Efficiency, resilience, and ethics.

John Michael Greer has an important post about systems in general, focusing on efficiency and how efficiency is achieved at the cost of resilience. Please read it; JMG and the commenters have many important things to say.

Myself, I diverge from the conclusion that JMG makes. I find that efficiency is the quality of a system that measures how much output is produced from a given amount of input, based on the primary inputs and outputs of a system. Resilience, to me, is how much change there is in the expected output from inputs that are not the designed input.

Take a rain gauge, and a one inch rain fall. A very efficient rain gauge will report that 1.000 inches of rain fell. A resilient rain gauge will report the same thing, regardless of the presence of dust, bugs, sunlight or clouds, or street work three blocks away.

Efficiency, then, and resilience can both be engineered into a system, with only modest compromises. A well engineered system, either through adjustments and corrections over extended use or by good design, might well have both good efficiency and good resilience.

What JMG, and others, look at, is skewed engineering. That is, emphasizing efficiency while ignoring, or actively degrading, resilience. Few people want a car that gets great fuel efficiency if it means the thing falls over when you turn a corner (one of the examples JMG uses). That is a focus on efficiency without attending resilience. Making a car that won't pollute California, on the other hand, resulted in too many vehicles that were massively inefficient in use of fuel, but very efficient at passing California screening standards (that should not have been a primary output of the design).

So, today I read about Seth Godin's comments on happy and unhappy versions of business ethics.

The happy theory of business ethics is this: do the right thing and you will also maximize your long-term profit.

After all, the thinking goes, doing the right thing builds your brand, burnishes your reputation, helps you attract better staff and gives back to the community, the very community that will in turn buy from you. Do all of that and of course you'll make more money. Problem solved.

The unhappy theory of business ethics is this: you have a fiduciary responsibility to maximize profit. Period. To do anything other than that is to cheat your investors. And in a competitive world, you don't have much wiggle room here.

If you would like to believe in business ethics, the unhappy theory is a huge problem.

I see a direct example of efficiency and resilience. In the "happy" theory, the focus is on resilience, on making changes and unexpected inputs to the system (the company) simple noise, and not impacting the ability to do business. In the "unhappy" theory, resilience is deliberately avoided as the sole engineering paradigm is focused on the "efficiency" of making a profit, and avoiding loss.

And I think that Seth and JMG both overlook the obvious.

That is, a resilient design, with good efficiency, is necessary. Spend to much effort on resilience, on effects on the system that don't pay off in supporting the designed output, and you waste resources and opportunities. Any system that fails to produce enough output will fail or be abandoned, so efficiency at some level is needed for survival of the system.

I look at a system differently. The health of the system might describe the ability to survive and perform in the presence of unexpected occurrences, and be described as resilience. Production would be the output of the system, and be described by the limits to how much can be produced, and by the efficiency of using inputs to produce a given output. Basal needs would describe inputs needed for the health and operation of the system that don't directly result in primary output production.

And I think that the definitions of efficiency and resilience are two different axes on a graph, and not opposite ends of a continuous spectrum. The better the design or engineering, the more each is maximized.

For Seth, the happy theory is useless to an organization that doesn't know how to do business. The unhappy theory makes an unwarranted assumption that ruthless operation is necessarily a successful business tactic; it can and often is a more rapid path to dissolution.

About the myth of "buy American"

I got an email, from someone that believes the union line that we have to "buy American" when they really mean "buy Union" so that unions can do what they do with more money.

> http://articles.latimes.com/2010/jun/18/business/la-fi-auto-quality-20100
> 618
>
>
>
>
> We don't need government intervention to save ourselves as a country.
> We need a movement. A unified movement for the people, by the people.
> As members of the greatest nation, we owe it to ourselves and the rest of
> the world to protect and strengthen our economy. With the greatest "buying
> power" of any nation, all that is needed for a national resurrection is
> for us to give the power back to ourselves. Support Made In the U.S.A.
> Support yourself. Support US, so that we may continue supporting others.
>
>
> Before your next purchase go to www.MadeInTheUSA.com to search for an
> American manufacturer of that product.


Ultimately, American economic affluence has been built on debt, and only indirectly on spending.

The problem today at the national level is that fewer families have nearly as much money to spend, and major assets like homes have significantly less value to use as collateral. The result is that fewer people have the means or confidence to service as much debt as previously.

Revolving credit accounts (credit cards) are being paid off more than in recent times, so that the total consumer debt is shrinking. Too many people cannot pay, and their accounts are being closed and taken as losses. That means that credit brokers and speculators have a shrinking mass of debt to manage, to package and sell, and to trade amongst themselves.

You are familiar, I hope, with the mortgage problems people are having. Many families believed the hype that they could pay three and four times the cost of their house and consider it an investment, a lump of value to be used into the future. With the current reduced ability to service mortgages, and the way houses have lost face value, fewer homes are being sold as "investments". Which contributes in a big way to the collapse of the value of mortgages outstanding, and even more to the illusory "assets" of the credit default swap and mortgage derivative industries.

The national debt, on the other hand, isn't collapsing or shrinking. The US is more like the family who cannot find jobs that pay as well as before, that sees the values of assets and incomes dropping because of things outside their control. Unfortunately, President Obama seems intent on following the family destined to foreclosure, instead of the choices many families made to reduce their debt to something they could manage on their reduced income, or eliminate entirely.

How families and individuals choose to spend their (fewer) dollars won't matter much, because it won't restore the debt levels that fueled the bubble in the American economy.

Industry won't be nearly as able to respond to increased local demand, today, because the direct and indirect costs have skyrocketed. Government regulations are more onerous. Limits on access to energy, including oil and electricity, are becoming more apparent and limiting growth, and the prices aren't going to be coming down as demand increases and market supplies continue to decline. And too many of the workers of yesterday have fallen from the workplace, and the younger workers that should have been learning industry are mowing yards and hanging out.

Traditional transition jobs, with low pay and providing discipline and training to the young, are going instead to older and more experienced workers displaced from higher skilled jobs by the collapse of credit, increased cost of meeting government regulations, and increases in minimum wage. The lowered family incomes and growing masses of untrained never-employed young and minority people that should have been workers amount to a problem that may take decades -- and much more than choosing to buy American -- to fix.

The mass of unemployed and under-employed people are a drag and a drain on the American economy. While they are potentially a resource, today they consume collected tax revenue and community resources that deplete the assets that others might have used to provide jobs. They are not increasing in skills and future value to the market place; they instead represent a growing body of difficult to hire, difficult and expensive to train, and unreliable workers. The virtues of Americans in previous decades was much less about our liberty and craft, but much because of our dedication to community and nation, our employ-ability and ever increasing body of skill and knowledge.

The body of unsuitable non-workers is building. We are amassing a regulatory quagmire. Their is an increasing squeeze of declining energy available and increasing energy costs. In short, the ability of industry in America to respond to increased demand is limited.

Besides, when you hold out for the Made In America label, think of the number of jobs, in America, you threaten - that distribute, transport, and sell those products.

Choosing what to buy based on where products are made is a mere puff of breath, when applied to the problems of the torrent of economic and personal liberties abuse coming from Washington, DC and the Obama Administration, and this and previous Congresses.

If you want to fix the American economy, I suggest that you start with supporting those Senators and Congresspeople opposed to the current regulatory and tax and debt agendas. I suggest that the most effective steps to make buying American and restoring the American economy is to fix the problems facing the American workplace.

I think that the most hopeful future will hold a lot less affluence, a lot less ability to leverage debt into a sellable commodity, but with more people working for sensible wages (and not whatever government or unions can impose).

"We don't need government intervention" to solve these problems? I disagree. Government intervention is, I believe, the biggest part of America's economic woes and the biggest reason so many young and minority people are unemployable at present, and that so many American families are making do with less than in previous years, with little hope for a quick recovery. Government intervention has to be addressed first, to make anything else worth the effort.

I think much of the growth of American affluence has been directly related to the expenditure of cheap energy -- mostly fossil fuels. Fuels are no longer as cheap, and President Obama is hell-bent on making all energy, including oil and natural gas, more expensive. Those individuals, industries, and governments expecting the historical models of generating lots of money to work in the future are doomed to be disappointed, without the no-longer-available cheap energy those expectations are based upon.

Brad K.
Ponca City, OK

Getting the economy backwards

President Obama got it backwards, at his press conference. You don't use tax revenue (collections) to create jobs. Collecting revenue destroys jobs, it always has. The more you collect (the higher the tax rate), the more jobs you destroy.

You destroy jobs when you increase the cost of hiring someone, that should have been obvious decades ago, but I guess the news hasn't gotten to Harvard Law School. I bet B. Hussein Obama could have gotten a straight answer from the Business School at Harvard, but the Harvard Business School doesn't talk about socialism as much. Business schools tend more toward making capitalism work well.

For the government to get more revenue, they need to get more people working. See, businesses don't pay taxes, they collect them. Any tax the IRS takes from any business increases the cost of doing business, which means that the business charges its customers more, or has to fire an employee or three, so that it can show the owner a profit. Or the business moves out of town (out of the country), or closes.

This also happens when you make regulations that cost the business, such as the EPA's grand "let's shut down the energy plants by making them too expensive to build and operate" scheme. Burning coal and oil don't put as much CO2 in the air as the swamps (protected wetlands, many of them) put out methane, as methane is much more green-housey than CO2. Well, and then there is the whole Brazilian effort to tear down the rain forest to grow "sustainable" ethanol, and then China is busy stripping the rain forests of Asia for lumber and charcoal to heat homes and cook meals. Tearing down old-growth forests, now, seems to this farm boy a pretty sure way to change the "climate".

After the profligate oil and coal burning, not to mention gunpowder use of the 1940s (WWII), how did it turn out that the 1950s were reputed to be the mildest decade on record, if putting out CO2 is supposed to de-stabilise the atmosphere?

Take a million bucks. Spend it on entitlements, to, say, a thousand people. How many jobs did you create, outside the bureaucracy of administering the plan (requiring more tax spending to pay for careers, facilities, benefits, and pensions)? Now take another million bucks, not collected as taxes, from, say a big company. How many jobs are not threatened? Maybe four, maybe fifty, depending on salaries and benefits.

The US Government cannot spend money that creates a job, that doesn't dismantle the ability of American employers to maintain or create more jobs somewhere else, not when they tax employers.

Either President Obama lies when he says he wants to use the government to create jobs, or he is just plain ignorant. I am sure at least one person has been able to describe what increasing taxes means to jobs growth or jobs lost. So is it lies, or is it refusal to hear the truth?

President Obama yesterday held a so-called press conference, All questions were pre-approved, the reporters asking were allowed, by name, to participate in a pre-determined order. It sounded more like a rehearsed press release/propaganda presentation/re-election speech.

And B. Hussein Obama trotted out the waste of the corporate jet again. Like his disparagement of the ATM machine, the corporate jet doesn't represent too much profit -- it represents the jobs of the folk that built and maintain that plane, that operate it daily. And it represents, all too often, a cost savings to the company. I mean, corporations exist to pay profits to the owners, and spending too much on anything from CEO salaries to jets, etc., can be expected to get the company in trouble with investors.

When government increases the costs of corporations and other businesses by collecting taxes, by increasing regulations and the minimum wage, they increase the amount of money that that business has to take in, that comes from the economy. Which leaves the customers of that business, and all other businesses, with less money to pay taxes and live comfortably.

And that means raising tax rates, especially for those in business or wealthy, make taxes harder to pay for the working people and middle class and poor.

I could wish that the American President didn't sound like a college protestor from the 1960s, with the Marxist change of "destroy the military industrial complex". Because this President is doing what the anti Vietnam War protestors advocated. And that Marx prescribed, to prepare a resisting culture for Communist rule. Or even a Chicago gang boss would want to make himself rich.

I think we are all correct - America is racist.

I watched an interesting take on PJTV, about how the liberal left and Democratic party have taken to refer to all dissent as 'racist'.
http://www.pjtv.com/?cmd=mpg&mpid=346&load=5386

Tony Katz (The Conversation), discusses the political label, "racers" - those that call all dissent 'racism'.

I think the problem is that there are two conflicting definitions in play for the concept of racism.

I think there is a racially-oriented agenda within the African-American community, that the liberal left is promoting. Agenda issues include affirmative action, avenging historical prejudices, biases, and harm.

This, any conflict with that political agenda actually is racist.

The version of racism I learned was an over-riding bias or prejudice one holds, that acts against others solely on the basis of their apparent or real race.

At dictionary.reference.com: Racism:

1. a belief or doctrine that inherent differences among the various human races determine cultural or individual achievement, usually involving the idea that one's own race is superior and has the right to rule others.
2. a policy, system of government, etc., based upon or fostering such a doctrine; discrimination.
3. hatred or intolerance of another race or other races.


PJTV discusses personal opinions of individuals, and whether, as a group, non-liberals share a common antipathy toward black or African-American people. Which appears to not be the case.

Hatred of white people, on the other hand, seems to be a shared and common hatred and prejudice among a sizable and vocal part of the black and liberal communities. So the conservative right is content to point at the racism of the left as being the cause of the miscommunication.

At the same time, the agenda of the left is discounted by the right, earning a blanket condemnation for racism of those same conservatives.

The part that bothers me most is that some rude and disrespectful leaders on many sides use the distrust and enmity to further their own personal financial and political ambition. It seems that calmness and communication will resolve the enmity.

Time wounds all heels. (Isaac Asimov)