What's Wrong With Us?
I think I have a framework for the reason why we can't seem to tell whether we're in a boom or bust era. Seems like things are going well with unemployment down and in my own world, no real crises. On the other hand, the housing market looks like the tech market from a few years ago and Chinese manufacturing is going through the growing pains U.S. manufacturing felt in the cresting of the Walmart era.
The problem lies within the prevalent system - capitalism. There's no ceiling and it seems like no guidance for maintaining success over the long haul. I've seen roadmaps and business plans that look ahead to 2012, but what about a longer-term outlook?
Chinese manufacturing has been so inexpensive because there are working conditions we would not allow here (but don't have to see if it's over there). Materials cost less because they have less quality control overall than we would require here. All of that will change eventually as workers unionize as they did here years ago. It won't take too many more massive recalls before U.S. companies start implementing more precise quality control. And when all of that is added together with shipping costs, there's a good chance that manufacturing will come back stateside.
Companies (and this is global) are the problem. The sky is the limit - and the goal. If you can make a 40% markup over last year, great. You scale the business to meet the newer demand. The bigwigs get nice bonuses, the shareholders get dividends, lots of people have jobs. Then comes next year. The bar is now set an extra 40% higher than the year before. 40% growth is now expected on top of that. Anyone with a rudimentary understanding of economics knows that this cannot continue. So what happens when the growth begins to level off or head south? Companies implement "cost reductions" and start cutting headcount (quickest way to impact bottom line). This is where the real de-humanization occurs, but it started back with the prosperous growth.
What's the answer? I'm not sure. But I have seen good examples of companies finding solid, niche markets, then setting themselves up for the long haul by hiring good people and keeping just ahead of the curve (but not by a 40% margin). I believe that's the foundation of a solid, sustainable business. I believe that's not what's taught in business school, though. What's the term I've heard? Oh yeah - "smash and grab".
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2 comments:
This is an interesting statement:
"Companies implement "cost reductions" and start cutting headcount (quickest way to impact bottom line). This is where the real de-humanization occurs, but it started back with the prosperous growth."
I follow the argument. The seeds for the decline and the human fallout were sown in the fever that led to the initial growth.
But I think what you are suggesting is a sane or at least sustainable model for commerce/interaction would be more human than the fast rise the smash and grab capitalism you speak of...
I wonder if the desire for 40% growth or the desire for so many Americans to own a house that they can't afford aren't as "human" as the system you hope for...
Or, on the other side of the question maybe no matter how humane institutions strive to be, there is always a dehumanizing element to them.
Lots to think about in your post.
My instinct is to be wary of your labeling "capitalism" as the source of all that seams to be mean and dehumanizing about what we have here in the west...
But by the end you suggest a bigger problem. If the "system" is dehumanizing, when or where does it become dehumanizing...
or are all systems by virtue of being what they are...dehumanizing.
Capitalism is the prevailing system, but it's fed by lots of subsystems. Capitalism, on its own, is a lot like nature in that the strong survive and the weak are swallowed up, but that's about it.
In nature, there's no pretense and no bullshit. You're either stronger/smarter/faster or you're dead. In capitalism, there's avarice, subterfuge, and moving cheese.
Capitalism, our economy, keeping up with the Joneses - all interwoven. Advertising and marketing are insidious, too. MBA programs instill double-digit growth as "survival".
I'm not sure there is an answer, really.
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