Saturday, January 25, 2014

Stupid Management Tricks

We at have to work for a living, if that was not clear to you already. We are not rich and we get no income from the blog. (You may have noticed the complete lack of advertising on the blog so far.) We have very little time during the week to work on the blog because we have to keep our jobs. Therefore can only be a kind of weekend hobby at this point, but it is also much more than that to us. It is a life's work in progress.

We mention this because even though we are not managers and never have been, we have worked for many managers over the years. We have come to see management and its systems in a sense as the source of most of our economic problems. That is, our economic problems are the result of bad management and bad managers in systems that encourage these things. This applies to governments as well as to private businesses. After all, what is government if it is not a huge gang of managers, often bad ones?

The fact that our managers and management systems need an overhaul and upgrade is why we have criticized management before and will do so again today. It is also why a major part of the tosoc plan is to improve the relationship between management and the people. But that is not our focus today. Today we will just present some stupid management tricks.

In general we have found that managers are simply company or government hacks. Their reality is in the realm of perception, not physical reality, and they get their realities from their own managers. They just have to look good to their bosses; they do not have to be good. Since another part of their job is to manage people, they have a tendency to want to keep employees who know how to look good, too, but who are not necessarily good at what they do. The danger is that they and their fiefdoms of workers build a dream world that has no relation to physical reality. That works great until reality steps up and smacks the whole system in the face.

This happens in government more, and more seriously, than in private business because the government is rich enough to maintain its fantasies and delusions much longer than any private concern. The most famous recent example in the US is the implementation of the Affordable Care Act (the ACA, or "Obamacare"), which was a great fairy tale until it was shredded by contact with the real world. As another possible example, it seems likely that the implementation of Dodd-Frank will suffer a similar fate. We think that because the bill was created with all the serious consideration and forethought that went into the ACA. Dodd-Franks' likely failure will be quieter, however, because the public does not have much interest in that fairy tale.

Aside from departure from reality and surrendering one's critical faculties to one's boss, another important management skill is damage control and managing expectations. This is the process of turning lies and failure into a kind of truth and success. For example, we feel quite sure that despite the ACA disaster, bits of its intent will survive for a long time. Therefore, after a few years and after the hubbub dies down, suddenly we will see reports about the bits that survived, and we will be told what a great success the ACA was.

At a lower and more personal level, here are some examples of real-life stupid management tricks.

First up is "commitment." Managers always want workers to commit to deadlines, even when the deadlines do not make sense. As much as anything else, the purpose appears to be to give the manager the moral high ground when workers fail to meet the deadlines. In fact, sometimes it may be that managers intend for workers to fail. If they need to buff up the paperwork to justify getting rid of some personnel, "Failed to meet deadlines" makes good copy.

Another side of "commitment" is that people have lots of commitments—to their loved ones, friends, and communities. Managers therefore sometimes demand that workers commit to unreasonable deadlines as a sort of psychological test. Which workers are willing to break their personal commitments in order to meet their commitments to the company? Some managers feel that the best employees are the ones who will stiff their own children in order to climb the corporate ladder. It is not clear how widespread this kind of thing is, but it raises the questions whether this should be our vision of the future and whether we should make leaders out of those who will break promises to their loved ones, and encourage others to do the same, for the sake of an unfaithful corporation. This may be a major contributor to the number of bad managers that we have.

Second, there are kindergarten-style motivational tactics, like gold stars or candy. One of the most childish and offensive recognition programs in our experience had one of our managers dropping candy bars in selected workers' chairs early in the mornings. What did that really mean? If all the reward we got for above-average productivity and extra effort was a candy bar, then management must have thought we were overpaid anyway. It was the kind of "reward" prograrm that would increase resentment of workers toward management, not reduce it. Who can feel good about working extra hard only to get a candy bar in return?

Then there is polishing the management resume. One worker told us this story: A manager hired a worker for his group, but there was nothing for the worker to do. (Note that this was a high-tech position, not unionized.) When asked, the manager unexpectedly told the truth about his motivation. As the manager's twelfth employee, the manager had reached the "next level" so far as his resume was concerned. Having managed at least twelve workers, he could apply for the next higher-level management job somewhere else.

If some of you readers out there are saying to yourselves, "What's wrong with that? It was the smart thing to do," then perhaps you are part of the problem. The problem is that we may be selecting our leadership in this country from those who are faithless to their own managers and obligations. This may be another major contributor to the number of bad managers we have.

Finally, there is "ownership." Managers these days often exhort their employees to "own it" or "take ownership" or "act like you owned the company." For many workers this may just drive home the fact that we workers do not own anything of significance. Also, this could be interpreted as saying that the workers get to own all the problems but none of the wealth. We get nothing but our regular salaries in return for "owning" the problems of the company and resolving them. The real owners get a lot and they get to own everything, too.

And what are we supposed to say when we are asked to "take ownership" of some problem and resolve it? Because we need to keep our jobs, we cannot tell the truth and say "Look, I will help you and work hard to resolve this problem because that is my job, but please; I do not own anything here, especially not the problems." Instead we have to lie like a manager. We have to smile and say, "Sure! You can count on us to get it done!"

At the risk of being repetitious, when managers ask you to "take ownership" of a problem, they are really asking if you want to keep your job. If you say anything other than that you will be happy to take ownership, then you are on your way to unemployment. (Notice that they always want you to "own" some unpleasant problem. They never ask you to take joyful ownership of a pile of money.)

This has been just a smattering of stupid things that managers do, things that increase the unexpressed anger and resentment of the people. The danger is that this is a negative feedback loop, where the workers lose faith in management because of its lies and betrayals, and where, after having forced the workers to lie to them and fail them, after firing the workers who tell them truths they do not want to hear, management loses faith in the workers. At that point, in a poisoned atmosphere of mutual mistrust, there can be no real cooperation. Getting anything done will require the use of force in some form, if only to say "work or starve!" Our leaders may be taking us to just this kind of society.

One reason they might do that is that it is always easier to rule than to lead. It is easier to give orders than to negotiate and convince. It certainly makes life easier for the managers, especially for lazy and stupid ones. On the surface, ruling may also appear to be a more efficient and profitable way to run an economy. However, history shows that leaders are more effective in the long term than rulers, and that rulers tend to impoverish their economies ... if anyone cares about the truth and the long term anymore.

One very brief way to express's plans is to say that we want the people to take the actions necessary so that no manager can threaten anyone's livelihood. We should not allow our managers to control our basic livelihoods. That is too much power to put in professionally faithless hands.

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (

Copyright © 2014 TheOtherSideOfCapitalism

Saturday, January 18, 2014

Greed is

Greed is ...
  • Universal?
  • Evil?
  • Natural?
  • Good?
  • Unnatural?
  • Inevitable?
  • Genetic?
Columnist Peggy Noonan has been on a bit of a tear recently about moral issues. See her Wall Street Journal column Our Selfish Public Servants from today. She is concerned about an apparently rising tide of selfishness on the part of our public servants that has ill effects on society. She closes by saying
"Someday history will write of our era, and to history the biggest scandal will be the thing we all accepted in our leaders, chronic and endemic selfishness. History will be hard on us for that."
OK, greed. Greed is bad. We know that. However, what is new here is that this is about government greed, not private greed. We think it is important for the people to realize that their government can be as greedy as any corporation, can cover up like any corporation, and can abuse the people like any corporation. See our previous post Relief for Manufacturers: Cambodia. Instead of working with the people and the manufacturers to raise garment workers' wages, the Cambodian government broke up the strike and restored the situation by ordering the workers to go back to work without any wage concessions.

There is a problem with the term "greed," however. It is just a pejorative label, not a measurable quantity. It is a "scarlet letter" that we pin on our enemies in the attempt to punish them socially. In truth, the difference between greed and need is not clear sometimes. Also, those with the ability to manage more resources should be allocated more resources. Are they greedy if they demand resources commensurate with their abilities?

This plays out differently in different systems. In socialist terms, just using the phrase "making a living" can evoke thoughts of "making money," "the profit motive," and "production for profit." Those are unacceptable ways of thinking and speaking in many socialist systems. Saying such things might even be against the law. Good socialists would not even think in terms of having to "make their livings." They are confident that heir needs will be taken care of by society. What good socialists should think about is how to contribute according to their abilities.

Even in egalitarian socialist societies, however, some have more ability to manage resources than others. Therefore persons with more ability will be given control of more resources. Also therefore they will live privileged lives compared to others, conditions commensurate with their contributions. This is necessary to keep morale high and support the continuation and quality of those contributions. Social stratification and hierarchy are natural and expected results even in supposedly egalitarian socialist societies.

The end result of stratification and hierarchy in socialist systems is of course the person who is supposedly the best resource manager of all. This person becomes the chief executive and chief administrative officer, and is of course the one who lives the most privileged life of all. This person directly and indirectly controls all of the society's resources. "The people" end up on the bottom again, and may live in conditions that are even worse than those that the worst capitalist system would impose on them.

Despite the fact that these individuals at the top of the socialist heaps control more of their societies' resources, with tighter control and less risk than any capitalist, it is difficult to apply the term "greedy" to them and make it stick. They do not own much as individuals, if anything, in a technical legal sense. They may not "make" any money at all in a technical legal sense. Thus they can argue that society has only temporarily assigned them so much power and privilege because they have shown that they are the best caretakers for their societies' resources and for their societies' visions of the future.

The sad fact is, however, that these persons live lives that are comparable not to any wealthy capitalists, but only to the kings and emperors that were supposedly relegated to the dustbin of history by social progress. They even find ways to pass their powers on to their sons and make their families hereditary rulers, as has been done already. For example, it has happened in what is called the Democratic People's Republic of Korea. Socialism in practice has come full circle and become what it claims that it hates.

The way sees it, these societies use "political currency" rather than money to carry out transactions at the higher levels. This has many advantages, the greatest of which perhaps is that the leaders are not accountable except to their own leaders, who will be reluctant to discipline lest they themselves be disciplined. Without ownership or money at the higher levels, the leaders cannot be punished for fraud, extortion, embezzlement, or other acts against individual ownership. They can just take what they want, something that leaders in capitalist societies must be wary of. How many politicians have been brought down in capitalist societies for example for misusing campaign funds? Many, but it will almost never happen in socialist societies. That is one reason why leaders tend to prefer socialism over capitalism. In a socialist sysem, one can rule. Under capitalism, one must lead, and leading is harder than ruling.

In any society, however, there are those who must be ruled and those who must be led. That is why there is inevitably a bit of socialism in capitalist systems and a bit of capitalism in socialist systems. recognizes that reality and incorporates it in our suggestions. Instead of awkwardly bolting bits of socialism onto capitalism and creating a Frankenstein result that still has major problems, we want to avoid those problems by seamlessly integrating socialist elements into a capitalist superstructure.

Finally, about greed, our readers will find that we rarely use the term. We think we have shown that greed operates just as much in socialist systems as in capitalist systems, but also that the accusation only has real political impact in capitalist systems. To us that means that the term is politicized and biased by nature. That is, "greedy" is just an epithet without foundation in reality. Its use makes rational decisions more difficult, not easier. Generally we will not use the term because we find it a stumbling block to keeping things "real."

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (

Copyright © 2014 TheOtherSideOfCapitalism

Saturday, January 11, 2014

Relief for Manufacturers: Cambodia

Headlines tell the tale. Here are three links to the latest updates of online Wall Street Journal articles by headline, from January 3rd, 5th, and 6th:

Strike, crackdown, and then everything returns to the way it was. Production resumes. Is this a happy or a sad tale? Here is a quote from the "Resumes Production" article:
"The fizzling of one of Cambodia's largest strikes in recent years brought relief for many garment manufacturers, who have complained of mounting financial losses because of missed shipments and lost orders."
Whew! All of us were concerned about the garment manufacturers and the stress they suffered from the strike. Now we can move on. The bodies have been buried. of course does not want to move on. This is another example how the poor are treated by the managers when the opportunity arises. Let us look at some of the economic details, also from the "Resumes Production" article:
"Garment manufacturing is Cambodia's biggest export business, supplying apparel to retailers mainly in the U.S. and European Union. The industry earned nearly $5.1 billion in the first 11 months of 2013, up 22% from the period in 2012, according to the Commerce Ministry. Cambodia has about 800 garment and footwear factories that employ about 600,000 workers, mostly women, labor officials say. 
"Manufacturers favor the country for its low-wage costs, but strikes are frequent because of what union leaders say is widespread discontent with meager salaries, poor working conditions and lax enforcement of labor laws."
This means that 600,000 workers generated about $5.6 billion in 2013 (estimated), or about $9,330 for each worker. Here is what they are paid (from the same article):
"The strike started as a protest against the government's offer last month to raise the industry minimum wage 19% to $95 a month, starting in April—well short of union demands for $160 a month. Workers then scorned a sweetened offer made by officials last week—a 25% increase to $100 a month, starting in February—and defied government orders to return to work by Jan 2."
Adjusting for the proposed increase, the workers are currently paid about $79.80 per month, or about $958 per year. On average, worker pay is about 10.3% of industry income in Cambodia.
Instead of complaining, the Cambodian government probably thinks that the workers should be grateful. Compare conditions in Cambodia to conditions in Bangladesh. In our tosoc update for 22 September, 2013, we noted a report about a Bangladesh garment workers strike (Tosoc Update 20130922). They were earning on average about $38 a month. That was less than 10% of industry earnings in Bangladesh.

Since then we see a report on that the Bangladeshi workers have won a 77% increase in monthly pay, to about $68 a month (Striking Bangladeshi garment workers win a 77% pay rise). Good for them! That corresponds to about $816 per year. According to the report, the Bangladesh garment industry makes about $20 billion per year with 4 million workers, or about $5000 per worker. With the pay increase, Bangladesh workers will now take in about 16% of their industry income. Very good!

In comparison, Cambodian garment workers had been earning about twice the pay for about twice the production of the Bangladesh workers. The articles do not say so, but presumably the Cambodian workers or their representatives are fully aware of what has happened in Bangladesh. A comparable 77% pay increase for the Cambodian workers would raise their incomes from about $80 a month to about $142 a month. No wonder the Cambodians are striking.

Beyond Cambodia and Bangladesh, US workers also need to be paying attention. The international rich, meaning international corporations and their owners, are always looking for cheaper labor. In the apparel industry, US employment dropped more than 80% from 1990 to 2011 (BLS Spotlight on Statistics: Fashion). This kind of trend is not limited to the apparel industry. It could happen in any industry.

The issue is not so much that US workers will lose their jobs because corporations move their operations to other countries, though that happens. The issue is that our money managers (the rich) will invest our savings in other countries. Those investments will create jobs that will not be available to our children. This is a variation on the theme we explored in our post Take from the Poor. The difference is this: We will be investing in the growth of other countries and not in the growth of our own. We will be absentee worklords relative to the workers in other countries, getting income from the fruits of their labor. If that trend continues, the risk is that we will work less and less, becoming a rentier nation. One for which large parts of the rest of the world labors at relatively low wages to maintain our lifestyles. (This will be true also for all the "Western" countries," not just the US.)

There is already enough worldwide anger about American "Imperialism." At this point, that anger is still misplaced. If the trend continues, however, that anger will ultimately become justified. We and our children will cease to work to produce what we need. We will be in a strange and probably unsustainable position. Our incomes will be based on our investments in those who produce what we need. We will pay for their goods and services, but if their wages are only about 10% of industry earnings, then we might get back as much as 90% of what we pay through our investments. What a refund!

That all depends on their allowing it to happen, however, which seems unlikely. We need to be prepared for change.

Finally, for, there is the question how multiple exclusive currencies and markets would help this situation. The main problem appears to be government support for international manufacturing rather than their own people. The Cambodian government ordered the garment workers to go back to work by January 2nd, according to the report. All we hear about is corporate greed. We do not hear enough about government greed. As we said before in Tosoc Update 20130922, government officials typically are not trying to keep up with their own people, they are trying to keep up with Western government officials. That means they have to squeeze their own people unmercifully.

That would change if Cambodian government officials were only allowed to earn and keep an internal currency, one that they cannot convert to a relatively hard external currency like the US dollar. Then Cambodian government officials would be in the same economic soup as their citizens. Their economic loyalties would no longer be to international corporations, but to their own people. Their wealth would be linked to their nations' wealth. Their focus would change from shooting their protestors to negotiating higher wages for their people. We cannot convert Cambodia from a poor nation to a wealthy nation overnight, but we may be able to turn it around and keep it from languishing in poverty. Who knows? We might even be able to help the US State of Mississippi. Support

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (

Copyright © 2014 TheOtherSideOfCapitalism

Saturday, January 4, 2014

Left for Dead

See this quote from the Global View opinion piece Obama's Envy Problem by Bret Stephens in the 31 December 2013 edition of the Wall Street Journal:
"Besides which, so what [if the top fifth takes in over half the aggregate income]? In 1979 the mean household income of the bottom 20% was $4,006. By 2012, it was $11,490. That's an increase of 186%. For the middle class, the increase was 211%. For the top fifth it's 320%. The richer have outpaced the poorer in growing their incomes, just as runners will outpace joggers who will, in turn, outpace walkers. ... 
"As it is, to whom except the envious should it matter that the boss now makes a lot more, provided you, too, also make more? ..."
Sorry, Mr. Stephens. This is not Obama's envy problem, this is your math problem. You looked at a snapshot of relative incomes today and said they were fine, but you did not consider the trend. It is not so much where income inequality is now, it is where it is going. Even if relative incomes are acceptable now, they will become worse unless something stops the trend. Your "who cares?" attitude means that no one need come to you for a solution.

The top fifth already makes about seven times what the bottom fifth makes. If the trend continues, that will become ten times, then 100 times, then 1,000 times, and so on. Is that still OK? How about when the multiplier is a million or a billion? And what is there in capitalist theory to stop the trend? Nothing. That is why it is important. It may not matter very much if our bosses makes seven times what we do, Mr. Stephens, but it will if they make a million times what we do. The whole economic system will break down. We will stop being a capitalist democracy and become a plutocracy. has a solution for this problem. The underlying issue is that, using Mr. Stephens' metaphor, we compel the walkers and joggers to compete for their lives against the runners. Then capitalism encourages the runners to leave everyone else for dead. So much for the idea that letting everyone work for their own selfish ends is good for society. That principle works well in situations where it possibly can work, but at some level of income inequality, it does not work at all.

In fact it is exploitative, oppressive, and cruel to force people to compete for their lives when they cannot win. That has been's major point all along. Walkers should only have to compete against other walkers and joggers only against other joggers. Sure, let the runners take the biggest prizes, but do not let them take all the prizes.

As it stands now, the system does not even recognize that some people are life's walkers and others are life's joggers. The government tries to fix this perverse nature of the system by taxing away some of the runners' prizes and giving them to the others. However, we think it would be even better to have a system that is not perverse by nature, but is designed to work properly in the first place.

On the other side of capitalism, therefore, the government would set up different competitions and apportion the prizes between them. There would be a competition for walkers, a different one for joggers, and yet another one for runners. It would not be possible for runners to win all the races. All the competitions would be, for lack of a better word, competitive. That way all types of competitors could survive and no one would be left for dead. Support

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (

Copyright © 2014 TheOtherSideOfCapitalism