the non-govt economy now is.
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If the data that we're getting through at my work (I'm in market research/forecasting) is accurate, then Q4-2009/Q1-2010 looks the most likely to see the start of any proper recovery. As my workload generally tracks economic conditions 6 months ahead, and it's crazy busy right now, it looks like there might be some real potential in the early months of next year.
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Error Bounds:
(I know I bang on about this) But I have just has a quick look at the ONS report and it would seem that the regions that the figures are subject to (over the last five years regardless of sign) is 0.2% so -0.8 actually means anything between -0.6 and -1.0 percent. (That is assuming that in these times of economic uncertainly the ONS manages to, by-luck, maintain its accuracy. which I doubt or rather to which occurrence I would intuitively not assign a high degree of confidence.)
-0.6 would not be too bad and may indicate that the upswing is starting, however -1.0 is a quite dire situation. At -0.6 the Treasury will not be too embarrassed, but...
All this business of a number really does indicate how non-scientific economics is...
I would place less chance on a 'V' shaped recover than I did yesterday. More chance of an 'L' shaped one I am sorry to say.
I still maintain that one of the major factors holding back the recovery is the over-pricing of assets held by the financial institutions. If the had to mark these assets to market they would have to take a large financial hit, BUT they would then be free to sell the assets into the market at their new lower price and then these assets could start being used to build up the economy. This is why I support bankruptcy for banks. Even the Americans have done just this to GM and Chrysler so that their can industry has a chance. But we are so stupid (or is it part of a cunning plan!) that we will burden ourselves unnecessarily with these dead assets. This is yet another case of the British politicians and civil service doing its best to cripple the country!
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In GDP per capita we remain one of richest nations in the world. Maybe we have to accept that even 2% annual growth is unsustainable. Our economy is matured, fully developed. Perhaps we have to let the rest of the world catch up and budget for long term zero growth. A falling population with a sustained GDP would actually mean increased living standards. Historically this country's pre-industrial population was 10-20,000,000 the industry's gone.
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Please help - I don't understand how, if things are getting worse, the stock market is rising all the time? Is this a good thing or should we be concerned about the reasons behind the rise?
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Sixty five consecutive quarters of continuous GDP growth averaging 2.5% per year, much of it based on irresponsible lending, fuelled several bubbles which now have to deflate. Just how far back in time that must take us is very hard to see given there's been a major change in what can be soundly/securely financed. If the economy is not to be put back on the road to ruin it was on before, surely it's obvious that we either have a very long painful period to go through, or else a short major shock where lots of people are very badly hurt?
As sixty-five quarters only take us back to 1993 - maybe we should be thinking further back still? This anarchism began at least as far back as 1979, and yet it ws peddled as the opposite.
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Maybe the banks are lending the money to the governments that the governments had given them and this is all to support government spending that somehow works its way into econmoic forecasts and shows a positive trend. In the US the stock market is on the uptake while the unemployment is on the rise. Go wonder. Doesn't this all make you want to take bankers, economist and politicians put them on a space ship and shoot them off the planet....I would call it "Climate Change."
No sign of new banking regulations....no sign of new oversight requirements....New Jersey School of Politics and Economics.
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Steph
Darlings debt figures are based on 3.5 but the figure is 5.6%.
And before you run out the BBC mantra Nobody saw this coming. Some of us did.
The only question in town now is
How big will this debt mountain grow.
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#14 If we don't openly discuss what matters, matters will only get worse, and then, people will be asking why nobody talked about what really mattered before it happened. Please think about this blogdog.
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#15. northJason wrote:
about Stock Market Prices...
1. Prices are set by the market makers. Have you every wondered why the aggregate indices move together, one goes up and so does the other e.g. the DOW and the S&P when they do not contain the same shares /stocks? A rational conclusion is that the prices are pushed around by the market makers is the only rational conclusion and these prices have only a little to do with the underlying company performances.
2. One great odds-on bet was/is when it comes to the times of year that the pension funds received large bucket loads of cash, and knowing that their regulations forced them to invest their cash piles - hence the market normally goes up before hand and, then as soon as the cash is grabbed by the city, down again to take away the pensioners' money!
3. Short term movements are traded by buying an selling by the second using programmed trades - this is yet another tool of the city to siphon away your wealth into their pockets for doing nothing.
I could go on and offer a view on how the derivatives (options and futures) markets work, but I guess you get the picture by now.
To answer your question about should we be 'concerned'... Well not really as the way the market works is the way the market works, and give or take the speed of trading, it has always worked. If your are an insider you make money, unless you are really stupid (or some catastrophic event occurs!)
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I've got a question: when we compare year-on-year figures for GDP, are we comparing the present with the period when the banks were reporting "false" profits: that is, profits which failed to reflect the true bad-debt risk, and which overstated their profits (unintentionally)? If that's the case, did the UK overstate its GDP during that period, making the y-o-y comparison invalid, or has that been corrected out?
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#9
That is quite a list leonist, its contents have been around for a while growing unseen, it only gets exposed when the tide goes out.
I see the same happening in the company I work for, I never had a great deal of faith in the management who it seemed to me had risen up on the crest of the wave of the boom, having high position through being at the right place at the right time rather than a great deal of talent and sometimes quite the opposite. Having things easy is not good preparation for anything in life.
Those same people in the boardroom are now hampering the decisions required to save the company, through a combination of denial and over estimating their own capabilities, their egos massaged over many years of easy won success and high reward, reward they will never get again in a competitive market. Their game is to 'hang on' as long as possible, to ride the gravy train to the edge of the cliff then jump off just before it goes over.
I find it immensley frustrating and a desperate inditement of human nature that the human traits which are most destructive in the long term are most rewarded in the short term under the current cultural climate in the west.
This dynamic has given a nitro injection to the retreat of common values previously promoted by religion and community, things that are in astonishing retreat now.
Stephanies figures are no surprise to me (and others) what so ever. You can not repair the system by quantitative easing or keynesian stimulus or anything else, the tail can not wag the dog.
You can only repair the system by repairing the value systems by which we live and updating them suitable for the modern technology of the 21st century.
Reason suggests the decline will continue until a crisis point is reached, there will then follow a period of chaos and something new will emerge.
In the age of the internet it should be possible to a degree to shortcut that process which will involve huge unecesarry human suffering, there will still be suffering, there always is with any significant change, but we should be able to manage it better now through the power of the net combined with democracy and the power of modern technology.
But there is not much time.
lobbygroup.org is one place trying to build a shortcut.
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Anyone who thinks we will get a recovery by next year is nuts. Additionally, printing money (I refuse to call it QE) makes things worse because there are consequences. Once things start moving it becomes a runaway train and that money inevitably has to be 'taken out' of the economy by higher inflation which in turn will mean far higher interest rates. That will then plunge the housing market through the floor again. Goodness knows what will happen to the public finances.
There do seem to be a lot of lunatics around who think that the economy can be stabilised in a few months and we can carry on our merry way. There has been to much stupidity over the past ten years for that, and it's still going on.
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#20 John_from_Hendon. If you are not concerned about how the markets work - why not short circuit the market and post money directly to Goldman Sachs?
This firm has been before a New York court of law claiming that someone has stolen from them some proprietary source code, and that this code can be used to MANIPULATE MARKETS!
It relates to high latency trading - of which Goldman account for about 50% of the market. Apparently the source code allows its owners to see other peoples trades before they are made. With that kind of information you can´t go wrong, and Goldman haven´t - they have raking in $100 million per day.
What is going on is nothing more than a giant shake down operation. Catherine Austin Fitts (Investment advisor and former member of the US Government) is on record as advising clients to stay out of US markets because they are rigged. Check it out!
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Post 22 - I agree with your comments entirely and I've also joined this group.
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Are the markets rigged? Well probably.
To me the stock market has always appeared like a bookies in that the odds vary to suit the turf accountant AND you can't be sure if the race is fixed.
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Thank goodness the economy is shrinking; at least there may be less consumer greed generated by irresponsible bankers, advertisers and hype from the media. Who knows - we might even get less packaging to throw into landfill, a few less cars on the roads with more people using public transport - or even commuting less. Fewer imports, maybe cheaper houses, more volunteers and communities working together. Hey, we may even get families to communicate more closely instead of going out on the "me, me, me" binge (be it alcohol, clothes or other consumer 'needs'). Ask yourself: Do I really need a flashier car? A new pair of shoes? More deodorant? Another "designer" product? (What exactly is a "designer" item? Surely most items are designed?)
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12 John_from_Hendon
''Even the Americans have done just this to GM and Chrysler so that their can industry has a chance.''
'can industry'. Brilliant John from, I supect it is a typo but it is all the better for than. Made my day.
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22 Jericoa
You are describing accidental or coincidental success and there has been much of it about. Those orifices who wish to be seen as the one passing all understanding are quick to peddle the notion that it somehow has something to do with them. Shame. It really would be good if the genuine thing was about, but most of the time it is not. When the very high profit based sucess rate is too high it has to be accidental. Competition normally balances things out. This remains the big problem with the banks and the idea that of London as a major financal centre. The question remains just how much of Londons success was accidental. If it was considerable then the revenues generated are highly likely to never return and we have to see what the new level settles out at.
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You should read this. It is worse than you think. And there seems to be no end to it.
http://gregpytel.blogspot.com/2009/04/largest-heist-in-history.html
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#28. glanafon wrote:
Yup, sorry for the type, glad I car amuse you!
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#30
I have read it now, others should too, it is not worse than I thought it just confirms it, in my case anyway.
What gets me is people like yourself whom clearly have an in-depth understanding of it and is a very good communicator and an established background in this field do not get mainstream constant coverage by the media.
The incumbent economists from the same institutions selling the same story are wheeled out to discuss which ineffective measure is more or less ineffective than another (in my view this goes deeper than any economic fix so queezing or investment in capital projects will all be ineffective).
You should be on Newsnight, you can take these guys on, on their level and expose them.
Someone like me could not and i would never be invited, I can see what is going on but I have no credibility, I don't have the vocabulary, they could tie me in knots using words and I do not understand and theories I am not aware of, I have not written a book, I am not a Dr or a professor from some university or part of a leveraged think tank, all of which seems to be pre-requisites for getting any media coverage.
The media have a lot to answer for their complacency in the choice of the opinions they seek.
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#29 glanafon. The "success" of the City was in no way accidental, but in every way a mirage.
The problem is most people will not or cannot recognise it for what it was/is. Hence ever money is being thrown their way. You cannot make something real just through force of will.
Brace yourself for another major lurch downwards sometime soon.
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#24. armagediontimes wrote:
"Apparently the source code allows its owners to see other peoples trades before they are made"
The process you describe, works - well sort of. Let us say you are electronically options trading on the US market (the UK market is too small and you are too visible!) Essentially what the software (that I know about) does is by examination of the short term history of trades, volumes and prices produces a reasonably accurate short term prediction of the likely up or down movements and the levels to which the price will move to. I'm not going to tell you how it works, for if I did, as one of my colleagues said to a recent curious visitor - I would have to shoot you!! Anyway, the maths is rather hairy, chaos theory helps.
I suspect that Goldman's more sophisticated internal software was the one they claim was nicked. The catch in operating these systems is that there still needs to have human supervision and you need quite a bit of courage and money to operate it - and you must also have a 100 per cent reliable data feed and trading account. (and another think it makes you UK tax return a gigantic problem as you have to list the trades and there can be 100s or thousands a day for a couple of hundred days a year and as they are priced in USD the sterling exchange rate kicks in too. Don't even think about doing it without a fully integrated computerised accounting system linked to your trading system which itself is not inexpensive as you need no data feed delay at all.) It does work, if you have the bottle and like working 2:30pm to 9 ish UK time. Oh, and you get square eyes!
The system I know about is about 80-90 percent reliable - just think picking the winning horse in every race of every day - 80-90 percent of the time - (and not being the bookie!) It does have off days and hours - the skill comes from knowing when to believe your system's prediction and then moving in and out very fast in seconds at the right time - 100s or 1000s USD per point on occasions. (When you see it going wrong reverse the trade immediately ! It works by taking money from people with less effective algorithms or with no computerised trading advice system at all and sometimes from the people with completely automated systems that get it wrong!
Next time you are in the trading room have a look at the screens and see if any of the squiggly lines run ahead of the actual data by five minutes or so.... It is quite fun to watch the predicted things happen, when you predicted they would happen and at the prices you and your system predicted. It can also be quite profitable.
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33 arm n leg
Yup, I thought I would get corrected as I posted it. And strangely enough I thought it might be you. lol. But the issue is it is largely either accidental or deceitful, not genuine capability.
Sadly I think your lurch is probable. A wonderous uplift would be nice but bumping along seems more likely. I cannot see any great resolution to the erosion of the low wage zone on the western economies coupled with the massive debt lurking in the system. Just what is hidden by the teams of high IQ people employed to do just that. I do not understand what all the excitement about an uplift is. I cannot see clean green tech providing the expansion necessary for growth. I can see nothing but substantial cuts in the public sector. The demographic problem has yet to be fully played. The pension problem has yet to be sorted. The youth unemployment problem will grow and fester. Graduates appear to have little job opportunity, many I hear about are jobless and no idea what to do to sort the problem. Yet we heard today of a friends property selling and there seems to be increased footfall in estate agents, beats me.
However we are still in growth so we are doing our bit.
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#34 John
As someone more familiar to the ins and outs of high finance, perhaps you can help me out with the questions I posed here:
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/07/business_still_being_crunched.html#P83315702
If as a bank I have moved a certain amount of money around 50 times, have I actually worked 50 times harder, have I "made" 50 times more productive output?
My hunch tells me "no". The likes of Soddy, and the spate of money reformists in the early 20th C said "no". Mr Satyajit Das of Traders, Guns and Money fame implicity says "no" (he states that derivatives / trading does not create wealth, it merely transfers it).
Has this been proven one way or the other? If not, then does this question not cut right to the heart of the current crisis?
While Gordon and his cronies preach: finance, finance, finance
China's maxim is: manufacturing, manufacturing, manufacturing (with a bit of monopoly control of raw material input thrown in)
I wonder which is the right strategy.
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34 John from
Hmm. Interesting. Either you move to rapid data analysis with robot capture, which can pick up the data before it is even visually displayed on screen or you look for key markers and data sets which a human can observe and react to. The approach you are suggesting appears to try and incorporate both. On the markets I have observed, not stock exchange floor, I use the key data sets and price dynamics in a particular subset. The problem with the robot approach as I see it is convergence in the software inevitably results and the problem is that it can only drive you towards spread purchasing which introduces inefficiency. As more and more software converges it drive inefficency upwards as it introduces more and more spread purchasing, that is my observation. It seems to me that the human content you refer to is a delibrate compensation model to intervene and increase efficiency. When I have purchased I just use a human model but you have to have identified the marker subsets.
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#30 Greg
Thanks for the link, will take the time over the next few days to read your blog.
In undertaking your research have you come across Frederick Soddy?
http://en.wikipedia.org/wiki/Wealth,_Virtual_Wealth_and_Debt
And is this short little piece by Eric Zencey on the same track as your assertions:
http://hnn.us/articles/47330.html
Or is the pyramid scheme limited just to the use of certain financial improprieties (rather than inherent in fiat monetary systems per se)?
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Why are people surprised by this? It is obvious that over the past few months there has been a concerted attempt from government and media to talk up the economy when it is clear to all disinterested parties that the economy is a basket case. All this talk of green shoots is just nonsense. People (and the city) are forgetting that the ONLY reason that we are not in financia armgeddon is because the government has bailed out the financial industry with several decades worth of future money that the rst of the country will be paying of for the next 50 years. The FTSE may be in cloud cuckoo land but not for much longer....
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#30 Thanks very much :-) BUT it's actually nothing new. Galbraith describes the process in "Money - Whence it Came, Where it Went" (To regular bloggers: sorry for repeating myself). He also published a blueprint for every leverage induced economic crisis in his book "A Short History Of Financial Euphoria". Well worth a read: in recent months I have bought (with my own money) several copies for friends and acquaintances (including my MP who sits on McFall's committee).
The economy is still shrinking partly because the "multiplier" for purchasing power from deposits is less than during the boom: hence the "justification" for QE.
BY THE WAY, ALEXANDER CURZON HAS BEEN BANNED FROM THE BBC BLOGOSPHERE FOR "DISRUPTIVE" POSTING. Disgraceful in my view - and self-defeating! Nor do I really understand why. There is at least one regular blogger here who is genuinely disruptive and seeks to hijack every blog to a very different agenda. Why is it AC who was banned?
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36 Hawkeye_Pierce
Finace is not my field but I have played in the manufacturing field.
One is short term and one is long term. The short term can yield dramatic profits (and losses). The long term one demands a secure environment, concerted and sustained effort and a supporting network of expertise.
If you take a look at the background of Thatchers government, which is where the current problems started you will find a disproportionate number of people who had made money in short term ventures (lots of property dev for example).
As short term ventures suit a short term political environment (4 year cycle) and appear very attractive to accountants it is no surprise that road has largely been taken. Opposition to the short term road was ridiculed repeatedly and the silver and jewels sold off to lubricate election filips. In fact one current response is to try to find stuff to sell off. Labour appeared different at the start but effectively said they would stick to Conservative policy upon election.
Brown then apparently became entranced with the City money machine which gave an easy answer to his infrastructure and service aspirations. He seems quite Roman to me.
To re-establish a long term sector now is a considerable problem. The flywheel has to be built and to be got running, meanwhile, elsewhere, things are not standing still. Pretty much gane set and match. There are solutions but they do not help with the grandiose tax collection desired, and now expected by the general population.
The long and short of it is that short term activiites can be stolen and moved elsewhere or are a transient. Long term activities demand long term care and attention and are undermined by low wage zones elsewhere. Thus the pressing issue is one of decline, which if ignored or not acted upon builds up destructively. Only one part of the game has been played so far and it is naive to think matters are going to be one of easy uplift. As soon as progress is made another major lurking problem will manifest itself in all probability. An aging population with high expectations will not help and remorsely is getting closer. There is some evidence that economic cycles run on a decade long cycle so if in 5 years things are improving, if, then we are halfway to the next dip. A big uplift is needed to prepare not to be knocked back again, which other than the City (and asset ie property market manipulation) has been the case I would suggest.
But you know that already or you would not be asking..
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#37. glanafon wrote:
"Hmm. Interesting..."
Essentially the continuous computerise modelling of market behaviour. The chaotic market turns out to be full of patterns and repetitions. Why doesn't seem to matter (and the study of which is a full time activity.) Most trading organisations have their own algorithms. The ideas behind neural networks, stochastic processes and chaos contributed to the experimentation and the modelling - and computing can now be processed on a pc. Often the market in a particular derivative is predictable for a few minutes if you have access to up to data real time data feeds (plus the right software)and that is ample time to get in and out and make a few hundred or thousand dollars. In theory it should not work, but it seems to!
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All this economics stuff, is mind boggling. Different papers say different things. What is the best way to learn Economics, so us mere mortals can decipher what conmen like Ben Benanke, Ed Balls, Georgie Osbourne, Everyone at Goldman Sucks say. From now I am keeping all my cash in my shoebox. I suggest everyone else do the same.
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#36. Hawkeye_Pierce wrote:
"As someone more familiar to the ins and outs of high finance, perhaps you can help me out with the questions I posed here:
More low cunning than high finance I am sorry to say! But I put my twopennyworth in the melting pot.
First: As far as I am aware CDSs tend to be traded over the counter - that is not through an exchange so access to the data is tricky for everyone concerned. (Hence the concern to get them put through an exchange system so there is a chance of regulating the market.)
Second: Most of the OTC markets work on trust that the trades can be and will be settled.
Third: I think I am right in asserting that the speed of circulation question is one that has been studied by economists and the conclusion is that the faster that goods and money move the greater the value of transaction that take place in a given period of time using the same capital.
This is the reason that just 60 billion US dollars of mortgages generated 600 billion dollars of derivatives. Nobody really knows how many derivatives contracts are out there so far as I know. (Anyone any idea?)
addendum: This should have been understood long ago by the Fed and Bank of England (M. King) etc. and stopped (or at least alarm bells should have been ringing for years)! The fact was because of the structure of these, essentially insurance, contracts so long as the parcel kept being passed and the mortgages performed the brown stuff did not hit the blades of the rotating metal air moving device - but the rest as they say is history. (And of course the faster the parcels moved the more 'fake' profits the institution made and the bigger the bonus!)
It also concerns me that it will be many years before the extent of the CDS and associated derivatives nonsense is worked through. Many institutions both bought and sold the same contract to cover themselves so those will cancel out, however there will be a few institutions with uninsured (and gigantic) losses. Let us hope that these have worked through the system already!
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#43 Modernizer
"What is the best way to learn Economics?"
Read the Paul Jorion blog.
This economist and anthropologist, who forecast the recession, as did Nouriel Roubini, with whom he is in agreement on a number of key points, not least the illusory nature of the so-called green shoots, yesterday issued an audio-visual assessment of the present state of affairs, which can be accessed at
[Unsuitable/Broken URL removed by Moderator]
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#44 John_from_Hendon,
I have nothing to back this up with except, the accounting fiddles (sorry changes) for Wall Street institutions and the insane reluctance of banks across Europe to make full disclosure of their true financial positions, but I don't believe that the losses have worked their way through the system.
I have the feeling that we have had the earthquake and are now in a hiatus awaiting the tsunmai. It has a lot of similarities to the Phoney War at the start of WW2.
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#43 Modernizer
"What is the best way to learn Economics?"
Read the Paul Jorion blog. This economist and anthropologist, like Nouriel Roubini, forecast the recession and has today issued an audio-visual assessment of the present state of affairs, which can be accessed at a site which, evidently, I am not allowed to provide a link to. So you will have to find it yourself.
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#46 foredeckdave
Insightful. Spot on. Jorion agrees with you (#47). Something monstrous this way comes.
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Further to my #47, I should make it clear that it is the French version of Jorion's blog that his latest assessment appears in, not the English-language one.
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#48 frankly_francophone
Thank you.
For well over a year now I have been calling for protectionist measures as a means of the UK survivng this debacle. I am now more convinced that it is imperative that protectionism is adopted on a pan-European basis.
The UK economy has its own problems and they are different from those of France, Germany, Spain, etc. However, if my nightmares are anything like true then we are all facing a matter of survival rather than economic advantage. Survival I believe is possible if the EU acts in concert. I have no idea how we can make our leaders see this.
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50 fdd
The bigger war is within not without. If you face the wrong way you will get shot in the back. A major proportion of the domestic population who hold voting influence are due to be told the reality is there is not the money in the system to provide what they are expecting. A drop in affluence will provide the answer to imports. You are still looking the wrong way. The only way to operate in a hostile environment is to be mobile, flexible, adaptive, quick and to move faster. This is why small groups of badly equipped but mobile personnel can tied up a considerable resource in conflict. However tax yields for the provision of services is going to be hard to come by from a small adaptive activity. You are seeking to change the environment not the mode of operation. It is less effective and probably will not work. I would describe it as synthetic. Darwin has the answer. : )
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42 John from
Modelling - The objective is to meaasure intent or behaviour which is irrational so the issue of whether something should or should not work is irrelevent because the irrational is being monitored. Essentially it is a question of looking for behaviour markers. That is my conclusion.
Lurking CDOs. There is quote somewhere along the lines of - A man is debt lies, he has no other option - somebody like Benjamin Franklin I think, can't remember. However the whole basis of the boom was a game of pass the stinking parcel. Dishonesty is central to it. When big business is facing meltdown is not the time I expect the highest level of honesty. So something unpleasent may well this way come, fair chance of it. The situation is further clouded by the fact that valuation is a variable, an estimate and there will be the desire to not dump suspect assets on a dead market. I can understand your position that a forced sale, ie bankruptcy is a solution but the fact remains that there is no market, that is why the Fed had to rapidly dump the idea of asset auctions. Therefore a forced sale can only cause truely massive write-offs and probably a meltdown. The only hope for some recovery in value is to give the matter time. Fundimentally it is a matter of government failure as well as commercial self harm. Every citizen is being mugged but few arrests are being made. The thing is if something unpleasent this way comes there probably is not any money left in the kitty to deal with it they way they have so far.
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PS to post 52
Modelling the irrational - Incidentally this is why I have little faith in economics as a subject. It is quite obvious that irrational behaviour has a great deal to do with trading and therefore with consumer activity. It is fundimentally flawed to believe you can rationally model the irrational and that is why we are where we are today. Too much faith in rational models. The mavericks pointing at rising problems used observations of irrational behaviour tied in with basic imbalances in the rational model to warn of a downside. The opponents of the warnings, and there were many, ridiculed the irrational behaviour based assessment and said the rational model did not recognise the problem, which of course it wouldnt. IMO.
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sashaclarkson (#40) "Disgraceful in my view - and self-defeating! Nor do I really understand why. There is at least one regular blogger here who is genuinely disruptive and seeks to hijack every blog to a very different agenda. Why is it AC who was banned?"
Might it depend on the nature of the 'disruption'?
Does not the behaviour driving the recent economic crisis need to be 'disrupted'? Painful though that may be to those who have either driven it, or colluded (often wunwittingly) with it, that would be benevolent disruption if it could be achieved would it not? Is that not what Darling and others have said is the sine qua non? Yet many here still expect it to be business as usual whilst asserting otherwise do they not?
It isn't the word 'disruptive' (or even the action) which matters per se, but the overall context determining its 'meaning' (see the last third of 'Two Dogmas' on 'meaning holism', a notion which goes all the way back to Frege and the beginning of programming in fact). The problem is that people's core assumptions determine where their behaviour takes takes them, and for change to occur, those assumptions often need to be radically disrupted i.e. sometimes one has to be cruel to be kind. The current problem is not going ot go away unless and until there is a major change of the sort which that I have been highlighting, as the problem is perpectuated by dogmatic a priorism.
Keep working on it.
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#43 The problem with learning economics, is that much economic theory is theology rather than science. People believe, and teach, what they would like to be true rather than what is true. This was certainly true of the Chicago and Austrian schools.
The next thing about economics, is that like politics, even if you live more or less in the real world, you have to decide the really important question: Whose side are you on? There is no "neutral" economics. Choices have to be made which will favour one group of people rather than another. Or, to put it slightly differently: "How much of someone else's pain are you prepared to accept for your own benefit?" One to ask yourself next time you buy cheap clothes in a discount store?
If you want an approach to economics which promotes gradualism where possible to minimise pain, but seeks the greatest good of the greatest number, then read Keynes and his followers like the Galbraiths (father and son) and Krugman.
Start with "The Great Crash" by JK Galbraith. For views of the Gold standard and its demise also try Keynes' "Essays in Persuasion". The good thing about both these works is that, even if you are of a different political persuasion, you will gain enough understanding of how the system works to understand the real consequences for real people of political/economic decisions.
If you want something a little different, try Robert Heinlein's posthumously published first novel "For Us The Living". This gives a very good exposition of Major CH Douglas' Social Credit philosophy of money and economic activity. I neither recommend nor reject Heinlein's other social ideas.
If you believe that it should be a natural law that your money increases in value, I'd also strongly recommend the following Wikipedia article:
http://en.wikipedia.org/wiki/Wealth,_Virtual_Wealth_and_Debt
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"And, of course, it makes it that much less likely that the Treasury will hit its forecast for 2009 of a 3.5% decline overall. From where we are now, you would need growth of maybe 1.5% or more in both of the second quarters to make the numbers add up."
And pigs will fly !! Oh, look, there's Wing Commander Porky !!
"No 10 had a different view, and in the end, the forecast was for a decline of 3.25-3.75% this year."
And who knows what they put in their pipe ??
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#13 "In GDP per capita we remain one of richest nations in the world. Maybe we have to accept that even 2% annual growth is unsustainable. Our economy is matured, fully developed. Perhaps we have to let the rest of the world catch up and budget for long term zero growth. A falling population with a sustained GDP would actually mean increased living standards. Historically this country's pre-industrial population was 10-20,000,000 the industry's gone."
The industry's gone and with it, the *real* wealth !! What this GDP comprise of is ever mounting debts !! This standard of living will last so long as the creditors don't call in their loans !! When they do, it will be the debtors prison for everyone !!
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#20 "If your are an insider you make money, unless you are really stupid (or some catastrophic event occurs!)"
Have you asked Nick Leeson or Jerome Kervail ?? There was also an oil trader recently but I forgot his name !! :-)
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#53. glanafon wrote:
"Modelling" I lookup on it this way some of the methods seem to work over the short term It is a bit like statistical mechanics describes the way that molecules move in a gas. To make money all you need to be is better than 50 percent accurate on direction of movement and the price it will move to and many of the systems are as good as this. Trading system modelling only needs to work over the short term. Indeed the longer term models, where actual events impinge on the price, don't seem to work. The short term models are essentially looking at the short term dynamics of transactions. In the way fro example stochastic processes describe why in heavy traffic cars tend to stop and start rather that flowing smoothly - hens the variable speed limits on the M25 etc.
(I share you view of economics - a busted flush!
#46. foredeckdave wrote:
"the accounting fiddles (sorry changes)"
And beware of mark to market! This I believe grew out of the knowledge within the system that they way that they were accounting (fair value) had stored up huge inherent dangers. They chose to move to mark to market but the consequences was (in part) the crash.
Accounting procedures are in the end set by regualtors and governments... need I say more.
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#22 "I see the same happening in the company I work for, I never had a great deal of faith in the management who it seemed to me had risen up on the crest of the wave of the boom, having high position through being at the right place at the right time rather than a great deal of talent and sometimes quite the opposite."
The Peter Principle, by Professor Laurence J Peter and Raymond Hull (1968), states that employees tend to rise to the level of their incompetence !! The bigger the organisation, the more likely it is !! Also, the more levels of hierarchies there are, the worse it gets !!
If you are nearing the top, then BEWARE !! :-)
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#24 "If you are not concerned about how the markets work - why not short circuit the market and post money directly to Goldman Sachs?"
Oi !! I have a bank account, too !! Why not post it to me, instead !! I, too, am in dire need of millions in bonuses !! :-)
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#27 "(What exactly is a "designer" item? Surely most items are designed?) "
They are items so labeled by their marketeers in order to extract the maximum out of your pocket !! Or, in the words of P.T. Barnum, "There's a sucker born every minute !!"
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#34 "Anyway, the maths is rather hairy, chaos theory helps."
Chaos thinking helps even more !! But at the end of the day, it's still data-mining through a complex filter !! :-)
"and another think it makes you UK tax return a gigantic problem as you have to list the trades and there can be 100s or thousands a day for a couple of hundred days a year and as they are priced in USD the sterling exchange rate kicks in too"
All trades should be mere rows in a database and, if there is a good FX module in place, any sum can be expressed in any currency with reference to original sum in the original currency and the FX rate ruling at transaction date/time !!
"Don't even think about doing it without a fully integrated computerised accounting system linked to your trading system which itself is not inexpensive as you need no data feed delay at all"
It's only needed for the bean-counters (speaking as an ex-bean-counter) and the vampires (oops, sorry, I mean the honourable taxmen) !! Otherwise, it will happily function on its own !!
"It does work, if you have the bottle and like working 2:30pm to 9 ish UK time. Oh, and you get square eyes!"
And a predilection for lots of strong black coffee and stronger ciggies !! :-)
"It works by taking money from people with less effective algorithms or with no computerised trading advice system at all and sometimes from the people with completely automated systems that get it wrong!"
And unto those who have more, more shalt be given - the Bible !!
"It is quite fun to watch the predicted things happen, when you predicted they would happen and at the prices you and your system predicted. It can also be quite profitable."
Unless you bet your shirt and your first born child and it goes the other way !! That's why brown trousers are *ALWAYS* recommended !! :-)
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40 sasha
I'm sorry to hear AC has been banned. Seems a bit rough. Perhaps someone will fill the gap. YOU NEVER KNOW. AT LEAST HE HAD SOME ENERGY AND POSTED UNDER HIS OWN NAME. OH DEAR MY CAPITALIST KEY HAS STUCK ON MY KEYBOARD AGAIN. STILL I EXPECT WE WILL ENJOY AN ANDREW BRONS TYPE POSTING EVERY DAY TO FILL THE GAP.
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John_from_Hendon (#59) What you're describing is gambling/betting which isn't really a science at all, but it did give birth to probability/statistics in the vain hope that some sort of 'system' could be derived (a priorism was busted by Godel). The utility of Dynamical Systems Theory is dubious too, as in the practical applications you refer to this just comes down to lagged Time Series which are really not much more than fancy moving averages. Ignorance/spin in this area is largely why this financial mess came about is it not?
We need to get back to business fundamentals all round do we not, i.e being more honest (regulatory) about what can and can not be predicted/managed? Do you see how that can be enforced in practice within the current liberal political system? I don't.
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#36 "While Gordon and his cronies preach: finance, finance, finance
China's maxim is: manufacturing, manufacturing, manufacturing (with a bit of monopoly control of raw material input thrown in)
I wonder which is the right strategy."
My take is *NEITHER* !! Without free and sustainable trade, neither will survive !! China had already learnt the lesson of shrinking resources and is trying to find a suitable answer !! They know they cannot keep manufacturing forever without a similar input of resources !!
Will Crash Gordon and his crew realise what *IS* wrong and try to find an answer ?? Answers on a postage stamp written with a 10 inch brush, please !!
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Thank you, sashaclarkson (#55) for your elegant summary: "The problem with learning economics, is that much economic theory is theology rather than science. People believe, and teach, what they would like to be true rather than what is true...".
To the non - economist (me, for example) this perhaps explains why so much of what we see and hear on a daily basis in the "media" or even read here is at best bewildering navel - gazing that appears to be more concerned with which "theory" appears to be the best fit to our current predicament rather than trying to identify detailed practical solutions. I have a mental picture of large numbers of rabbits caught in car headlights; trouble is clearly looming but the ability to react to it has clearly deserted them.
The problem is compounded by the fact that the word "economics" can be deleted from the quotation and replaced by "politics" and the sentence still makes perfect sense.
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#37 "As more and more software converges it drive inefficency upwards as it introduces more and more spread purchasing, that is my observation. It seems to me that the human content you refer to is a delibrate compensation model to intervene and increase efficiency."
Computers cannot *THINK*, humans do !! Therefore, this war is one between competing Systems Analysts and Designers as to whose software can give the closes approximations to human thoughts but at a far greater speed !! Software can only process data when given set(s) of conditions to process them in. The better the conditions, the better the output. GIGO (Garbage In, Garbage Out) has been in IT since the first computer was built !! As software designs move ever closer to mimicking human thinking, the need for ever more difficult algorithms are needed. Hence the need for chaos theory that John_from_Hendon mentioned !!
If a designer builds a better mousetrap, he'll slam the killing bar on the necks of the other mice before they can get to the cheese !! Then another designer builds an even better mousetrap..... !! :-)
Solid state drives at 10 paces ?? Used CRT monitors at 5 paces (they're damn heavy, those things) ?? :-)
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#43 "From now I am keeping all my cash in my shoebox. I suggest everyone else do the same."
Not likely, mate !! Especially when the moths get at it !! I'll keep mine in gold; at least it will break the little b...... teeth if they try !! :-)
Besides that your paper will soon devalue to nothingness whereas gold will still have some residual value !!
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#55 "Whose side are you on? There is no "neutral" economics."
There's always Mercutio who (purportedly) said, " A plague on both your houses!" - "Romeo and Juliet" by one Billy Shakespeare !!
"If you want something a little different, try Robert Heinlein's posthumously published first novel "For Us The Living". This gives a very good exposition of Major CH Douglas' Social Credit philosophy of money and economic activity. I neither recommend nor reject Heinlein's other social ideas."
He had some strange ideas regarding incest, etc. !! But his tales were works of wonder to an impressionable 14 year old, moi !! Grok ??
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SEXY VAMPIRES
ishkandar (#68) "Hence the need for chaos theory that John_from_Hendon mentioned !!"
If you look into it, you'll see it technically washes out as probability/statistics in practice (the work of the actuary), i.e. uncertainty and risk assessment/management or 'insurance' (CDOs, hedging etc) - precisely what got out of hand in the first place through lack of regulation. That was no accident, it was legislated for, and that legislation has not been repealed. We've just had months of spin and distraction (MP's expenses, (A)H1N1, you name it).
In the end, it just comes down to usury which is very profitable. Those currently raising mortgage rates and credit card APRs are quite content to do business as usual even though the money costs them next to nothing, and is often coming from the very people they are lending to, albeit via a long loop delay...
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#40 Sasha
JJ probably gets away with it because the single issue poison hidden within his posting is rather subtle and probably goes under the moderators radar. An Issue AC has never had, thank goodness, his directness was refreshing.
JJ takes on the manor of a patient teacher surrounded by petulent students whom he has a duty to educate with the benefit of his self confessed superior insight, yet blind himself to the effect he has on others and his own narrow mindedness.
The goal in life should be happiness, happiness is not related to IQ or genetics. You will see more happiness in a gospel choir in harlem on a sunday than all the dry debate and analysis in dusty tomes on genetics and IQ put together.
It is quite sad really....
but he still has time to learn :)
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#53 Glenafon
Quite so.
As a matter of interest, Nouriel Roubini, who has nothing very encouraging to say about the so-called 'green shoots' of recovery, recently accounted for his deviant foresight. In a speech at Yeshida University, a video of which can easily be tracked down on line if you are interested, he claims an ability to stand aside from the madness of the crowd which can be attributed to a contrarian mental discipline not unrelated to his outsider background as a Jew brought up in Turkey and then Iran.
If you observe Roubini's media performances, you may notice that in America he has to tread particularly carefully, of course, as there is always someone ready to pop up there to say something along the lines of "And just what is it that you consider to be so very wrong with the American way of life, Mr Roubini?" Even relatively innocuous Robert Shiller, who knows his way around his home patch, fell into that trap recently, to his own astonishment. Roubini appears to be too circumspect to fall into any traps, on the other hand, although misrepresentation of his views is an ever-present danger, as perusal of a recent entry in his blog should reveal.
We are obviously living in unusually interesting times, especially if Paul Jorion is right to claim that the Crisis is of such a nature that the future of capitalism is in doubt. At the very least, he claims, confidently, as if nothing could be plainer, that the character of the US economy (and the American way) is undergoing a transformation which precludes any return to the way things were. In other words, the US (and the EU, inter alia) are doomed to become more authoritarian and protectionist command-economy zones in response to the extreme challenges of the Crisis. China and the West are coming to resemble one another more, that is to say, not because China is adopting western ways but because Anglo-American capitalism is broken and cannot be fixed.
Naturally, this is not a popular view, and Mr Jorion will never receive the Nobel Prize for economics if he goes on like this. Not to worry. You only have to listen to him for less than a half a minute to know that he couldn't care less about that. What does he care about? Why, telling the truth, of course. This man is dangerous.
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#70 ishkandar
"But his (Heinlein's) tales were works of wonder to an impressionable 14 year old, moi !! Grok ??"
Yep - my favourite was probably "The Moon is a Harsh Mistress". Heinlein had an enormous influence on me. Not because I agree or agreed with him, but because so often he dared think the unthinkable. One was shocked into thinking for oneself! The first book where he mentioned Social Credit was in "Beyond This Horizon", a rather more polished novel than "For Us The Living", but a less detailed exposition.
One little gem from "The Moon ..." is where he has a character explain that you can't get insurance on the Moon, but you can go to a bookie and make a bet --- and that the transaction is essentially the same! I first read this book (out of the library) at the age of about 14 too, but I bought the hardback recently and it had lost none of his charm.
Funny enough, my late mum loved Heinlein too, although she wasn't keen on SF in general.
Another favourite Heinlein definition: an "honest politician" is one who "stays bought".
I think "grok" is a wonderful word, which deserves wider use.
http://en.wiktionary.org/wiki/grok
Mum used to use it in Russian with me, eg: "On nye grokal" - "He didn't get it".
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#72 Jericoa
Did I mention a name?
to quote Francis Urquhart: "You might think that - I couldn't possibly comment!"
;-)
PS On teachers in general: there's nothing worse than somebody who poses as one, preaches certainties, but doesn't really know or understand his subject.
I've visited the new lobby group site BTW - very good - I'll be there in earnest in about a month - I look forward to some lively but constructive debate.
Right - computer's going off now: the veggie and flower gardens are complaining of neglect!
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#65. JadedJean wrote:
"What you're describing is gambling/betting which isn't really a science at all,"
Never claimed it was a science, but it is the one we use and it seems to prevent the worst errors and provides a reasonable yield. There is no science, in the sense of a methodology based on any deep understanding of the way things work. It is a misunderstanding to call it a science, a bit like economics!
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#63. ishkandar wrote:
"Computers cannot *THINK*, humans do"
One of the reasons that trading systems work is that there are many people using the same or similar systems plus you need to be an insider.
This is not really the place to dissect what computers, fleshy or microchip, can do, but I have not formed the opinion that neither humans nor computers 'think' much of the time. Otherwise the gigantic and obvious disaster of the credit crunch might have been foreseen and prevented! Human thinking is vastly overrated! Within a decade the medical people believe (and there is another unscientific lot!) that they will be able to produce a microchip human intelligence (by the way it has always been a decade away sine the 1970s!)
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#71 "(A)H1N1"
No surprise here !! Plenty of swine around !!
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#74 "One little gem from "The Moon ..." "
"The Moon is a harsh mistress" !! That's the title you are thinking of !! He also postulated lobbing rocks from the moon as a kinetic weapon long before the military even though it was possible. The, then, American military were totally obsessed with ever bigger nukes !!
"where he has a character explain that you can't get insurance on the Moon, but you can go to a bookie and make a bet --- and that the transaction is essentially the same!"
No, it's not !! A bookie does *NOT* charge you brokers' fees, admin fees and then try to welsh on the claim using the fine print !! :-)
I believe his most famous acronym is TANSTAAFL - There Ain't No Such Thing As A Free Lunch !!
In my youth, I had to wander abroad in search of a crust, or even a crumb !! The very first time I landed in a country where English is barely spoken, if at all, the very first thought in my mind is "Oh, oh, Stranger in a Strange Land" !! :-)
Meanwhile, back on topic.....
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#77 "Within a decade the medical people believe (and there is another unscientific lot!) that they will be able to produce a microchip human intelligence (by the way it has always been a decade away sine the 1970s!)"
Currently, artificial intelligence is about on par with military intelligence - an oxymoron !! All that hoo-haw about OO methodologies producing near human intelligence is just that - hoo-haw !! Producing true artificial intelligence, I think, will not succeed even in my grandchildren's lifetime !!
Meanwhile, there's still money to be made !! P.T. Barnum was correct !!
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John_from_Hendon (#76) "Never claimed it was a science, but it is the one we use and it seems to prevent the worst errors and provides a reasonable yield. There is no science, in the sense of a methodology based on any deep understanding of the way things work. It is a misunderstanding to call it a science, a bit like economics!"
No. Actuarial judgment (over clinical judgment - see Groves on Meehl) has a sound history in both behavioural science and medicine. It's part of 'evidence baded practice'. I know how this came about in the UK at least. It is Frequentist not Bayesian. It is not gambling/betting. Risk assessment was misappropriated/misapplied by Financial Services in recent times. The language was appropriated as sales spin. For an example, see Credit Ratings, an instance of clinical judgment masquerading as actuarial judgment.
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ishkandar (#80) "Currently, artificial intelligence is about on par with military intelligence - an oxymoron !!"
Yes.
This is because a) AI misconceived what intelligent behaviour comprised, and b) the three fathers of AI in the 1950s were cognitivists and thus had a scotoma in common.
It's worth looking into, as it's at the root of many problems discussed in these blogs.
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Jericoa (#72) "JJ takes on the manor of a patient teacher surrounded by petulent students whom he has a duty to educate... yet blind himself to the effect he has on others..."
I certainly have something to teach you (and several others here) as it's obvious to me that you believe a lot which is factually untrue and are not aware of much which is factually true.
I am also aware of the way in which some find it very difficult to learn without having tantrums. That is one of the things I am trying to teach you and several others here, as this disposition has a direct bearing on the economic crisis given our demographics. I fear it may be genetic however.
"The goal in life should be happiness, happiness is not related to IQ or genetics."
No, that's hedonism, and it's one of those ill-conceived, self-destructive notions which have been peddled by those who have helped bring about the current economic/social crisis. How rewards and punishments control behaviour is very much related to IQ and genetics. Rewards are things people learn about however, they are not coextenive with reinforcement. See the brain monoamines, endogenous opioid peptides, and how their receptors/transporters etc function as a consequence of genetic variation/individual differences.
I suggest you have a look into what life is actually about as revealed by research into the above instead of telling people what you think it should be about.
You are, it would appear, still too fond of magical thinking, and far too averse to taking helpful instruction. This is a helpful post, try to be grateful for it.
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#65 Jadedjean You appear in danger of being hoist by your own petard, and engaging in magical thinking. John_from_Hendon may very well be describing betting/gambling, but the charge against Goldman is that of market manipulation.
For market manipulators (should they exist) no gambling is involved since they know the answer ahead of time, and hence just hoover up all the losing bets made by others who did not know the answer ahead of time.
I think you will find that hedonism is normally defined as relating to pleasure, not to happiness. The two words (pleasure and happiness)are different and it therefore follows that they have different meanings.
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armagediontimes (#84) "I think you will find that hedonism is normally defined as relating to pleasure, not to happiness. The two words (pleasure and happiness)are different and it therefore follows that they have different meanings."
Same vs different.. who defines the 'meanings' of folk psychological terms? Do you think you know what you're talking about here? If so, how do you know? Are there different entities because there are different words? Do you know better than the people who research this sort of thing (cf. Behaviour Analysis), because operationally this is pretty well understood, you probably just don't know about it.
People talk of all sorts of 'mental entities' without knowing what they're really talking about, they just collude in ignorance. They're as bad as economists and the shrinking Wicked Witch of The West. Their ignorance shows up in their love of fan charts.
A helpful suggestion or two:- first, you don't appear to have been doing any of your austere homework. As a consequence, why do you expect to be able to keep up? Second, look into the ETS stuff very carefully.
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jj
"This is a helpful post, try to be grateful for it."
How arrogant and downright rude. You may think that you are right but you certainly have no ability to teach as this process has to start with respect for both teacher and pupil. Arrogance is an element of disrespect.
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foredeckdave (#86) "How arrogant and downright rude."
No, just forthright, honest and informative. Get used to it.
"You may think that you are right"
No, I have a major advantage over you. I know my material. I know that I am right.
"but you certainly have no ability to teach as this process has to start with respect for both teacher and pupil."
No, it just requires someone to presemt the facts and have people who can benefit from see them. That is what I am doing. What we see from some here is an inability/reluctance to learn. In children it's called Oppositional Defiance. This happens. These people serve a useful function too. You need to be careful about representativeness, as people who do learn will rarely post to say so. There's a bias operating here. I know that, you and several others don't.
"Arrogance is an element of disrespect."
Except I know what I'm talking about, you should know that by now. Your arrogance on the other hand is certainly indicative of lack fo respect, as well as lack of knowledge.
If you'd followed up the links witb some respect/humility you might have learned something. What we're seeing here from some is a group of like-minded people being flushed out, which is what I intended. It illustrates precsely how we get into socio-economic messes like the current one. Think of yourself as a star in this instantiation.
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#52
galnny glanny glanafon!
It's not a matter of facing the wrong way. It is a matter of continuing to THINK the wrong way.
We have created (or allowed to be created) a society that no longer understands value and its relationship to wealth. Don't look at the tangible comptitive world, look at the whole world of finance. If we are honest with ourselves for a moment we have to accept that this industry has moved itself further and further away from reality. Despite its sef-vaunted expertise and sophisticated models and systems it is truly sophistry. Until the present system collapses there will be no improvement.
At its simplest the real economy is controlled by relatively equal competeing forces acting as checks and balances. However, now the rich have over-ridden those checks and balances. This has led to a situation wherein the rich have increased their money values to such an extent that there is no longer a true relationship with any physical assets. Until money is forced (and it will have to be forced) back into its true position in the economic jigsaw then their can be no positive political or economic planning.
However, it is still possible for the governments and people to regain some form of control and that is via a European protectionist policy.
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#86
JJ is the blogging equivalent of Gordon Brown, a lone voice in isolation, convinced of his own value despite the fact that the vast majority of people here take issue with his postings. Postings which often only escape being extremely offensive by virtue of the disguise of the scientific language he uses to 'instruct us' poor uneducated souls unfortunate enough to have the wrong 'jeans' to meet his required IQ standard to fix the world.
JJ may I direct you to attend a gospel choir on a Sunday in Harlem in order to help you understand, just consider it research, any good scioentist must explore both sides of the argument thouroughly must he not to have credibility?
How such a gathering of gospel singers can be described as 'hedonism' by JJ merely shows how afraid of it he. Afraid to confront the error of what must have been many years dedicated to the pursuit of proving scientifically that IQ and behaviour is related to ''genetics'' you could call it race of course instead of genetics but the moderators would wake up at that point and pull the post...so he doesn't.
It is rather annoying, but we should be kind to him, he still has a chance to learn from us all and see the error of his ways.
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#85 Jadedjean In common with most of the rest of the population I am happy enough to along with dictionary definitions. From your comments it would appear that a dictionary falls someway short of your requirements.
Going to war with the dictionary may or may not be intellectually pure, but it could engender certain communication difficulties.
As for ongoing adulation of Quine can you tell me who described his thesis in the following terms:
"Quines thesis of the indeterminacy of translation amounts to an implausible and quite unsubstantiated empirical claim about what the mind brings to the problem of acquisition of language (or of knowledge in general) as an innate property"
Perhaps you could let me know if the writer of the foregoing is generally recognised as being a world leading expert in his field.
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sashaclarkson # 55
"If you want an approach to economics which promotes gradualism where possible to minimise pain, but seeks the greatest good of the greatest number, then read Keynes and his followers like the Galbraiths (father and son) and Krugman."
This is just the kind of advice we do NOT need! Keynes's wacky economic theories were thoroughly discredited during the 1970s period of stagflation. Even Jim Callaghan had to admit that one cannot spend one's way out of a recession/depression.
And so-called economists like Paul Krugman have completely lost the plot! Krugman estimated that the "spending hole" that needs "filling" in the US economy is $2.9 trillion dollars. Because of that, he complained, President Obama's stimulus package ($789 billion) should be over three times is present size!
"It's helpful, but it does not cover even one-third of the gap, so it's disappointing," Krugman said. Out of the $789 billion approved, only about $600 billion adds real stimulus, in Krugman's opinion. "So you've only got $600 billion to fill a $2.9 trillion hole."
The only hole that needs filling is the one in Krugman's understanding of economics!
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#91
Hi Kurt,
Not so sure about your post here. I understand that it runs contrary to your economic beliefs but I think you have to respect sashaclarkson's intentions in giving the advice. Now you can always feel free to add your own readings to those suggested?
Ever stop to think that Krugman might be right? At least he has been consistant. He said TARP was insufficient and mis-directed and then he said the Obama package was too small.
It's only money and Warren Buffett can afford it :)
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Jericoa (#90) "a lone voice in isolation, convinced of his own value despite the fact that the vast majority of people here take issue with his postings."
Those 'taking issue' are demonstrably ill-informed and incorrigible, are they not? In fact, they're making themselves look even more so given the evidence available but persistently ignored, don't you think?
Aren't people odd?
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JJ
The legend of his own imagination.
Google Beatles and hill
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foredeckdave # 92
Dave
"...but I think you have to respect sashaclarkson's intentions in giving the advice. Now you can always feel free to add your own readings to those suggested?"
Hmmm...perhaps I was being a tad hasty; maybe people should go and read Keynes's magnum opus: The General Theory of Employment, Interest and Money (1936) and then afterwards read Hazlitt's: The Failure of the "New Economics": An Analysis of the Keynesian Fallacies (1959) - my suggested reading!
"Ever stop to think that Krugman might be right? At least he has been consistant."
Never; he is and always will be consistently wrong! Any economist who wholeheartedly supports a statement like this...
"If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."
...is as wrongheaded as the man who wrote it; i.e. Keynes himself. Krugman likes to think of himself as our "saviour", and like a saviour he will perform a miracle for us: that of turning consumption into wealth. But who would accept a messiah with such a John the Baptist as John Maynard Keynes, who proclaimed that credit expansion could perform the "miracle...of turning a stone into bread"? In any case, Krugman is a curious kind of saviour: one more interested in exercising his brilliance than in actually helping people. In the Newsweek profile, he said of his policy advocacy:
"I am not overflowing with human compassion. It's more of an intellectual thing."
http://krugman.blogs.nytimes.com/2009/04/14/time-for-bottles-in-coal-mines/
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CHINESE WHISPERS AND GAVAGAI (INSCRUTABILTY OR REFERENCE)
armagediontimes (#90) Dictionaries merely record popular usage, this lags behind science. Science ignores dictionary usage.
Do you have any grasp at all of how often people 'report' what other people allegedly say, think or believe (substitute other intensional (mentalistic/psychological) idioms/verbs of propositional attitude), whilst substituting what such people actually say, think or believe, with something which the 'reporter' thinks 'means the same', whilst still asserting that the substitution is what the person actually said?
You appear to have no idea as to the scope/extent of the problem. When the magnitude of this dawns on you you might start to write differently, as you'll start to understand the extent to which you, like many others, unwittingly indulge in irrational creative writing (fiction), distortion and spin within a closed intensional circle of your own making, which is resistant to rational analysis, as this depends on preservation of logical quantification-in (the sine qua non for logical inference), the preserve of extensional contexts).
Note: If one doesn't understand something, it doesn't mean it isn't the case, it just means that one is unaware of something. Despite modern Liberal-Democratic obsession with narcissism, tragically, we are not omniscient (see Oedipus and Jocasta). This explains a lot that is wrong with C20th economics and much else besides.
You need to take this seriously, as you've shown me, at least, that you do not understand.
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foredeckdave (#94) You still don't understand that truth is not personal. It's sentential, disquotational and referential.
You don't understand the nature of the ad hominem either or you wouldn't write the way that you do.
Truth and celebritism/narcissism don't mix but you don't see why. This is why you don't understand what I post. You are not the only one, but then, that's largely what I hope to show to others to explain our predicament.
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#96 Jadedjean. I suspect dictionaries do rather more than record popular usage. This would explain why dictionaries contain words such a "bachycephalic" which hardly crops up in every day conversation, and, so far as I am aware, has substantially no popular usage.
I don´t think science ignores dictionaries. Think of all the problems that scientists would run into; one scientist says "can you open the door?" the second scientist responds by killing a chicken. Where would it all end?
Simple recourse to quotation marks is ordinarily sufficient to signify a direct quotation, and similarly their absence is sufficient to indicate "substitution."
Maybe language is much more straightforward than you think.
Do you know the identity of the person who described Quine´s thesis as "implausible" and "unsubstantiated"? It seems to have a ring of truth about it to me.
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Jadedjean
"You still don't understand that truth is not personal. It's sentential, disquotational and referential."
What you do not understand is the meaning of truth. You have shown time and time again that you will not accept the proven truths of the Holoucast and yet you still hide behind your cloak of empirical truth.
"No, I have a major advantage over you. I know my material. I know that I am right."
Hear we have yet another falicy stated as fact. There is absolutely no way that you can know your material,the absolute best that you can say is that "I think" or "it appears". Therefore you cannot know that you are right.
From the many many posts on these blogs proveing the inadequacy or incorrectness of your statements we can safely presume that you do not know your material as knowing involves understanding. It is very clear that your understanding of history, economics and politics is incredibly flawed. It is even fair to say that your knowledge of sociology and psychology, indeed of the human condition, is incredibly flawed - hence your unsubstantiated rejecion of any cognitive understanding.
Given the above my charge of arrogance based upon ignorance still stands.
In your words - "GET USED TO IT"
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#88 "At its simplest the real economy is controlled by relatively equal competeing forces acting as checks and balances. However, now the rich have over-ridden those checks and balances. This has led to a situation wherein the rich have increased their money values to such an extent that there is no longer a true relationship with any physical assets. Until money is forced (and it will have to be forced) back into its true position in the economic jigsaw then their can be no positive political or economic planning."
This is so true !! We need to re-gain the true value of money !!
"However, it is still possible for the governments and people to regain some form of control and that is via a European protectionist policy."
But protectionist policies are yet another method of artificially manipulating the value of money !! By artificially pricing goods through such protectionism, you are, in effect, making a temporary defence of local production. However, without local sources of raw materials, such policies will result is counter-protectionism and the rise in the cost of raw materials, and thus the spiral goes, ending in one or both parties being economically destroyed to the glee of those watching in the sidelines !! Therefore, you will destroy *that* which you hope to protect !!
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#92 "It's only money and Warren Buffett can afford it :)"
Well, considering that Warren Buffet is nearly, or at, 80 years old and has more billions than most people have millions, unless he intends to line his pure gold coffin with diamonds, he's not going to be able to take it with him when he pops it (one of the *TWO* guarantees of life - death and taxes) !! :-)
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foredeckdave (#99) "What you do not understand is the meaning of truth. You have shown time and time again that you will not accept the proven truths of the Holoucast and yet you still hide behind your cloak of empirical truth."
You might do yourelf a favour if you spent some time working through this in an effort to learn a little more about 'pursuit of truth' (aka the scientific method). Then, just as an exercise, perhaps, when considering what you've been told by others about freedom, choice, the merits of deregulative anarchism, and the free-market over the last three decades or so (note how fears of statism have been simultaeously marshalled), bear in mind the regularity of peculiar events like this and this and of course, this.
Consider the feeder funds in the Madoff scheme, both early and late given the US demographics I have covered elsewhere and especially in the context of the currently shrinking economies, as intelligence (see the Feb 2007 ets report), and the Axis II Personality Disordered function in very odd/infantile ways.
I know my material here, just lack group prevalence rates. I suggest you try to listen and learn, as trends are not looking good here or over in the USA. See the ETS report.
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#80 ishkandar wrote:
"Artificial Intelligence" isn't really much about economics - except by comparison to non-artificial intelligence and the making of real world economic choices. "You can fool the vast majority of the people most of the time" (to misquote) and it seems many of these self delude pseudo-scientific people are economists (or are self defined as economists).
See for example today's Sunday Times: ( Tim Besley, Kuwait professor of economics and political science at the London School of Economics, and Peter Hennessy, professor of contemporary British history at Queen Mary College, University of London) "The academics have now replied in a three-page letter blaming a failure of the collective imagination of many bright people" as a response to HM the Queen as to why the economists as a profession(!) did not spot the credit crunch.
When even the Queen is demanding answers, why are we, the people, not being allowed to both have answers and the take appropriate steps - that is to fire the miseducated economists working as regulators (the Bank of England, The FSA the MPC) and in economic management (HM Treasury) and universities (too numerous to list including Harvard, Balliol etc.). Certainly we, the people, should have the right to ask that all economists re-apply for their posts and in that process we should only re-employ those economists who can provide documentary proof that they saw the crunch coming. Their text books should be moved to the comedy section of all libraries.
I wonder if a simple computer intelligence (even the Phillips Machine analogue computer in the basement of LSE!) would have spotted it(?) and in which case, what value is non-artificial intelligence! And yet the self described 'economists' claim to be 'bright'! What rubbish - particularly when many outsiders had predicted the credit crunch and warned against the faulty economic policies that led to the crunch. These people who define themselves as economists, and who we pay to be such, should explain why they ignored those within and outside their clique that warned what was going to happen.
(Perhaps an [erroneous] monomaniac could work out why the inbreeding, or whatever fanciful reason/nonsense he/she can come up with, 'created' economists with such a low level of intelligence! Do economists breed more and more stupid (less and less intelligent) people who in turn become economists because their parents know the right people? Something must have caused this error -if we admit that economists are in some way liked to any form of scientific methodology, however remotely, which I doubt!)!!!!
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armagediontimes (#98) "I don't think science ignores dictionaries."
It's precisely because of what you currently think that I've been telling you how it actually is. We are not all equals in the blogosphere you know - despite the Lysenkoist, equalitarian, 'Marxist' nonsense being peddled today - think about this ;-)
"Maybe language is much more straightforward than you think."
It isn't. Natural Language is not truth-functional. Try to find out what that means and why scientific languages are created in their stead. You just don't aren't looking carefully enough. People who don't discriminate just don't see very much. Everything's obvious to them.
"Do you know the identity of the person who described Quine's thesis as "implausible" and "unsubstantiated"? It seems to have a ring of truth about it to me."
He's was a leading logican. It's based on equivalences in mathematical logic, the lingua franca of all of science. There are many ways of saying the same thing using the logical connectives/quantifiers. What is translation? What is the relation between theory and evidence? What are the three indeterminacies?
As you don't know/understand the work, how are you possibly able to judge what someone says about it?
You really should listen - you'll learn more.
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John_from_Hendon (#103) Several years ago, when working on the demographics of all of this (as I say, ETS was a relatively late-comer), someone else in the field remarked that there had been a systematic replacement of one type of economist with another in academia ove rthe years. It was about the same time that those who working in the field I keep drawing attention to found it more and more difficlt to hold onto their jobs and publish. This was no coincidence. Academia has been politicised without many seeing how. It is easier to see this in the USA. Thirty years ago, there were not as many 'professors' in UK universities as there are today, and that isn't just a function of the expansion of the universities.
As to your slur, I remind you that in all of science, the basic task is one of data reduction and establishing testable relations between the variables which come out of this accounting for most of the variance. You should take the Feb ETS 2007 report very seriously for this reason. We have a demographic problem on both sides of the Atlantic and the group at most risk, is expendable to those who most benefit. This is what led to WWII, and much trouble in much earlier times too.
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Addendum (#105) All one has to think about is how changes in legislation over recent decades has worked to increase the likelihood of employment of some types over others. It's how contingencies of reinforcement operate, i.e. there need be no 'conspiracy' at any local level, it would all be legal anyway. One must analyse all of this in terms of contingent evenst and outcomes only. If one can't change the legislation and its enforcement likelihood, nothing can change. It's as simple as that. Talking, wishing, posting, ranting and abusing, won't make an iota of difference if the legislation remains and that (and its enforcement contingencies by the executive) is all that controls collective behaviour. Those milking the majority know this.
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On this mornings 'The Big Question Show' on the BBC they were debating the question 'should great apes have rights'.
There is a certain poster on this blog who has repeatedly mentioned the secret agenda of Libertarianism and the free market anarchists.
I am now inclined to agree with much of what he/she writes.
They will be making great apes professors next!
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#104 Jadedjean. It is certainly true that your use of language militates against straightforwardness.
When you write "He´s was a leading logician" to whom are you referring? Quine or his eminent critic? Is it common practice for scientists to attempt sentences that omit the subject and show no recognition of past and present tenses?
As you are seemingly unable or unwilling to recognise that Quine attracted eminent criticism let me help you out. The critic is Chomsky.
Chomsky is credited with the creation of the theory of generative grammar which is widely recognised as being the most significant contribution of theoretical linguistics in the 20th Century. Among many other talents he also writes in sentences that are readily understandable. But I am sure you already know all of this.
Quine also taught one Theodore Kaczynski. Kaczynski is principally noted for two things - having an IQ of 167 and posting bombs to people.
So, to answer your question: It is not necessary for me to know or to understand any given body of work in order for me to judge (or to know definitively) that I do not wish people to post bombs to me. To express it in more general terms I do not wish to experience pain or terror merely in order that someone else can be replete in their own intellectual purity. Neither would I consider that others are, in general, likely to take a different view. Hence I have no interest in harming others merely because they may disagree with me.
When you think about it, it is really quite straightforward, and I would hope entirely non controversial.
Your main problem is that you write about specialist areas of enquiry and deliberately employ obscure language except when you express absolute certainty in the purity of your knowledge. At no point do you ever let the people know that there are others of equally high intellect who think it is all rubbish - that is basically what "implausible" and "unsubstantiated" sums to in common parlance.
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armagediontimes (#108) "As you are seemingly unable or unwilling to recognise that Quine attracted eminent criticism let me help you out. The critic is Chomsky"
You've go to be joking! I've warned you before about the dangers of the ad hominem and celbritism. Chomksy is a propagandist. He worked with George Miller in the 50s when the pair tried to use Information Theory in Natural Language, but note, Natural Language is not truth-functional - end of story. Do you understand? It was typical slieght of hand/smoke and mirrors stuff. Information Theory is a statistical (entropic) model which applies to formal symbol manipulation not Natural Language which is largely intensional, i.e outside the scope of such analysis (or we'd have Natural Language programming and better interfaces). To use computers properly you have to learn artificial languages just as one does the sciences.
Try to take this on board a) Chomsky is an anarchist, b) he was responsible, along with other Jewish psychologists on the East coast, for a lot of nonsense which morphed into cognitivism in psychology from the 60s onwards b) Quine and Skinner were hightly critical of all this nonsense. Quine's logical criticism of Chomsky in the late 60s was a classic. Skinner's equally damning criticism was in 'On Having A Poem' - Chomsky didn't know what he was talking about - literally.
I have said before that this is highly technical, but it's also political. One can't talk rationally to these people as they lie. It is why well documented, internationally replicated, empirical facts in behavioural science are now subject to a kind of censorship. If you follow the links that I have provided over the months you will see what I mean. The facts themselves are solid, what is said about those empirical facts by this political group are lies as you'll discover if you follow the links.
This is, I suggest, why the German National Socialists behaved the way that they did towards this group in the 1930s. The scale of deception of the public is really quite remarkable given the emprical facts.
I suggest you look into it for yourself using the links here and in the Newsnight blog. Try Jensen, Rushton, Gottfredson, Lynn, Murray on intelligence (and look at the USA ETS NAEP data and our KS SATs), and the Experimental Analysis of Behaviour for what's wrong with mainstream cognitive psychology (the weakspot is Null Hypothesis testing). Or you could just look at what Quine wrote, as it's devastating as you'll find out if you do as instructed.
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armagediontimes (#108) "At no point do you ever let the people know that there are others of equally high intellect who think it is all rubbish"
That's because those people (esteemed 'celebrities' in your eyes no doubt, mere spin-masters in mine - who dominates Hollywood and the publishing industry in the USA?) are the very anarchistic group which, as I have gone to some lengths to show (blogdog permitting), is ultimately behind (wittingly or unwittingly it doesn't matter, it's just predatory business, mostly legal) the economic and social mess which we now find ourselves in.
History has a habit of repeating itself. Look at who the new Nazis ('terrorists' - and state sponsors of this) have allegedly been in recent times, and look at their values - what do they proscribe, whose interests does their demographic expansion threaten?
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JJ's structuralist nonsense was deconstructed here:
http://www.bbc.co.uk/blogs/newsnight/paulmason/2009/06/a_journey_through_chinas_econo.html
careful consideration of FrankSz comments will open up the reasons why.
JJ is left with a private language - utterly meaningless to others. WVO Quines Natural Epistemology suffered simialar criticism regarding meaning.
What more is there to say ?
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superiorsnapshot (#112) "JJ's structuralist nonsense was deconstructed here"
Get you facts right, I'm a radical/evidential behaviourist. Chomsky is a structuralist. Radical/evidential (Skinner-Herrnstein/Quine) behaviourists have no truck with mentalism. You don't understand the words you are writing and neitehr does FrankSz.
Intensional contexts are resistant to logical analysis, which was taken as prima facie evidence that they have nothing to do with accounts of reality, just a modus vivendi in lieu of something better. It's science (behavioural) which provides that 'something better', and that's what was being subverted by structuralists/anarchists like Chomsky. Science is not beased on subjective experience but demonstable relations in the physical world, relations which can be automated via physical probes and compuyters iof necessary. What you have to grasp is that this is the way that the world is going through automation. You are even using some of it now, and your behaviour has to comply with it, rather than the reverse.
Deconstruction is an intentionalists' aka phenomenologists' word - Derrida's in fact - another 'cogntivist'. It's time to wake up to what's going on at the expense of truth. Do you not see a pattern?
The more you cling to their hogwash the worse the economy will get for all but those who peddle the hogwash.
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(#114) Apology. A long verbatim quote. I assumed it might be acceptable wtthin the copyright rules. Clearly I'm mistaken.
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Isn't anybody interested in economics?
And in particular the pathetic excuses economists give for their failure - see #103 above (And can't we all just ignore the subject of the last paragraph!)
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armagediontimes # 108
superiorsnapshot # 112
Don't encourage JJ: Once she gets going, she just clutters up the blog with her maniacal empiricism which, of course, has very little to do with the subject at hand, i.e. economics.
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John_from_Hendon (#116) "Isn't anybody interested in economics?"
Not if it's a 'busted flush' pseudo-science as you keep asserting. Have you always had, or just recently acquired a penchant for nefarious rhetoric and self-contradiction?
LibertararianKurt (#117) As opposed to pseudo-science.
You keep subverting naive, ignorant people and encourage them to ignore empirical reality and wallow in metaphysical nonsense instead. That's going to be great for the economy isn't it? Great for Hollywood and celbritism though. What you have to realise is that empiricism sets limits to what can be said and done, and that should lead to restraints in behaviour, i.e to regulations in pursuit of safety/order/predictability. See Command Economies and socialism or Islam (many of the Socialist Republics were Muslim).
Prediction: watch them both wriggle rather than come out with mea culpa as they should.
People don't learn easily. The downturn will just get worse if these people continue to behave like narcissistic children/adolescents, and that is what has been encouraged post war in pursuit of anarchistic economics I suggest.
In the meantime, watch the SCO/BRIC grow...
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Heads-up: The behaviour highlighted above is very common amongst humans. You will see it more and more as the economy gets worse, and it must givent he65 querters of growth based on securitization etc which must contract. Those who brought it about will do anything to defend their status quo as the alternatve is just too frightening - i.e the unknown.
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#38
Your reminders of the importance of energy are welcome.
Do any of these writers have any models that explain how the economy works, just how it reproduces itself?
Anything along the lines of Marx's reproduction schema?
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#117. LibertarianKurt wrote:
"maniacal empiricism ... has very little to do with... economics. "
Correct, but how can it be treated? And should we bother?
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I enjoyed this one too !
http://www.bbc.co.uk/blogs/newsnight/paulmason/2009/06/blood_bees_and_banking_the_the.html#P82338191
I always thought of Derrida as thoroughgoing empirisist, but I guess he is difficult to read if you remain entrenched in a passe Analytic enclosure.
Still the world of thought has moved on my dear dinosaur -
http://en.wikipedia.org/wiki/Technics_and_Time,_1
Enjoy...........
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"117. At 3:59pm on 26 Jul 2009, LibertarianKurt wrote:
Don't encourage JJ: Once she gets going, she just clutters up the blog with her maniacal empiricism which, of course, has very little to do with the subject at hand, i.e. economics. "
1. JJ's language usage patterns are male.
2. Behavioural (including economics) science... Isn't. Hence all the hand waving.
On to the GDP problem. Just how big would you like the GDP to be? Well, print the money and you can make it as big as you like. Give it to your favourite needy causes, drop it from helicopters. But crucially, *remove the control from the bankers*. It'd be great to be able to remove monetary control from the politicians as well, but human history demonstrates that is infeasible.
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superiorsnapshot (#122) "I always thought of Derrida as thoroughgoing empirisist"
But you're wrong. You don't know what empiricism is. It's hard science. Tough finding things out isn't it?
"Still the world of thought has moved on my dear dinosaur"
It most certainly has. When did you first notice?
You, and several others must try much harder not to attack the source of messages which are true just because you don't like what they tell you. You must try to deal with the message material itself. Arguing is a waste of time too if the evidence is still left intact. Go and look at the changing demographics for the USA and UK. Look at the birth rates and the NAEP results in the USA. Look at the group differences, the places where sub-prime was focused, and where unemployment is highest. Where is labour cheap in the world. Where will industry move to? Look around the world at OECD PISA data, look into the problems with the UK samples in 2000 and 2003. The 'sabotaging' of the SATs via interference with the NAA/QCA. Why was that done to KS3 SATs do you think? Answer, the same reason why you don't like the message I'm posting, they hope to be able to spin better if the evidence goes away that attainment gaps are not narrowing, that folk won't see that the expansion of education has been another bubble basd on untruths. They hope to persuade you to live in la-la land. That's the problem in a nutshell these days.
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#123. true-liberal wrote:
in reply to #117
re 1: does it matter? - I don't think so - the 'idee fixe' problem wastes time, but as is nothing to do with economics it can be ignored.
re 2: I agree that economics is not a science - it just puts up a smoke screen of number - but some of the basic numbers actually matter - such as exchange rates and interest rates. Interest rates are now out of the control of the Bank, and are rising as many of us predicted a while back.
A. Darling is urging commercial banks to lend to business, but the commercial case that business can put forward are in many case quite weak (because of the slump). The one good point in A. Darlings statement today is that he (deliberately?) did not say that banks should lend to home buyers (as profligate lending in the area is precisely the reason for the credit crunch and even A. Darling knows this).
I believe our biggest obstacle to a recovery is that the management of the economy is still in the hands of the bureaucrats that caused the slump! (And interest rates need to be raised by the Bank (of E) to do two things - first regain control of interest rates and secondly start working towards a sound money situation where money and capital are price appropriately once again - i.e. 5 percent plus. The longer the Bank (of E) waits the higher the eventual rate.)
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true-liberal (#123) "Behavioural (including economics) science"
You are describing your cognitive states, not what is true. There is an important difference. Mnay people do not know this. You are one of them.
In its extreme for it is called delusion.
Behaviour Analysis is Operant Analysis. It is lab based work. It is as reliable and replicable as any other physical science. I suggest you look into this more carefully, as what you say is false. it is used all over the world for precisely this reliability reason (see neuroscience and pharmacology labs).
The laws of physics are very well understood. You are a physical system. This does not mean a physicist can tell what you are going to buy in the shops next week. That failure does not make physics a pseudoscience. Why not? Like many people posting here, you are wrong but unwilling/unable to learn from your errors.
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Post 103 - A brilliant post and I thought it was so good I've included it below again ...
".... See for example today's Sunday Times: ( Tim Besley, Kuwait professor of economics and political science at the London School of Economics, and Peter Hennessy, professor of contemporary British history at Queen Mary College, University of London) "The academics have now replied in a three-page letter blaming a failure of the collective imagination of many bright people" as a response to HM the Queen as to why the economists as a profession(!) did not spot the credit crunch.
When even the Queen is demanding answers, why are we, the people, not being allowed to both have answers and the take appropriate steps - that is to fire the miseducated economists working as regulators (the Bank of England, The FSA the MPC) and in economic management (HM Treasury) and universities (too numerous to list including Harvard, Balliol etc.). Certainly we, the people, should have the right to ask that all economists re-apply for their posts and in that process we should only re-employ those economists who can provide documentary proof that they saw the crunch coming. Their text books should be moved to the comedy section of all libraries...."
------
I would also like to expand on this too ....
'Traditional economics' is dead, and traditional establishments will always be the last to spot this, or admit this ... and they will fight to avoid acknowledging their mistakes (e.g. listening / promoting their own - their own people, ideas and incompetence..!)
Many people were aware (e.g. 'creative outsiders', less 'favored' economists and fellow bloggers), but they were not the ones the Government and other establishments listened too (including the BBC) ... hence the problems we now face* ...
Hence I would also want to include the involvement, cover-ups and collusion of other 'traditional' establishments too (e.g. BBC, Government, Banks, CBI ...), and as far as the current 'leaders' from all these traditional establishments are concerned, they are all "Maybe Best Avoided" ... and they should all be re-applying for their posts, with more hard-working people having confidence in the values, knowledge and abilities of those who are appointed to them ... e.g. see http://poweromics.blogspot.com/2009/07/asking-simple-question-getting-right.html for more information etc.
David Clift, A Future 500 Leader
* NB Solutions exist - but these establishment still don't understand, get it, or listen to anyone other than themselves ... e.g. go to http://poweromics.blogspot.com/2009/07/leanomics-charting-path-to-recovery.html for instance.
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true-liberal # 123
"JJ's language usage patterns are male."
Have a look at JJ's innumerable posts (not just on this blog) over the last 5 months or so and the pattern or, should I say, picture becomes quite clear.
"Just how big would you like the GDP to be?"
There is a tendency by mainstream economists to rely too much on GDP as a statistical measure of economic output. The GDP framework looks at the value of final goods and services produced during a particular time interval, usually a quarter or a year. This statistic is constructed in accordance with the view that what drives an economy is not the production of wealth but rather its consumption. What matters here is demand for final goods and services. Since consumer outlays are the largest part of overall demand, it is commonly held that consumer demand sets in motion economic growth.
By focusing exclusively on final goods and services, the GDP framework lapses into a world of fantasy wherein goods emerge because of people's desires. This is in total disregard to the facts of reality (that is, the issue of whether such desires can be accommodated). All that matters in this view is the demand for goods, which in turn will give rise almost immediately to their supply. Because the supply of goods is taken for granted, this framework completely ignores the whole issue of the various stages of production that precede the emergence of the final good.
In the real world, it is not enough to have demand for goods: one must have the means to accommodate people's desires. Means - i.e., various intermediate goods that are required in the production of final goods - are not readily available; they have to be produced. Thus, in order to manufacture a car, there is a need for coal that will be employed in the production of steel, which in turn will be employed to manufacture an array of tools. These in turn are used to produce other tools and machinery and so on, until we reach the final stage of the production of a car. The harmonious interaction of the various stages of production results in the final product.
The GDP framework gives the impression that it is not the activities of individuals that produce goods and services, but something else outside these activities called the "economy." However, at no stage does the so-called "economy" have a life of its own independent of individuals. The so-called economy is a metaphor - it doesn't exist.
So, your question, to my mind, is nugatory.
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#117 Libertariankurt. We live in a diverse world. It is the case that JJ´s specialist subject matter is of little direct relevance to economics.
However the repetition of the message, the style of delivery, the hostility to disagreement, the dismissal of any alternate perspective, the ignoring of evidence that does not fit the message, and the manifest errors all have something to teach.
It is, for example, not dissimiliar from Enron. Both JJ and Enron venerated those blessed with high IQ´s. For JJ´s attachment to Quine substitute mark to market accounting. Mark to market accounting was also claimed to be the only way, the one path to enlightenment, and all those who disagreed were summarily dismissed as either stupid or subversive.
Sadly I suspect the same certainty of being right and the same intolerance of any dissenting view is alive and well. I would expect to find it inside large financial corporations,and inside the regulatory bodies and governments.
Thus they will be able to say that there was universal agreement that wealth sequestration, money printing and the further enrichment of the wealthy was the only way forward, the one path to economic enlightenment.
What they will not say is that they sacked or traduced all who held a different view.
As someone once said "The only people I fear are those who are without doubt"
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Well folks there we have Jaded(busted flush)jean is a " a radical/evidential behaviourist."
To be a behaviourist one first has to undertsand behaviour. What happens in neurological and pharmacology labs is abstracted from REAL human behaviour. The assertions presented by him/her/it are therefore also fearful abstractions.
"must try much harder not to attack the source of messages" How dare you? You hypocrit. Your total strategy is based upon attacking the messenger because you are totally unable to prove the falsehoods of opposing points of view.
YOU ARE WRONG. To repeat your words "GET USED TO IT"
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John_from_Hendon (#125 It appears that economics is pseudoscience so long as it's not John_from_Hendon's economics.
Whilst this obvious irrationality doesn't surprise me, it should, I suggest, give you, and others here, pause for some serious thought.
I don't expect this will make any difference, but it is why we're in such a mess.
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#124 Jadedjean. I have no idea as to why superiorsnapshot may not like the message you post. However I have every idea why educational testing results are "sabotaged."
Thet are not sabotaged it just that the ruling elites do not care what the educational attainment of the population is. Their children will not be experiencing the same system. They only need a few people to run the more complicated bits of their operations. They probably have some statistical analysis that shows that a certain number of people will come through irrespective of how bad the system is.
They do not want a population that is educated but they do want a population that thinks it is educated.
That is the reason why test results are wrong, incomplete, not carried out or simply thrown in the bin. No one cares.
I would be very surprised if superiorsnapshot takes exception to your message on the basis of the foregoing explanation. It is therefore likely that you are wrong!!
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Deat Stephan,
Well and wish to hear the same from you.
All my writings on your economics subjects were already published by BBC.
Thanks to BBC.
What you said on this subjects is quitely agreeable.
I am happily reading of all your writings on economic matters with full attentions.
During taking tuitions to High grade students, i used to quote your words often and often for their storage of good economics for getting good marks to their examinations.
I have studied all old school of economics in detailed manner,and to add her,recent noble laurates economic theoris are in my mind.
All these economic theoris are failed miserablly.
Only,The new,practical Wisdom can save us from drowing ,and sinking from these unfitted boats.
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armagediontimes (#129) #117 Libertariankurt. We live in a diverse world. It is the case that JJs specialist subject matter is of little direct relevance to economics.
'ello 'ello 'ello. What's all this then? Months before the Credit Crisis, but years after several of us gave the warning to where it mattered. YOu aren't quite tacking the chronology in are you? This was all known to be on the cards because of the relation between GDP and IQ internationally.
"However the repetition of the message, the style of delivery, the hostility to disagreement, the dismissal of any alternate perspective, the ignoring of evidence that does not fit the message,"
This is what people do when they're right and others are wrong...is it not?
"and the manifest errors all have something to teach."
Let's see you document these 'errors' - the problem was predicted. That isn't the issue. The real issue is why, given these relations have been known for so long, that it was allowed to happen.
"It is, for example, not dissimiliar from Enron. Both JJ and Enron venerated those blessed with high IQs."
No. Perhaps you're thinking of the OECD (see PISA), ETS and every other government body in the world including our Treasury (see Leitch). You have also left out 'conscientiousness' one of the Big 5 Factors of personality, which is rather low in Anti-Social Personality Disorder which we suspect to be highly prevalent in Financial Services (see Hare). We know APD is typical in prisons, the problem with White Collar venality is that the behaviours are legal - deregulated.
This point has been made several times. You've ignoring inconvenient evidence, like many others. That's what people do. This may be why these problems occur. Think back to the 1920s/30s in Germany, but ask, who were the psychopaths?
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Just watched the Uri Geller programme about his relationship with Michael Jackson on ITV (My Friend Michael Jackson: Uri's Story).
What a load of BS Uri was coming out with and he's not a very good actor.
Uri was just 'bigging up' the ultimate narcissist/celebrity icon of recent times (worldwide).
Their actions are certainly consistent!
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foredeckdave (#130) You appear to be raging again. This tends to happen when people's core, unquestioned, i.e introjected constructs/assumptions close to their unrealistic sense of identity are challenged.
Don't fret too long I'll hold your hand through some of this if you start to behave with some respect. Seriously. It's a genuine offer.
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Lib Kurt
What is it you do not understand. Look up Andrew Brons.
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There are as many realities a speople. There are commonalities between realities but if somebody doesnt wish to consider anything outside their reality then dialogue is pointless.
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BBC - Why am I still getting the this new member tripe when I post.
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BankSlickerminustheR (#135) It's worth watching this if you can find it As I've said elsewhere, Hare says NPD and psychopaths share half their Factor Structure. I reckon this may explain a lot of history given the demographics and professional concentration. It can still just be a higher prevalence issue if true, (I hope).
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This is getting boring. I don't understand why we keep getting expressions of surprise like this: http://news.bbc.co.uk/2/hi/business/8169225.stm or even the OP of this thread...
Whether it be the government, economics reporters, or average middle class people who thought they knew something because they were making money off property, I don't care - these people are practically clueless when it comes to the economy, because the rug has been pulled out from their feet: the old rules no longer apply.
Here are the new rules:
a) There is no recovery
b) It's downhill from here
c) Unless you can think of a damn good reason why not, and then really make it happen...
And for you halfwits who think you understand money, answer this question: Why should there be any demand for money, beyond for faster repayment of debt, during the next ten years?
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glanafon (#138) "There are as many realities a speople."
A word of advice: don't tell your GP that.
(Incidentally, how do you know?)
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#15 northJason
People trying to make a return are focusing on minimising risk, so they are getting away from the dollar and putting their investments into other securities, especially if they are connected with Asian growth at the moment. The main thing is the balance of risk between securities and USD cash holding.
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#142
Actually for what it's worth while you are on that topic - one thing I know is that if I interfere with my brain, everything else alters, therefore everything I am aware of is a function of my brain. If you are not familiar with altering your brain, then try this simple experiment: close your eyes. You will notice that everything has disappeared. This is because everything is a function of sensory input to the brain.
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glanafon # 137
Are you saying that I don't understand that Andrew Brons is a friend of yours?
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127 leanomist
You are looking at a protective behaviour towards a model by those involved in the building of the model, in this case an economic model. The more it is attacked the greater the resistance to criticism. It reaches the point where critics are dismissed out of hand and ridiculed. Coupled with veested interest it can have a devastation effect. It blocks progress. It developes faux science. It is also present in other sectors, in my opinion it is present in medicine. Actions and policies are taken and there is then hostility to any objection.
I do not actually believe the problem is economics, although it seems to me that economics has major flaws. The problem quite simply is those with the job of regulating, of being corrosive in assessment of the commercial sector, lost that perspective. Simply, HMG came to depend on the financial sector revenues, therefore it de facto became partners with the financial sector profit and that eroded the regulation role.
It is generally said in cases of domestic abuse or violence that somebody kmew what was going on somewhere and tries to raise some sort of alarm, however muted.
It is obvious that with the bubble, which seems to be based on systematic abuse that somebody knew what was going on, and there is plenty of data about people warning. There is anecdotal eveidence and reports by journalists of graphs at the treasury and BoE. There are published comments of concern. There are a lot of clever people working in the sector and it is inconcieveable that questions where not raised. They were swamped by the model believers and vested interests.
Criticallty HMG were the problem, they were lax. this is why Brown is politically dead. Everybody in there heart knows he was part of the game and the game has failed. There is no escape for him. It is a sad case because I do believe he genuinely wanted to build infrastructure and services. However one cannot trust effective monopolies and what look to be near cartels and effectively that is what he did. That is why what ever is said as a political strategy has little impact.
Business has one desire, to create monoploy and exploit. It has to be balanced by regulation. It becomes more difficult when business becomes multinational, because logic says the regulation has to become multinational, and no solution has been implemented todate.
It is only fright that is controlling business not HMG.
BTW Darlings recent plead for the banks to play ball, as he sees it, on loan costs. I understand the issue is that the smaller the loan the high the risk of default. In other words credit ratings are failing, because only a high credit rating will get a high value loan. The outcome is that consumer purchase volumes cannot, well are unlikely, to grow in the near term as many are based on low value loans.
Mr Darling seems to be slow to learn that his drive by shooting was not stringent enough for his needs, and that at the end of the day he should have seized opportunity. That is what a business would have done. Left to their own devices the banks rebuid their bottom line not the economy. It is to be expected. It is however typical of the dichotomy of the infrastructure role of banks and the commercial risk taking activity of the banks. Logic suggests that the infrastructure role should be split off.
There remain major problems in the UK hosting multinationals with an individual book larger than the host, the UK, and the UK taxpayer being the lender of last resort in an ad lib Ponzi scheme. eg RBS for one. That is inescapable.
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#139 "BBC - Why am I still getting the this new member tripe when I post."
It is probably an error in programming the system to accept and process comments on this blog. However, "Lessons have been learnt" !! When is quite a different question entirely !!
Still, as some wise person once said, "What can not be cured, must be endured !!" :-)
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#136 Fadedbean
I'm not raging at all. I have merely pointed out the fallicy and hypocracy of your pointless arrogant ramblings.
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Kurt. More of a friend of yours at the moment perhaps. lol
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FrankSz (#141) Exactly. When one warns someone, one needs to have a credible sanction. So this warning is more political spin surely? Hitler had to take rather drastic steps in the 1930s to get control of this behaviour.
The CEOs of the main banks were warned back in 2003 about credit rates. What followed? More deregulation. HSBC didn't take any government money, they raised their own via a fully subscribed Rights Issue so what will Mr Darling threaten HSBC and Barclays with?
Have you really seen how dumb 'educated' people in the UK and USA are these days? If not, you can't be reading this blog very closely. People can't be told anything anymore unless they're celebrities. That can't bode well can it?
To most these days, qualifications have become 'bling' ;-)
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142 jj
Observation. It is because the realities are individual that they can be influenced. Which of course is what you are often trying to do. : )
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#131. JadedJean wrote:
Rubbish as usual.
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JJ everyone except you seems to have formed the opinion that you talk at length but say nothing at all of interest or of relevance to the pertaining to real world economics. Have you not yet grasped this?
Many tens of posts ago I formed the opinion that your views are morally despicable and totally ethically unacceptable and there is nothing you can say and no 'source' you can cite that will alter my opinion. Do you understand this.
I find you ideas disgraceful, immoral and unethical. Do you understand this?
You already know why I have formed this opinion and nothing you have written since has provided any reason for me to change my opinion.
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#140 JJ
Couldn't find the programme...but found an interesting radio interview with Vaknin re psychopaths and their part in the financial crisis.
http://www.youtube.com/watch?v=UBZBWhqbLC4
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#141. FrankSz wrote:
"Here are the new rules:
a) There is no recovery
b) It's downhill from here
c) Unless you can think of a damn good reason why not, and then really make it happen..."
re b. Perhaps you are too pessimistic?:
Consider: if the overvalued assets held by the banks were reintroduced into the market at a more realistic price (like GM and Chrysler for example) does that not provide a path out of the abyss. This is why bankruptcy of the banks would have potentially provided with a way for the overpriced assets to get back into productive capacity at a more realistic (much lower) price.
(To annoy JJ, who doesn't understand number at all.) I'd estimate a probability of this happening as 10% up from my initial estimate in January of 5 percent. My reason for feeling that the likelihood has risen is that there is a perception that the crisis has deepened.
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FrankSz (#144) "...close your eyes. You will notice that everything has disappeared. This is because everything is a function of sensory input to the brain."
Please do not try that experiment on a busy road. I can assure you FrankSz, when you close your eyes, the world does not go away.
There is some evidence that popping MDMA etc may be neurotoxic to 5-HT neurones. Could this possibly explain some of the odd things said in this and other blogs?
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141. At 9:53pm on 26 Jul 2009, FrankSz wrote:
''Here are the new rules:
a) There is no recovery
b) It's downhill from here
c) Unless you can think of a damn good reason why not, and then really make it happen...
And for you halfwits who think you understand money, answer this question: Why should there be any demand for money, beyond for faster repayment of debt, during the next ten years?''
Well generally little to object to. However it is how it affects you as an individual that matters. Like the only minor operation surgically is the one somebody else has.
There is likely to be something called recovery because the measurements are based on the last position and the slide cannot be evermore. The question is how big it is.
Downhill from here. Not for everybody. It is devil take the hindmost.
Growth - we have growth here. I keep trying to say what the game is and that a change is working practice is needed for the new game. The new game is likely to reduce tax revenues because it has to be low overhead, that is my guess. Tax revenues dropping (which is already happening) are not the problem of business, that is an HMG and service user problem. There are likely outcomes. The detatchment in the public sector that revenues are protected somehow does not help.
Make it happen. Well after wasting decades trying to advise companies what was needed we are doing it ourselves. The problem is nobody wants to know whilst things are jogging along and when it hits it is too late. So I have little sympathy with some companies.
The debt issue is simple. Credit got overblown. The economy demands credit fueled expenditure. If you turn off virtually all the credit in the system than things fall off a cliff. It multiplies a downturn. Destroy business and it seldom returns, it is always easier to import. That is the history. Credit needs to be reestablished, not overblow. Many are not greatly affected by this downturn and can still spend. That is the impact of recessions they are localised. The longer it goes on the greater and wider the damage. HMG are only just realising the game, it would seem.
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#141
I wish I could be bored with it like you, the whole thing as you describe it drives me absolutely NUTS!
If it was not for these spaces on the web you would probably find me wild eyed bothering strangers on the high street.
What I am bored with is the lack of debate on what the answers are, round and round and round we go on these pages, I cant believe how un-questioning people have become, I cant believe how few free thinkers there seems to be out there now. I cant believe there is nobbody with influence (if you read the press anyway) offering a tangible alternative other than ...getting banks lending again and restoring growth.....perhaps we should ask Joanna Lumley to take that on next...for goodness sake!!
Perhaps I missed what ever national lobotomising process the nation went through by working overseas for 8 years ending in 2003.
Read post 221 on RP's blog from a director of a manufacturer, it beggers belief. and who is there to save us from them...THE CONSERVATIVE PARTY.
I make no wonder the bankers are feeling so bold.
ARGHHHHHHHHH!!!@@@@**!!$
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In #146 glanafon wrote:
"You are looking at a protective behaviour towards a model by those involved in the building of the model, in this case an economic model. The more it is attacked the greater the resistance to criticism. It reaches the point where critics are dismissed out of hand and ridiculed. Coupled with veested interest it can have a devastation effect. It blocks progress. It developes faux science. It is also present in other sectors, in my opinion it is present in medicine. Actions and policies are taken and there is then hostility to any objection."
I suggest that this is classic "Groupthink", as I seem to recall mentioning in an earlier thread. The problem is compounded by the fact that the long term "ambitions" of the Government, the Governed (us!) and the "Finance Industry" are not necessarily coincident; I submit that this is a variant of the "Principal - Agent Problem". I say variant because there are 3 broad parties rather than the normal 2.
In this instance I might have to agree that the "behaviorist" approach has some relevance, even if it grieves me slightly to admit it...
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156 jj
Van Gogh was supposed to have epilepsy or a similar problem. Absinth, the Green Fairy, in volume probably didnt help. It has been proposed his brain produced a LSD type of compound on occassion, hence his reality. The brain is just a biochemical computing device and produced many mood influencing compounds naturally.
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Post 146 - I agree with a great deal in your post. The only bit I would personally tweak is the following:
'Business has one desire, to create monopoly and exploit' ... and change it to say '20th Century enterprises have one desire, to create monopoly and exploit' ...
As 21st century enterprises see/do things very differently ... and operate using very different 'value systems' - hence the link to a "new economics" ...
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158 jericoa
Unfortunately the central issue with the government in any western developed country is the collection of taxes and the provision of welfare and social services. That is the orientation and it is fair to say they are elected for that function. The number of commercial hard nuts in the government or in oppostition is small. William Hauge is one of the few with experience. He is quite interesting, worth looking up.
In any conflict between big business and government my money is always on the big business winning. They are specialists, know their patch, hard nosed. Can cry essential to the economy. More people, better funded. Just look at the tax avoidance issue. Half a mill budget and specialist accountants and lawyers. Plus motivation. On the other side a handfull of HMRC people. Auditors - my experience was they asked to be shown what was what.
The banks behaving the way they are was entirely predictable. You only had to think about it a few seconds.
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161 leano
Agree.
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IS THIS NARCISSISTS ANONYMOUS?
armagediontimes (#132) "I have no idea as to why superiorsnapshot may not like the message you post. However I have every idea why educational testing results are "sabotaged.""
No you don't. I'm refering to the KS3 SATs fiasco which the recently published committee report now says HMG had a hand in 'sabotaging' last year (the marking had been contracted out to ETS(Europe). HMG has now abandoned KS3 SATs in the format which they've been run for years.
You don't understand, any more than you understand how the NAA contructed and feminized the SATs, but you'd like to pretend that you do I bet, so as you don't know the difference between a) analysing the facts and B) creative writing, you now join foredeckdave et al. in my assessment.
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156 radiowonk
Life is just a minestrone. Didnt somebody sing that. I'm off.
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I am disappointed at the way the government have stuck their head in the sands over this recession. I remember in the late 80's the conservative party was looking to tighten the grip on bank lending and personal debt. What they was planning would have left us in a lot stronger position that what we have now. I remember at the time thinking I didnt want them interfering but now when i talk to the man in the street. It seems everyone has something on credit and whilst in the past £750 was considered a generous credit limit for Mr Average over the past few years times that by 10. I read somewhere that a bank is reducing their min payments so that a 5k debt will take 100 years to pay. Maybe instead of getting banks to lend more we need to examine how much they have already lent otherwise when will we the people ever pay back our own debts?
[Unsuitable/Broken URL removed by Moderator]
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glanafon # 149
"More of a friend of yours at the moment perhaps."
You're a bit confused, aren't you? I suggest you look up Mr Brons or, better still, call his PA at the EU parliament and attempt to discover his economic views.
;)
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Johm_from_hendon (#155) "(To annoy JJ, who doesn't understand number at all.) I'd estimate a probability of this happening as 10% up from my initial estimate in January of 5 percent. My reason for feeling that the likelihood has risen is that there is a perception that the crisis has deepened."
Do you have any other 'feelings' you'd like to share (and put numbers on?).
Does Alistair Darling and Mervyn King do this do you think? Do they have Rogerian Encounter Groups in the Treasury all day and put numbers on all their 'feelings'? If so, it might well explain a lot that's not quite right with the management of the economy. Does it explain Ruth's sudden departure and Yvette's arrival? Maybe Yvette has stronger 'feelings'? Do you reckon your 'feelings' are stronger than Mervyns?
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John_from_Hendon (#153) "JJ everyone except you seems to have formed the opinion that you talk at length but say nothing at all of interest or of relevance to the pertaining to real world economics."
Have you not noticed that they are all very dim?
"Many tens of posts ago I formed the opinion that your views are morally despicable and totally ethically unacceptable and there is nothing you can say and no 'source' you can cite that will alter my opinion."
Thank you for sharing your feelings. Can you put a number on that please?
"I find you ideas disgraceful, immoral and unethical. Do you understand this?"
Does that have a big number attached to it or just a middling one?
Did you learn to talk this way at a 'bogus college'?
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JadedJean # 118
"What you have to realise is that empiricism sets limits to what can be said and done, and that should lead to restraints in behaviour, i.e to regulations in pursuit of safety/order/predictability."
And is the above going to be "great" for the economic life of everyone in your statist utopia?
;)
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#161 leanomist
Now there is a sweeping statement! Fortunately or unfortunately (depending upon your position) 21st century enterprises (whatever they may be!) are more than outnumbered by those operating in the 'present' economy.
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foredeckdave (#148) "I'm not raging at all."
Don't forget though, as you're not very good at getting things right, and are low on self-awareness/insight, you may be mistaken.
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LibertarianKurt (#170) "And is the above going to be "great" for the economic life of everyone in your statist utopia?"
Maybe we should just ask a few experienced party members over from the PRC to advise on how to run the UK?
Know anyone who would object?
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JadedJean # 173
I knew I could squeeze one more scornful comment from you before your head hits the pillow. BTW, sweet dreams of Chairman Mao and Uncle Joe!
;)
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#172 Jumpedupjean
self-awareness/insight is certainly missing from your personality -part of your disorder maybe?
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#164 Jadedjean I think you will find that ETS (Europe) did not bother to test their systems ahead of time and that the government did not bother to provide certain data, and no-one bothered to project manage the whole thing.
It could be a complex conspiracy because ETS was about to announce that all clever people were white or Chinese or whatever it is you think. Or it could be just another example of grotesque incompetence because no-one cares about anything other than money.
You see the same incompetence with the military. $ millions spent on Chinook helicopters that can´t fly because they lack proper software. They lack proper software because no one can be bothered to write proper contract specifications. The Americans wanted a greater British commitment to Afghanistan, but only so long as that commitment did not involve them in discounting the prices of the bits that make helicopters fly. The British decided to hang tough and to give any money they could find to a bunch of banks instead. No-one cares, so some more British soldiers get killed, who in government cares?
Or maybe you think someone is out in Afghanistan surreptitiously checking the soldiers IQ´s and correlating that to racial origin - and if they don´t like the results they cut off equipment supplies.
Both the British and the US have some form with regard to military procurement. Check out their contracts and supplies to the UN Military mission in Rwanda.
Great so the British government sabotaged SATS - but only in the same way that they are sabotaging their own show of military strength in Afghanistan, and in the same way that they are sabotaging the NHS through the introduction of bo bonkers IT systems and PFI.
Normally people look for common themes - as opposed to having only one theme.
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#163 Jadedjean. If your theory is so all encompassing perhaps you can explain the reasons why the British government have also "sabotaged" the electric power industry.
I still see no nuclear power stations under construction. You have until about 2017 before the lights start going out. Maybe "thick" people like the dark. But what about people like you? You will be in the dark as well.
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#158
Jericoa - I don't think that what is happening here is just getting banks lending again - I am pretty sure that world leaders know that this is just a temporary patch. I am pretty sure that world leaders know that existing institutions need to be replaced, are WW2 legacies, that banks need to be reined-in permanently and so on....I am convinced that we are heading to a very new, different world structure, with different institutions, different balances of power, different systems of international trade, decoupling of USD from the dollar, different geopolitical structures, and the world leaders know this.
In a way it is out of their hands, they just have to face the inevitable. However, they can delay the inevitable, and because so many are dealing with current issues, or have interests in the status quo enough to worry about sudden catastrophic changes, they are trying to drag things out.
This global alteration is underway and has been for several years. The financial crisis is as much a symptom as a cause of a general demographic and geopolitical shift away from the US and the USD that the US now feels cannot be averted. The neocon policies prior to Obama were in my opinion attempts at averting this process...
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#178
Oops! "decoupling of USD from the dollar" should read "decoupling of the world from the dollar" or something to that effect
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armagediontimes (#176) "If your theory is so all encompassing perhaps you can explain the reasons why the British government have also "sabotaged" the electric power industry."
It's not theory, it's an accurate, informed, description. What we see at work is decentralisation and deregulation, i.e erosion of the state. The emasculation of the armed forces (by the recent act) is part of this. I have said what this is probably in pursuit of - i.e. European membership and the Balkanization of Britain into Regonal Development Agencies about the size of NUTs. It is you (like others here) who are unable to focus on the bigger picture and what the important variables are within this strategic plan. The SATs pattern by ethic groiup has been avaialble on government websites since the beginning of this century. Most people just don't know this. It shows show the group differences are not changing any more than they are in the USA. But different groups are changing in relative size. That is the problem for the economy based on group 'properties'. I'm not here to argue, just to inform those who are interested and don't know. Those who argue with or 'debate' the facts are just unstable in my book. I find them irritating. 'Debate' does not happen in science. This is a daft, non scientific notion.
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armagediontimes (#177) "I still see no nuclear power stations under construction. You have until about 2017 before the lights start going out. Maybe "thick" people like the dark. But what about people like you? You will be in the dark as well."
This, plus all the coal-fired power stations being built in the PRC, along with the very high number of able science graduate they produce (which dwarfs those being produced in the USA and Europe given the PRC's higher mean IQ and popualtion size, according to one recnet statistic publsihed in a Telegraph article, "China's government has overseen an almost four-fold expansion of higher education during the last decade, with the number of college students rising from 6.2 million in 1998 to just under 24 million last year") is surely a good indicator that much of what's being said in the West about energy and anthropogenic climate change, is just hot air. See Lawson and the Lords report a few years ago.
The trouble in this blog and elsewhere today is that many contributors have been taught to argue, but not to analyse their assumptions as scientists do. This is major ingredient of our liberal-democratic economies today, as such behaviour fuels the anarchism which liberal-democracy now pathologically depends upon. This is what's now 'a busted flush'. Those responsible are largely oblivious to their own irrationality and how it has been contributory to their own economic demise. They now have next to nothing to offer. Watch unemployment and GDP fall but people here continue to argue/abuse/self-contradict. See graph at end and remember, 65 consecutive quarters of growth averaging 2.5% a year. That's 16 years of bubble economics.....at least....
Let me know when you are ready to listen and learn.
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Here's another example of a clown who doesn't know what he is talking about getting air time:
http://news.yahoo.com/s/ap/20090727/ap_on_bi_ge/oil_prices
When are these fools going to clam up and simply observer that when the dollar index drops, oil prices rise [because of the OPEC link,etc]?
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#182 ... and thank God for the Iranian non-USD oil bourse.
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#183
...and Chavez, and the petrorouble.
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167 Lib Kurt
Kurt me ol' mate.
Take a look at the speech mannerisms and some of the things on record. Take a look at the job history. Take a look at the introduction of science to support arguements. Take a look at a number of key issues, little to do with economics as you know it. Take a look at the political affiliation. Basic profiling thats all. At the risk of sounding like someone else you are just reacting not thinking. You will then realise you are dealing with at the least a staunch advocate. If nothing else you have to give the guy an award for endurance and tenacity. : )
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Post 171 - "Unfortunately 21st century enterprises are more than outnumbered by those operating in the 'present' economy".
I agree with the statement above - but it's changing times and those that are (e.g. Toyota) will survive (and prosper), and those that do not, will not (e.g. GM - $170bn bankruptcy). History says "Happen it will", and we haven't really started yet - we don't quite know how long the overall process will take, but this time appears to be shortening rapidly by the day ... and those enterprises/nations who ignore this (which many of course will!), will do so at their peril I'm afraid ... as unfortunately ignorance in this case is not 'bliss' * ...
David Clift, a Future 500 Leader
* see http://poweromics.blogspot.com/2009/06/leanomics-v-poweromics-ignoromics_01.html for example.
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180 JadedJean
'I'm not here to argue'
Thats a relief. Be interesting to see you argue. ; )
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186 leano
The question for me is can the old ways change. I have my doubts. You are talking about whole new structures and cultures and values that need to be introduced. I was involved in trying to introduce new ways of doing things in old companies on two occassions and it was unbelieveably hard work.
Embracing the new was not something that came to mind. Even though it gave a 10+ percent improvement in operating efficiency which went straight thru to the profit line it was fought every step of the way. At the second outfit I recommended setting up a detatched fresh new start operation rather than trying to change from within. They ignored the advice, failed to grapple with the inbuilt cultural problems and are now a fraction of the size they were. Ego got in the way. Of course there is no data to prove the alternative because it never happened.
To me it remains the central problem that structurally many businesses are just not suited to the forthcoming environment. Can adaptation occur fast enough. It is more likely there are pleads for special treatment and funding to try and prop up what has gone on before in a reduced size. Big has to act small, which demands flexibility and responsiveness and a high degree of networking. This applies to businesses big and small.
You mention the Japanese automakers. They introduced a new way of working in the 60's, Just - in - time, highly flexible focused production. If you take a look at the prodcuts they introduced the idea of flexibility in response in models. A common floorplan and running gear has different upper bodywork and interiors, allowing quick new model introduction and critically smalled volumes per model, targeting niches in the market.
It all is a bit basic now but if it is compared with the production in the UK at the time the diffence is startling. The UK production was monolithic and sequential in process, very slow to take to market. The UK production could not respond in time. That was not the only problem, subsidised plants elsewhere in the EU did not help.
It has nothing to do with how hard a workforce works or how efficient they are, it comes back to how smart they work and whether they are undermined by a low wage zone.
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glanafon (#185) Note how preoccupied some have become with irrelevant attributes/issues in an efort to avoid the important propositional content. If one can finds something personal about the source of messages one does not like, people will often focus on those in te mistaken belief that the fcats will go away. They won't. The facts have nothing to do with perosnal characteristics although the latter can be used to furter guide others towards the relevant facts.
Beware of superstitious 'credit/blame assignment'. It takes effort to see past that. Without that, rational analysis and practical solutions to problems becomes all but impossible. The ad hominem and celebritism/narcissism are variants on the same theme and all too common in our society (it didn't used to be this bad, back in the 70s and before). It's such behaviours which I'm highlighting as being obstructive to helpful analysis and usful action.
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#156 JJ
No, not MDMA, just the good old C2H5OH, which I use frequently when posting here.
By the way, the world disappearing when closing your eyes on a busy street is not a convincing counterargument. There may be something hostile or dangerous, but it is certainly not anything that is seen - as what is seen is the result of seeing, ie a function of the brain.
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From purely subjective, personal experience, I've seen reasons for optimism in recent months. Specifically:
My father embarked on a property development just prior to the downturn. The past 18 months have been extremely difficult, but in the past two months the number of viewings at his development has increased dramtatically and he has sold several of the properties.
My wife runs a web design company in York. She scaled back the business after the birth of our first child, but now that he is old enough to attend nursery she is increasing her workload and doing extremely well - even having to outsource work.
During this downturn the online sector is benefiting twofold: firstly from businesses attracted by the reduced overheads and increased accountability provided by online fulfilment and marketing, and secondly from savvy consumers who are searching the additional value that these operational efficiencies can generate.
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#191
Automation would be sought after, as unemployment grows.
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Post 186 - glanafon
I agree with what you've said here again. Most enterprises will fail ... because their current 'leaders' will fail to lead*, will fail to change, or will fail to change quick enough ... (and the starting whistle has already been blown!)
The future primarily involves a fundamental change in 'leadership' and 'management' practices, and most will fail to do this (in fact, as you say, many will try to resist this - as it's opposite to what they currently do and to what's got them to where they are today) ...
History tells us this too I'm afraid, as your comments quite rightly point out, and 21st century management practices go way beyond just a few techniques like the ones mentioned** (e.g. in-built quality, just-in-time) ... in fact the entire management system has now been virtually decoded (that's what 'Lean World' is about***) ... the problem is that history is set to repeat itself again (viz a viz Dr. W. Edwards Deming, a US Citizen, being largely ignored by the West but his work being rapidly embraced by the East - e.g. Japan)**** ...
David Clift, a Future 500 Leader
* Front line staff rapidly embrace 21st century practices - as they are mostly common sense, and remove most of the stress and frustration they (and customers) currently face.
** NB Most 'leaders' in the West have never really understood this.
*** Take a look at Lean World online http://books.google.co.uk/books?id=-8xAIgkewOUC&printsec=frontcover
**** 'Those who don't know history are destined to repeat it' [Edmund Burke, 1729-1797] - take a look at http://poweromics.blogspot.com/2009/07/history-tells-story-and-it-will.html for instance.
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#169. JadedJean wrote:
"Have you not noticed that they are all (every poster on this blog except JJ) very dim?"
You clearly have no mirrors in the bigoted subterranean world where you live - your arrogance is yet another reason to ignore your contributions.
Quite apart from your overt and covert racism. Which is totally unacceptable in a civilised society.
You have clearly leant nothing at all, especially about the way to persuade others that you talk sense.!
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No.188. glanafon wrote:
"They ignored the advice, failed to grapple with the inbuilt cultural problems and are now a fraction of the size they were. Ego got in the way."
Interesting observation......
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#194 John_from_Hendon
You are getting out of hand by making these scurrilous accusations.
Your personal attacks on JJ's are puerile.
The irony is that the more you do it, the more you prove his/her point.
If any of JJ's comments were racist, in any way, they would be moderated out.
I suggest you take a look at yourself before slandering others in your posts.
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#180 Jadedjean. So you are not here to argue merely to inform. What a pity you could not retain that train of thought and allow it to condition your post at #181.
The reason that the UK is highly likely to experience power outtages from about 2017 onward has absolutely no connection to China. Why then would you seek to reference a total irrelevancy, if not to argue, dissemble or obfuscate?
Similarly no matter how hard you try you will be unable to establish any Chinese, IQ, genetic, or racial connection to explain the alleged failure of equipment procurement processes and procedures in Afghanistan.
These things are all explicable, but your theories have nothing to contribute to any credible or accurate explanation.
I fully accept the advice that your profer in #189 and duly note your preoccupation with irrelevant attributes/issues.
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Maybe liberty ain't what it used to be?
"Even men who were engaged in organizing debt-serf cultivation and debt-serf industrialism in the American cotton districts, in the old rubber plantations, and in the factories of India, China, and South Italy, appeared as generous supporters of and subscribers to the sacred cause of individual liberty." H. G. Wells, The Shape of Things to Come
See the first reference link:
http://en.wikipedia.org/wiki/Michael_Hudson_(economist)
"Super Imperialism: The Economic Strategy of American Empire, was the first book to describe the global free ride for America after it went off the gold standard in 1971, putting the world onto a paper U.S. Treasury-bill standard."
And boy have they enjoyed that free ride.
There are none so enslaved as those that think they are free. Roll on more wage-slavery!
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Oh what joy! Even Taiwan and China are having bed-warming parties.
http://news.yahoo.com/s/ap/20090727/ap_on_re_as/as_taiwan_china
Another US arms market bites the dust. I wonder how those Georgians are getting on these days?
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#198
If you like Michael Hudson then read Loren Goldner who has made use of his work:
http://home.earthlink.net/~lrgoldner/
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#79 ishkandar "where he has a character explain that you can't get insurance on the Moon, but you can go to a bookie and make a bet --- and that the transaction is essentially the same!"
No, it's not !! A bookie does *NOT* charge you brokers' fees, admin fees and then try to welsh on the claim using the fine print !! :-)"
I'm sorry, you are right - bookies are far from perfect, but more honest than the other lot! :-)
#198 Hawkeye
Re Michael Hudson. Someone posted this link on Pesto's blog this morning:
http://www.youtube.com/watch?v=ZYcIQvSAHZ8&feature=channel
Very good, very eloquent: - clearly someone to watch!
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BankSlickerminustheR (#196) This is how the 'censorship' or 'collective guilt' conditioning works (it was done by experts in WWII PSYOPS and was continued by UNESCO etc). The evidence doesn't matter of course. Thye won't be told.
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#178
If you are right (and you may well be) it is even more worrying, ineptitude and denial is one thing, deliberatley saying and promoting one solution in public while preparing for another in private is much worse and makes a mockery of democracy for issues which effect us all. No doubt they will make the excuse to themselves that they are acting in order to 'protect us', us being a seperate entity to 'them'.
By dragging it out, buying the existing economic model time and not putting the debate out in the open they misunderstand that it is the actions of 'us' that dictate world economy, how are we supposed to start to modify our behaviour if they do not debate it in the mainstream. It is the tail trying to wag the dog yet again.
The arrogance not the intelligence of the ruling elite will be our downfall is what you seem to be suggesting.
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Jericoa (#203) "...deliberatley saying and promoting one solution in public while preparing for another in private is much worse and makes a mockery of democracy for issues which effect us all"
You have a very ill-informed (fabricated) conception of representative liberal-democracy. The electorate gives the incumbents a mandate (in the UK, every 4-5 years). Once the elected government has that mandate, they can pretty much do what they like within the law (and outside it if they can get away with it) until they are voted out of office. They are not obligated to tell the public much at all, or even tell them the truth when they do tell them anything (as you will find if you read some of the cleverly worded introductions to some Home Office reports). There are also lots of exceptions to Freedom of Information etc. Even Civil Servants have a primary duty to their Minister and not to the Select Committees they appear before.
You are another one who doesn't listen, but judges everything in terms of fantasies you have created about how you thnk the world should be. Try to listen and learn a little when people try to help you. Many won't bother. You can pick up why if you look through this blog self-critically.
I'm doing something atypical here.
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#204 JJ
Just a quickie for you. If you have truly unlocked the puzzle of the world's ills, then what motivates you to keep pointing us in the right direction? I understand that you want us to look into the references you post, but who or what made you discover it in the first place?
i.e. what made you behave the way you behave?
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Hawkeye_Pierce (#205) "What made you behave the way you behave?"
Does it really matter, given what I have said (cf. the nature of the ad hominem)? Surely all that matters is whether it pulls a lot together in a pragmatically useful, (ultimately benevolent), way?
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JJ and JJ debaters,
Keynes demonstrated a nice couple of examples in how to disagree in his 'Treatise on Probability' (1920)
chap 3 - the measurement of probabilities
'We can through stupidity fail to make any estimate of a probability at all, just as we may through the same cause estimate a probability wrongly. As soon as we distinguish between the degree of of belief which it is rational to entertain and the degree of belief actually entertained, we have in effect admitted that the true probability is not known to everybody....
..The degree of probability which it is rational for us to entertain does not presume perfect logical insight...and it is not dependent upon whether more perfect logical insight is or is not conceivable...but we cannot ever know what degree of probability would be justifiable by the perception of logical relations which we are, and must always be, incapable of comprehending.'
chap 4 - the principle of indifference
(in disagreeing with an earlier authors work)
'...the plausibility of the principle (i.e. the principle of the earlier author) will be most easily shaken by an exhibition of the contradictions which it involves....In (a later section) my criticisms will be purely destructive and I shall not attempt in these paragraphs to indicate my way out of the difficulties'
which are far better put-downs than those corresponding to
'I am right because you lot are too thick to understand'
or
'your underlying argument is ethically unacceptable therefore all your writings have no merit'
Sometimes it is more productive to simply agree to disagree
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An interesting interplay of ideas between glanafon and leanomist.
In a lot of ways galanafon describes a corporate cultural model based upon small reactive units as the means for both survival and advantage. From many studies of UK organisations we find that culturally the British workforce is happier and more productive in units of less than 300 people. Studies also suggest that there is no one management style that fits all organisations. To this degree therefore I have to disagree with leanomist's declaration regarding the decoding of the management system. Having said that then, I share their views that new management styles and systems will have to evelove to meet the different environment of the 21st Century.
It was stated earlier in the thread that organisations (firms if you will) tend towards monoplolistic positions. This is clearly untrue. However, they do tend towards oligopoly. This can be a consequence of the volatility of the market or the control/structure of the market a la UK power market.
glanfon raises the point of JIT. This is an iteresting technique. Envisioned originally as an efficiency techique, it was quickly hijacked by the beancounters so that its prime focus became tansfer cost advantage.
leanomist brings forward the example of Toyota. Will they survive the 21st Century? Only time will tell. Are they better managed than their competitors? Well that is debateable. There does not appear to a sustainable compeitive advantage over their local or global competitiors gained by Toyota.
Finally, i was pleasing to see some posts concentrating upon production and employment as the essential elements of the economy rather than the financial industry.
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#206 JJ
I'm afraid it does because then we can understand why it was that yo got it all SO WRONG
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Stephanie
How much reliability do you think should be attached to any countries GDP figures?
A large proportion of UK GDP figures are generated by multi-national companies whicc are heavily internationalised/globalised and deliberately disharmonised for accounting/taxation purposes. Some of the world's leading accountancy firms are unable to disentangle complex international transactions - particularly those pertaining to finance.
In addition, some of these transactions are chanelled through tax havens and trillions of pounds are shunted around the world overnight for interest earning capability.
In addition, each country has a sizeable black economy and tax havens are nothing more than indepnedent black economies.
You mention the spin and manipulation of GDP figures - I think this is a strong indication of manipulation for political purposes even by institutions such as the IMF - and a massive industry of economists, financiers media pundits hand on and bleat about every minute change in GDP as if it all rolls down from Mt Sinai.
How reliable are GDP figures - surely there is over-counting, double counting, error, mis-definition. mis-counting of GDP on quite a large scale and everyone involved pushes the figures tothe limit all of the time?
Isn't it time to set the record straight on the great GDP reporting fiasco in this runaway global economic mess?
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Post 208 - an interesting, albeit slightly curious, summing up. The success of Toyota is already there for everyone to see (e.g. compare their situation with the demise of GM - a $170bn bankruptcy) ... they have still got a lot more to do, but they know this already and have everybody working everyday to improve these things too (nb their philosophy is one of continuous improvement - and one of their common phrases is 'no problem - is a problem'! ... if only more UK 'leaders' were willing to take such an approach and systematically expose all problems faced ... so they can be removed / solved ... we would frankly not be in the mess we are in now*).
As far as decoding the management system is concerned, I think you'll find it does (as that's what other people have said - e.g. CBI/business school deans) and it also defines what a 'management system' actually is - and how it also applies to every type of enterprise (service/production, big/small, public/private) as well as civil service departments and entrepreneurial enterprises too ... however, I'm not here to educate, or to persuade anyone on anything - individuals need to be curious and start to find more things out for themselves (and look into what's already happening*) ...
To this end I hope more people do become more curious about the changes already going on around them ... because our future economy depends on it ... 'leadership' and 'management' practices are already starting to change, and 'leading' enterprises / groups are already starting to benefit from this (including a few key leading NHS hospitals / UK police forces !) ... and creating much better outcomes for everyone as a result ...
For our economy to turn around it will take the concerted effort of many, and not the reliance on just a few ... In the 21st century survival is not a given, as history also tells us that those who are left behind will find it very difficult to catch up ...
David Clift, a Future 500 Leader
* You might want to also look at GE - a company who are now starting to move to the next phase of 'lean management' maturity/practice (and who are also referred to in the book) ... e.g. there are quite a few clues in Robert Peston's recent interview with their new Chairman/CEO, but you probably need to know where to look (as Robert didn't necessarily ask all the right questions - e.g. about their fundamental practices) ... http://news.bbc.co.uk/1/hi/business/8168078.stm (nb GE are arguably at second generation maturity, and they are a production/service company too).
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Is blogging, with its sleek monikers and cross-timezone detachment, transhumanism?
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P212 - I don't know - but what a great question!
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195 MrTweedy
Like I say Mr T. You have to watch the quiet ones. You are quite a quiet one.
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Franksz
Could it even be Transhamanism.
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#215
Maybe but not Transhemanism, as that starts to sound a bit on the dodgy side.
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189 JadedJean
It is always interesting to know the framework of statements. It is part of the picture. Otherwise all is Alice in Wonderland. 'How can you see nobody at that distance'. You have an unclarified politcial agenda which does not help, other than statements of support for some political areas. Sadly you have yet to propose a solution to problems which can be implemented. Otherwise I would be more interested. Are you doing your nefarious homework so you can converse in the street jive with the thickos who you have to get to support you in order to implement you policy. Quite Johnathan Swift don't you think. ; )
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Speaking of transhumanism, have a look at this
:
http://en.wikipedia.org/wiki/Caffeic_acid
which you can see here:
http://en.wikipedia.org/wiki/List_of_phytochemicals_in_food
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#217
JJ sometimes sounds like someone who has been indoctrinated.
Sometimes I wonder if being so committed to a viewpoint is admirable or not. In any case, I do agree that Political Correctness is a disease, and that policies have been crippled by the inability to appropriately discriminate. So, I support JJ in that regard. I don't agree with JJ's anti-mentalism, other than in a purely ontological sense, where I do not distinguish between the mental and the physical in terms of substance ...that is to say, it's all about information
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#213
lol
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#211 leanomist
Firstly let me agree with you that leadership and management are major elements of both our existence and future. How that management is implemented is still up for debte and you will find the argument is still hotly contested in both academia and in practice.
Since 1950, GE took a corporate strategy decision to base the whole of their organisation upon what Porter describes as Overall Cost Leadership. This strategy demanded that all of GE's actions and plans were dedicated to being the lowest cost provider in their various market places. It should be noted that this strategy goes far deeper than any 'normal' cost reduction exercise. They were so sure of the advantage that at the end of each Annual Report they published not only their targets for the coming year but also the basis of their system. Perhaps they were quite safe to do so as there can be only 1 cost LEADER and any newcomer would have a lot of catching-up to do! Perhaps a 'hidden' advantage in the strategy was that competitors equated Low Cost with both Low Quality and Low Price. As GE proved this was a fallicy. I only make this point to show that GE has been an innovative organisation for many, many years and that their success/failure is not solely due to "lean management".
You really cannot claim Toyota as a success by comparing them to GM. Part of Toyota's market success has also been due to the failure of GM, Ford and Chrysler rather than their own efforts. There are many similarities in the collapse of the US auto industry to the death of the UK motorcycle industry. So will Toyota be successful in the 21st century? Well let's compare them to say Nissan, Honda and what may emerge as the Euro car industry in say 10 or 20 years.
One of the things that I feel sure of is that this crisis has finally cracked-open the US Corporate model. Many things will flow from this in terms of management and organisational structure, finance and maybe even ethics! My hope is that effectiveness replaces cost-efficiency. In the UK, I would love to see organisations put the CUSTOMER back at the heart of their decision making i.e. a return to true marketing philosophy.
That there are many different approaches to meeting the future can only be good.
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208 foredeckdaveyjoneslocker
Small business has to act like a big business, multiskilled. Very difficult to do for most, quite a dysfunctional requirement in some respects. Has to be a microcosom of the big business. Best thing is the advantage of being small, aids flexibility and responsivenes, shortens feedbackloops from the marketplace. Has to network into a community. Big business has to act like small business and overcome the inflexibility of size. Demands high levels of IT and a different way of working. Has to think more like a networked village or work community, more freefloating. Difficult cultural change for some. Handful of very successful big businesses good at it. Both models have convergent features. Difficult game, takes time to build. Envirnoment made more difficult by low wage zones but not impossible, can be dealt with by smart moves. Low wage zones at present inflexible and time delays and distance from consumer dont help them. Above all low wage zones pressurise for low overheads. Low overheads probably reduce tax revenues for UK and lead to problems funding public services, as a probable trend. Thats my view anyway. Each to their own solution.
Guerillas and Armies, different ways of doing things but key to sucess is using the landscape to your advantage as the Duke of Wellington was very sucessful at doing. It is mode of operation, flexibility and and adaptability in conflict. Nelson is almost a guerilla in the way he deployed and delegated. Highly adaptive. I wont mention guerilla tactics I dont want blogdog on my back barking, but they are worth studying, and do relate to business strategy.
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216 FrankSz
: ) Some people have the most interesting friends.
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221 ffdave
The idea of being the lowest cost provider is an anathema to me. Why on earth would anybody want to have that title. All you attract is the nillionaires, nil in the wallet but talk like millionaires and ponce and preen. They are the wallies who helped pump up the bubble on credit. Its all about being valued, simple as that. If something is valued it is given value and commands money. The ever present demand for cheaper and cheaper goods promoted by consumer oriented business is self harming for those businesses, as a strategy it just devalues the goods. Insane. A reduction in consumer affluence, or credit if you prefer, will increase the value of goods and ensure people are more careful with purchase and use. If all that drives things is cost then logically you would never use any bag other than a supermarket plastic carrier bag and you would never drive a car younger than 10 years old, both can be perfectly functional. It is about soul. Thats also why many businesses are in trouble - they are looking at the wrong target.
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#222 glanondaphone,
I agree with you. My favourite Wellington quote:
"They planned their strategy like a fancy harness - all gold and leather. I made mine out of rope. When it broke I re-tied it and went on."
Strategy is strategy, don't matter if it's applied to war, business or sport.
My big problem with IT is that the systems themselves can become a harness and prevent flexibility. In larger organisations it also appears to remove them from the customer/end user - tried to sort out a billing problem with BT on-line?
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207 strategycall
The issue is whether an individual disagrees with implied policies and outcomes, not the possible problem(s), in which case I turn to the following -
'It's easier to resist at the beginning than at the end.'
Leonardo da Vinci
Objection, and the request for elucidation, is the right of any individual. It is the onus of the proposer of a policy implied or otherwise to justify their position. It is not a issue of the problem it is the issue of the implied solution.
So I cannot agree convenience. : )
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glanafon (#217) "You have an unclarified politcial agenda"
Or you are just not very good at grasping/reading/doing_as_instructed.
How do you know how to tell the difference given that other people have grasped what has been written here.
Sometimes people have to be told what to do even as adults. They also have to accept that they lack abilities.
strategycall (#207) - Do you have any grasp at all of time/history? Keynes was writing that in 1920. Quine was writing later. Are you so silly that you have no idea how subjects progress with time?
What was the point about intensional contexts (e.g. 'beliefs') and non-reality? Why is 'subjective probability' nonsensical?
When pupils get things wrong at school, teachers and pupils don't 'agree to disagree'. Why not? Does this suddenly change when one leaves school. An act of magic perhaps?
Do you now understand that some people really do say some very stupid things?
PS. Look up dysgenesis and how it comes about and manifests.
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Did you know...
....that if you can figure out how to make normal petrol engine camless, so that you can time the exhaust and injection electronically, then you will have made a normal petrol engine so efficient that hybrids will be irrelevant..
but did you also know...that if you can figure out how to make an exhaust pipe diameter vary so that exhaust gas velocity varies throughout the rev range (and low compression parts of the sound wave in the pipe can be timed to meet the opening exhaust valves for a scavenging effect) then the petrol engine will become so efficient and powerful that we will have less cause to think about hybrid engines too
...and did you know that there is something called a foil bearing, that requires no oil, but is used mainly for high revving military apps
...and did you know that some engine manufacturers use a variable sized intake plenum, so that helmholz resonance can be timed to meet injection pulses with compression and improve the gas flow in, thus efficiency by using the accoustic energy...
and in short, the petrol engine hasn't changed in a 100 years but it could and it damn well should...
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#224 galnafon
Now you's gone and done it too!!!!
YOUR costs are only of interest to you. However, if you can manage your activities so that your products and services match your competitiors BUT cost you less then you have already earn't a major element of profitability.
Because your costs are lower you do not HAVE to offer the lowest price. Therefore:
Competitor Cost $X + 10% Margin = Selling Price
You Cost $X-? + 10%Margin = Selling Price
That's a very simplistic example. But LOW COST does NOT mean LOW VALUE or LOW PRICE. It does however give you lots of tactical pricing options!
Don't care what strategy you choose, if your succesful you'll still "attract is the nillionaires, nil in the wallet but talk like millionaires and ponce and preen."
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227 JadedJean
''Or you are just not very good at grasping/reading/doing_as_instructed.''
No, I'm just being polite.
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FrankSz (#219) "JJ sometimes sounds like someone who has been indoctrinated."
No, I'm just well educated. There is a difference. To better understand this diffference read this and spend some time on the demographics I posted before about NYC (and its history from the end of the C19th through the early 20th with respect to Russia). Then think what happened in the late 1920s through 30s in Russia and why the USA turned on the USSR after WWII. How does that relate to the Chicago, Austrian and Frankfurt Schools in the USA?
Unless you see this bigger picture you won't understand what the recent behaviour in this blog (and others) is the consequence of, I suggest. Those doing this don't know what they are doing, or what is being done through them. That's how it works.
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FrankSz
What are you on today? Fascinating stuff, from the internal combustion engine to phyto-oestrogens!
keep it coming!
#91 LibK As usual, you insult what you don't understand. Might I suggest that you and JJ form a civil (or indeed uncivil) partnership. Your theologies might conflict, but otherwise you complement each other rather well.
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JadedJean # 231
Frankfurt School? Did you just make that one up?
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#224 glanafon. It has never occurred to me that I may find my soul in a supermarket much less in a supermarket carrier bag. Still I guess it takes all sorts...
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#196 BankSlickerminustheR - You have a touching faith in the munificence of censorship.
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229 foredeckdave
''YOUR costs are only of interest to you. However, if you can manage your activities so that your products and services match your competitiors BUT cost you less then you have already earn't a major element of profitability.''
You are miles away, or the rum is particularly good. I have no interest in having competitors. We have no direct competitiors. That is the whole point of what we do. We made the market. It is an internet based business. It is independent of location. It is in some respects a niche market we serve but it is a growing niche in a multicultural market whcih is part of an estimated population approaching one billion worldwide. How many customers do you want. As soon as you have a competitor you have some snivelling git saying they can offer a faxsmile of what you do but just a 'bit' different and 'cheaper', sort of like saying here is a marzipan or sugar mouse instead of a real live one, its much cheaper. Our website is monitored from the far east and elsewhere from the internet data reports from the IT guys but we are both too specific and too flexible in what we do. They cannot compete because they are not set up to do so, they are inflexible, unadaptive and slow, and unethical. We have had sustained (failed) attacks on our website trying to gain data. We have a custom and expensive website to avoid that sort of thing.
''Don't care what strategy you choose, if your succesful you'll still "attract is the nillionaires, nil in the wallet but talk like millionaires and ponce and preen." ''
We can spot 'em a mile off. They are dangerous because they influence marketing returns unless you know they exist. They are not a problem as far as we are concerned. We only supply on prepayment unless we know the individual, many are repeat purchasers. Simple. We make, flexibly and adaptively, and supply direct worldwide into a lifestyle market, objects that are valued, that was the objective, it eliminates the middle man and cuts overhead, we provide value. We network into the communities that our customer base is centred on. It is more difficult to set up but it eliminates as much dependency on other parties as possible and gives immediacy of contact with the marketplace. We have placed two low key adverts in our entire process that is how much we do conventionally in marketing terms. We are the subject of discussion on Facebook and forums, some foreign language ones, and word of mouth. I've said before - take the book out, look at the rules and write down the inverse, because the old rules are dead. Then try and do it, and keep doing it till it works.
The price is set by the customer in any business, not the business. With much of our output we are told the price is not an issue, please just do it. We control costs and do not overcharge, it is an ethical decision and also a defensive one. Once trust is lost it is never regained. We are trusted to provide something of high value at a fair price. It is an honour. We are in growth and profitable. We regard cost, profit, and money transfer as the means of enabling supply. How many businesses can say that.
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Jumpedupjean
"Do you now understand that some people really do say some very stupid things?"
We should do by now after all of your ravings!
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234 arm n leg
You won't find your soul in a supermarket or a plastic carrier bag that is the point. You may well find somebody elses soul in one supermarket that I know because it was built on a plague pit. A bare site for centuries before the supermarket started to lobby for development.
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sashaclarkson # 232
Insult? Read post # 95.
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LibertarianKurt (#233) No, people like Marcuse made it up.
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#208 foredeckdave wrote:
'leanomist brings forward the example of Toyota. Will they survive the 21st Century? Only time will tell. Are they better managed than their competitors? Well that is debateable. There does not appear to a sustainable compeitive advantage over their local or global competitiors gained by Toyota.'
'Finally, i was pleasing to see some posts concentrating upon production and employment as the essential elements of the economy rather than the financial industry.'
-----------------------------------------
I worked for Toyota for 4 years (in engineering), after that length of time you get an inkling of their philosophy.
It is, first and foremost, an engineering company run by engineers (how novel!)
Secondly, the work force never stop working. They work 'til they drop'. The company excuse for these conditions is that they could not afford their 'cradle to grave' social system otherwise. All employees have to save their holidays over a 5 year period to cover bouts of sickness.
Thirdly, and this is obviously a cultural thing, the far East Asian attitude toward self and group being the total opposite to the Wests'. It's not a case of 'what can my company do for me'...but more 'what can I do for my company/society'.
Lastly, their manufacturing facilities, and the personnel working in them, are King. Their product engineers spend many years working in the developing departments and are then regularly rotated to experience the manufacturing environs. Everyone knows what everyone else does, or more importantly, what they should be doing. But remember...those in manufacturing are the Kings.
...and of course, I could not endorse more...your final paragraph
'production and employment as the essential elements of the economy rather than the financial industry.'
PS I recommend the book 'The Toyota way' - think of it as the 'Total Manufacturing' equivalent of 'Total Football'. Toyota took Dr. Deming to their hearts. They would literally rather die than make something of inferior quality.
I'm pretty sure they will be around for another 70 years.
I can recommend their cars too!
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Post 221 - 21st century lean enterprises focus on VALUE, value as defined by the customer - NOT COST ... and GE have been rapidly moving towards this type of working over recent years (part of what their new Chairman/CEO hinted at in his interview with Robert Peston) - they're a company which has picked up the winds of change, built on where they were, and are starting to take themselves to a new level ....
Simply focusing on being lowest cost risks a downward spiral towards commoditization (and outsourcing to the lowest labor rate economies etc), which in the vast majority of cases is 'fools gold' (hence I agree with glanafon's previous comments in Posts 222/224 - who really wants to chase that goal?)
21st century lean enterprises focus on value management, not cost management (which is where GE are now going ... and employing some simple & clever ways to do this too - which are referred to in 'Lean World'), they also focus on long term goals, and as you quite rightly say effectiveness (rather than simple cost-efficiency), which is underpinned by a pervasive philosophy of innovation & continuous improvement, channelled by a robust strategy and underpinned by the application of strong ethics & a robust 'values system'.
There is much more besides, but I think you'll find most of the things in the 'wish list' are actually already in there* - including far more effective customer focus and an innovative market philosophy which applies 21st century marketing practices (nb glanafon's Post 236 refers to a number of these, and many of attributes the above too).
I'm not looking to expand on this much more on this blog, because those who are curious will hopefully go find out more about 'lean' themselves ... I'm starting to feel like I'm starting to summarise the book 'Lean World' now, which is not the purpose of this blog (those who are interested can read it online**, take a look at Deming's work and/or the book "The Toyota Way' for instance). I hope this helps to tie some of the discussions we've been having together here, and that it's managed to remove a few of the most common misconceptions ...
David Clift, a Future 500 Leader
* NB a 'management system' is well-defined and very different to 'management styles', and the terms 'leadership' and 'management' also require simple and more robust definitions too.
** http://books.google.co.uk/books?id=-8xAIgkewOUC&printsec=frontcover
PS Nissan & Honda also apply Lean Management, but Toyota are recognised all around the world as the true 'world leader' - nb one of their key differentiators is that they can now launch new cars twice as fast, and at half the cost, of their competitors (e.g. I believe they've launched 5 new models this year alone). Toyota do have weaknesses however, and still have much they need to do (so you are quite right - they have to address these to stay ahead).
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JadedJean # 240
Ah, you mean the school of renegade Marxists; hardly a school of economic thought though, is it?
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glanafon,
I know nothing of your business and I would not presume to try and tell you how it should be run, the objectives that should be set or the strategies that should be employed to meet them.
Some of your comments started me thinking. If your customer set's the price then the product per se is bespoke. If he customer sets the price then you DO have competitors - direct or otherwise. They need to be identified and understood (just how and why they compete).
If your product is unique then you may be wrong when you state that the customer sets the price. This is purely because the uniqueness of the product makes price comparison either impossible or at least difficult. If it is indeed innovative then you become the price setter - even if an element negotiation takes place. You also have to accept that, as you become more successful you will ultimately attract ME2 competitors (I can assure you that with an identified a segment of the size you describe then you will attract competitors). It is therefore embounden upon you to maximise the benefits that stem from innovation.
Now, I quoted Overall Cost Leadership as an element of my discussion with leanomist in relation to GE. If Michael Porter is right (and I've no reason to believe that he is not) then in his Theory of Competitive Advantage he identifies Overall Cost Leadership as one of 3 generic strategies - the others being Differentiation and Market Segmentation. Hence Overall Cost Leadership is no better per se then the other 2 options. I never intended to make a claim that OCL was the 'answer'. In fact I was trying to show leanomist that GE had a developmental corporate culture well before lean management had even been considered.
I really like what you say in your final paragraph. As a confirmed supporter of relationship marketing then TRUST is the key component of any long term marketing relationship. BTW in Porter speak then you appear to be gaining advantage from a Differentiation Strategy - being different from your competititors in a way that is valued by your CUSTOMERS and who are willing to pay a premium for that difference.
Good Luck mate - now I'll go and have that rum :)
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JJ (227)
you wrote
'strategycall (#207) - Do you have any grasp at all of time/history? Keynes was writing that in 1920.'
I provided a clue that Keynes wrote it in 1920.
The clue was fairly obvious and noticeable by most people who read my sentence which was as follows
'Keynes demonstrated a nice couple of examples in how to disagree in his 'Treatise on Probability' (1920)'
CLUE *(1920)*
Perhaps you failed to understand my posting ( the subject matter was 'how to disagree' and the clue to that is in the same sentence as above) but nevertheless maybe you would be good enough to show which bit of the Keynes statements I quoted that you would be in disagreement with?
'Quine was writing later.'
A side issue perhaps- who is talking about Quine's method of disagreement ?
If you think that Quine's disagreements quotes are worthy of inclusion then perhaps a couple of worthwhile examples might be beneficial.
Please feel free to quote, I would like to see them.
'Why is 'subjective probability' nonsensical?'
I think if you analysed your sentence and thought it through then perhaps you may find the answer lurking. Try it
Glenafon (226)
I understood the main part of your post and would probably agree,
but I didn't understand the last bit i.e
'So I cannot agree convenience. : )'
Typo maybe or am I missing something important ?
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#242 leanomist
I refer you to Michael Porter's work on Competitive Advantage. If you look at his definitions of OCL, you will find that he is not talking about commoditization or least cost or outsourcing. That GE degenerated has more to do with the Corporate Cycle than anything - probably.
As an amusing aside (especially for BankSlickerminustheR), there is always the Moulinex experience. As part of an economy drive many years ago Moulinex required all of their directors to find major savings in their respective departments. The production director had a bee in his bonnet about the amount and cost of flex attached to their products. Therefore he ordered a 10% reduction in the flex.
At the next meeting he proudly announced that he had made a major saving only to be told by the marketing director that all of the saving had been lost due to the increased number of returns - on the basis that the flex was not long enough!
A true story? - well maybe! But it proves to me that a truly succesful organisation attempts to marry all of the skills without creating KINGS. It also proves that a CEO who spends the majority of his time in his own boardroom or those of The City is NOT doing his job.
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#246
PS Like you I don't wish to focus upon the minutae of management. However, I deliberately used 'styles' so as not to go off on a tangent between 'system' and 'culture'
From what you have said so far, it would appear that we are reaching for similar goals but using different routes to try and achieve this
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Post 246 - Thanks for the Moulinex example - a good example of 'traditional management' in practice! ... and as you (and BankSlickerminustheR) quite rightly say, the 'kings' are actually the front line staff (not the CEO's) ... and again a very big difference between 21st century management & traditional management [cf glanafon's post 236 ... "take the book out, look at the rules and write down the inverse, because the old rules are dead ..."]
As BankSlickerminustheR also said, if you are interested in Toyota and manufacturing I would definitely recommend Deming's work as well as the 'Toyota Way' - 'The Toyota Way' is indeed 'Total Manufacturing' and it highlights many of Toyota's core principles and values too.
IMHO one of the major challenges we really face, and I've alluded to this in the past (e.g. the history of Dr. Deming, Japan, Toyota)*, is the fact that the UK/US (i.e. the West) are unlikely to pick this up as quickly or as effectively as the Far East, which some of the additional comments made here arguably allude to too ...
e.g. BankSlickerminustheR (post 241) wrote "... Thirdly, and this is obviously a cultural thing, the far East Asian attitude toward self and group being the total opposite to the Wests'. It's not a case of 'what can my company do for me'...but more 'what can I do for my company/society'..."
21st century economics (i.e. Leanomics**), and 21st century management (Lean Management) are founded on 21st century 'values systems' that are generally more natural/prevalent in the Far East (than here in the West) ... and IMHO we ignore this at our peril ... [as the current 'economics' already favors the Far East, and the West is already in serious trouble!]*** ...
David Clift, a Future 500 Leader
* see http://poweromics.blogspot.com/2009/07/history-tells-story-and-it-will.html for instance.
** Leanomics = People taking responsibility for adding value and continuously improving the situation for others (e.g. customers, communities, overall environment), based upon fundamental values such as trust, honor, responsibility and respect. e.g. take a look at http://poweromics.blogspot.com/2009/07/leanomics-charting-path-to-recovery.html for more information.
*** And this is something I am keen to blog about !
Post 247 - I agree.
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The economy hasn't shrunk nearly as much as economists say it has. The misconception comes from the previous period where its growth was an illusion created by accountants. Accountants like economists know the price of everything and the value of nothing. Take the merger of AOL and Time Warner as an example. Time Warner was what is now called a brick and mortar business owning television and movie studios, films, TV shows, magazines, publishing houses, recording studios, a cable TV networks etc. AOL was a list of subscribers to internet service at $29.95 a month whose customers could switch on a dime to someone who was a dollar or two a month cheaper. But because of the numbers of shares outstanding and their market prices, AOL was valued at $180 billion and Time Warner at only $100 billion. Once you got past all the media hoopla, what happened was that AOL didn't create a synergy with Time Warner, it destroyed Time Warner. It was at least as bad a deal as the merger of Daimler Benz and Chrysler, Chrysler having destroyed Daimler.
And so the economy was not as good as economists said it was. Money was wasted on all kinds of mergers and acquisitions, crazy investments, and other schemes that created no new real wealth. Money was poured into an overheated housing market creating products that were in the end unmarketable because nobody had the money to buy them once the whole scam was exploded. That doesn't mean people didn't get rich off of this nonsense but not because they created anything of real worth.
If an economist were to perform a complete audit of say everything in the UK or the US and adjust its price for inflation and depreciate it for the delapidated condition much of it is in due to neglect and eternally deferred maintenance, you'd see the real net worth of these countries is far less than the numbers economists like to look at would suggest they are. And while when it comes to executive bonuses, high risk investment schemes, and other frivilous expenses no amount of money is too high to spend, when it comes to capital investment and hiring the best trained and performing workerbees who actually create wealth, those who run businesses and government try to squeeze the last penny of cost out of it in what they laughably refer to as due dilligence. They bid every last dollar out of something of value while they blithely throw around hundreds of millions, even tens and hundreds of billions that go down the sewer and for this they get paid handsomely. Bad as capitalism is, the alternatives are even worse heaven help us.
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MarcusAureliusII # 249
And, pray tell, how did all this recklessness you have enunciated above come about?
BTW, the alternative is far worse than you think.
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#232 Alex Clarkson
:-)
#Others
My personal bee in the bonnet regarding productivity and IT, is that we have in most businesses today an inappropriate and unhealthy divide between business operations and IT, (or ICT if you like).
I see this is a major problem afflicting businesses over the last few decades, and I even wonder how much of the financial crisis has been to do with a gradual loss of inertia in improving operational efficiency as a result. I will go on to explain in a moment.
I know some of you above have been talking about value versus cost, but in my books the difference would best be eliminated because what I really value is the ability to produce at low cost, where cost for me is a lot to do with the long term impact on humanity. I do not mean that we should all be focusing on making items as cheap as possible, as we could get false economies and low quality and so on, but what I mean is that we should strive for very high quality operations... As leanomist has pointed out I think, the principle of striving for high quality products usually leads to low cost operations.
Someone mentioned earlier, I think foredeckdave, that IT often becomes a harness, rather than an enabler. It is true. Once you commit to running a system, it is often difficult to change and/or get rid of. There are companies I know of still running systems they bought in the 80s. Now they have the dilemma of a choice between replacing it at huge cost, or operating it with hard-to-find experts are huge cost.
As an expert in this field I can say with great confidence that this is all down to three things:
a) Attitude towards quality
b) The approach to measuring the cost of a system and net reward
c) The separation of IT from business operations
What I see in most businesses, daily, is that as business activities become automated, those areas of business operations are pushed to the domain of the programmers and IT experts. The analyst programmers, senior developers, system architects and so on become the real experts in the business. They have the overview, they know why and how department A and department B do what they do and exactly how they interact. Reps from dept A or dept B usually do not. Business rules are implemented as software code, and often get forgotten. The number of times I've had business reps come to us asking what the rules are for a particular business artefact...
This is a major problem. The software experts are not perceived as business experts, they have no authority to change business processes and thus the business becomes rigid and harnessed. Effecting change becomes nearly impossible as everything requires a 'GAP analysis' to elucidate the now and to-be situation to those who don't know. The only businesses I know of where this is not the case are those ultra-successful tech businesses like ebay, amazon, salesforce.com, google, microsoft, some online banks and so on, which were built by tech people and managed by tech people.
WHat is the solution to this problem?
Actually I have a concrete solution:
a) Always define the product to be delivered using tests. If after 2 years you need to make a change, you have a suite of tests that define and show if the system post-change works or not. Otherwise your attitude to change will be hesitant and tentative.
b) The short term cost of developing tests to define the product is outweighed by the long term maintenance rewards. Think long term.
c) Here's something novel that is only made possible by newer technology, and is what I aim to introduce now wherever I go: Use workflow engines, like the .NET Workflow Foundation, to deliver products that describe business processes, rules and general behaviour in a visual language that both the business and the development staff can understand and change. Completely remove the need for a double step of doing business analysis to provide a requirements specification that needs translating to a system specification - have one specification that is BOTH the requirements documentation AND the actual program (an executable workflow diagram)
There you go. You're welcome.
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Don't forget to mention:
(i) Hubris born of success
(ii) Undisciplined pursuit of more
(iii) Denial of risk and peril
(iv) Grasping for salvation
(v) Capitulation to irrelevance
If you don't like that, think of:
(i) Harmonious consensus of encouragement
(ii) Environmental adaptability of internal transformation
(iii) Selfless wisdom of accessible open mindedness
(iv) Focus less explicitly on whole system change models
(v) Consolidation of all company activity margins less central overheads
Then you'll have the complete picture.
It's easy for me to say.........
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FrankSz (#251)
"What I see in most businesses, daily, is that as business activities become automated, those areas of business operations are pushed to the domain of the programmers and IT experts. The analyst programmers, senior developers, system architects and so on become the real experts in the business."
Yet, rather ironically, elsewhere you have been unwittingly arguing against the very tide of 'data driven' effectivity/extensionality which you tacitly (but correctly) explicate above.
The difference between you and I on this is that I know exactly where this movement came from, you apparently don't, nor, oddly, will you be instructed (cf. 'referential integrity' ;-).
As ever grasshopper...go figure ;-)
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#253
Actually...I don't understand your post above. What I described is not anything to do with data driven anything, and yes I am arguing against the move of business operations to the IT dept. What I am arguing for is a fusion of the two: business operations IS information processing. If the boss of a department (eg: sales) cannot deal with workflows and databases, he should not be the boss of a department.
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Various, --- and if it's a bore pass it by.
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244 foredeckdave
''If your customer set's the price then the product per se is bespoke. If (t)he customer sets the price then you DO have competitors - direct or otherwise. They need to be identified and understood (just how and why they compete).''
Much production is moving towards the 'synthetic' bespoke end from mass conformity production. It is gained by add-ons and variations. It demands smarter working and more sophisticated presentation. It is in rsponse to a more sophisticated consumer. It is present in big and small goods. It was central to the sale of the Mini One fo example. Up until the recession most sales from the Mini One were in the region of 5 to 6K up on the base price due to a pick and mix options approach which the customer used to customise their particular car. It gives a bond with the product. A participation. The bespoke thing is present to some extent on stuff like mobile phones, skins and add-ons, service packs, even ring tones. We sell a small amount of repeat stuff which within its spec varies slightly to avoid conformity. Most of our output is classed as bespoke. We have a matrix of product and pick and mix ensures it is to all intent and purposes nonrepeating. We can make something which we can guarentee is never repeated by scrubbing it from the matrix, we have never had to yet. The martrix is massive because it is combinational and easily added to. We have the advantage of bespoke and the shared unit cost savings of standardised production. We have a brand look which was not planned but evolved. It is our answer to going up against the low cost mass production machine of the Far East. Our customers to all intents and purposes set the price they are prepared to pay and we can offer them options around that budget. They elect what they want. However you are wrong to suggest that the customer does not always set the price which is embedded in your comment. They do. If the supplier cannot meet the price the consumer wishes to spend to then a sale does not occur. If that continues then the supplier disappears. Hence the UK problem. We find people bond with what we supply because they are part of the process of its generation. I will treasure it always - a common comment. Like I have said before we sell lifestyle not products, there are no competitiors. It is all soft not hard. It is all about soul.
We therefore have to all intents and purposes no competitiors. We have competition for the money in the customers wallet but no competing products. The way we work is alien to many businesses and they will have difficulty in changing their culture. Further we deal directly with the customer which is part of the mix and most manufacturers do not do this. The disconection from the customer introduces a lack of responsiveness and additional cost so was eliminated. We started with a blank piece of paper. We deal with all social groups. However some of the most striking things are when customers with very little money write and say please can you do this for me in 6 months time, I am putting and have been putting money to one side each week. Or I have been made bankrupt, I should clear my debt in 15 months time, my first purchase then will be from you. I want such and such, it is important to me, please can you schedule it. At the other end purchases which appear casual and affluent you find a year later being discussed on a foreign language forum.
Value is in the eyes of the beholder not the provider.
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Strategycall 245
I didn't understand the last bit
'So I cannot agree convenience. : )'
It is quite frankly easier to ingnore JJ and drop into the convenience of tacit agreement. I don't do it because JJs route forward by implication is taking action on groups he personally has identifed as being a problem. JJ is careful never to set out what action he would like to see undertaken but it is inevitably present inbetween the lines. As far as I am concerned the onus is on him to detail and justify both policy and action. Just saying endlessly there is a problem is not much help, it is pretty obvious there is a problem. Democracy is tiresome but nobody seems to have found anything better yet. At the very least the groups JJ identifies should have dialogue in any process.
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Leanonme 248 '..the current 'economics' already favors the Far East, and the West is already in serious trouble..' I just wish those detatched from things, by which the public sector comes to mind, would realise just how bad things could get. If you remove any smart edge from your product and have no technical edge than all you have is price, therefore cost, and the low labour zone renders you uncompetitive. There remain plenty of people inthe world prepared to work for a dollar or two a day. China is even losing some production to Vietnam and Cambodia due to cost.
The UK private sector has major problems, but the UK public sector is entirely dependent on the private sector even though they do not seem to realise it. That includes the BBC who talked recently along the lines of such and such is needed to provide good services it will be difficult to operate on less, or similar.
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Marcus 249 - 'The economy hasnt shrunk as much as..' Well I agree this one but it is not a good thing. The economy grew at a steady rate blown up by the bubble. The implication is the 'real economy' under the bubble was in decline because the rate of growth was steady. Growth rate is related to inflation rate and is needed to avoid deflation, or so I am told. Interest rates sooner or later tie in also. Bubble now gone so we are now back probably on a decline curve. This is supported by people, usually in manufacturing, who say they never saw the bubble, life was always tough. The problem is the drop in tax revenues which have been spent up to the max throughout and now have to drop. There is the small matter of trying to get growth back into ingnored sectors.
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FrankSz 251 - 'Think long term'
Couldnt agree more that is why the UK is in trouble.
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Thats more than enough from me, I'm off.
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Many great comments/threads here ... and the one I've been involved I've tried to summarise here too ... http://poweromics.blogspot.com/2009/07/leanomics-its-all-about-value-and.html
I have also included a reduced version of post 9 below (as post 22 Jericoa referred it, and the original was unfortunately removed) ... it also highlights the need to focus on value creation and the need for a leadership & management that exposes problems so it can solve problems ... something we arguably really need everywhere right now ...
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Post 9 (leanomist) - Revised version
"I agree with a number of posts above (e.g. 1,3,4,7), and we need more value creation (and not financial engineering) too ... but I think there are more fundamental questions that need answering too ...
e.g. take a look at the question "Does the Size of ..... Matter?", and some of 'starter for ten' example questions I've included below ...
* The size of our debt
* The size of the trade/budget deficits
* The size of the future pensions crisis
* The size of our untapped talent (unemployment, part-time, temporary working)
* The size of the innovation gap
* The size of the population stressed and insecure about their jobs/future
* The size of the waste (between 40%-90%) and frustration systematically created by out of date 'leadership' and 'management' practices
* The gap between what current 'leaders' are 'telling you' and what is actually 'true'
* The size of the gap between the 'leadership' we currently have and the 'leadership' we really need
* The size of the cover ups we now see
* The size of the greed/incompetence current leaders show
* The size of the culpability, current leaders will bear
* The size of the anger that is yet to rise from the people
* The size of the problem that will be eventually occur before most people decide to do something about it
* The size of the failure that will result from people not taking responsibility, or being accountable for what they do (and don't do)
* The size of the hypocrisy we now see
* The size of the gap between the behaviours we now see and the ethical behaviours (trust, honor, responsibility, respect - Leanomics) we now need
* The size of the 'backlash' likely to occur when most people realise what 'leaders' have been doing
* The size of the wealth being generated for just a few, and the expense of the many
* The size of the self interest/greed which will cause certain nations to collapse
* The size of the collusion that exist to stop progress/improvements being made
* The size of conspiracies that exist, to benefit the few and not the many
* The size of the group who 'manipulate wealth' rather than 'add value' and 'create wealth'
* The size of the arrogance of those in Power
* The size of the failure in 'leadership' we now see
* The size and number of scams we now see
* The size of failure and the lack of democracy people actually have (one of the biggest scams/spin of all)
* The size of the failure by mainstream education, and the impact this will have on us too
* The size of the failure created (and the lack of wisdom shown) by 'traditional establishments', and their failure to see this too
* The size and misuse of power, from all those in 'power' (Poweromics)
* The size of the group who do not understand this (an example of Ignoromics Type 1*)
* The size of the apathy from people at large (an example of Ignoromics Type 2*)
* The size of the collapse the nation is still yet to see
* The size of power hard-working people currently have but have not yet realised
* The size of change we have to come
* The size of the crisis will get before we see the changes we now need
* The size of our irrelevance in the world of the future
* The size of gap that will continue to grow, until people become more curious and take more responsibility for doing things differently
* The size of the gap between what current 'leaders' & 'management' do and what 21st century "leadership" & "management" is
* The size of the holes in the Government plan (or any other party's plan of action) for doing anything about it
.....
I think these will continually point to the future, until we have 'leaders' who are prepared to answer these questions and are prepared to do something about them ... and as has also been pointed out above (no 5), 'good news/solutions doesn't sell newspapers' or 'get reported' ...
Even though this is the case, it would be helpful if they asked the right questions, and examined failure properly ... so we can understand the real reasons our nation (and economy) will fail ... and/or start to do something about it ...
David Clift, a Future 500 Leader
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FrankSz (#254) "Actually...I don't understand your post above. What I described is not anything to do with data driven anything, and yes I am arguing against the move of business operations to the IT dept."
Exactly. You're confused. When you read something which could take you out of your confusion, you are prone to argue. That may be your way of learning (many here will do that, walk away with far more than they give (but still petulently shoot the messengers - c'est la vie). Just try to make sure that you don't bite the hand that's feeding you (and that you don't delude yourself too much along the way - 'fusion' indeed. is that banking talk - you know, as in 'fusion with credit card holders' or with sub-prime mortgagees?).
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Post 255 glanafon - I agree with your comments and they are very important ... hence I've repeated them again below:
'... the current 'economics' already favors the Far East, and the West is already in serious trouble..' I just wish those detatched from things, by which the public sector comes to mind, would realise just how bad things could get. If you remove any smart edge from your product and have no technical edge than all you have is price, therefore cost, and the low labour zone renders you uncompetitive. There remain plenty of people in the world prepared to work for a dollar or two a day. China is even losing some production to Vietnam and Cambodia due to cost.
The UK private sector has major problems, but the UK public sector is entirely dependent on the private sector even though they do not seem to realise it. That includes the BBC who talked recently along the lines of such and such is needed to provide good services it will be difficult to operate on less, or similar..."
I also have to join you too - as I have to be off now too ...!
PS Thanks to all involved in this thread - IMHO it has been a good one, and one uniquely focused on value and 'wealth creation' .... instead of 'wealth manipulation' !
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"When you read something which could take you out of your confusion, you are prone to argue."
Haha! Actually, I wasn't being argumentative at all - I am and have been in a good mood all day, and am still not arguing! Perhaps my English is not good enough at this point to more clearly depict my mood, as I speak a kind of basic foreigner's English most of the time and I am losing the knack, but I think you are just prone to interpret things as argumentative, which is understandable because the probability of you getting argumentative responses seems to be pretty high! :-)
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#257
Here's a question for you (or anyone else who's interested):
- There's a disease called Snifflitis
- Snifflitis is a horrible, frightening disease
- The probability of Snifflitis being caught is 1:10000
- Everyone undergoes mandatory testing for Snifflitis. Going for a test is not based on symptoms, it is a periodic check that is mandatory for all.
- You go for your regular Snifflitis test to the doctors
- The doctor says "Here is a test. The test is 99% accurate." The doctor means that 1% of test results are false positives or false negatives.
- The doctor administers the test on you and says regretfully that the test result is positive.
What is the probability that you have Snifflitis?
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0.000099
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#260
less than 1% (or 99/10,098 to be precise)
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#261, #262 - Come on guys. Show your working! What's your rationale for your answers? JJ's answer should be interesting too...
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FrankSz (#260) You've been reading some Tversky & Kahneman on base-rate neglect etc. Of course, in reality, when things are really serious, once does tests repeatedly, or, which comes down to much the same thing, one uses several variables in multiple regression or discriminant analysis and still does more and more tests. That's science folks.
Here's an example of where this game has been played in an underhanded way, and though refuted, it's still peddled by disciples of ideologues such as Lewontin, Rose, Kamin etc (see the 1950s UNESCO statement for a true 'work of art'. Do you see the connection? If not, look up non CODIS forensic technology and why CODIS was constructed the way it was. ;-)
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"...when things are really serious, once does tests repeatedly"
Ah but if probability is not subjective, why does one do repeated tests?
GOTCHA! Go on admit it. You're in a pickle now, aintcha? Eh? EH?
:-)
PS: Come on, so what's the answer? Everyone is eagerly awaiting a number from you, with baited breath etc
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Discrete probability whatsit.
Chance of having chestweazels = 1 divided by 10,000 = 0.0001
Chance of being correctly diagnosed = 0.99
Chance of having chestweazels and then being correctly diagnosed
= 0.0001 x 0.99 = 0.000099
Then again, if a random variable is discrete, the set of all values it can assume with non-zero probability is finite or countably infinite, because the sum of uncountably many positive real numbers (which is the least upper bound of the set of all finite partial sums) always diverges to infinity. Typically, this set of possible values is a topologically discrete set in the sense that all its points are isolated points. But, there are discrete random variables for which this countable set is dense on the real line.
Which makes sense, when you think about it.
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FrankSz (#261) "...when things are really serious, once does tests repeatedly"
"Ah but if probability is not subjective, why does one do repeated tests?"
Because, as I keep telling you, it's a frequency issue not a belief issue. Frequentists are not Bayesians.
Heads up - possibility and necessity in many uses is intensional.
You really do need to look into what Quine had to say to Caranp. Carnap was very good at artificial (programming) languages well before FORTRAN etc, and his chum Quine played a significant role in helping Shannon on his way too (as well as helping with the maths/logic for how many gates to stick onto a chip). Quine was the answer to Post's, Godel's, Turing's and Church's theses, see Two Dogmas - last third especially and see my earlier reply on 'holism' (aka multivariate analysis) ;-) .
Know what's I'm saying grasshopper? ;-)
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#266 MrTweedy. Assuming you to be responding to post #260, you appear to have arrived at a somewhat optimistic answer.
If the Dr. has told you that based on a test result you have the disease then the probability of your having the disease is 1 minus the probability of the test delivering false results (specifically a false positive).
As we are not told whether there is an equal probability of the test delivering false positives as false negatives then we cannot compute an exact answer. However the chances of you having the disease will be high - minimum 99%.
Still if it makes you feel better who am I to argue.
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This could be worked with Baysian conditional problem
Define events:
N=no disease P(N)=1/10000
Y=have disease P(Y)=1-P(N)
Y'=test positive P(Y')=P(Y'/N)*P(N)+P(Y'/Y)*P(Y)
N'=test negitive
WRONG TEST RESULT P(Y'/N) =1/100= P(N'/Y) note: not always equal but assumed here.
GOOD TEST RESULT P(Y'/Y)=.99=P(N'/N)
COMPUTE P(Y')= 1/100*(9999/10000)+.99*(1/10000) =100.98/10000
From Bayes; P(Y/Y')*P(Y')=P(Y'/Y)*P(Y)
We want P(Y/Y')= P(Y'/Y)*P(Y)/P(Y')
=.99*(1/10000)/(100.98/10000)
=.99/100.98=1/102
So less than 1% chance
'You can find anythin on t'internet!' ;o)
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FrankSz (#260) You've either got it (100%) or you haven't (0%).
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#255 glanafon. You appear to discovered economic nirvana - something I have been seeking but never quite managing to locate.
I guess artists and craftsmen manage to achieve the same thing (perhaps you are one of these I don´t know, and it´s not my business anyway).
Good luck to all who have the key to unlock this particular door. You talk about honesty and integrity and then observe that you have no direct competition. I wonder why...oh wait I know the answer.
Beware because the new rulers of the world despise honesty and integrity with a vengence, and in the shadows a new Inquisition is forming.
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No.268. armagediontimes
You couldn't price some share options for me, could you?
Better still, do you want to buy some I have for sale?
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The error being discussed above is measurement error. This has nothing to do with belief. Beliefs are like goblins.
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#272 MrTweedy. The answer to your first question is no.
The answer to your second question (assuming your reasoning to be consistent), is yes. I will buy as many as you have for sale, and will pay you over twice what you calculate them to be worth. I can pay cash.
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#208 "leanomist brings forward the example of Toyota. Will they survive the 21st Century? Only time will tell. Are they better managed than their competitors? Well that is debateable. There does not appear to a sustainable compeitive advantage over their local or global competitiors gained by Toyota."
From what I can gather, Toyota is not that much better managed than their competitors. It's just that they have a corporate culture of build-to-market-demands and R&D !! The same can be said of Honda who started in the motorcycle industry and made the successful jump to the car industry and is still successful in both !! Their ASIMO robot is a showcase of bleeding edge robotics !!
Not so for Suzuki whose cars are abysmal !! On the other hand, Yamaha successfully straddled an even odder pair of industries - bikes and keyboard instruments !! Yamaha pianos are some of the best in the world and their bikes ae wonderful too !!
This is not so much a praise of Japanese industries as a question - if the Japanese can do it, why can't we ?? Nissan in Sunderland is doing well despite having a mainly British management and workforce !! What's wrong with Vauxhall ??
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#269 BankSlicker - Correct
#266 MrT - Valiant attempt but wrong
#270 Haha...well you see...*QUOTE* how do you know? *UNQUOTE* LOL Oh dear, JJ, dig your way out of this one. It's good to see an intellectual amateur squirm. Come on, explain yourself :-)
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#212 "Is blogging, with its sleek monikers and cross-timezone detachment, transhumanism?"
I don't know about transhumanism but it's a great way of utilising my insomnia !! :-)
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No.267. JadedJean wrote:
"Know what's I'm saying grasshopper?"
When you have read to the end of Two Dogmas of Empiricism it will be time for you to leave....
Perhaps the proper conclusion one can come to is not to come easily to conclusions......
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No.276. FrankSz
Being proved wrong in public is not a worry to me, as I have a career in politics; so it's simply water off a duck's back.....
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210 Continued ...
Goldman Sachs' GDP figures are well out of date.
Official government GDP stats are also well out of date - see [Unsuitable/Broken URL removed by Moderator]
Otherwise, the GDP figures being passed around in the media are most unreliable, I think, particularly as the National Stats web sites makes reference to deduction of 'subsidies' in the calculation of GDP - but what are the current deductions on these and other questionable items e.g. government welfare payments, interest on national debt?.
If you try and make an allowance for items such as QE, bank bail outs etc it is not too difficult to imagine why the Civil Service 'mandarins' and the likes of A. Darling,MP and Liam Byrne,MP are very coy indeed when when using GDP figures as I think they know that the current UK GDP figures are heavily manipulated and are therefore very sensitive and it would not be beneficial for government spin if the Tories or Lib Dems were to probe into their accuracy - in the absence of a detailed anaylsis by the BBC or similar in the interests of transparency.
So when Liam Byrne next comes on Newsnight discussing minute fractions of a percentage decreases/adjustments in current and forecasted GDP figures (so as to generate political capital in conning the electorate?) - Please bear in mind that the current UK GDP figures are a closely guarded secret within HM Treasury as deemed not suitable for public release and that the figures that are being released probably contain major inaccuracies and misrepresentation and are in fact complete Tosh (Mmm sorry that's too polite - I meant bu****it!)
Sorry to interrupt the neo-intellectual tittle-tattle on this blog (as entertaining as it sometimes is) but this might be important as to when the UK economic recession may actually, one day, be called to an end?
Perhaps the BBC's economic research dept. might do some digging here and reveal what is actually happening with UK government GDP calculations, so that 'we' are better informed as including UK taxpayers?
I hope we don't have to wait for 'Newsnight' to pick up and carry this thread.
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FrankSZ,
Ok I'll fall for it
Bamkslicker used Bayes to give a correct answer to the question - what is the probability of having it ....BEFORE walking through the Doctor's door i.e. a conditional probabilty of two things happening - probability of a reading saying you have got it, and probability of a false positive.
(and ignoring the effect of getting a false negative which increases the odds)
However, once the Doc has given his reading, the second element has ceased to be conditional on the first and it now becomes a single possibility of the false positive being right or wrong. ie he says you have it and therefore is it simply a true or false reading probability.
Divulging the result removes the prospect of the initial reading being negative, and this therefore changes the subsequent odds, so a new game starts.
(unlike Monty Don and his boxes where you don't know who has the key but always swapping gives a higher p )
OR, if you know the half time score in a match is 5-0, then the odds of an away win will have lengthened from what they were before the game began.
The latest information changes the probabilty of the subsequent outcome
(p for an away win was 50% before the match, and is now what, 3%?)
....probably
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#278
Oooooo. Deep. Bet you can dance on rice-paper without leaving a footprint too. :-)
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#279
Really? I thought you managed FX for some Northern cheese factory or something?
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@281 and #Others
Thanks for playing the game...
The whole point was that I knew that JJ does not agree that probability is subjective. That is, for JJ, the probability is always 1:10000, or the probability is 50:50 (have it/don't have it), whichever equates to the 'objective truth'
However, probability and knowledge are the same thing. The information you receive affects the perceived probability. With Bayes, the first knowledge you have is 1:10000. Then you receive new information (1:99) and using Bayes formula your knowledge has been modified - now you the probability is much higher. The more you repeat the test and the more you get positives, the higher the subjective likelihood that you have the disease.
On the other hand JJ denies subjectivity and mentalism, and rejects that new information (results of tests) affects knowledge and probability, JJ only accepts reduction of measurement error, while probability remains unconditional (1:10000)
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#260
Frank,
Why bother? You either have the diesase or you don't. So why waste time being tested. If it's that horrible you NEED to know if you can be cured/prevented. Spend the time doing some research! If it's that horrible you will soon know with 100% certainty if you have it or not.
Now stop wasting time doing silly calculations and get back to work - you Central European you - hahahahahaha (glad you are in a good mood!)
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MrTweedy # 279
"Being proved wrong in public is not a worry to me, as I have a career in politics; so it's simply water off a duck's back....."
And that is the fundamental problem with career politicians: no matter how consistently they are proved wrong in public - which is always - they will nevertheless disregard the people they claim to represent and cheerfully pursue their self-interested policies.
Would you like a bandage for that gunshot wound in your foot or do you want to take aim and have another go?
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"Because, as I keep telling you, it's a frequency issue not a belief issue. Frequentists are not Bayesians. "
Frequency as counted by whom? You see? You cannot draw line between frequency and belief. Probability and frequency and belief. Same kind of thing.
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#285 #286
LOL!!!
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AMATEURISM
FrankSz (#276) "Haha...well you see...*QUOTE* how do you know? *UNQUOTE* LOL Oh dear, JJ, dig your way out of this one. It's good to see an intellectual amateur squirm. Come on, explain yourself :-)"
Now you're getting a bit cheeky grasshopper ;-).
Tversky and Kahneman claimed they based their original work on three trends of research: The first was Paul Meehl's work on statistical vs clinical (actuarial) prediction (which he reviewed in the 1950s, but see the 1989 co-authored paper with Dawes and Faust). The second was Harold Kelley's Attribution Theory (which dominated Social Psychology and Personality in the 60s and 70s), and the third was Herb Simon's work on 'minimal rationality'.
The problem is, not everyone subscribed to Bayesian statistics (subjective probability). Others are Frequentists etc. You see, Tversky and Kahneman belong(ed) to a bunch of witch doctors/warlocks called 'Cognitive Scientists', a group of miscreants which real Behavioural Economists (e.h Chng and Herrnstein etc) who got sidelined when it came to Nobels as they weren't into wrecking economies) regard as subversive, deluded, plagiarizing/translating pseudo-scientists (for reasons which I've given elsewhere (clearly to no avail so far). I'm being deadly serious - if you want to know why the economy is tanking stop arguing and start listening. How do I know? Note that knowing is not the point. It begs all sorts of questions. Studying how people go about making errors is a lot of what the study of 'folk psychology' has been about for decades, not that I would recommend anyone basing any intelligent (expert) systems on such behaviours....
Now, what is the behaviour that I am highlighting there? Why did I say GOFAI was misconceived a while back? What is a modus vivendi, and what are those limits to Natural Languages which lead to the preferential use of 3 AND 4GLs in business/industry/science? Hmmm?
Speaking of listening up, see Newsnight ;-)
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erratum (#289) e.g Shin-Ho Chung and Richard Herrnstein etc. Chung left the field early and went into medical research. Now works on ion channels.
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Franksz,
I'm with Armagediontimes on the answer to your little game, i.e. its roughly 99% probable that I have the lurgy based on the positive diagnosis so I will just get under the blanket and wait. Do you think the recession might have gone away when I peep out again in a few days time?
And, are you sure it wasn't stalking horse flu?
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"I'm being deadly serious - if you want to know why the economy is tanking stop arguing and start listening. How do I know? Note that knowing is not the point. It begs all sorts of questions"
I know why the economy is tanking. It is most immediately because of the 1971 US gold decoupling, the resulting fiat credit-money explosion and US-OPEC and US-Asia trade imbalances, all supported by institutions set up after WW2 that favoured the US, which benefited from a demographic influx of all kinds of high calibre bodies fleeing war torn Europe and later the Soviet Union. That tide of high calibre influx peaked in the late 50s, early 60s, and began reversing. The USA was a nation of smart, capable people, with most of the world's wealth under its belt, but managed by the detritus of the British Empire.
People left the USA as it's share of global GDP fell, one feeding off the other. The pro-US global system remained in place however. The stress on the system led to recent wars in Middle East because of the USD-Oil critical link. That failed. Israel remains the last wildcard that wants to preserve the status quo.
The USD-centric, USA-centric global financial establishment has come to an end. That's why the [Western] 'economy' has tanked.
And...it doesn't beg questions...it raises questions.
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glanafon,
You make the mistake of believing that what works in a niche bespoke market works in say FMCG - it doesn't neither does the philosophy!
As for the relationship with the customer. The closer the relationship that you can form with the customer the better. For the majority of manufacturers this direct relationship is either imposible or too costly to implement. Those who purvey what may losely be called 'vitrual' products have a totally different channel reality from tangible providers but the rest of the mix remains the same - with the same problems and opportunities.
I have done a lot of work on pricing policies and strategies (so in JJ speak I do know what I'm talking about). The price is NOT purely at the discretion of the customer. Even if not verbalised, YOU are part of the pricing discussion. You know what level of return you need to stay in existence. You know how close or far from achieving that you are. You therefore can accept or reject the offer that is made to you. Now you can employ ethical and/or social considerations in your decision making (I am in no way demeaning those considerations) BUT the spread of those decisions will have to meet your own requirements.
If I was to try and define PRICE then I would say something along the lines of: THAT LEVEL OF MONETRY EXCHANGE THAT PROVIDES VALUE TO BOTH BUYER AND SELLER. The values are totally different for both parties and will change over time e.g. percieved values of the buyer life cycle (in simple terms Innovators - Laggards). However, the prime point is that value lies at the heart of price. Unfortunately, in too many organisations, price has merely been equated with money and not value for BOTH parties.
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#291 Thornton Heathen
It's like this:
If ten thousand people are tested, with a 99% accurate test, about 100 of those tested will be tested positive. You, positive, are on of those 100. So the answer is about 1 in 100. Your chance of being actually positive is about 1 in 100.
(It's slightly less because there's the chance of a false negative for the one who is actually positive.)
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FrankSz (#284) "With Bayes, the first knowledge you have is 1:10000. Then you receive new information (1:99) and using Bayes formula your knowledge has been modified - now you the probability is much higher."
This 'knowledge' stuff which you imagine is in people's heads etc. Have you any evidence for any of it other than how people behave? As such why bother with the imaginary 'knowledge' stuff (aka intensional mumbo-jumbo, aka witch's and warlock's cognitivism aka verbal kabbalah)? It's why 80% of psychologists are now female. Have you seen the end of The Wizard of Oz when Toto pulls back the curtain to reveal a very very bad man? That's the cognitivists! PS They don't like National Socialism or Socialism in One Country, they just like anarchism, aka free market libertarianism, aka Trotskyism. Power to the people (they can't organize then).
It's a con you know.... see predatory lending..same kind of 'stuff'.
PS. Carnap was in Prague...
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"This 'knowledge' stuff which you imagine is in people's heads etc.."
In what we imagine to probably be people's heads... There's no difference.
I'll see where Carnap went. Maybe he frequented the same pubs as me..
Ok. Gotta go. Cau
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FrankSz (#287) "Frequency as counted by whom? You see? You cannot draw line between frequency and belief. Probability and frequency and belief. Same kind of thing."
Are you attributing mental sttributes/processes to moon and other space probes? This is what you do. It is not what the systems which you evaluate are doing. It is just a modus vivendi language - some move on in their real work.
It's where much of conventional economics has not moved on from - it is still mentalistic in that it talks of rational man, choice etc etc. What I have pointed you towards is beyond their ken... It requires one to learn a new language-game.
capice? ;-)
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"which benefited from a demographic influx of all kinds of high calibre bodies fleeing war torn Europe and later the Soviet Union."
Many say that's how the problem began!
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#221 "Perhaps a 'hidden' advantage in the strategy was that competitors equated Low Cost with both Low Quality and Low Price."
A lot of other people do that too; especially when they are furiously typing out comments about "low-cost, low-quality Chinese tat" on their Chinese made computers !! :-)
"Many things will flow from this in terms of management and organisational structure, finance and maybe even ethics!"
Ethics !! That word had been AWOL from the City for some time now. All those American "financial" imports into the City drove ethics out to the wilderness !! "My word is my bond" was treated as a sick joke !!
A return of ethics will be very nice !!
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#294 FrankSz. You seem to be changing the rules of your own game.
Your question was phrased as a request to compute the probability of someone having a disease at a point in time after they had been told that they had the disease.
Therefore the probability of having the disease is 1 minus the partially known statistical error in the test. I guess you could also make some kind of estimate that the Dr. was deliberately falsifying test results. But then people would never do that would they...?
I think you will find that if the initial (pre test) probability of having a disease is 1 in 10,000 (as you specify) then if you test 10,000 people; 1 person (to the nearest whole number) will test positive. To get 100 positive tests (as you now postulate) you would need to test rather more people.
Would you like to buy some options? You can always book a profit by manually changing the amount that you have paid for them. (My options come with free tippex).
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#224 "The idea of being the lowest cost provider is an anathema to me. Why on earth would anybody want to have that title."
I think what ffd is trying to say is that one doesn't have to be the most expensive to be the best. Sometimes, just sometimes, the lowest cost provider may be the best simply because he/she/it has some means of controlling cost that is not available/practiced by others !! Or, perhaps, the others keep their cost high because of some political/philosophical agenda that is not intrinsically necessary !!
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#225 "My big problem with IT is that the systems themselves can become a harness and prevent flexibility. In larger organisations it also appears to remove them from the customer/end user - tried to sort out a billing problem with BT on-line?"
A computer system will do EXACTLY what it's designed to do !! If there are any failures it is due to the faults in the design. Now, there are a host of reasons why the design may be at fault but the most common ones are -
1) vague Alice-in-wonderland specifications from management
2) massive interference from management resulting in changes that make no sense
3) management turf wars spilling over into the design
4) project handed out to some crony of the management
Point 4 has resulted in some of the biggest failures to date in Britain. Just look at the government IT initiatives to date !! Billions spend to no good use !!
I'm sure others may add to or correct or challenge these points !!
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Thanks for the money-in-a-bottle quote, LibertarianKurt. It's true that it would remove all unemployment but there is a condition: that the productive part of the economy be willing to provide for the non-productive part. Whether the money comes from tax, borrowing or printing, it ends up being paid by the productive part of society.
Keynes is famous for the multiplier effect. It is the idea that public spending is good for the economy just by virtue of filtering through the economy. Taken to the extreme it supports the idea of a communist society, where everything is taxed and spent by the government. But we know that communism kills entrepreneurial activity and is less efficient than the free market by several orders of magnitude.
To demonstrate that the multiplier effect works you would have to demonstrate that it is better for society than all the alternatives, including hoarding, saving in a bank, and consumer spending. Hoarding like Uncle Scrooge does have the same positive effect as a reduction in the money supply: lower prices and money is worth more. Saving in a bank doesn't mean that the money is locked away: the bank will use it for investments into companies. Consumer spending is the same as public spending, with the difference that people get what they want rather than what the government thinks we want (mining money bottles?).
Regarding the statistic problem, probability of (A and B) is equal to p(A) x p(B) only if A and B are independent events. In this case A (having the disease) and B (having a positive test result which is not a false positive) are not independent. As #281 said, once you get the test result, the probability of having the disease becomes much higher.
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#222 & 225 If I remember my Peninsular War readings correctly, the Light Division contributed quire a fair bit to Wellington's victories.
It was called the "Light" Division because the men were trained to be nimble with their tactics and to fight using vantage points rather than stand in neat rows to be slaughtered in bloody-minded attrition !! Rather akin to nimble business practices, don't you think ?? :-)
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#228 "Did you know...
....that if you can figure out how to make normal petrol engine camless, so that you can time the exhaust and injection electronically, then you will have made a normal petrol engine so efficient that hybrids will be irrelevant.."
Didn't Wankel invent one and isn't Mazda producing cars that use them ?? I seem to remember the Mazda RX-7 had a 1600 engine that produced the performance of a "normal" 2 litre engine while being more economical of fuel that a standard 1600 engine !!
Then again, my memory is fading and I could be wrong !! :-)
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ishkandar (#302) "I'm sure others may add to or correct or challenge these points !!"
Seems pretty accurate to me! ;-)
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#236 "We make, flexibly and adaptively, and supply direct worldwide into a lifestyle market, objects that are valued, that was the objective, it eliminates the middle man and cuts overhead, we provide value. We network into the communities that our customer base is centred on. It is more difficult to set up but it eliminates as much dependency on other parties as possible and gives immediacy of contact with the marketplace."
And, thereby, lowering your costs !! What margins you make, I cannot begin to guess but that is also none of my business !! Your "value" is what the market will bear !! IF there were competitors who offer *equally* good goods or services at a lower market price that yours because they have lower costs, it does not mean that theirs are no good. It just means that they have lower costs as a base !!
"We are in growth and profitable. We regard cost, profit, and money transfer as the means of enabling supply. How many businesses can say that."
From what little I know, not many !! :-)
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#238 "You won't find your soul in a supermarket or a plastic carrier bag that is the point. You may well find somebody elses soul in one supermarket that I know because it was built on a plague pit. A bare site for centuries before the supermarket started to lobby for development."
You might find ghosts or you might even find spirits but souls are a Judeo-Christian/Muslim concept that is not replicated in other religions. On the other hand, soles you'll find aplenty in any supermarket !! :-)
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#299 ishkandar,
ETHICS
I totally agree a return of ethics would be more than just "very nice".
Perhaps the biggest con of the 20th Century and still on going is that the customer demands the lowest price. This has never been true.
One thing China learnt from the post WW2 Japanese experience was that it is very difficult to break the 'tat' reputation once the label has been attached. It took the Japanese over 20 years to break that reputation and then only in specific market segments.
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#241 "I can recommend their cars too!"
I'm not too sure about that since they can be very market focused and may not be good value for money. The fact that certain models are sold in Japan as "Toyota" are sold in this country are an over-priced *upmarket* "Lexus" !!
Then again, they may also have taken P T Barnum to heart and are "pandering" to *that* market !!Or, as the English say, "A fool and his money...." :-)
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The_judge_of_it # 303
"Thanks for the money-in-a-bottle quote."
My pleasure.
Here's some more from Keynes's reincarnation on earth, i.e. Krugman. He wrote recently (see his blog at the NY Times):
"...one of the high points of the semester, if you're a teacher of introductory macroeconomics, comes when you explain how individual virtue can be public vice, how attempts by consumers to do the right thing by saving more can leave everyone worse off. The point is that if consumers cut their spending, and nothing else takes the place of that spending, the economy will slide into a recession, reducing everyone's income."
Therefore, according to "our" Nobel prize winner, the road to economic hell is paved with the good intentions of frugality. The "under-consumption theory" is what he's on about. He warns ominously about the "savings glut", the "paradox of thrift", "consumer capitulation" and "insufficient aggregate demand", etc., etc. It's really all just jargon dressed up as childish theory.
How this man ever won the Nobel prize for economics is beyond me. But then again, how his hero (Keynes) came to be regarded as the 20th century giant among other economists is equally baffling!
It's not hard to see through the Keynesian and Krugmanite fallacies; it just requires a little bit of reading - something I would recommend a few contributors to this blog should do.
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#249 "AOL was a list of subscribers to internet service at $29.95 a month whose customers could switch on a dime to someone who was a dollar or two a month cheaper. But because of the numbers of shares outstanding and their market prices, AOL was valued at $180 billion and Time Warner at only $100 billion."
AOL was a dotcom bubble waiting to burst on some sucker. As it happened, that sucker was Time-Warner !! Many in the IT/dotcom business saw this coming but the TW management charged ahead anyway, secure in their certainty that they were on to a "GOOD THING" !! The rest, as they say, is history !!
The Daimler-Chrysler shotgun marriage was for a different reason !!
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#251 "There are companies I know of still running systems they bought in the 80s."
Legacy systems !! Aaargh !! Spit !! Spit !! :-)
"Now they have the dilemma of a choice between replacing it at huge cost, or operating it with hard-to-find experts are huge cost."
I know some operations that have systems written in COBOL that might consider hiring voodoo priests to "fetch" the required personnel to make the changes !! Not "hard to find"; just "hard to fetch" !! :-)
"As an expert in this field I can say with great confidence that this is all down to three things:
a) Attitude towards quality
b) The approach to measuring the cost of a system and net reward
c) The separation of IT from business operations"
May I add a fourth - Planning and forward thinking to allow the systems to be modified easily; *INCLUDING PROPER DOCUMENTATION*, for God's sake !!
"The software experts are not perceived as business experts,"
Unfortunately, the majority of them ARE NOT business experts !! It's the rare few who are and they should be priced beyond diamonds and gold !!
"to deliver products that describe business processes, rules and general behaviour in a visual language that both the business and the development staff can understand and change."
Business process engineering !! CASE (Computer Aided Software Engineering) has been around a fair while !! It all started will CASE V0.0 which consists of a plastic sheet will varying shaped holes in it !! It's mode of operation was to run a pencil round the edge(s) of the holes onto a piece of paper to produce shapes representing various processes in a business !! I know !! I know !! I'm a Boring Old Fart !! :-)
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271 armagediontimes
'discovered economic nirvana - something I have been seeking but never quite managing to locate.'
What I have described is real and working. Because of the completeness of the scope it was difficult to set up. We have high levels of technical and art skills available to us. All bespoke has echos of craft in it, that is the entire point. The objective is to move away from the mass produced idiom. I am not sure craft or art exists anymore. The nearest I can get to it is the Jeff Koons opinion that the art is not in the artists eye it is in the observers eye.
I have stated before that we use any technology from mesolithic to contemporary state of the art computing, anything that gives an edge. We believe in working inefficiently in conventional terms. We have dealt with blue chip companies in consultancy roles before providing IP. I would never consider dealing with a blue chip company again after the 90s recession. That is why we set up to market direct.
''I guess artists and craftsmen manage to achieve the same thing.'' There are many myths and illusions and the idea any work is serene is one of them. You must have seen the cartoon of the swan gracefully gliding along and the feet working furiously beneath the surface.
I have said before growth is growth and decline is decline. It is a matter of finding growth and following it. Stability is simply the transition between the two, it is the one to be wary of. It is worth reading the I Ching.
Growth is providing us with a very real problem because we did not want the level of growth we are seeing.
Our philosophy is if you are providing something that people value and you are doing it effectively then all things will follow and the development is natural and self steering. The product self defines and developes. Our only interest in cost and profit is that they are necessary to function. You have to have an income and money is part of the value transaction.
Our conclusion was that there was little point in doing anything convetional anymore. We had already done that. There was only one place to go.
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#304 ishkandar,
There is very little diffrence between military and corporate strategy - only the means differ. (it's hell you know!). The militarist will argue over the pecking order of the nomenclature but it's still the same: knowing what you want to do, devising a plan to do it and implementing the plan.
In the Peninsular War, Wellington proved the applicability of the KISS principle - hence the 'harness' quote. He also proved that strategy has to change - static defence in Portugal and then (because of both the terrain and the size of the opposition) a mobile campaign.
#302
I wouldn't argue with your list. I was thinking more in terms of the system/human interface especially with regard to customer service (or the lack of it!). Just think for a few minutes of the number of system menues (oh I forgot 'options') that you get when you try and phone most organisations. Why is it that none of them actually fit your problem or question?
One time a silly system did have a 'good result' for me was back in the early 70's. I worked for Avon Products Inc. in London and a minor part of my responsibility was for Names Clearnance (ie the trademark registration of brand names). Now Avon then employed a PERT system which included a target date for this to be accomplished. However, the legal system would not 'clear' the name until the actual registration certificates were recieved. This meant that Names Clearance was always late. When the 'lateness' reached 100 weeks the system automatically issued a first class plane ticket to New York (Avon's HQ) to explain the delay to a senior board. Silly thing was, we could tell all relevant departments that with 95% probability that the name was 'clear' and therefore no developmental delays actually occured! But it gave me a firs class trip simply because the system could not be overriden. A wate of money for Avon, a freebe for me BUT the system proved its efficiency if not its effectiveness!
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#258 "If you remove any smart edge from your product and have no technical edge than all you have is price, therefore cost, and the low labour zone renders you uncompetitive. There remain plenty of people in the world prepared to work for a dollar or two a day. China is even losing some production to Vietnam and Cambodia due to cost."
It's called moving up the food chain !! Darwinism at its rawest !! :-)
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#314 "I have stated before that we use any technology from mesolithic to contemporary state of the art computing,"
WHAT ?? Only Mesolithic ?? What's wrong with Paleolithic stuff, then ?? :-)
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307 ishkandar
And, thereby, lowering your costs !! What margins you make, I cannot begin to guess but that is also none of my business !! Your "value" is what the market will bear !! IF there were competitors who offer *equally* good goods or services at a lower market price that yours because they have lower costs, it does not mean that theirs are no good. It just means that they have lower costs as a base !!
Our costs remain the same. It is the price the customer sees that becomes potentially lower.
You guys make me laugh. The 'value is what the market will bear'. There is no market. We have some customers saying I want to pay you more, and the money turns up. We have people who send cheques and say please bank them for me and start on something when there is enough, tell me when that is. Tell me what more you need. I told you we do not seek to exploit. It is ultimately self defeating. We operate on an ethical basis. We have a reputation. Some of our stuff is specifically mentioned in wills. Most of what we provide is regarded as personally important. It is a matter of lifestyle, soft not hard. The money is only important as an enabling tool.
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#311 Kurt
So Krugman is at the top of your Christmas card list then!
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293 foredeckdave
''The price is NOT purely at the discretion of the customer. Even if not verbalised, YOU are part of the pricing discussion. You know what level of return you need to stay in existence. You know how close or far from achieving that you are. You therefore can accept or reject the offer that is made to you. Now you can employ ethical and/or social considerations in your decision making (I am in no way demeaning those considerations) BUT the spread of those decisions will have to meet your own requirements.''
Not so I am afraid. The question is if the customer is not prepared to pay the price to allow you to provide a product or service then you do not provide it. This is why we are due not to see UK grown cauliflowers on sale in the UK supermarkets. They are produced at a loss at present so they are progressively not being grown anymore. No more next year. I do not have a choice. I would be prepared to buy at a higher price but the product is not available. If we the look at a Ferrari. I have found that I would not pay the price under any circumstances. So I will never buy one. Ferrari will never sell me one.
This idea of some sort of barter going on is not correct. It is the way things used to be. There are psychological problems with the consumer in general at the moment. Cheap imports have destroyed the percieved value so nobody will pay much for anything - in general. The upshot is the destruction of providers. Ultimately consumers will regret this but for the moment they are happy. The people who in general value what they buy the most are those with little money. The fact they have little money has preserved their sense of value. So value relates to disposable income, buying power. The judgement of value is not rational. What somebody is prepared to pay depends on whether they value something or not so the price is not rational. Only when many competing comparable goods are on offer does price comparison make any difference. That is the downward pressure on price, it relates to oversupply. It is providers cutting their own throats. Or if one has a particular advantage that provider trying to create a monopoly by destroying the opposition. Or on the purchase side it is a monopoly or cartel buyer group, more than 40 percent of purchase volume, abusing the position. As in the farmer - supermarket balance. The price is set by the consumer in almost all cases.
That is why we sought to create our own market. There would be no oversupply. It is difficult to create new markets. But it can be done. Look at the Apple Ipod.
Sadly we seem to disagree again.
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#315 "Just think for a few minutes of the number of system menues (oh I forgot 'options') that you get when you try and phone most organisations. Why is it that none of them actually fit your problem or question?"
The multiple levels of menus in a phone-in system is not a failure of the system but a failure in human thinking. Most people cannot think in hexadecimal (base 16 arithmetic), therefore telephones have 10 digits (0-9). Thus menus have a maximum of 10 options and any more options are accessible through one in a higher menu. If telephones have 16 digits (including A-F in hexadecimal), we'll have much fewer menus to go through since there are more options available at each level of menu !!
In your second paragraph, the system did what it was designed for NOT what was logical but what was written into it !! Therefore, the system had not failed. It was, again, human thinking (in this case, the designer's or the management's) that failed. That it failed TO your advantage must be pleasing to you but, per se, it is not to the company's advantage. This clearly illustrates my point (1) in that no account was taken of the special case (i.e. the legal system's requirement)!! This can be taken to an extreme when American companies that require you to supply your address insist on your filling in a valid zip code despite your being a resident in the UK (which have postcodes, instead) !!
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#318 Perhaps it is my misunderstanding since I had assumed (erroneously, I concede) that you were in a general manufacturing/business environment instead of a specialist/bespoke environment. The rules for each are very different.
The bespoke environment is usually a sellers' market whereas the general environment is usually a buyers' market !! What you have mentioned is exactly "what the market will bear". They are anxious for their goods and are willing to pay whatever price it takes to get them.
Whereas, if you tried to produce (say) 10 units of the same thing and tried to hawk them to various different companies, some will say "No, thank you; we don't need any today" and some will haggle for a better (to them) price and some will pay your price if they need it badly enough !! That's a buyers' market !!
What you mention sounds like a luxuary goods market. That is usually a sellers' market. For instance, daubs of colour on pieces of woven cotton are really cheap but paintings (especially ones in demand) can fetch millions of quid !! Since people don't usually die from the lack of a painting, they are not a necessity. Therefore, they are luxuary goods.
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#314 glanafon. Very interesting.
From how you describe things I would expect the good times are about to roll. There are plenty of people who have been around a while and are very concerned about the future. These types are getting into precious metals, and I guess art and stuff if they are rich enough.
Pretty much anyone who has led a conservative life can afford a few gold coins. The problem is you can´t do anything with them, and you need to hide them in case they get stolen. All in all pretty useless apart from the single function of being likely to retain value over the long term.
If you can produce stuff that is also likely to hold its value over the long term, then it doesn´t need to be capable of doing very much at all in order to beat gold hands down.
Price should not be much of an issue. If you have decided to buy a few gold coins you just pay the price on the day. Value preservation not "buying it cheap" tends not to be the motivating force.
You obviously need to establish trust. I remember the "Rolex watch" sellers in the far east. Wanna buy a watch? You are having a laugh, they are all fake. Ah you very clever man, but don´t worry I have real ones as well, see how they look exactly like the fakes - that is because our fakes are of such high quality.
As for swans...I have seen a few black ones recently, and am expecting to see the rivers clogged with them in the near future.
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#320 "As in the farmer - supermarket balance. The price is set by the consumer in almost all cases."
Not necessarily true. In many cases it is set by the intermediary, in this case, the supermarket !! Milk is cheap to a farmer because supermarkets push down the price they pay because of their buying clout but is not cheap to the consumer because the supermarkets slap on their (often hefty) margin(s) !! Of course, the consumer could always trek to the nearest dairy farm for a pint of it but what will it cost them to do so ??
As for your cauliflower example, the price IS set by the consumer in that UK dietary preferences have created a lessening of demand for them. Therefore, it is not only UK grown ones that are suffering !! On the other hand, broccoli are increasing in demand, so, perhaps, the UK farmers should or have switched to broccoli !!
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#323 "You obviously need to establish trust. I remember the "Rolex watch" sellers in the far east. Wanna buy a watch? You are having a laugh, they are all fake. Ah you very clever man, but dont worry I have real ones as well, see how they look exactly like the fakes - that is because our fakes are of such high quality."
To that you must add " .....and they are all made in the same factory, anyway !!" :-)
And then there's the case of the one quid fifty Polo shirts from the same factories as the "originals" !! Hence there are the new definitions of "originals", "real fakes" and "fake fakes" !! :-)
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#323 "As for swans...I have seen a few black ones recently, and am expecting to see the rivers clogged with them in the near future."
Bloody Aussie illegal immigrants !! Here to snatch away the living from honest, hardworking British swans !! :-)
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#320 glanafon.
I hate to say this but you are essentially wrong.
Let's get the UK caulliflower issue out of the way. For the grower there are still a number of options. This may well mean changing the channel choice, marketing operations (eg cooperatives), and re-looking at the pricing structure. The problem here is that you are taking too narrow a definition of customer. If by customer you mean the supermarkets then you have to look past them at the end-user. I'm not being over-dramatic but in the time that I have taken to type this I can already envisgae numerous ways that the UK caulliflower industry could be sustained at some level -if i can do that so can the majority of people!
You have a very strange view of customers and their price/buy decisions. as you say the individual decisions are based on a wide veriety of factors and low price is not necessarily the major one. In the cut throat food market Heinz have sustained themselves very well. There is hardly a more basic food purchase for the average family in the UK. They all know that they can buy cheaper own-label brands with similar quality and even cheaper basic lines. However, Heinz have maintained their premium price - why? The answer has to lie in the apparent satisfaction that the customer gets from their product. This premium is still maintained despite the present downturn/crisis.
We know that a Ferrari has a value well over and above that of its utility value. Various of its models are outperformed or even out-spec'd. Yet they still command top$. Why? Perhaps it has something to do with knowing the motivations and needs (real and percieved) of their customers and potential customers. They already know that you and I are unlikely to buy a Ferrari so we don't even enter their marketing equation.
If, in your instance, you do not quote a price then are you not doing your customer a dis-service? How are they supposed to know when they are being offered value? Are you merely adding to their Cognitive Dissonance? (Juandicedjean will hate that - but it exists!). How do you know? If they come back are they merely limiting their dissatisfaction rather than maximising their satisfaction? With no direct competitors how can you be sure?
Price is an important factor in the mix but it is not the only factor or even the prime factor. Price will however ultimately determin if you are going to here tomorrow to service the market need.
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#321 ishkandar
"The multiple levels of menus in a phone-in system is not a failure of the system but a failure in human thinking. Most people cannot think in hexadecimal (base 16 arithmetic), therefore telephones have 10 digits (0-9). Thus menus have a maximum of 10 options and any more options are accessible through one in a higher menu. If telephones have 16 digits (including A-F in hexadecimal), we'll have much fewer menus to go through since there are more options available at each level of menu !!"
That is where you are wrong. The caller couldn't give a dam about 10 or 16 digits or even A-F hexadecimals! They actually don't want the menus in the first place. What they want is somebody to answer their questions. It is a classic example of the failure of systems to properly interface with humans as it requires the human to change behaviour or expectation to meet the needs/limitations of the system. Forget the 'chin music' of "to answer your queery more effectively" that is a downright lie. The true translation is "so we can save cost and monitor how efficient we our system is" - to hell with effectiveness!
Further to my BT quote earlier. The b****rs have now emailed me with an e:contact survey!! But they still haven't resolved the original problem!!!!
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"It is difficult to create new markets. But it can be done. Look at the Apple Ipod."
Sorry mate but the MP3 player market was already well established before the Apple Ipod was reeased.
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#329 "What they want is somebody to answer their questions."
In a properly designed system, there will be an option that will allow you to speak to one of the Customer Relations Officers (a fancy term for "Complains Person") !! If 90% of the questions can be answered by their FAQs, then this system will have great efficiencies. Where most companies fall down is when they put poorly trained or non-knowledgeable persons to "man" the phone lines !! Therefore, speaking to someone who cannot answer your questions will only add to your frustrations !! Not all companies are sufficiently small to allow a caller to get through without several intermediate steps.
Please note that I am NOT defending BT since they have a poor record in this area.
As for the menus, they are the electronic equivalent of "Good Afternoon, which department do you wish to speak to ?" !! This is then followed by "Please hold while I put you through." followed immediately by 10 minutes of inane muzak !! Would that be better than simply punching numbers to get you to the right department ??
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#331 ishkandar,
Are you having troule sleeping or like me in another time zone?
I understand what you are trying to say. However, you have to look past system efficiencies and try and look at effectiveness. All systems have constraints that are system oriented and not human oriented. Now you can keep making more efficient systems but more and more people will either by-pass or sabotage them. You have to ask yourself the question why do the majority of people have a high degree of dissatisfaction and frustration when they come into contact with corporate systems?
There is a really big flaw in understanding human psychology and behaviour when 'systems people' design systems. Try making the most of your new computer by reading the handbook.
BTW I also hate "your call is important to us" followed by 20 minutes of music (generally a loop of the same tune) or even worse "you are in a queue and your call will be answered shortly" - if you are lucky. Mix that with the first statement and you have a broken phone on your hands!!
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#332 "Are you having troule sleeping or like me in another time zone?"
As a self-confessed BOF, I tend to go for short naps now rather than a long night's sleep !! :-)
"There is a really big flaw in understanding human psychology and behaviour when 'systems people' design systems. Try making the most of your new computer by reading the handbook."
I can understand this sentiment. However, there can never be a one-size-fits-all design philosophy that many designers seem to think exist. Hence there should always be an "escape hatch" (known in the trade as "exception handling") !! It is the failure to deal with this that had/has caused much of this grief. This is a human failure and not a computer failure.
As for reading the handbook, I've been building PCs from bits and pieces and installing the O/S long before it became fashionable !! So I generally know more about the computer than what is in the handbook that is normally aimed at beginners with little or no knowledge of computer engineering. Therefore, I do not expect to get anything new from the handbook at all. Any knowledge I need or want is usually garnered from the Web through Special Interest Groups (SIGs). Besides, I'd never buy a PC without extensive into its capabilities beforehand, so I'd generally know a fair bit about it before even laying hands on it !! :-)
Re. Broken phone - taking your frustrations on a poor innocent piece of equipment may be emotionally satisfying but is hardly economically efficient, is it ?? :-)
A better way might be to change suppliers aka "voting with your wallet" !!
The failings of large organisations are legion but that does not mean that computerising parts of the functions/processes are not efficient, especially when it is done properly. It is when the systems are not designed and/or built properly and/or people (humans) start blaming the computer for their own failures that things start to get into the realms that you've so described. This is akin to the old "The cheque's in the post" that raises the frustration levels !! :-)
BTW, I have an irrational urge to sabotage any system that pipes inane muzak into the "on hold" queue !!
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#300 Armagediontimes
Hi. The test *result* was positive. The test is only 99% accurate. 1% are false positives, therefore of 10000 tests about 100 will come out positive. You are one of those positives. It's about knowledge - the doctor knows as much as the test tells him with his prior knowledge.
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FrankSz (#260 "The probability of Snifflitis being caught is 1:10000
- Everyone undergoes mandatory testing for Snifflitis. Going for a test is not based on symptoms, it is a periodic check that is mandatory for all.
- You go for your regular Snifflitis test to the doctors
- The doctor says "Here is a test. The test is 99% accurate." The doctor means that 1% of test results are false positives or false negatives."
Note you did not say that the initial prevalence of 'snifflitis' was based on the test which is only 99% accurate. You said the prevalence was 1 in 10,000.
My point here is that Natural Language and ceteris paribus clauses always have to be examined critically because of its know intensionality (which here means lack of truth-functionality). Probability is essentially a matter of frequencies and error, but the error is not subjective i.e psychological. It's a function of behavioural quality control to understand that you need to study some Behaviour Analysis which is not easy stuff grasshopper, especially the Quinean contribution in language and philosophy of science).
In te meantime, try not to speak/write too much Mandelsonian (as John_from_Hendon has been lured into doing) especially if ever going for a business loan, as such talk really is the busted flush - it was by 1960, it's just that the evil-dooers didn't listen).
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addendum: Most people go beyond the information given (as Bruner famously said) all the time. The essence of science ('pursuit of truth')is to learn constrain and not do that. This makes speech and writing dull and full of gaps, and that's where the intensionl fillers are readily supplied by the over eager and thus untrained. To the trained, those gaps are interestng areas for further empirical research/testing, which is also very mundane and tedious. Alas, we seem to very keen to put the eager, high verbal fluency, charming folk in charge, when really we should be locking them away in the back office (and well clear of any systems too!), or...idelaly, just locked away full stop....
Are you taking the scope of this analysis in?
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Look up the population base rates for New York City linked to some time back. What do you notice? Why do mean group differences in SATs and NAEP scores matter in conjunction with these population frequencies? What I have posted is cumulative, you need to look at the conjunction of material.
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"Note you did not say that the initial prevalence of 'snifflitis' was based on the test which is only 99% accurate. You said the prevalence was 1 in 10,000."
Yes. If you identify 1,000,000 people, about 100 of them will die of Snifflitis within the next few weeks. At the time of identification you don't know if you are one of those 100 or not.
You go for a mandatory test and the chance of you being actually positive is, if the test is positive, about 1:100
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#337 will look some time - can you post links to the orig posts?
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#313 - Ishkandar
The systems we run at the core, built in the 80s, are written in......wait for it......PROLOG!!! AAAARGH! Can you believe it?
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#341 "The systems we run at the core, built in the 80s, are written in......wait for it......PROLOG!!! AAAARGH! Can you believe it?"
Ah !! I can see that you are having great fun with your systems !! Prolog ?? "The language of pure logic" !! Hah !! Aren't most of the practitioners to be found in various cackle factories now ?? :-)
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#342
Thankfully I don't have anything to do with the core systems. They basically act as data sources for me. I go via interfaces of various types and we develop on dot net. If it was my decision I'd just start a new bank and phase out the old one.
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FrankSz (#339) We are not communicating are we? This is what is wrong with so many of these subjective probability models. Did you look into the Lewontin Fallacy link I provided? Do you not see how people talk in an obscure manner but dres it up as 'probability'? What is the difference betweeen uncertainty assessment/management and risk assessment/management? Why do people talk of risk assessment when it is no such thing? Do you see what is wrong when people use idioms such as 'said that...', 'thinks that...' etc? This is not an exercise/test.
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328 foredeckdave
We offer price ladders and options. The customer decides what they want and what they want to pay. There is no subtefuge. The customer sets the price against the soft structure of options. There is dialogue. We have an extensive gallery of products made previously. Customers do not have to display their purchase there but many, many ask to. We do not ever reproduce some items because the output was particularly personal to the customer. We also see no point in the straight reprodcution of the pre-existing anyway. We do not divulge prices paid even if very small, they are a private matter. We will give a range of options around a nominated type of product configuration. Bar a few deliberately low cost ready to go items there is no standard product, and even they vary. There is no point in standardisation. Cost is 'controlled' via underlying commonality of some components. Price is 'controlled' by selling direct. We have nothing hidden, many of our costs are identifiable online, and if anybody wants detail they can have it. Our advantage is in the sophistication of our operation, our flexibility and our speed of response, agility. We market worldwide via the internet, direct. We see any transaction as a joint venture with the customer, a partnership. If somebody does not like an outcome they do not have to take it, although that has never happened. If their circumstances are affected they do not have to take the item or can return it. I think one person had problems and it was put to one side and they were told forget it, its not a problem. They came back for it about 6 months later. There is no point in having unnecessary onus in a partnership which will not positively affect the outcome. If we had something returned it would be a minority event and can be absorbed in turnover, but for that individual it is a major event if it was not dealt with considerately. We had to sumbmit an ethical policy to established the independent finiancial processing from a major multinational bank. They had never seen anything like it. Our position is that any customer engages in risk when making a purchase because they do not know the outcome. For us there is virtually no risk in a transaction because we know the product outcome and track record.
The guy with the caulis has a perishable product. He has no market route set up other than the supermarket. In practice he has little sales or market experience. The individual consumer has been surplanted by the supermarket. The supeprmarket is defining what price it is prepared to pay. it is not enough so production stops. To set up another distribution route demands specialist skills and knowledge. He is busy growing things. that is his specialist skill. The fact you are suggesting he moves away from that to become more skilled is exactly yhte point I have stated before. That small business has to act like big business to survive. Big businesses are clearly fragmenting structure and trying to act like a village of small businesses to survive. There is convergence between the the two business model needs and driving pressures. Whether a business can adapt into these roles will determine if it will suceed. IMO.
The fact the MP3 existed before the Ipod is irrelevant. The Ipod has established its own market, a closed, or largely closed, market environment.
The fact the automobile existed before Henry Ford got going was irrelevant to Henry Ford developing the car market almost single handedly.
There are othe examples, and lower cost one but those are well known ones.
324 ishkandar
Caulis are still available, they are imported now, not grown here. Some of the advantages of growing elsewhere are real, some are artifical.
323 armagediontimes
''From how you describe things I would expect the good times are about to roll. There are plenty of people who have been around a while and are very concerned about the future. These types are getting into precious metals, and I guess art and stuff if they are rich enough.''
We do not provide art n stuff. We do not provide luxury goods.
Your friends are almost certainly operating conventionally. John from Hendon has already commented and detailed that trade is irrational. Why do you think the problem can be solved by rationale. The problem is psychological.
I have said before in a recession trade still goes on and money is still spent.
When you go to a pick your own fruit centre the fruit is cheaper. The experience is part of the process, the involvement is part of the process. The perception is different although the fruit is the same as the supermarket.
I got to know a guy involved in running a very high class restaurant. His definiton of luxury food was fish and chips, freshly cooked and wrapped in paper. The definition of value depends on the individual. I've given you a business plan it is up to you. The addressable internet market is easily a billion based largely on English as a language. One in a million is a thousand customers. If happy they come back, they have friends and family. How many customers do you need. That is one group. Move onto the next specialist interest group, one in a million again, same outcome. How many customers do you need. Dont deal with businesses, you are dependent on their success or failures, deal with the customer direct the future is then yours. I'm not giving a link to the site. If I did I would have to rein in what I am able to say at present. You need to start with what you see as a minority interest forum. Open the dictionary and pick a word and look. Or pick something arbitarily like say sporrans. Jim Slater, of early 70s Slater Walker fame said if you pick out Zulus as a topic you can fairly easily become very knowledgable about Zulus, in the general perception of people. Whereas if you try to study a very broadbrush subject many people will have studied it to a greated depth and you cannot compete.
322 ishkandar
''Perhaps it is my misunderstanding since I had assumed (erroneously, I concede) that you were in a general manufacturing/business environment instead of a specialist/bespoke environment. The rules for each are very different.''
They are no difference. There is no differnece in running a design team and supplying North Sea Oil Rig pressure vessel subsystems to ASME or BS codes, which I have done at one time, or supplying a small item direct over the internet. The problem and processes are identical. There are no more niche markets. The internet groups and networks niches worldwide so a collective niche assembly developes - so the market is bigger than a niche. The are just a specialist market but all markets are specialist so it becomes meaningless.
We are NOT in luxury goods. We are in a different way of working.
Bespoke - As volumes in manufacture increase the uptake in 'standard' goods becomes saturated. Production then has to devolve to feature elements of bespoke in order to maintain value. More complex procedures and prodcuts. Eg The Mini One, Harley Davidson motorcycles etc etc. These are not grandiose prodcuts, they cost a little more than the basic alternative that is all.
Luxury goods. Hmm apart from basic food and shelter and heating all else is luxury. The problems in the west are related largely to the destruction of value in any product or service generally. The destruction of value means that gaining of access to the products or services affected is no longer valued. There is no purpose any more.
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You all continue to operate within the conventional perspective. You are not heeding Mr T's comment about coming to conclusions too easily.
I have said before in terms of generally carrying something about a supermarket carrier bag is often quite functional. Why then do people not use them all the time. Because it is about more than function. The greatest bond with a product is the involvement of the customer in the process of the creation of the product. We simple enable the customer to be part of the process. It is not about cost or price it is about what is valued.
Too many people are lost in the music and do not know how to conduct themselves.
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glanafon (#345) "You are not heeding Mr T's comment about coming to conclusions too easily."
Are you?
It's very difficult with the pace of life for most of us not to err just as you say. I suspect it's a good part of the reason for the current mess, that plus distabce from the 'consumer'. We get all too easily swept along with a treacherous 'telegraphic analysis'.
We need to slow down, but contingencies of modern life make this almost impossible. There are grave costs to this and I fear it is getting steadily worse and worse.
I call it 'skimming'.
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#345 glanafon,
many tings will change over both the short and medium term. However, some of the basic principles will remain the same. Now you are taking a deliberately obtuse view of how your company operates. That's fine and I hope it is successful for you BUT your understandings will not fit all organisations or activities. Your optional pricing ladder in no way invalidates what I have said earlier.
As for the Ipod. It DOES matter that the MP3 market already existed as it gave Apple clear markers as to functionality and price. Sure the Ipod came to dominate the mass of the market. However, many of the smaller firms were in the market as innovators and targeting the Innovator/Early Adopter market. If you look you will find firms such as iriver who have now moved on in their product development and offering their target market greater or different functionality at a premium price. Knowing their marget segments they always knew that they would be wiped-out in the mass market (if not by Apple then by somebodyelse e.g. Sony). Hence, they targettted the Innoators and then used the pofits from that segment to develop different products. By concentrating their efforts and being a moving target they sustain their existence and profitability. Like you they never want to be mass market players.
Now the cauli man has clearly demonstrated that he does not know his market. IF, and it is a big IF he is committed to caullis then he would have been able to see the trend in price and supply well before planting this years crop. If however he could have grown brocolli, as suggested, then he only has himself to blame. Farming is a way of life but it is also a business.
"The greatest bond with a product is the involvement of the customer in the process of the creation of the product". That statement is clearly wrong. The greatest involement of a customer is the satisfaction that they gain from the product.
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347 fdd
I am not being at all obtuse. I am stating how things work here. In particular if people do not wish to pay a price then trade stops, which is what is happening all around. You will not recognise the UK when you return, you will not recognise town centres. They are in shutdown. So are many industrial units. You are looking at the best part of a 10 percent drop in the economy from where it would have been if the good times had kept rolling. That is effectively all in the private sector. So you can pretty much multiply it as an impact on that sector. Sooner or later the public sector has to dive to follow. Meanwhile all there is is some vague talk of growth. There may be a blip due to deferred activity but there may not be a case for it forming a basis for vigorous growth.
I do not expect my solution to fit all. I have said each has to find their own. I do however know what we do here can be applied elsewhere. Where have I said everybody should do what I do. There is a dearth of business growth ideas and many appear dazed. Few seem to have any idea as to how to move forward. Without people getting on and doing something the situation will just slide more.
'The greatest involvement of a customer is the satisfaction that they gain from the product.' Being part of the creative process just extends that. Satisfaction with our product is a given from the data.
Broccoli! Whats that got to do with it. The issue is the disappearance of UK cauliflower. Farmers clearly do not know their market becasue they break the rule of thumb of never letting the customer be bigger than 40 percent of your turnover or you get abused.
jj 346
I try not to come to conclusions. However I have stated my objections to your premise and not seen any reason yet to overturn them. That does nto mean there is not a problem, it just means I am concerned about unstated and probable outcomes of what looks to be likley unilateral intervention idea.
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#346 glanafon. Thanks for the explanations. I had assumed that you were into creating things of lasting value hence my comparison to gold. However my business is most definitely not to pry into your business.
I am an occasional investor in small scale start ups. The UK is a nightmare - lot of bankruptcies. The media and stuff all keeps going on about banks, but a lot of big corporates are also slowing down payments. After a while you think why bother. Sometimes it is not a case of being unable to continue it is a case of just giving up because the hassle is not worth it.
In other stuff I see a lot of serious money leaving the UK.
If you are relatively small and global things should remain viable. As you say there will always be growth somewhere - the British do very well with landmine exports.
There is always a danger of extrapolating personal experiences. You can look at the economy and it is obviously problematic. It does not bother me from a personal perspective - but when I look around I worry at the expectations that people seem to have, how they will cope and what their reactions will be when they wake up to reality. Too many people expecting a free ride and convinced that they deserve it.
As Bob said - A Hard Rain is gonna fall.
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Wow - this blog/discussion has moved on ...
IMHO what glanafon (e.g. Post 345 etc) is effectively describing is 21st century management practices ... and entrepreneurs just do it ... whilst most 'traditional' enterprises do not (... and they often fail to 'see it' either).
Hence most traditional enterprises will unfortunately fail ... whilst entrepreneurial ones, as well as a few of the more enlightened traditional ones (who quickly adopt 21st century management practices), will replace them ... history tells us this - though sometimes governments will try to delay the onset of this by 'bailing' some of them out (with our money - e.g. Banks/GM) ... trying to change the course of history and hoping their nation's victitious gravy train of 'wealth creation' (which is actually mostly 'wealth manipulation') continues ... without them having to change how they 'lead' or 'manage' ...
Unfortunately in a global economy this will not work ... it will only bankrupt nations (and future generations) and make them an irrelevance in the future world economy (i.e. 'make them history' ... which is arguably a little bit of 'future history'...!) - a future where 'value' is king (defined by customers, who often 'help' in the process of product & service development too - as also highlighted by glanafon), supported by 'values systems' based on trust, honor, responsibility and mutual respect (and also mentioned by glanafon).
Not hard really, just a shame there are not more UK enterprises doing it yet ... as those slow to start will find it difficult to catch up ... (nb history tells us this too ... and I'm afraid enterprises & nations now ignore this at their peril*) ...
David Clift, a Future 500 Leader
* take a look at http://poweromics.blogspot.com/2009/07/history-tells-story-and-it-will.html for instance, and what's starting to go on all around us now.
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349 Arm n leg
I'm not bothered about people prying, not that you have, if I was I would just say no, its easy. There have been serious hack attempts on our site after data. Unsuccessful. Our IT guys were a bit taken aback.
I'm not trying to extrapolate my experience, just report them. If people don't like them then put in the digital Waste Paper Bin.
BTW our things are of lasting value. They are valued and last. They are not designed to have a short life. We expect them to outlast the purchaser and us. It is all part of the tide against short termism. : )
The refusal to deal with the invoice period issue, which arose in the 90's recession, is going to cripple some businesses. There was a strong lobby for reform but it was ignored. We probably have burnt them by now but we have, as it were, invoices on currently trading blue chip companies never honoured from the early 90's. We ended up just saying we will not supply you under any circumstances, please go away, stop asking for supply. For that reason we deal direct with consumers. That is why I talk about trust. There is no trade without trust. So we place trust central. It is not some pose, it is just good business.
I am greatly concerned about false expectations in the system at all levels. Realistically I do not think a large number of people have any idea of possible outcomes. Politicans have to lean towards the positive. people genrally have little idea of the bias against them. look at the public reaction to soldiers compensation. They are claimed to be good against civilian levels. They may be but the judiciary booklet gives something like 140k for the loss of both arms. And injury lump sums are not additive. Would you part with both arms for 140k ish. I thought not. But stop somebody in the street and ask and they will point blank deny the figure is that small. Couldnt possibly be that small. Not that the opinion is based on any data. Just a belief in fair play.
We wish to remain small. Something about the small having a higher metabolic rate. Growth is upon us and we may have to deal with it the problem is keeping the capabilities of the small even if we only grow a bit.
I am not surprised are people legging it. I wanted to a few years ago but the family didnt.
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350 leanonme
It is the size of the problem which worries me. And if successful businesses are not about in the UK in whatever form or shape then we will all suffer as members of this country. I think it all looks a bit grim. I have worked in conventional big businesses, some of them 'upper quartile in profit' returns. They had profound difficulty in reshaping themselves. They had some very intelligent people working in them so it is nothing to do with intelligence. They also had some very hard working staff, so again it is nothing to do with working hard. But if you start to say the attributes of being clever and working hard will not necessarily save you they cannot get their head around it. The cultural brainwashing is those attributes will save you, just keep at it. Bizarrely the experience I had was that whatever innovation you introduced and savings made in one division of a big business, they where simply used to prop up another area that refused to adapt. All local progress did was slow the decline not reform working practice.
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Post 352 - I agree entirely and share the same concerns. The future for the UK does not look bright ... and as you say, not because it has too be like this ... but because of the way most traditional 'leaders' and 'managers' currently work ... to the detrimant of everyone else ... e.g. customers, workforce, families, communities, long term shareholders, environment ...
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#351 glanafon. Yeah people have no idea. I was in a place (now in the EU) where you could not buy envelopes (you had to make your own - a bit like Blue Peter), and their industrial machinery kept breaking down because they relied on Russian coal for fuel. The coal came OK but the Russians had "contaminated" it with dead bodies.
Years ago someone offered me $ thousands if I would buy a fridge and check it through on a flight out of the UK.
I´ve been in places where oil seeps out of the ground and yet you cannot buy petrol.
All the locals worked just fine, were well qualified, spoke multiple languages, and yet still nothing worked.
All this stuff is now coming our way. Unless of course you solve all problems by just raising benefits.
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glanafon (#348) "I try not to come to conclusions. However I have stated my objections to your premise and not seen any reason yet to overturn them. That does nto mean there is not a problem, it just means I am concerned about unstated and probable outcomes of what looks to be likley unilateral intervention idea."
Well, maybe that's a step in a positive direction. The only reason I post here is because I reckon large numbers of people have false assumptions which get in the way of their better understanding of how things are currently faring. The value of what I've posted lies in whether or not it provides a more coherent conceptual framework for understanding current events than others. If what I've posted is of value, it will prove to be be useful to you, and perhaps you'll be able to add to it sometime.
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355 jj
The problem is if you are not part of the solution you are part of the problem. You keep going on about the problem but have no solution therefore you remain part of the problem. You are no different from anybody else unless you have a solution which can be implemented.
In a democracy the problem you have, as an anarchist, which is your role, anti residing establishment as it is, is that you need the support of the groups you wish to have intervention on. As your intervention is at risk of a negative impact on them you are unlikely to get it. Getting local support in one neck of the woods is not a mandate for national action. Your position appears to me to be entirely selfdefeating and the only outcome is likely to be the promotion of social discord. There is no collective anarchist implementation. You do not even seem to realise you are an anarchist JJ which I do find funny. But you have been banging this particular drum for a long time from what I can see, so you are most unlikely to stop.
Don't go changin' or rearrangin' You know we can't take all that clever conversation, da dah.
: )
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glanafon (#356) Social discord? You don't appear to be living in the same country. We already have plenty of social discord in Balkanized Britain.
You really do need to try to grasp that you are just describing your own confusion in the above post, nothing more. I hope someday you'll come to realise why that is, and what the alternative requires of people such as yourself. In the meantime, you'll probably seek comfort from others who behave like you, which if you think about it, is nothing more than looking for support from your errant self ;-)
Another thing for you to grapple with is that people come and go in blogs and that what's posted isn't for your exclusive benefit/entertainment.
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jj
Youre up to your transference tricks again.
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glanafon (#358) "Youre up to your transference tricks again."
You've degenerated into speaking Austrian emigree lingo. You should try to learn from those who know more than you about these matters when you're given the chance. Like so many these days, you appear to be far too concerned about how you appear...
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AWARENESS OF BEHAVIOURAL CONSEQUENCES VS. 'BEING PICKED ON'
When one ethnic group of kids is excluded from school at twice the rate of other groups, is that down to a) a higher risk of that group being responsible for trouble or b) institutional racism?
Apply this logic to past mass migration from East Europe/Russia at the end of the C19th and early C20th to London and on to NYC, and the ensuing socio-political consequences (e.g see Sidney Street siege and 1905 Act in UK, and similar USA legislation for early hints).
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