Political opinion, thoughts, reflections

More and more people understand today, that our future is not accidentally happening but literally created by us and by the forces of our universe.

If a large asteroid is destroying our planet before we found an emergency exit, that future is created by the forces of the universe or whatever we call it and believe in, including by chance if you like. But if we find a way to either destroy such an asteroid before it hits us – or find a way to rescue people and escape to another planet, this is a future we literally create ourselves. Everything we have today, homes, running water, accessible electricity, cars, planes, hospitals, computer, artificial intelligence, robots, machines, cranes…. was created by us. The live we live in today was the future, created by our parents – for us.

With that understanding, we should help all people understand, that every single one is helping create our future. Whether it is building a rocket to the moon where thousands of people, engineers and metal worker created that future – or agreeing that the UK shall no longer be in the EU, was  created by the sum of all of the respective people. The responsibility of every single one is much grander than most realize. Their ever growing influence is way more powerful than most people can comprehend. It is our responsibility to help everybody, understand that we are a collective and we collectively create our future – in what way ever.

For those who fear that influence – I guess we can trust that there are more people with a common sense on earth than those with destructive or criminal energy.

 

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I’m concerned. With a defense budget of $690 Billion, the US spends more money on defense and armor than China ($129B), India ($44B), Russia ($64B), UK ($57B), France ($58B), Germany ($43B), Korea… all together. That means that every US family is paying $6,200 per year to defend – what?

In contrast, the US education budget is only $69B, infrastructure and everything else is even less.

If you restructure the budget, keep $250B for defense, you are still bigger than China, India, Russia combined, or bigger than all Europe and have $440B for making the US the nation with the biggest education budget, the biggest science budget, the biggest economic stimulation, the biggest traffic infrastructure development and make it the leading nation – again. And still have a few billion to revitalize a Space program.

I believe the most significant defense program for 2014 is to defend US internal poverty, under education and economic meltdown.

I wish you and all Americans a happy and prosperous 2014

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I’d like to expand further on an earlier post about the three priorities of a well run democratic government: Education, Infrastructure and Law. I made a short statement about separation of state and capital.

In recent year I saw quite some interesting posts about ‘separation between state and economics’ or ‘separation between state and economy’. Well first of all i see “economy’ as the mirror of how we conduct business and how business can flourish in a given society. Economy or the economics of a nation is a result of a carefully interwoven and networked interaction between capital or the business owning part of a society and the government with it’s responsibility to take care of ALL of its citizens. Hence I believe it is better to say “Separation of state and capital”. With this approach we will also see a major conflict right away in a political form that is called capitalism.  Capitalism basically fuses capital and state in one unit that has eventually the same problem than communism. In a capitalistic world less and less people control more and more assets to a point where there is no difference to communism from an economic point of view.

When capitalism becomes an economic communism

Let’s look into the United States today, end of 2013. The largest part, approximately 80% of the population works in large global enterprises. They are all public companies. Public companies means the public participates in the economic success of those companies, very much like in communism. The company leadership including the ‘real investors’ however work very closely with the government and have a huge influence in the government’s decisions. When we look at the investor structure of the food industry which is still the most essential industry to mankind, the 350 ‘individual brands’ in the US are owned by approximately 10 large enterprises and only a few people like Warren Buffet have a large stake in those companies. At present time, less and less people control more and more assets and build and incomprehensible wealth – while an unhappiness 99% seeing the chances to become rich rapidly vanishing away.   Some predict that there will be the first Trillionaires in the next two generations.

Unlike the idea of free competition – as seen by Wesley Gant – and a well self balanced economy, capitalism allows an uncontrolled gravitational force that allows one company gets acquired by another until there is no competition left and we experience monopolies that are not only as bad as communism, it’s actually worst. AT&T, Comcast Cable, Microsoft, Ford and GM, General Electric, super market chains are only a few of those examples. The US had once 26 world class auto makers and have been considered the world leading auto industry. A sales pitch from GM telling other companies that ‘economy of scale’ will crush them and they better merge with GM worked well enough to buy most of the car makers, creating an unmanageable behemoth, that was eventually unable to compete on the world market. Ford and Chrysler did the same and the US ended up with three brands, so inflexible and lacking of innovation that international brands took over and crushed the US auto industry. In just 16 years the US lost all it’s leadership, no more the leading auto industry, no more the leading home appliance industry, no longer the leading aerospace industry, no longer the best education, no longer a self sufficient energy producer, no leadership in environmental technologies, renewable energy, health care….

The end of the american dream? The end of the land of opportunities? It is certainly just a few seconds before 12 and when you see billions of US$ flow into countries like Africa and revolutionize the African infrastructure, you know that a large portion of that gigantic wealth is leaving the country.

Is separation of economics and state an illusion?

One of the very related and controversial discussed movies is Atlas Shrugged from Ayn Rand. The story was written in 1953 and the third movie of that trilogy is currently in the making. Also Ayn is a big proponent for a free and uncontrolled capitalism and is mentioning the separation between economics and state – as she is migrating from Russia to the fast emerging US. But now – 60 years later, where are we? There is no separation between economics and state and capitalism is at risk to collapse. Replacing “economics” with “capital” isn’t just semantics but a significant difference.

I believe capitalism and communism are both idealistic and extreme forms of an ideal world, described by people who would like everybody adopts what is ideal for them. As such I trust neither one will ever work. All too often freedom for one is a limitation to another. We need to recognize and respect that a peaceful coexistence requires compromises. And compromises need to be democratically decided and then respected (one may not agree but will commit).

Separation of state and capital

The government of a society needs to look at the entire population and be not guided by the capital. That a company such as GM can buy and destroy public transportation in the interest to sell more cars, should never be possible in a democratic and capital independent government. That a government supports the weapons industry to a degree that the arsenal is able to destroy the plant 60 times and sell weapons to countries that are simply unpredictable just to fuel war for their own business interest should never be possible. Infrastructure that is part of the foundation of a society’s success should not be privatized unless it can be insured that there are at least three independent competitors. Patent laws should be in the interest of an inventor not in the interest of the capital. Trade laws should be in the interest of all independent trader and need to be predictable.

EDUCATION
In today’s technological very demanding world education is not only a base right but a responsibility of the government to provide the best possible education to its society. That responsibility includes motivation why such education is so essential. Unlike in the US education system where higher education is almost in-affordable for an average family, the state need to ensure that all talented citizens are motivated and have access to the best possible education, including political education to grow a nation that is mentally able to execute their democratic rights and can contribute to the evolution of such a democracy. Political education also needed to ensure a society can maintain their democratic rights so that at least a large part of the society is able to comprehend the evolution of the law and rules and regulation the society is governed by. Since there will always be talents that come out of circumstances unable to afford first class education, it is the states responsibility to support those in the interest of the entire society.

INFRASTRUCTURE
From history we can learn that infrastructure has always been a keystone for prosperity. First cities in Egypt were build at the river Nile, where the river was a key transport medium. Harbors became the strategic infrastructure for prospering nations for thousands of years. Later on trading hubs emerged inland if good roads where available, expanded by trains and lately airports to be connected to air traffic. Public transportation systems are key in large cities to provide fast transportation within those cities. Phone connections, Internet, mobile phone infrastructure are the latest examples for key strategic infrastructure elements. Obviously handing those over to private businesses seemed to make a lot of sense, but the economic interest and the interest of a society as a whole are colliding also here. European countries for instance responded to those essentially just different monopolies with state regulations to ensure service needed for a prospering country. Germany, one of the most healthy economies, for instance took it even a step further and followed the principle to have communication managed by the department of traffic and infrastructure. Traffic, communication and energy are so critical to a nations success that it may make a lot of sense to make those carefully watched and co-managed by the state.

LAW
Obviously one of the most essential responsibilities of the sate is to create, maintain and enforce the law for its society. In particular maintenance of a law is a big challenge for most modern societies, that have still rules and regulations that are more than hundred years old and are completely outdated. Yet as one rule builds on previous ones it is very difficult to remove such outdated laws. More importantly is the need to create new rules for new behaviors, often triggered by new technologies. While the law is the foundation of today’s democratic society, all too often is the society not participating to execute their democratic rights by virtue of not even understanding what the law is for and what permutation it may have (see education).  I rising issue in the developed world is to understand and navigate business development. In today’s capitalistic societies it is easily possible that financially dominant groups can easily overpower less powerful groups for their own benefit but not for the benefit of the economy. For instance Microsoft was able to deliver Internet Explorer for free and killed innovator Netscape. This example is in particular valuable as one school of thought will suggest that any intervention of a government is negative for the economy and if the government would regulate at that level, where will it end? The other school of thought may argue that destroying innovation not in a competition of innovation but in a competition of capital is not in the interest of a thriving society and we need to find ways of fair competition in the base of the matter – in this case innovation. Obviously I’m not writing this to make a suggestion but to raise the issue and show the challenges that lay ahead of us.

In all of the above core elements, a well run government has deep connection between state and economy, yet not necessarily a need to have state and capital be as closely connected as it is today in many societies.

Economy, being “the wealth and resources of a country or region, esp. in terms of the production and consumption of goods and services” in accordance to Google, it would be hard to believe to decouple economy from state but separating state and capital as only one of the players of a nation seems to make a lot of sense.

 

References:
Market Watch, 11 Trillionaires in 2 generations
Currently richest people
Wesley Gant – separation of economy and state
Any Rand – principles of a free society
Recent theories of the capitalist state
What is economy

 

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With the ongoing struggle of the US economy, the inner unhappiness and the many questions arising every day in the public web, I was thinking back and forth over the past 2 years about the essence of democracy and the top priorities of a democratic leader. The list is obviously almost with no end. But running a country is all about focus and complexity management.

 

I think there are three things a well run democracy provides for their citizens:

1) Education

Lowest cost possible education is essential. Education drives innovation and innovation drives the economy. Nobody can predict who are the next innovators. But one thing is for sure: limiting top education to a top class in the society is reducing the amount of possible innovation by order of magnitude. Most of the big tech leader and tech innovations in the US were essentially stemmed by people from middle class or lower families. If a country can’t support broad education it cripples its ability to innovate and as such it essentially reduces its competitiveness on a global scale.

2) Infrastructure

An omnipresent basic infrastructure for clean water, energy, public transportation and communication (i.e. mobile networks and Internet) is essential for a society to work and deliver a high value to the society. Communication, knowledge transfer and interaction via the Internet and mobile communication is in today’s world as important as air traffic was in the 60’s and 70’s. If you can’t go there easily you decouple yourself from the rest of the business world. If you don’t make it easy and encourage people to leverage the global Internet you disconnect yourself from the global business flow.

3) Common sense law

A law is helping citizen to collaborate and live with each other, keep freedom and prosperity. However like education models and infrastructure if it is not well maintained, there is a high risk of permutation that makes the law not the law for the people but against the people. The Headline in Wire Magazine a year or so ago: “Need cash – sue Google” is a funny yet devastating testimony for a law that is out of control.

All the other key needs including Jobs, Healthcare, Freedom…. will fall into its place if the above is a top priority. To the contrary if any one of the above responsibilities are a low priority, there is a high risk a society is at jeopardy.

Separation of state and capital

Very much like the separation of state and church back in the 1700’s a modern society need to care about the separation between state and capital. Societies in capitalistic nations are particularly at risk to outbalance democracy in a way where poor get ever poorer and less and less people get ever richer to a degree that the capital eventually controls what happens in a country and not an elected government.

 

Plausibility check

Jobs & Innovation

If we have many well educated kids from all kinds of levels of our society we will see a lot of creativity and start-ups driving the creativity to new business and new jobs. Jobs can’t be “created” for people to have a job. Jobs can only be created by demand to do things we haven’t done before. Innovation means developing the ability on a global scale and build more than we can consume ourselves.

Health Care

If we have jobs we can pay for healthcare and if we have agile and creative people, they find new ways to make health care more affordable, less complicated, more variety and more option. We can’t “generate” healthcare unless we put it back to a government function.

Prosperity

If the laws of a country help keeping the balance between a young generations innovation and mature capital we alleviate the risk of monopolies and support the growth of a middle class – which is essential for a stable and well balanced economy. If like in some countries over 80% of the food supply is concentrated in 350 brands that are essentially owned by 10 companies who have all one major shareholder in common, we live in a very dangerous system that allowed the prosperity development to get out of synch. It doesn’t make sense to finger point to people and call the greedy – when the system is build to make it happen.

Well – is our democratic model no longer working? No – our world and it’s needs and haves have evolved dramatically and our democratic answers need to evolve as well. Public companies for instance were a great innovation about 100 years ago to let the public participate in the gains of larger companies. Today public companies ruin more individuals than other investment opportunities, or no longer even give access to many citizens and investments have grown to a level of complication that it just doesn’t make sense any longer. Neither the laws to protect investors or businesses nor the laws and rules to run businesses kept up with the evolution of our globally connected business world.

Summary

While this is all very complex, if we distill it down to Education, Infrastructure and Law we can start working on it and get out of trouble easily within a few years.  Just thinking

Axel
http://XeeMe.com/AxelS

 

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I learned from my grandmother: “At one point in time capitalism is identically to communism. It is at the time when a tiny group of people control most of the assets of that society.” Are we there?

I think raising minimum wage is only one more action where the small group takes control. The free flow of economic forces has stopped. And now the worst thing is that the 99% point fingers to the 1% as the bad guys. In my opinion the real problem is a system that just have seen its days. To fix that it actually takes the 99% and not the 1%. But here is the real problem: zero political education for generations. The 99% does only know little to nothing about macroeconomic, economy dynamics…

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Yes, we lost the leadership but maybe in the future there is no more single world leader. Maybe there are different leaders in different areas. We don’t need a global leader we need global collaboration. With connections across all countries we develop friends across all countries. And with friends across all countries we are less likely to start yet another war just to make the weapons industry happy. There are over 300 Million Americans who no longer want war, instead want to see the tax money put into education and innovation, both being the no.1 driver for jobs and wealth.

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This is my personal observation on our current economic situation. (2007)

We call an economic melt down “Recession”, when we don’t know the origin of the situation.

We call a Recession a ”Depression” if we failed to find the reason and continue the way we did in the past

We don’t know what we don’t know
The oil crisis or energy crisis had a name because we knew what the issues are. The Internet bubble had a name because we knew the cause and could deal with it. The current “recessive behavior of economy” seems unknown to many and have a real vague reason for some. It is pretty easy to point to the financial institutes who in turn point to politicians, and argue about interest rate definitions, manipulation of a free economy etc. But what do we say about the automobile industry and their issues? What do we say why HighTech consumption is declining? Why even consumer goods are declining before the “Financial hammer” was hitting? The list is as long as our Industry SIC codes.

Businesses around the glob will suffer 10% – 20% decrease in revenue. This causes layoffs and a dramatic increase in unemployment rate. Now this will really accelerate recessive revenues and a decrease in consumption and the spiral goes further down.

We don’t know the real origin of the revenue recessiveness
Why the layoffs in the first place? Because all we know is that consumption is going down. But too many don’t know why or have false assumptions. And hence a stimulus package would only absorb additional liquidity without helping “reform” our macro economic landscape.

Analyzing the details of recessive revenue
Try to buy a car. What is happening? You feel ripped off by that car dealer which probably has the worst reputation in the sales guild. A friend of ours found the perfect car. But the sales guy was so pushy and so aggressive that she left the store. It took another month until she found the equivalent car and be prepared through online research so she exactly knew what to buy, where to buy and what to pay. As a result she bought much later than she planned to. And so many of us have seen this same behavior with friends and with ourselves.

I tried to add an additional cable TV connection at another place. Not only that the customer unfriendly voice recognition system and out sourced call centers are rather incompetent, the available plans are so complicated and vary every day that I hung up and it took me two more month until I finally ordered it because I really had to. Just forget about some cool extras – many of us just buy what you absolutely need. And this is not because we have no money – but because we just don’t want to deal with those companies. Again you buy less and much later.

Try by a cell phone. The sales information, the plans and the sales methods are like 25 years old. Buy an Apple iPhone and you need to stand in artificially created lines to activate the phone to make it look more attractive. How can just a few weeks later people download millions of gadgets when only a few 20 per store can get activated? Better wait until the artificial hype is over and be treated as a welcome customer. Purchase delayed by 2-3 month.

Want to book a vacation. Ohhh what a drama. You wait until you know it is really about time because all those offers are so complicated and since there is no such thing called travel agency who has some friendly local representatives, you order online – cheap – late.

Buy some new clothes. You only can get what the industry is producing right now, dependent of the season, dependent on surveyed fashion trends and based on regional aspects of their purchasing departments. So the selection is highly limited, optimized, maximized in accordance to some business process automation suggestion. You simply buy less.

Now buy food. Grocery store consolidation has reduced the product variety, quality has shrunk and with less consumption the personal is now less and cheaper. You buy what you find and many get fancy by going to WholeFoods and Trader Joe’s despite the higher price. But isn’t it interesting that the super expensive Whole Food is very successful?

I can go on and on and see one interesting pattern across the board – purchases are made later by approximately one or two month at least. A delay of 2 month or 1/6th of a year translates to 16% reduction in revenue. But that is only for the goods and services we HAVE TO HAVE – or believe so. Now add the other little things that we buy or not buy and never buy just because we are sick of the bad service that is provided. An over all revenue reduction of 20% for an economy that is used to think in 3 or more percent growth – that is RECESSIVE and if we don’t wake up it will get DEPRESSIVE!

Now think about the initial customer contacts:
Call a business and you will need to dial 2 – dial 6 – dial 7 – dial 1 then land at an  outsourced call center that hardly speaks English and only has a repertoire of some 20 – 30 questions. As a customer or prospect I just feel how much I’m worth to the company I try to contact. THAT CAN BE CHANGED – RIGHT?

Business Process Automation
BPI is one of the main topics of most companies. Business processes are so deeply optimized that as a customer or prospect I’m hardly playing any role. It’s all about the internal processes. The focus then includes quickly compliance issues, information flow, disclaimers and who can provide what information. At the end nobody can say anything. Corporations became so closed that again a business relationship is hardly possible. I’ve seen user groups collecting contact information from a vendors sales people to get in touch with them. It sounds unbelievable but even the customers can’t talk to sales people to buy updates (A still multi B$ telecommunication company). THAT CAN BE CHANGED – RIGHT?

Information Flow
While businesses make it much harder to get to relevant information, users are forced to dig through forums, blogs, communities to find information. The only information flow is mass emails, advertising, sponsored link with all the same – excuse me – bullshit nobody really want’s to read. I asked participants in an event “who trusts or even just cares about advertising?” all I got as an answer was a laughter. Still approximately 1 Trillion Dollar is spend in advertising and advertising related initiatives – unfortunately it’s no longer bringing any results. In general business simply lost the sense for their most precious good – customers. THAT CAN BE CHANGED – RIGHT?

Product Design, Production, Marketing, Sales, Support
We build products that are neither verified nor wanted by the market. And while customers scream about their needs in forums and user groups, producers are not even aware what they say. Businesses spend 3-5% on advertising that nobody cares anymore, they loose 3-5% of their profit right here. Sales is purely trained, and under such pressure to sell that it scares customers away. If purchase is delayed about a month translating to 8.33% reduction in revenue it often represents another loss of 4% profitability. Support is so underpowered and the leverage from knowledgeable users is simply ignored which cost another 2-5% profitability. And if we add all up our business in some cases looses even more than the average 5-10 but more like 20% soon. People get laid off to keep the company going – keep the status quo – which drives the company further down.

What on earth has all that to do with the “financial crisis”?
When businesses around the world loose their customers because the customers loose interest in those products and services, what has that to do with the prime rate? NOTHING. Why are a few companies thriving? Sheer luck? Absolutely NO. Can companies produce, market and sell products in a crisis? Yes, as long as we live, eat, move, search for new opportunities, create new opportunities, build more attractive products, provide better service, spend less on advertising nobody cares about and do what customers really are interested in.

For Even if you think – this is stupid, this is too easy, this is superficial, and I have absolutely no clue. Wouldn’t it make sense to improve your business anyway?

1) First off all re-architect your first impression:
– Stop the outsourced call centers and put less but well trained customer focused people on the phone
– Move your advertising budget towards customer relevant initiatives like blogs, communities, forums
– Seriously redefine your information policy – your shareholders rather have results than an over compliant closed company.

2) Rethink your product / service / pricing model:
– Work with product management on more transparent pricing models – the old customer rip off didn’t fly
– Listen to your customers and simply build what they ask for – if you don’t do it someone else will
– Take green and social serious. It’s not a hype it’s what the majority of customers care about.

3) Redefine your corporate values (if you have any)
– Make the ones who pay you (customers) not silly Kings but seriously valued Advisors and Advocates
– Measure, manage and control customer reflection on you not by anonymous endless surveys but by tangible activities in your ecosystem
– As CEO erase “Shareholder value” from your list of priorities. Shareholder value comes automatically and for free if your customers are happy and buy more products. Instead make market relevance the one and only goal for your business. Market relevance is when more people consider you important, trustful and buy your products, services and buy into your vision.

I’ve never been in a real recession before, so I can’t tell if this one is different or if our tools and information flow is so much better that we can analyze the issues. But it is very obvious to me that if people are less motivated to buy, mostly disappointed with the resources and services the seller provides them, that consumption goes down.

Plausibility Check:
1) Personal Experience
look at the last 6 months where you as a consumer bought things whether it was a new or used car, stereo, TV, video games, phone services, homes, food, clothes, booked a vacation… what ever, how happy where you with the service, hoe easy was it to buy it, how compelling was the offer.
2) Influence
Now check: what or who were the influencing factors for said purchases, how important was advertising for any of them, how important were past experience, suggestions from friends or what kind of other influences would you name as important
3) Behavior
Try to remember what would you have purchased either faster or more of in the last 12 month if the offer would have been more compelling, if the producer or reseller would have been more trustful and if the whole business experience would have been more attractive. Whatever dollar amount you come up with from the last 12 month multiply it by 300 Million (US population) and you get the “Recession value”. For instance if you would have purchased stuff worth of $1,000 in the last 12 month as an average citizen – The “Recession Value” for the US economy would be 3 Trillion Dollar. A lot of tax dollars our country is loosing too.

Well – this is just a short and superficial glimpse into our super complex economic network. But hopefully enough to get you thinking “What can I do to create a better business experience for my customers, prospects and partners”.

 

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