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Source: (consider it)
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Thread: how to create jobs
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Josephine
Orthodox Belle
# 3899
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Posted
An acquaintance with a background in finance suggested that what we really need in order to help businesses create more jobs, and to overcome some of the problems that result from their duty to create as much value as possible for their stockholders, and at the same time to help companies that are struggling, is an accounting change.
Right now, everything related to employees is on the liability side of the ledger. Nothing about an employee is an asset on the books. Nothing. That's why, when a business is struggling, they want to get rid of their oldest and most experienced employees first -- those employees are bigger liabilities. They don't value the experience and knowledge those employees have, because there is nothing in the books that says those employees are worth the extra money that they cost.
She said that, until there is a change in accounting rules to make some aspect of employees (experience, training, recognition for work done well, etc.) an asset on the ledger, employees themselves are an expense, pure and simple, with no other value.
As a result, any business that requires a lot of people doing hands-on things (from restaurants to medical offices to, well, just about anything)have to regard their employees as an impediment, not a value. That results in the anti-employee behavior of the businesses, and in their reluctance to invest in training, equipment, etc., as well as their desire to reduce employee numbers.
So the accounting rules need to be changed to reflect the value of the employees.
I don't know how that can be made to happen, or even how to get it into the discussion. But it seems like something that would create a lot of value for companies, and help workers, and be a win all around.
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I've written a book! Catherine's Pascha: A celebration of Easter in the Orthodox Church. It's a lovely book for children. Take a look!
Posts: 10273 | From: Pacific Northwest, USA | Registered: Jan 2003
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lilBuddha
Shipmate
# 14333
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Posted
I agree with the basics, however this line,
quote:
their duty to create as much value as possible for their stockholders
highlights the biggest issue and one that drives your friend's observation.
The focus on quick returns over the long term viability is a massive component of the problem.
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I put on my rockin' shoes in the morning
Hallellou, hallellou
Posts: 17627 | From: the round earth's imagined corners | Registered: Dec 2008
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Caissa
Shipmate
# 16710
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Posted
What we need to do is abolish capitalism and get on with a more equitable economic system.
Posts: 972 | From: Saint John, N.B. | Registered: Oct 2011
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Boogie
Boogie on down!
# 13538
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Posted
quote:
Originally posted by Caissa:
What we need to do is abolish capitalism and get on with a more equitable economic system.
How about "Co-operativeism"?
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Garden. Room. Walk
Posts: 13030 | From: Boogie Wonderland | Registered: Mar 2008
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Josephine:
An acquaintance with a background in finance suggested that what we really need in order to help businesses create more jobs, and to overcome some of the problems that result from their duty to create as much value as possible for their stockholders, and at the same time to help companies that are struggling, is an accounting change.
Right now, everything related to employees is on the liability side of the ledger. Nothing about an employee is an asset on the books. Nothing.
You'd think businesses would have at least some idea of the productive capacity of workers, and might regard the ability to [build their product/provide their services/whatever the business model is] as something of an asset. If they don't regard productive capacity as an asset now, I'm not sure revising accounting rules will change that.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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cliffdweller
Shipmate
# 13338
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Posted
quote:
Originally posted by Crœsos:
]You'd think businesses would have at least some idea of the productive capacity of workers, and might regard the ability to [build their product/provide their services/whatever the business model is] as something of an asset. If they don't regard productive capacity as an asset now, I'm not sure revising accounting rules will change that.
Exactly. The lack of respect some American business owners & CEOs have shown for their own workers in the last 11 months has been shocking.
But in the end, you notice what you value. If you don't value labor, you won't notice how they contribute to your bottom line. What we're talking about here is not a simple matter of accounting. We're talking about a change of heart and of worldview-- and those things never shift quickly, or easily.
I suspect we are in for a very rough patch.
[ 04. December 2012, 14:46: Message edited by: cliffdweller ]
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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner
Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008
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Beeswax Altar
Shipmate
# 11644
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Posted
quote:
Originally posted by Caissa:
What we need to do is abolish capitalism and get on with a more equitable economic system.
What system would that be?
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Losing sleep is something you want to avoid, if possible.
-Og: King of Bashan
Posts: 8411 | From: By a large lake | Registered: Jul 2006
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Josephine
Orthodox Belle
# 3899
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Posted
quote:
Originally posted by cliffdweller:
in the end, you notice what you value. If you don't value labor, you won't notice how they contribute to your bottom line.
That's the point, though. CEOs and CFOs and people with MBAs are all trained to notice what hits the bottom line. If their labor never hits the bottom line in any way that they can see, they won't notice it, and they therefore won't value it appropriately.
If you put the value of labor on the bottom line, because the bottom line is what they value, they will notice it, and will begin to value it. If it's only the cost of labor that is on the bottom line, then it's only the cost that they notice.
I think that changing the accounting rule could change the behavior of corporations very, very quickly.
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I've written a book! Catherine's Pascha: A celebration of Easter in the Orthodox Church. It's a lovely book for children. Take a look!
Posts: 10273 | From: Pacific Northwest, USA | Registered: Jan 2003
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Enoch
Shipmate
# 14322
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Posted
How would you put a financial value on the workforce, capable of going in the balance sheet unless you owned the workforce? I thought that was called slavery.
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Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
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cliffdweller
Shipmate
# 13338
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Posted
But that data is already out there. They already have records of things like productivity, and hours worked, and output, and wages as a percentage of overhead. They have all that data.
The problem is not that they don't have the data. The problem is that they don't notice it. All of us are bombarded with a slew of data every day. We can't attend to all of it. So we selectively attend to the ones that we consider relevant, important.
For whatever reasons, US business owners & CEOs have chosen to consider the already-present data re: the contributions of their workers irrelevant. They have chosen to give it no more consideration than the color of socks worn by the guy standing next to them in line at Starbucks. The data is out there-- it's able to be discerned. It is attending to it, valuing it, considering it relevant, that brings change.
And I simply don't know how you make that sort of change in worldview.
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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner
Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008
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Sober Preacher's Kid
Presbymethegationalist
# 12699
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Posted
Until 1980 or so, most corporations did value their employees, they wanted to retain them and knew that they were the basis of production. But then finance types took over, neo-liberalism came in and "downsizing" became the fashion.
I've worked at companies were "contractors" vastly outnumbered "employees"; the latter was some sort of status. It's a legal sham, but the Employment Standards Act here in Ontario permits it.
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NDP Federal Convention Ottawa 2018: A random assortment of Prots and Trots.
Posts: 7646 | From: Peterborough, Upper Canada | Registered: Jun 2007
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moonlitdoor
Shipmate
# 11707
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Posted
quote:
originally posted by Josephine
If it's only the cost of labor that is on the bottom line, then it's only the cost that they notice.
We seem to have some scope for misunderstanding accounting terminology here. The opening post refers to showing the value of employees' skills/knowledge on the balance sheet as intangible assets. But the term the bottom line generally refers to the profit and loss account. The proft and loss account automatically includes the contribution of labour as well as its costs, in the current accouting period, because it represents the difference between the company's revenue, partly generated by its labour force, and its operating costs, partly comprised of its labour costs.
As far as the balance sheet is concerned, it would be interesting to know what your friend was referring to as far as the liabilities side, as you won't generally find much in a company's liability statement which is directly related to labour costs. That's because liabilities are only for events which have already happened but which have future financial consequences. So you generally have a current liability to pay your workforce for the work they have already done, but that is only likely to be a month's worth the way most companies operate. There are no liabilities for the costs of continuing to operate in the future so future labour costs are not in the balance sheet.
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We've evolved to being strange monkeys, but in the next life he'll help us be something more worthwhile - Gwai
Posts: 2210 | From: london | Registered: Aug 2006
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the giant cheeseburger
Shipmate
# 10942
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Posted
quote:
Originally posted by Josephine:
Right now, everything related to employees is on the liability side of the ledger. Nothing about an employee is an asset on the books. Nothing. That's why, when a business is struggling, they want to get rid of their oldest and most experienced employees first -- those employees are bigger liabilities. They don't value the experience and knowledge those employees have, because there is nothing in the books that says those employees are worth the extra money that they cost.
The question has to be asked then - why are the older employees costing more?
Usually the answer is that they advanced through to higher pay scales because they've been employed there for a given length of time and regarded as entitled to a higher pay scale. If workers were to be promoted to higher pay rates only when they applied for it and had demonstrated that they could maintain the higher level of productivity, then it would be demonstrable that they contribute a higher amount of value to the company.
quote:
Originally posted by Crœsos:
quote:
Originally posted by Josephine:
An acquaintance with a background in finance suggested that what we really need in order to help businesses create more jobs, and to overcome some of the problems that result from their duty to create as much value as possible for their stockholders, and at the same time to help companies that are struggling, is an accounting change.
Right now, everything related to employees is on the liability side of the ledger. Nothing about an employee is an asset on the books. Nothing.
You'd think businesses would have at least some idea of the productive capacity of workers, and might regard the ability to [build their product/provide their services/whatever the business model is] as something of an asset. If they don't regard productive capacity as an asset now, I'm not sure revising accounting rules will change that.
Good managers can be expected to understand the productivity because they read the timesheets (or production figures) and not just the aggregated balance sheets. It is not reasonable to expect a bean counter reading a balance sheet to understand the productivity of individual employees when all they have is the big picture of the overall performance of the business or division.
quote:
Originally posted by Boogie:
quote:
Originally posted by Caissa:
What we need to do is abolish capitalism and get on with a more equitable economic system.
How about "Co-operativeism"?
Even in a cooperative, a member who does not pull their weight will not reap the rewards as greatly as a member who does.
For example, I do my banking through a Credit Union of which I'm a member. If I do everything right and don't let any of my accounts get overdrawn then all is well, but if I do then I have a small penalty fee deducted for being a burden on the membership.
quote:
Originally posted by Josephine:
If you put the value of labor on the bottom line, because the bottom line is what they value, they will notice it, and will begin to value it. If it's only the cost of labor that is on the bottom line, then it's only the cost that they notice.
I think that changing the accounting rule could change the behavior of corporations very, very quickly.
The value of the labour is in what goods and services they produce, the income from which does go on the big picture balance sheet.
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If I give a homeopathy advocate a really huge punch in the face, can the injury be cured by giving them another really small punch in the face?
Posts: 4834 | From: Adelaide, South Australia. | Registered: Jan 2006
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by the giant cheeseburger:
Good managers can be expected to understand the productivity because they read the timesheets (or production figures) and not just the aggregated balance sheets. It is not reasonable to expect a bean counter reading a balance sheet to understand the productivity of individual employees when all they have is the big picture of the overall performance of the business or division.
Even taking a "big picture" view, the idea that productivity is a result of the efforts of workers doesn't seem terribly complicated to grasp. You don't need to know the specifics of which individual workers are the most productive to get the very basic concept "if we have no workers, work won't get done".
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Josephine
Orthodox Belle
# 3899
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Posted
quote:
Originally posted by moonlitdoor:
quote:
originally posted by Josephine
If it's only the cost of labor that is on the bottom line, then it's only the cost that they notice.
We seem to have some scope for misunderstanding accounting terminology here. The opening post refers to showing the value of employees' skills/knowledge on the balance sheet as intangible assets. But the term the bottom line generally refers to the profit and loss account.
If there is an opportunity to get accounting terminology wrong, I will probably get it wrong. I am reasonably certain that my acquaintance was talking about the balance sheet, not P&L.
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I've written a book! Catherine's Pascha: A celebration of Easter in the Orthodox Church. It's a lovely book for children. Take a look!
Posts: 10273 | From: Pacific Northwest, USA | Registered: Jan 2003
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Beeswax Altar
Shipmate
# 11644
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Posted
quote:
Originally posted by leo:
quote:
Originally posted by Beeswax Altar:
quote:
Originally posted by Caissa:
What we need to do is abolish capitalism and get on with a more equitable economic system.
What system would that be?
One that is not based upon usury.
Such as?
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Losing sleep is something you want to avoid, if possible.
-Og: King of Bashan
Posts: 8411 | From: By a large lake | Registered: Jul 2006
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ken
Ship's Roundhead
# 2460
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Posted
quote:
Originally posted by the giant cheeseburger:
If workers were to be promoted to higher pay rates only when they applied for it and had demonstrated that they could maintain the higher level of productivity, then it would be demonstrable that they contribute a higher amount of value to the company.
Except that that is the way the vast majority of small and medium sized companies do it anyway. The slowly-rising-up-the-pay-scale thing is almost dead except in some very large organisations (private as well as public)
And payment by results sounds all very well, but in practice it usually leads to whoever the middle managers like most getting the promotion or bonus. Or else to workers getting paid for unimagiitivly sticking to stupid rules and targets becoming completely detached from what they are supposed to be trying to do. Its a recipe for arse-lickers and jobsworths and bullies.
And once you've promoted someone for making a bit more money for their boss than the next bloke what do you do when they get a little older or slower? Chuck them out and replace them with a younger model? That's what most manual employers used to do in the 19th and early 20th centuries. There never was a golden age when all those lovely paternalistic bosses valued their workers. In many manual occupations your earnings peaked in your early 20s and it was downhill from then on.
And you can't realistically measure most worker's individual productivity anyway - its been a long time since we were all employed in vast factories putting wigibuggers on doodaflips and the one who flipped the most bruggleyshites per fortnight was worth more to the business. How do you fairly measure a monetary value of the productivity of a teacher (OFSTED? ![[Projectile]](graemlins/puke2.gif) ) or an accountant or a social worker or a call centre worker or a supermarket checkout worker (whose work rate is determined by the rate at which the system presents them with customers and the way their bosses set up the systems they use) or a programmer (code metrics? ![[Killing me]](graemlins/killingme.gif) ) or a plumber (if involved in domestic repairs, then every job is different - and their boss gets paid more the longer they take to do the job) a "consultant" or even a "manager" (which I think may be the individually most common job title in Britain these days)
And most importantly, most work is done by workers together, by people co-operating. The sort of individualistic hypercompetitive war of all against all that maybe some sales workers or estate agents or unfortunate middle managers in a few brutally run large companies, might get involved in, where one winnter takes all the prizes, and the losers get the boot, just doesn't happen in most jobs. Its the whole team, maybe the whole organisation, that does well or badly, not some individual within it. Good work makes other people's work easier and amkes them more produictive. Bad work can have the opposite effect. Sometimes things succeeed or fail for no reason under your control at all. When things go right for a project even the worst workers on it benefit, when badly,m even the best can;t fix it. But maybe the same team will do different ly next year? re on Why look for completely artificial reasons to pay some more and others less, to promote one and sack another,just because it makes the bosses feel more macho? Why set workers against each other when they need to co-operate?
On second thoughts, no need to answer that last question... we know why it pays bosses to set workers against each other.
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Ken
L’amor che move il sole e l’altre stelle.
Posts: 39579 | From: London | Registered: Mar 2002
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moonlitdoor
Shipmate
# 11707
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Posted
quote:
originally posted by Joesphine
I am reasonably certain that my acquaintance was talking about the balance sheet, not P&L.
ok, well in terms of the balance sheet, I don't think it's right to say that employees feature heavily as liabilities but not as assets. They don't feature much on either side. That's because as I said before, liabilities are only for events that have already happened. Generally a company has already paid its workforce for the work they have already done, a liability only arises for work done but not yet paid for. The fact that they will have to be paid in the future might make them a liability in the mind of the Chief Executive but not on the balance sheet.
The reason why they are not assets, in UK accounting principles at least, is as Enoch alluded to, that you can only claim things as assets if you have control over them for the future, and you don't have control over your employees because they might leave. I am not really qualified to comment on the overall consequences of changing such a principle, but one obvious one is in terms of secured loans. Secured loans are at lower interest rates than unsecured loans because the lender can expect to be repaid from the assets of the company in the event of a default. If the assets of a small company were primarily people who might get a better offer the week after the loan, this would be a problem.
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We've evolved to being strange monkeys, but in the next life he'll help us be something more worthwhile - Gwai
Posts: 2210 | From: london | Registered: Aug 2006
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deano
princess
# 12063
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Posted
quote:
Originally posted by Beeswax Altar:
quote:
Originally posted by leo:
quote:
Originally posted by Beeswax Altar:
quote:
Originally posted by Caissa:
What we need to do is abolish capitalism and get on with a more equitable economic system.
What system would that be?
One that is not based upon usury.
Such as?
Anyone going to answer BA?
Anyone prepared to nail their colours to the mast?
Go on - for old times sake. I miss the cold war.
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Caissa
Shipmate
# 16710
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Posted
All BS has to do is look at my avatar for my answer.
Posts: 972 | From: Saint John, N.B. | Registered: Oct 2011
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Drewthealexander
Shipmate
# 16660
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Posted
It's an interesting question how a business attributes value to its workers. There are presumably means other than a balance sheet. Since we are all living longer, we will eventually get to the point when 'older workers' will be in the majority. There are employers, in collaboration with Government, who are promoting the value of a mixed aged workforce, and particularly of older workers.
Posts: 499 | Registered: Sep 2011
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Porridge
Shipmate
# 15405
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Posted
An interesting discussion, but . . . I don't quite see how documenting the value workers bring to a company creates jobs. Saves jobs, maybe, but . . . creates them?
Posts: 3925 | From: Upper right corner | Registered: Jan 2010
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no prophet's flag is set so...
Proceed to see sea
# 15560
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Posted
Illustrative example below. Please blame your political elites, business school graduates and what their ideas have wrought.
Simple business in a global market or even in a local market is about money. Current policies allow the spending of money in country or overseas to be business expenses in the home country. Thus I can buy infrastructure from China or Korea and expense it in Canada. How could I justify buying it for nearly 3 times the cost locally? or from the USA or EU? I'd rather pay 10K than 30. So I'm buying a computer server for my small business sourced from China and Korea, before the end of December. It is not my fault that the tax laws are constructed to make this a better idea that having locals employed or even people employed somewhere in country. The companies that make the server components moved their manufacturing operations over to Asia long ago due to trade liberalisation. Local workers are simply SOL.
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Out of this nettle, danger, we pluck this flower, safety.
\_(ツ)_/
Posts: 11498 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010
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no prophet's flag is set so...
Proceed to see sea
# 15560
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Posted
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
It was Marx who said that things that visit us first as tragedy return as comedy. I hope you're being funny. Marx was a complete disaster.
The middle ground is social democracy with a regulated economy so no-one exploits anyone. We've moved away from that. We need to restore it. But Marx? No.
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Out of this nettle, danger, we pluck this flower, safety.
\_(ツ)_/
Posts: 11498 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010
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deano
princess
# 12063
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Posted
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
No idea who that is. Why don't you tell us? Is there a particular flavour of whoever-that-is's politics you prefer over others? Come on, stop being so coy. Name names!
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by deano:
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
No idea who that is. Why don't you tell us? Is there a particular flavour of whoever-that-is's politics you prefer over others? Come on, stop being so coy. Name names!
Yeah! Are you now, or have you ever been, . . .
[ 04. December 2012, 20:32: Message edited by: Crœsos ]
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Russ
Old salt
# 120
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Posted
Nothing that bean-counters do creates jobs. Jobs are created by innovation and creativity, by individuals who understand the production process and the market well enough to see how things could be done differently.
Sound finance is important, but if the accountancy tail starts to wag the management dog then it'll all end in tears.
Best wishes,
Russ
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Wish everyone well; the enemy is not people, the enemy is wrong ideas
Posts: 3169 | From: rural Ireland | Registered: May 2001
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deano
princess
# 12063
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Posted
quote:
Originally posted by Crœsos:
quote:
Originally posted by deano:
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
No idea who that is. Why don't you tell us? Is there a particular flavour of whoever-that-is's politics you prefer over others? Come on, stop being so coy. Name names!
Yeah! Are you now, or have you ever been, . . .
Now that's funny! To be honest I think everyone in the entertainment industry would be a... er... I dunno! I don't know what we are discussing here, because the person hinting at it seems to by shy about saying what it is he believes in. So I don't know what anyone in the Entertainment business would be.
Come on everybody, let's give him a big hand and a nice warm welcome, there's no need to by shy Caissa, come and talk to us! Just name your politics so we can all... understand it! Yes, understand it.
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Beeswax Altar
Shipmate
# 11644
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Posted
quote:
Originally posted by no prophet:
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
It was Marx who said that things that visit us first as tragedy return as comedy. I hope you're being funny. Marx was a complete disaster.
The middle ground is social democracy with a regulated economy so no-one exploits anyone. We've moved away from that. We need to restore it. But Marx? No.
Her avatar says nothing about what system she favors. Good luck trying to identify what a self-identified Socialist favors other than not Capitalism. Mao's China? Stalin's Russia? Castro's Cuba? Chavez's Venezuela?
Social Democracy doesn't guarantee no-one exploits anyone. Who decides what counts as exploitation? No matter the economic system somebody will claim to be exploited by somebody else who will also claim exploitation.
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Losing sleep is something you want to avoid, if possible.
-Og: King of Bashan
Posts: 8411 | From: By a large lake | Registered: Jul 2006
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deano
princess
# 12063
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Posted
quote:
Originally posted by Beeswax Altar:
quote:
Originally posted by no prophet:
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
It was Marx who said that things that visit us first as tragedy return as comedy. I hope you're being funny. Marx was a complete disaster.
The middle ground is social democracy with a regulated economy so no-one exploits anyone. We've moved away from that. We need to restore it. But Marx? No.
Her avatar says nothing about what system she favors. Good luck trying to identify what a self-identified Socialist favors other than not Capitalism. Mao's China? Stalin's Russia? Castro's Cuba? Chavez's Venezuela?
Social Democracy doesn't guarantee no-one exploits anyone. Who decides what counts as exploitation? No matter the economic system somebody will claim to be exploited by somebody else who will also claim exploitation.
That's why asked about any particular flavours. I always think Marxism - there, I've said it for you... pet - is a bit like Baskin-Robbins ice-cream, fifty different flavours.
I'm looking forward to a trip down memory lane here. Materialist Dialecticism, negation of the negation, unity of opposites... ahhh! Bisto!
It feels like the 80's again!
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Chapelhead
I am
# 21
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Posted
quote:
Originally posted by Caissa:
All BS has to do is look at my avatar for my answer.
Jesus - the answer's always Jesus, so he must be the beardy bloke.
More seriously, as others have pointed out, putting a value on employees isn't going to create jobs, or even save them. What a company has that is of value is reputation, systems, market position, public profile, fixed and current assets etc and possibly the experience of it workforce. Many in the workforce (those most likely to be dispensed with) probably have a pretty low value from a business perspective - they can easily be replaced.
Indeed, because of the cost associated with getting rid of staff, and the need to continue paying them whether they or the firm produces anything of value, employees may be a liability rather than an asset. Should firms include a liability in the balance sheet based on the cost and length of service of their staff?
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At times like this I find myself thinking, what would the Amish do?
Posts: 9123 | From: Near where I was before. | Registered: Aug 2001
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no prophet's flag is set so...
Proceed to see sea
# 15560
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Posted
quote:
Originally posted by Beeswax Altar:
Social Democracy doesn't guarantee no-one exploits anyone. Who decides what counts as exploitation? No matter the economic system somebody will claim to be exploited by somebody else who will also claim exploitation.
You're right, that's true. We've done a little better with regulated and restrained capitalism here. I am for the middle ground, between restraint of business entirely by socialist ideology, and reasoned restraint of that gov't control. We need a balance. Better than either end, and I have seen both in relative mild versions. The European irresponsible manner of social welfare of France and Greece is not acceptable and isn't what we've had. Nor is the total wide open capitalist exploitive model of say some Asian and South American countries; America seems to be between us and them from my read. I worry about the the growing rich and poor groups, and the shrinking middle group, from whom we get patriots and revolutionaries.
The most recent risks here have come from the excesses of capitalism, off shoring of economy, various tax and free trade strategies. All of this said, I have benefitted hugely from the tax and economic policy changes from the 1980s to now. It has made me wealthy, such that I don't have to work anymore, but the way I got there was through fear of destitution, with the progressive erosion of the social safety net. It took me about 25 years to do. I also see the social costs in my province and country of the change in economic policies. People who can't afford necessary prescriptions, people who can't afford housing, children who go to school without breakfast.
Would I have preferred to stay a civil servant? Very hard to say, because that's an alternate history I haven't lived and I could not tolerate the greatly eroded income level of such a position today.
Posts: 11498 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010
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Spiffy
Ship's WonderSheep
# 5267
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Posted
There is a movement to create a different type of corporation which is not solely focused on the dollar amount at the bottom line and how that affects the shareholders. It's referred to as a B Corporation and so far the largest one is Ben and Jerry's Ice Cream.
There's two tricky pieces, as I understand it:
1) First, your state has to pass laws permitting a B Corporation as a legal business entity, and then
2) if you are an existing company, your shareholders have to vote to permit you to reincorporate as a B Corporation, which was super tricky in the B&J reincorporation as they are a subsidiary of Unilever-- who says they supported it *now* but I'm always suspicious of press releases.
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Looking for a simple solution to all life's problems? We are proud to present obstinate denial. Accept no substitute. Accept nothing.
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Posts: 10281 | From: Beervana | Registered: Dec 2003
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Carex
Shipmate
# 9643
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Posted
quote:
Originally posted by Chapelhead:
What a company has that is of value is reputation, systems, market position, public profile, fixed and current assets etc and possibly the experience of it workforce.
One important addition to that list is capacity, the amount of product that can be created in a certain time period. Employees contribute to this, along with equipment and infrastructure. Lack of capacity holds back a lot of businesses with good ideas and excellent products, because it requires investment to build, and it costs to maintain it even if you aren't using it during a slack period. Capacity puts a limit on how much product a company can sell.
Experienced and competent employees can increase capacity, but any weak link across the whole organization can decrease it by forming a bottleneck.
Posts: 1425 | Registered: Jun 2005
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deano
princess
# 12063
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Posted
quote:
Originally posted by Spiffy:
2) if you are an existing company, your shareholders have to vote to permit you to reincorporate as a B Corporation, which was super tricky in the B&J reincorporation as they are a subsidiary of Unilever-- who says they supported it *now* but I'm always suspicious of press releases.
No, you are just suspicious of big companies like Unilever. If a small company dispatched a press release would you worry about veracity then?
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Ricardus
Shipmate
# 8757
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Posted
quote:
Originally posted by Josephine:
An acquaintance with a background in finance suggested that what we really need in order to help businesses create more jobs, and to overcome some of the problems that result from their duty to create as much value as possible for their stockholders, and at the same time to help companies that are struggling, is an accounting change.
Right now, everything related to employees is on the liability side of the ledger. Nothing about an employee is an asset on the books. Nothing. That's why, when a business is struggling, they want to get rid of their oldest and most experienced employees first -- those employees are bigger liabilities. They don't value the experience and knowledge those employees have, because there is nothing in the books that says those employees are worth the extra money that they cost.
Surely the shareholders' valuation of the company is always distinct from the accounting valuation? No company ever trades on the stock market at the price its balance sheet would suggest.
Also, anything that increased the assets of a company would decrease the rate of return on each asset, and thus suggest the company was less profitable, not more.
AIUI an investor is supposed (among other things) to look at the balance sheet in conjunction with the revenue and then compare that to industry norms. So a software company will typically have quite a high rate of return on its assets, because most of what makes it profitable can't for various reasons appear on the balance sheet, but for any given company an investor will want to know how its performance compares to similar companies, not how it compares to a manufacturing plant that might have a lower return on its assets.
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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004
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Caissa
Shipmate
# 16710
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Posted
I don't mean to be coy and I am not shy. Capitalism is a system based on worker exploitation and the increasing accumulation of wealth by the richest. The disparity between the rich and poor keeps growing. At some point capitalism will become unsustainable and will collapse.It almost did a few years ago. Hopefully, when capitalism collapses, it will be replaced by some more equitable form of socialism.
Posts: 972 | From: Saint John, N.B. | Registered: Oct 2011
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leo
Shipmate
# 1458
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Posted
quote:
Originally posted by Beeswax Altar:
quote:
Originally posted by leo:
quote:
Originally posted by Beeswax Altar:
quote:
Originally posted by Caissa:
What we need to do is abolish capitalism and get on with a more equitable economic system.
What system would that be?
One that is not based upon usury.
Such as?
Co-operative socialism - another name for living the Magnificat; of prophets before profits.
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My Jewish-positive lectionary blog is at http://recognisingjewishrootsinthelectionary.wordpress.com/
My reviews at http://layreadersbookreviews.wordpress.com
Posts: 23198 | From: Bristol | Registered: Oct 2001
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deano
princess
# 12063
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Posted
quote:
Originally posted by Caissa:
I don't mean to be coy and I am not shy. Capitalism is a system based on worker exploitation and the increasing accumulation of wealth by the richest. The disparity between the rich and poor keeps growing. At some point capitalism will become unsustainable and will collapse.It almost did a few years ago. Hopefully, when capitalism collapses, it will be replaced by some more equitable form of socialism.
I think only someone who doesn’t understand capitalism could truly believe that capitalism “almost collapsed” a few years ago.
Seriously, it did not. It was not even close. Even if every bank in the EU and USA had been nationalised, the regular day to day business of buying and selling and investing would still have gone ahead. All that would have happened is taxes would have gone up more than they did, but they would still be far less than those in the seventies.
The problem with Marxist socialism is that it has an inherent, built-in flaw in its DNA. The materialist philosophy on which it is predicated is only geared towards social constructs, and it ignores individuals. Unfortunately individuals have hopes and dreams beyond the social basics, which Marxism either ignores or tries to repress. It was individuals who brought down the Soviet Union, because as individuals they refused to fight to keep socialism alive. People stood by and watched it falter and die and did nothing to save it, because it was not “theirs”. They didn’t feel enfranchised by Socialism, it didn’t help them attain their dreams, it was a political system “for the others, not for me”.
But I notice that you say “when” capitalism collapses. This is straight from the thesis, antithesis, and synthesis argument of Marxism. Marxism says that the original Capitalist society (the thesis) will die away as the opposite – Anti-capitalism – overcomes the thesis (the antithesis), and eventually that will change into a combination of the good bits of both parts, Socialism (the synthesis).
But look at China. It started as pure Communist (thesis) and is now capitalist, but is that the antithesis or the synthesis? If it’s the synthesis then we must all have missed the antithesis somewhere in the early 90’s! If the current Chinese capitalism is the antithesis, then perhaps the synthesis will be a transition to democratic capitalism!
Either way it is a progression AWAY from the predictions of Marx that Capitalism will inevitably be replaced by Socialism because it is demanded by the materialist dialectic he proposed. Taking his philosophy, Socialism is being replaced by Capitalism.
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by deano:
But look at China. It started as pure Communist (thesis) and is now capitalist, but is that the antithesis or the synthesis?
Whatever the present Chinese economic system may be, "capitalism" seems an insufficient descriptor. Nineteen of China's top twenty corporations are either government entities or have the Chinese government as the majority shareholder. While China may not be strictly communist anymore, it's not really a either a capitalist economy or a "mixed" economy (market capitalism with social safety net) like we see in the West. I'd say the best descriptor would be "industrialized feudalism", or maybe "feudal industrialism".
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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ken
Ship's Roundhead
# 2460
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Posted
quote:
Originally posted by Russ:
Nothing that bean-counters do creates jobs. Jobs are created by innovation and creativity, by individuals who understand the production process and the market well enough to see how things could be done differently.
True about accountants. But less true about the other stuff. Work creates jobs. The more that is produced and sold and used the more there is to go round and the more work there is. Workers make more work to do, not managers, never mind accountants.
Bosses hate to hear that because they like to blieve in their self-servin g myth of the "entrepreneur".
Its not a zero-sum game.
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Ken
L’amor che move il sole e l’altre stelle.
Posts: 39579 | From: London | Registered: Mar 2002
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ken
Ship's Roundhead
# 2460
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Posted
quote:
Originally posted by Crœsos:
I'd say the best descriptor would be "industrialized feudalism", or maybe "feudal industrialism".
"State Capitalism" is a traditional term.
It bears no resemblance to feudalism at all, so those other names are needlessly confusing.
[ 05. December 2012, 16:16: Message edited by: ken ]
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Ken
L’amor che move il sole e l’altre stelle.
Posts: 39579 | From: London | Registered: Mar 2002
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Sioni Sais
Shipmate
# 5713
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Posted
ken states, correctly, that work creates jobs. That leads me to wonder why so many are without jobs because there is clearly a lot of work that needs doing. Houses are not being built and repaired (there goes Sioni again, about empty homes needing repair and refurbishment) and there are thousands of businesses that have started in the last few years, at the behest of government to fill the gap in the jobs market, only to find that finance is not available from the banks and that the government business lending schemes have either been hijacked by spin-offs from established big business or put on a "reserve list" for goodnes knows what purpose.
Of course, the bankers are twitchy about lending at the moment, governments require them to hold more capital in reserve and those who might in the past have saved look at the deposit rates and wonder why they should bother!
It looks like capital for investment is needed. The commercial sector won't and the government doesn't appear able to provide it in the UK so where the heck is it to come from? I would like to think it could come from those savers who are pissed off at the lousy deposit rates available and could come from them on a partnership basis - some folk put labour in, others put loan capital in, products are made, services are provided and an income stream ensues which provides, after an initial period, a return to the investors. Of course, those who work would receive a wage on which they would pay some tax and their benefits payments would reduce substantially, both of which help the deficit.
I suspect I've done no more than re-invent the investment bank, but it vital that we get the notes out from under the mattresses, because money is like manure: spread it around and it helps things grow. Pile it up in one place and it makes a huge stink.
Of course there are two other alternatives: revolutionary socialism, which even I don't fancy or the awful possibility that George Osborne and his pals want the ordinary man and woman in the UK, employed or not, to remain poor for decades to come.
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"He isn't Doctor Who, he's The Doctor"
(Paul Sinha, BBC)
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004
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deano
princess
# 12063
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Posted
quote:
Originally posted by Sioni Sais:
ken states, correctly, that work creates jobs. That leads me to wonder why so many are without jobs because there is clearly a lot of work that needs doing.
Which proves that you and Ken are mistaken about work creating jobs. It does nothing of the sort. Work is what you get when you expend energy. Jobs are created by people being willing to pay someone to expend their energy to do work.
You have the cart before the horse.
In order to pay someone to do work, you must first get the money. Unfortunately in Britain, the Government, held back as it is by LibDems, and preceeded by 13 years of Labour Governments, has decided that it wants the money business earn. Therefore there are no jobs, as no businesses have the money to create jobs.
Cutting taxes would increase the ability of companies to employ people to do work.
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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cliffdweller
Shipmate
# 13338
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Posted
quote:
Originally posted by deano:
quote:
Originally posted by Sioni Sais:
ken states, correctly, that work creates jobs. That leads me to wonder why so many are without jobs because there is clearly a lot of work that needs doing.
Which proves that you and Ken are mistaken about work creating jobs. It does nothing of the sort. Work is what you get when you expend energy. Jobs are created by people being willing to pay someone to expend their energy to do work.
You have the cart before the horse.
In order to pay someone to do work, you must first get the money. Unfortunately in Britain, the Government, held back as it is by LibDems, and preceeded by 13 years of Labour Governments, has decided that it wants the money business earn. Therefore there are no jobs, as no businesses have the money to create jobs.
Cutting taxes would increase the ability of companies to employ people to do work.
That hasn't worked here in the US. The last time we had an employment boom, it was after tax hikes, not cuts.
I think you are both wrong. Consumers create jobs. Jobs are created when consumption of goods and services create a demand for those goods and services. Again, your assumption that if businesses just had more money they'd hire more people is proven false by our situation here in the US. American corps. are sitting on record stacks of cash, but still they don't hire. Because they aren't employment agencies, they're businesses. They don't hire workers because they don't know what to do with all this money, they hire workers because they need them to meet a demand for goods or services. Employment will pick up with consumption picks up. In order for that to happen, we need to get more money, not into the hands of business, but in the hands of consumers.
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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner
Posts: 11242 | From: a small canyon overlooking the city | Registered: Jan 2008
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Alogon
Cabin boy emeritus
# 5513
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Posted
quote:
Originally posted by moonlitdoor:
The reason why they are not assets, in UK accounting principles at least, is as Enoch alluded to, that you can only claim things as assets if you have control over them for the future, and you don't have control over your employees because they might leave.
Wouldn't it make a difference if they had contracts? Goodwill is often claimed as an asset. This is entirely in the mind of the public. What control does the company have over it?
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Patriarchy (n.): A belief in original sin unaccompanied by a belief in God.
Posts: 7808 | From: West Chester PA | Registered: Feb 2004
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deano
princess
# 12063
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Posted
quote:
Originally posted by cliffdweller:
I think you are both wrong. Consumers create jobs. Jobs are created when consumption of goods and services create a demand for those goods and services.
Actually you are right. I failed to start from the beginning of the chain, and picked it up in the middle.
But those consumers are being picked clean by taxes as well. Cut their taxes and they will start spending again. That money goes into businesses and they will start hiring.
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
Posts: 2118 | From: Chesterfield | Registered: Nov 2006
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Porridge
Shipmate
# 15405
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Posted
quote:
Originally posted by deano:
quote:
Originally posted by cliffdweller:
I think you are both wrong. Consumers create jobs. Jobs are created when consumption of goods and services create a demand for those goods and services.
Actually you are right. I failed to start from the beginning of the chain, and picked it up in the middle.
But those consumers are being picked clean by taxes as well. Cut their taxes and they will start spending again. That money goes into businesses and they will start hiring.
*Chokes on tea*
I make barely over subsistence in my lowly work as an overeducated person-minder of individuals with assorted cognitive and psychiatric disabilities. I'm one of those dreadfully dependent 47%-ers who get most of my tax money back at refund time.
My problem isn't taxes. It's crap pay combined with high costs of food, shelter, clothing, and gas.
If I were paid better wages, I would have more to spend. In fact, I could spend it on items I need but can't afford, and/or even the odd luxury or two -- movie tickets or a book from the bookstore instead of waiting until the 12th of Never in the public library queue for Hilary Mantel's latest.
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Spiggott: Everything I've ever told you is a lie, including that.
Moon: Including what?
Spiggott: That everything I've ever told you is a lie.
Moon: That's not true!
Posts: 3925 | From: Upper right corner | Registered: Jan 2010
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RuthW
liberal "peace first" hankie squeezer
# 13
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Posted
quote:
Originally posted by deano:
But those consumers are being picked clean by taxes as well. Cut their taxes and they will start spending again.
Bullshit. Pure and utter bullshit. High taxes are most certainly NOT the source of our problems.
The taxes collected in the US are among the lowest in the industrialized world (source), and they are lower than they used to be (source), and it's not helping us any. You don't pay a whole lot in taxes when you don't have a job.
Posts: 24453 | From: La La Land | Registered: Apr 2001
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