THE ACCUMULATION OF ASSETS IN FREE-ENTERPRISE


the justification of ownership on the basis of hard work




A Study in Thought

sa055



by





Marius Heuff

Chapter 1

Content

It is an obvious right to hold-on to the fruits of one's labours.
Property rights, and the tendency towards disparity.
Questions about the rights of ownership.
Problems associated with inherited assets and privileges.
Basic principles of social justice.
Ownership nearly always involves "hard work".
A philosophy, changed by the results of mechanised labour.
Questions about the right to advertise and influence.
A matter of efficiency.
Arguments in favour of "free-enterprise".
An erosion of the drive to work hard.
The many negative aspects of government interference in economic matters.
A scenario for social decay.

It seems so obvious. If I have worked hard to accomplish something; to build-up a little place of my own; to make a few things for myself, or to save some money, of course, I am entitled to the fruits of my labours. Would it be fair and just, if someone could come-along and take these fruits from me by force? Are the very first laws and regulations in society not concerned with safeguarding the right to own and to hold-on to the fruits of one's efforts? Is not one of the first and foremost principles of justice concerned with the protection of the hard worker against robbery or exploitation by people, who rather take than work?

Indeed, one of the first concerns of the earlier societies was centered around the need to safeguard the fruits of labour, and, to avoid the robbery of the weak by the strong. Only after the fairness of the principle of just or legal ownership had been established, became it possible, and meaningful, to start a process of "barter", or "voluntary exchange", which, eventually, after many modifications and adaptations, grew into a world-wide system of trade and commerce, linking every nation on earth in a bond of more or less voluntary exchanges of goods and services.

If there would be no principle of fair ownership, and, if there would not be an authority to guarantee this right of ownership, the stronger party would take from the weaker without giving anything in return. There would be no barter or voluntary exchange, and, every encounter would be determined by the outcome of a raw, physical power-struggle.

No individual can deny the basic fairness of the principle to own, at least, a part of the fruits of one's labours, and, yet, it is ironic and baffling to see, that the evolution of the right of ownership has become one of the major disruptive forces in society; that it has become the origin of numerous conditions and circumstances of injustice.

The divergence between the poor and the rich seemed such an inevitable result of the principle of just and legal ownership, that it was not surprising to conclude, that such a divergence must have been "divinely ordained", and, that it must conform to God's Will. How else, was it possible, that a principle which was conceived and implemented as an instrument of justice, ended-up tearing society apart?

The answer, of course, lies in the fact, that we have to make a sharp distinction between the legality of owning the fruits of one's personal labours, and, the accumulation of assets as a result of the harvesting of natural resources with the help of hired people and externally powered machines. Often, assets were accumulated over a time-span of several generations, but, then, the principle of ownership has been extended to the right to hand-over ownership to one's next of kin. Then, the accumulation of assets could be gigantic, and, once again, the principle of an essential equality in opportunity for healthy and normal members of a social environment would have been severely distorted.

Indeed, we enter a slippery principle of rightful ownership, whenever we consider natural assets such as resources or land. These lands and natural resources may have become the property of a group of people, either, as a result of conquest, or, through the mechanisms of government grants, purchase or settlement. However, we have to state, right from the beginning, that, many of the natural resources belonging to the land, be it on the surface, deep under the ground, or, in streams and lakes or the adjacent sea, are not necessarily included in the definition of "legal ownership". The criterium of legal ownership should reflect one's labours, and, therefore, it should represent e.g. land that has been cleared, farmed or worked in one way or another. Ownership should be justified by the erection of buildings, the construction of a dam, the sinking of a well, or some other effort.

In a way, the legal purchase of a piece of land with money an individual has worked for, also represents the fruits of one's labours. However, a marked increase in the value of land due to a rising demand, the discovery of valuable minerals, or the accumulation of assets when natural resources are processed, do not necessarily represent the hard work of the owners of such a piece of land, and the claim to legal ownership of assets and wealth arising from land-ownership should be carefully scrutinised.

It is obvious, that a strong appreciation in the value of land resulting from a rise in demand does not represent a gain reflecting someone's efforts. Similarly, all natural resources, be they minerals, game or fish, trees or other products that grow naturally, do not necessarily reflect the fruits of someone's efforts.

Certainly, there is an aspect of work in harvesting, mining or managing all these resources, but, we know, that this labour is nearly always carried-out by hired people, while the "owner" supervises and organises the work, and, often, reaps the largest benefits. I fully agree, that a supervisor or manager should also get paid for the work he does, or the risks he takes, but, where do we stand with the absentee landlord; the great land-barons, who live in luxury and powerful exclusivity, while they contribute little or nothing to the income-generating processes themselves?

If their assets reflect the accumulated earnings and savings of a frugal life-style and a life-long dedication to hard work, I can have peace with the idea, that these people have retired and reap the benefits of a long life of hard work during their old-age, while all the work is then carried-out by other people. But, what about the heirs to such assets? What about the capital or business inherited by the children of a successful "accumulator" of material wealth? Is it fair to let them start and continue a life of leisure, luxury and influence, just because they have had the good fortune to have been born from frugal, hard-working and saving parents who have become rich?

It is understandable, that hard-working parents want their children to inherit their assets, especially, when they become somewhat anxiously aware of the fact, that their off-spring lacks their own capabilities of foresight and the energy to build from scratch. It is natural, that we want to protect our children from these weaknesses, especially, since we suspect in the back of our mind, that our children are weak as a result of the fact, that they have lived a sheltered childhood, and, perhaps, we spoiled them a little too much.

While the desire of anxious parents to help their children, is understandable, the question still remains; is it just and fair to let children inherit the capital resources and other assets of their parents? Does the right of legal or legitimate ownership, means, that we also have the right to determine what happens with these possessions after our death?

It is clear, that the answer to both questions has to be negative. No, it is not fair to let the off-spring of successful and wealthy parents have an advantage from the start in terms of luxury, wealth or privileged living standards. No, we can not maintain justice, if we allow the "will" of wealthy parents to direct the ownership of their assets to their children and other heirs. However, these considerations have rarely been separated clearly from the rights of ownership, in spite of the fact, that, many societies have recognised the fairness of levying a heavy tax upon inherited fortunes.

Even less of a distinction has been made between the various categories of possessions and the extent of ownership. Rarely has the right to legal ownership remained strictly confined to that, which was earned by personal, hard work, and, rarely, has a society or community shown any hesitation to claim all the riches of the soil and territories, the waters and forests under its control, in spite of the fact, that their only legitimate claim to ownership may be the fact, that the people of this community happen to live in this particular area.

Since a society or community writes its own laws, and determines the nature and extent of its moral concerns and guidelines, we should not be surprised to see, that no nation, and no social environment, has ever come spontaneously to the conclusion, that the riches of the earth have not been "earned" by them, and, that these assets should, therefore, belong to all the peoples of the world.

However, there are good reasons, why such concepts did not arise, and, why these thoughts and ideas are typically the product of a contemporary level of awareness. In the first place, a community or group had to live-off the environment, and, even, the collecting of edible fruits or nuts, or, the hunting of a prey, involved considerable "work". The idea that the riches of the land were there just for the taking, without any effort, would have been laughed-at in the era before industrialisation and sophisticated mechanisation.

The idea and the practice to claim a territory was so natural, and so much a part of our biological heritage, that it would have been absurd in any time, but our own, to come to the conclusion, that we should not claim the resources of the land, which we did not put there ourselves. Now, it does make sense to distinguish between assets gained by hard, personal work, and those gained by the work of others, or, by the work of machines that have been fueled by the energy of natural resources.

It has become timely, and important, to ask ourselves a number of questions. For example; if we decide to start a business in a modern, affluent society, we are trying to fill a need or a demand, but, more often, we have to create, somewhat artificially, a need or demand for our products by appealing to the fancy, emotions, instincts of power and pleasure, or the lure of excitement. This, we do with clever and persistent advertising techniques.

Do we have a right to influence the taste or life-style, spending habits and behaviour of other people? If we find a market for our products, we will be encouraging the consumption of a natural resource, and, we will be enticing people to consume one more item, perhaps, at the expense of another item, but, as a rule, the processes of economic expansion mean, an increase in the amount of energy and natural resources that are being consumed.

We did not make these natural resources. We do not know, how rapidly we are depleting them, and, nearly always, our manufacturing processes add to the burdens of pollution and contamination. Do we have the right, as a business-enterprise, to set or influence the standard of consumption of the public? Do we have the right to alter the rate of depletion of a natural resource, or, do we have the right to add to the problems of waste-disposal and pollution?

Are these matters of concern which we should be allowed to decide as a private entrepreneur, seeking profits and providing employment, or, should such decisions, in essence, be the prerogative of the society as a whole? The answers to these questions are not as simple as they may seem, in spite of the fact, that many people have adopted a clear-cut position; either, for free-enterprise, or, in favour of an economy that is guided by society as a whole.

If one asks people, why they are so certain of their answers and opinions in these matters, one discovers, that this is largely a matter of "faith". It is a matter of traditional attitudes, as well as the product of a certain up-bringing, and, the opinion reflects, then, the prevailing attitudes and beliefs of the society or social environment from which people come.

Let us first review the opinions and arguments of those, who are in favour of leaving the development of the economy outside the concerns of government. These people feel, by and large, that society is better of, if the ownership and responsibility for business-ventures remain in private hands. They point-out, that, a privately owned and operated business is far more efficient than an enterprise run by government, because the constant pressures to show a profit, or, to avoid, at least, a serious deficit, keep the organisation lean, and these pressures and demands keep the management and workers on their toes.

A government-run enterprise does not have the same compelling reasons to "make money", and, we see, indeed, that such an enterprise is less efficient. As a rule, it is far more costly to operate, and, a government operated enterprise shows many hair-raising examples of bureaucratic bungling, inertia or redundancies. Indeed, as a rule, there is no comparison, and the private enterprise can do a job more efficiently and economically than a government.

Another argument in favour of private business and free-enterprise is based on the perceived nature and motivations of the human being. The philosohy of free enterprise can be summarised, in general terms, by saying, that man has to be rewarded financially, as well as with the freedom to make his own decisions, before an individual is willing to take-on the many long-term headaches and constant hard work associated with the establishment of a successful business-venture.

If these incentives fall-away, we see immediately a "nine-to-five" attitude, which means, that the people involved in a business-enterprise, from management to its employees, are just doing a job, without this extra incentive and push towards an excellent performance, which, often, spells the difference between success and failure. Add to this the problem, that the management in a government controled agency or business is always subjected to many directives from remote bureaucrats, or, perhaps, even, to contradictory and confusing directives, and, we are not surprised to see many government agencies wallow in redundancies and stagnate in endless rounds of memoranda and studies. It is not surprising to see, that they are beset by chaotic relationships between departments, together with a poor productivity and a low morale.

This results in a heavy load on the "earning" segments of society, because, only rarely, do government institutions "make money" themselves, like a true business-enterprise. Look, also, at the ever-increasing debt-load politicians are placing upon the nation with their election promises and their spending sprees, and, we see, indeed, that a society becomes easily burdened by big government and irresponsible financial policies.

Ironically, many people begin to depend for their income, directly or indirectly, upon this willingness of governments to print, borrow and spend ever more freely, and then, the feed-back towards the politicians becomes, predominantly, an attitude or mood of encouragement to continue such disastrous spending habits and practices.

We can not blame the many intelligent and frugal people with a sense of pride and independence for coming to the conclusion, that govenments are already involved, far too much, in society, and, especially, in the world of business. These people come to the conclusion, that irresponsible fiscal policies are largely to blame for the disruptive and divisive phenomena of inflation, and, that everyone in society would be better of, if all the major economic activities and developments were left in the hands of private enterprise.

Many people have seen, how well-meant programs to help people in need have led to a severe erosion of the work ethic. Often, people on social assitance live a life-style that is just as good and luxurious as that of someone who has to work full-time for his or her income. No wonder, that people with a measure of faith in the economic and moral salvation of "hard work", are convinced, that we should cut-back on these social assistance programs, so that more people will see the need to put-in a genuine effort in order to survive.

The gradual decline of the willingness to work hard, to be successful, and to work efficiently, is then blamed on the interference of governments in "the economy", the devastating effects of inflation, as well as the continuous erosion of the buying power of earnings and savings. There are other reasons and factors, such as the uncontroled growth of government bureaucracies and expenditures, an ever greater dependency of many people on "hand outs", as well as a relentless pressure upon political leaders to continue this momentum of economic expansion and rising debt-loads. All these developments are seen as a direct or indirect result of government intervention in the world of business, and, it is clear, that most of these arguments are perfectly justified.

Governments are always looking for ways to get more tax-revenues, and, of course, the successful business, as well as the successful entrepreneurs who have built-up a little property through hard work and a frugal life-style, are immediately eyed as prime targets for another hike in taxation. Business-ventures are increasingly restricted by regulations and laws, which, sometimes, provide "tax-incentives", but, tax-incentives are, primarily, attractive to those business people, who have learned to hold their hands up and profit from the willingness of governments to spend money.

However, the honest, hard working and independent spirit of intelligent enterprise is gradually undermined because of the practice of accepting grants and tax-incentives, because the spirit of free-enterprise becomes, then, captive to rapidly changing government policies. The spirit of hard work and independent enterprise is discouraged by a confused political leadership, as well as the social restlessness and economic uncertainty that are precipitated by inflation and collective work-stoppages.

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Chapter 2

Content

Free-enterprise and labour-unions.
The trend towards business-cartels and multi-national corporate "gigantism".
The rich will always represent a minority.
Continuing the free-enterprise argument.
A reflection upon the attitudes and opinions of ardent free-enterprisers.
Problems can not always be blamed "on the other side".
What is a business?
A review of the origins of socially integrated or cooperative behaviour.
The benefits of specialising in a specific function.
A "voluntary exchange" of goods and services.
Basic free-enterprise thinking.
Business "gigantism", before the advent of industrialisation.
Disparities in power relationships.
The ability to bargain "collectively" with an employer.
Specialised functions that are not tied to the hierarchical order.
The basic principles of business viability, or profitability.

The existence of labour-unions is often a sore point for those, who believe strongly in the virtues of free-enterprise. No-one will argue, that, in the past, labour-unions were necessary to give the workers a measure of protection against exploitation, but, now, labour-unions have become so powerful, that they can virtually dictate the level of wages they want to receive. Any increase in labour costs will have to be reflected in a higher price for the finished product, and, this may jeopardise the competitiveness of a business-enterprise.

While labourers have found legal protection to organise themselves into powerful bargaining units, we, owners or managers of businesses, are prevented from merging freely with other enterprises, and, we are certainly not permitted, by law, to come to pricing agreements with our competitors. Yet, there are many pressures upon small business-enterprises, and, it is not surprising to see many of them fold and go bankrupt, or, they are being swallowed-up by large competitors. It is not surprising, therefore, to see a trend towards very large, or, even, multi-national corporations, because this seems, often, the only way a business-enterprise can create the circumstances necessary for profit and growth.

When business enterprises become so large, that they resemble "dinosaurs", they can influence governments and dictate the terms under which they operate. Then, they have become the principle employer in a particular area, and, this employer has the economic fate and livelyhood of a whole region in its hands. Only, if we, business enterprisers, are gigantic in size, can we influence the politicians and make sure, that the legislation passed is to our liking. We have found, then, a new possibility or level of existence, because we are then "co-directors" of the economic and political events taking place in our social environment, and, we have become immune, at least, to some extent, from the hungry tax-collectors and petty bureaucrats.

Of course, we keep a close contact with the political leaderships, but, we are discrete about it, and, we hide this influence from public scrutiny, in particular, if the system of government is based upon the democratic principles of universal suffrage. In other social environments, the realities are more openly acknowledged, and, we see, that the elements in society with the greatest economic power have also the greatest influence over political and military events in their social environment.

"Our influence upon governments and political leaders is still growing, and, it seems to spread, even, to those societies, where the political leadership is supposed to do all the planning of economic activities, but, we have to be careful and on our guard. After all, numerically, we are a small minority, and, there are always a large number of people who are trying to spy upon our business affairs. These people are suspicious, and, they would like to know everything about us. They want to know our assets, the size and sphere of influence of our corporations. They want to know all about our contacts with political leaders, prominent members of society, as well as other business leaders, and, if they find-out something, or, if we tell them something about ourselves, it is printed immediately in the news-papers, often distorted with an unfavourable bias towards us".

"Are you surprised, then, that we have retreated into a world of our own, where we can live well-protected, without these vultures around us? Yes, we live in secrecy, because it is none of someone else's business whom we know, whom we entertain, what sort of deals we make with others, or, with whom we have close political contacts. We are, by far, the greatest providers of employment, and, we are the only business-ventures able to pay the big unions their wages. None of our workers are starving. Many of them earn a good living, and, they are doing relatively easy and clean work. Let them be happy, and, let them concern themselves with union affairs, but leave us alone to conduct our business privately and efficiently. We have developed an expertise in many essential fields, and, not many governments could muster this same expertise. Let us do our job. We are responsible people. We have our eyes and ears open. We know, what is going-on in the world. We agree, that we should, eventually, have a world, where the problems of mass-starvation and wide-spread ignorance and poverty have been overcome".

"All those foreign-aid programs and social development programs which governments have undertaken, were made possible, because we, big business enterprisers, created the wealth and the capital to finance these projects. Every goverment is now dependent upon the tax contributions we make. We sincerely wish, that governments would also learn to spend their monies more wisely; that they learned to cut-out the waste and reduce the redundancies and inefficiencies of their bureaucracies and institutions".

"Let all those, who clamor for the government to take us over, realise, how inefficient and wasteful all these business-ventures and multi-national corporations would become. Within a short period of time, chaos would be complete. The people would have no work, and no income. Anarchy would reign, because none of the governments are capable of handling the business transactions of the multi-national corporations. Yet, hostilities remain. Many people seem to consider us as a "devil incarnate" upon whom all the problems of society are blamed".

"We are getting discouraged, because it does not seem to matter, how much we spend on public relations. The attitudes of many people remain suspicious and hostile. Can you blame us for retreating, increasingly, into our own world and for entrenching ourselves within our own social enclaves? If people do not want to listen to us, then, we do not want to be involved with society any more than we have to. We will concentrate upon the needs and requirements of our corporations in order to keep them strong and efficient, and, we are less concerned, now, about creating an image of good corporate citizenship".

We have let an imaginary corporate spokesman speak his mind, and, we have to agree, that he or she has brought many valid observations to the fore. However, let us see, whether or not we are allowed to question this intelligent representative of big business, and, let us see, whether or not it is possible to create a meaningful dialogue. We will have to convince him, that we have an open mind about the advantages and disadvantages of the free-enterprise system. We have to show, that we are aware of free-enterprise and its many modifications, the complex inter-relationships between business-ventures, in particular, the relationships between large enterprises and their local and national governments.

You noticed, how the people of big business feel threatened and abused, and, how they tend to withdraw into their fortresses of power, secrecy and wealth. Let us be careful not to aggravate these feelings by approaching them with an attitude of hostility and prejudice, where we have decided, as a foregone conclusion, that these privileged segments of society should be eliminated, and, that their business-ventures should be liquidated or taken-over by society. Such attitudes are not going to be helpful, because we will never be able to get a meaningful dialogue going this way. Let us not forget, that, they too, are people who form a part of our social environment, and, we should first try to get as precise a view as possible of the origins of big business, their nature, as well as the irrepressible tendency for businesses to grow ever larger.

We should be willing to listen, seriously, to their charges and observations. Perhaps, their criticisms of government inefficiency and redundancy are justified. Perhaps, we should take a closer look at the charge that political leaderships and government bureaucracies are fiscally irresponsible. Perhaps, many of us have, indeed, become too dependent upon a freely spending government for our livelyhood or source of income. Perhaps, we are, indeed, contributing to inflation, the rising spiral of expectations, the chronic frustrations and discontentment, as well as the ever-rising tensions within society. Perhaps, the problems can not always be blamed on "the other side".

Let us begin by asking a few questions. Let us ask for a definition of a business or enterprise. We would like to know, what conditions and circumstances make a business-venture possible. Which conditions and circumstances are detrimental to the development of enterprises, and, why do we see, so often, the phenomenon of the very large business-enterprise or multi-national corporation? Once we have an idea what a business is, how it grows, and, what its requirements are, we may be able to see its influence upon society in a more comprehensive and objective manner.

A business is a specialised activity that is useful to other people, and, the entrepreneur of the business activity receives sufficient value in return for his efforts to satisfy all the requirements of existence; the requirements of his own existence, his dependents, as well as his enterprise. This sounds somewhat vague, theoretical and generalised, and it is, because we are trying to grasp, here, the essence of a commercial enterprise without specifying, whether it is a one-man operation or a large concern, and, without distinguishing between a barter or a cash-based economy.

In order to clarify this definition somewhat better, we have to recall our ideas about the origins of society. We have seen, that the advantages of cooperating in a social context are based upon the principle, that it is far easier to perform one-tenth of the necessary tasks, ten times, than to carry-out a wide range of ten different tasks, only once. The reason for this increased ease of performance, is due, at least, in part, to the factor of "familiarity", which lets us shorten a task to a remarkable extent, whenever we get a chance to do it several times. Whenever we have divided the existential chores amongst a group of competent people, the factor of "specialisation" allows us to devote all our attention to the easy and expert performance of one task, rather than the more difficult objective of having to switch from one task to another, as we try to cover the entire range of activities that concern our existential requirements.

There is another important advantage associated with a specialisation in function or a task-divison. It allows us to tackle, collectively, through the mechanisms of specialisation in function, tasks, that would be entirely outside the realm of possible accomplishments for one human being, just as the multi-cellular organism can exist in circumstances and conditions that would be entirely outside the range of existence possibilities for a single cell.

I am confident, that no-one will challenge this statement. We have also discussed the fact, that the introduction of lawful patterns of behaviour in the contacts between people, allows the practice of a "voluntary exchange" to come to the fore. We visualise, that there is, indeed, an element of voluntariness in this exchange, and, that the exchanges take place between equally powerful individuals who can argue about an exchance and call it off, whenever the terms are not pleasing to one party or the other. However, in practice, we see, that this process of voluntary exchanges of goods and services quickly alters the power relationships between people. These relationships have been accepted, by and large, as just on the basis of the specific cultural regulators that happen to operate in a particular social environment.

The individual who provides a service or makes a product that is more valuable than the products of someone else, (or, who works harder and is able to offer more products or services), such an individual can demand, and will receive, a much greater value in return, compared to others. Certainly, such a successful example will immediately entice others to mimic this performance, either, as a producer of a valuable product, or, as a provider of a valuable or skilled service.

Upon this trend towards competitiveness between freely inter-acting individuals, the entire philosophy of free-enterprise has been based, where we visualise, that, as a result of the mechanisms of free competition, eventually, the best possible products and services are offered at the best possible price, regardless of the standards of value in which such a price may be expressed.

While the initial results of free-enterprise activities tend to support these philosophical concepts and logical conclusions, we see, nevertheless, that the situation changes quickly. We see, that the relationships between the members of society do not remain equal, nor, do they remain entirely voluntary during the course of economic development. Some people accumulate, quickly, a significant number of assets, while a large percentage, and, eventually, a majority of the members of society, become somewhat dependent upon the recently produced goods and services, as well as on the employment opportunities provided by successful entrepreneurs.

Many workers recognise, therefore, the need to offer their "labour" to these successful entrepreneurs, especially those, whose businesses have become large enough to require extra workers. We are not referring, here, specifically to the industrial giants of our times. Before the advent of mechanisation and industrialisation, the most successful entrepreneurs became owners of large farms, or large "estates", which required the labours of many families to run properly.

In our industrial times, we see a parallel, because workers flock to the cities in the hope of finding employment, but, in either case, the poor, those who have lost-out in the competitive process to grab a slice of the economic benefits, (or the natural resources of the land), become increasingly dependent for their livelyhood upon finding employment with the land-barons of the feudal societies of yesterday, or, the industrial and financial power-brokers of today.

This means, that the bargaining power of the ordinary worker became quickly miniscule in comparison to the power of the employer, and, this inequality in the power-relationships between entrepreneurs and hired workers stimulated the search for collective bargaining powers and the threat of a collective work-stoppage. This was the only way the workers could redress, at least, to some extent, the disparity in power between the employers and themselves, and, the weapon or threat of a collective work-stoppage in search of a satisfactory work-contract was a logical result of the trend towards collective bargaining.

So far, we are on familiar territory, and, few people, who have some knowledge about the history of industrialisation and the abuses that inevitably came to the fore with the rapidly rising powers of enterprising people, will disagree, that it was necessary for the workers to bond together into unions. It became necessary for society to enact specific legislation, regulating the relationships between the employer and his workers, as well as the working conditions for the workers. We have answered, on various occasions, the question, whether or not present conditions still warrant an unqualified support for the trade-unions and the power to strike against corporations, or the society at large.

I would like to go back to an analysis of the mechanisms of task-division, specialisation in function, and the efforts of an entrepreneur to find a specific service or product he can "sell", or give in exchange for the other products, services and requirements that are needed to satisfy his own existential requirements. We will by-pass, here, a discussion of the more complex relationships and task-divisions that depend upon the hierarchical order. Let us assume, here, that we are discussing, only, the processes of "economic differentiation", or the voluntary exchange, together with the differences in the accumulation of assets and powers, resulting from such economic activities. These mechanisms take place between members, who are, at least, initially, essentially equal in status and power.

We should consider, here, the energy equations that play a vital role in determining the viability, growth and direction of economic enterprises. The underlying principle is quite simple. If an individual seeks a possibility to exist within a social environment by providing a product or service in exchange for his other requirements, (or, in exchange for a commodity, money, that can be exchanged for whatever one needs), it is important to make sure, that this product or service is, indeed, attractive enough that one can obtain, by voluntary exchange, enough products in exchange to "make a living".

Obviously, if one spends a whole day making something, or providing a service, which does not give sufficient products or funds in exchange to obtain the necessities of life for this day, one will not be able to continue such an acitivity for any length of time.

Later, the more complex enterprises had to take a large variety of factors into account in the equation of profitabiility, such as the purchase of raw materials, the hiring of people to do necessary work, the purchase of facilities and tools to carry-out the manufacturing and maintenance processes, etc. The entrepreneur will have to calculate, carefully, how many products he will have to sell within a specific period of time, and, how much he will have to receive for them in order to recover his costs, or "break even". Only after he has reached this point of "breaking even" will he begin to make a profit.

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Chapter 3

Content

The vulnerability of being dependent on a large volume of sales.
Parallels between a business enterprise and a living organism.
Constantly changing conditions of existence.
The quality of "adaptability".
The characteristics of symbiosis, parasitism and predation.
The phenomenon of competitiveness and "corporate predation".
Is an enterprise really a living organism?
Further parallels.
The life and death of an enterprise.
Obligatory inter-dependence in specialised social units.
Specialisation through genetic encoding or cultural mechanisms.
Rights and priorities; basic questions.
A review of living conditions at the beginning of "Civilisation".
Origins of task-differentiation or specialisation in function.
A strict hierarchical order, and the inhibition of entrepreneurial tendencies.
The freedoms associated with a large-scale social organisation.
The emergence of the possibility to exchange goods and services.
Coping with the problems of suspicion and deceit.

We see, then, how every entrepreneurial effort requires a measure of success. There has to be a balance between efforts spent or costs incurred, and, the income received from sales. If the business is small and can be conducted by one person, without the need to borrow money or to hire people and buy materials, the costs are low and the turn-over of the product does not have to be high, before the effort can be profitable. However, if a business becomes large, its organisation complex and "overhead" or "running expenses" high, then, it has to have a large market and a good price for its products, before it can operate with a profit.

Such a business is vulnerable to a slow-down in the demand for its products, or, the efforts of a competitor who can make the same product with less expenses. We see, then, how each business depends on a certain level of sales, or cash-income, before it can continue to operate successfully, and, in this respect a business is like any living organism that requires a minimum influx of energy, here money, before it can maintain its existence.

Let us continue to explore the parallels between a business and a living organism, because we will see, that we can gain many useful insights into the behaviour-patterns and requirements of the business enterprise. The similarities between a business and a living organism are, indeed, remarkable.

We have seen, that, every living cell requires a certain "maintenance energy", because there is a continuous influx of molecules and ions from the environment. These have to be removed against a concentration gradient, and, this costs energy. There are also numerous fragile and labile biochemical substances that require a maintenance-flow of energy in order to remain in existence, because they have to be replaced or repaired, continuously. At the same time, this fragility and lability of the biochemical reaction and its participating substances is the foundation for the ability of the cell to adapt and react to a changing environment.

We see in the world of enterprise, that the conditions also change constantly. Market-forces of supply and demand never remain stable or constant for any length of time, and, the supply of raw materials, energy and labour costs, also varies. Hired workers require a constant supply of cash, which is the main source to satisfy their own "energy requirements", but, there are many other costs or sources of "overhead" for a business enterprise. Contracts have to be made, and honoured, to acquire the necessary supplies, fuels and facilities, and, these commitments are "fixed costs", which have to be paid, regardless of the level of corporate earnings. Stockpiles of manufactured goods represent a cash-value which is lying idle. Perhaps, there are rents and taxes that have to be paid, and, even, if there are no hired workers, the owner-manager requires living expenses, which have to come from his business, because he or she is occupied full-time with the enterprise. Tools and machines require repair or replacement, waste-products accumulate and have to be cleaned and removed, etc.

Just like the living cell, the enterprise has to be able to adjust to changes in the demand for its products, variations in the supply of raw materials and energy, etc. The more flexible an enterprise is, the more viable and enduring it will be. The parallels in behaviour and conditions of existence between a living organism and a business enterprise are, indeed, abundant, and, we are fully justified to consider the enterprise a "living organism".

These parallels are even valid, when we compare the evolution of cells and business-enterprises. There are remarkable similarities in function and behaviour between enterprises and single cells, and, the evolution of corporate existence mirrors, in many ways, the evolution of multi-cellular life. At the same time, the mechanisms of symbiosis, parasitism an predation come also to the fore. A business may become much more powerful and efficient, if it grows into a large corporation, with many levels of organisation, and, it may put a competitor under; it may swallow him up, or merge with him.

Just like the biochemical sequences in the protoplasm of a living cell, we see, that, everyone, working in an enterprise, has to be organised into an efficient and inter-dependent unit, before the business as a whole functions well. If the members, or parts of a large business organisation, are not well coordinated, the corporation will stagnate, just like a disorganised or inefficient organism, and, it becomes vulnerable to disease and decay. Its life expectancy is, then, seriously undermined.

Just as multi-cellular organisms with similar requirements become competitors of each other, so can business enterprises become fiercely competitive. This may be benficial for the consumer, at least, for a while. As a result of fierce competitive strife, enterprises will experience a measure of "competitive inhibition", keeping them lean and hungry, but preventing them from growing any further. They can also come to an agreement with each other and form a "cartel", or monopoly, and, they may become so intertwined in their operations and financial interests, that we see, in essence, two competitors merge into one.

A powerful competitor can dictate its terms to a smaller one. This leads, often, to a form of advantage-taking or parasitism, where all the benefits go to the larger company, while the smaller enterprise loses its independence or faces bankruptcy. The competition between business-enterprises may become so fierce, that they are actively seeking to destroy each other; the phenomenon of predation. However, a very large corporation may incorporate smaller enterprises without much of a hassle because of the uneven power-relations between the antagonists. The smaller business enterprise disappears, as it is swallowed-up by a large predator; another example of the similarities in behaviour between business-enterprises and living organisms.

In spite of all these parallels, many people will refuse to take the idea seriously, that an enterprise is really a "living organism". True, it is not an organism like our own body, where the disintegration of this body means, literally, the death of each and every cell. The human members become dependent for their income on the functions and performance of a business, but, they will not literally perish, if the company goes bankrupt. Nevertheless, they often suffer hardships. The damage caused by failing enterprises and the loss of jobs, is cushioned by specific mechanisms or contractual agreements between people within a society, because the members have recognised the fact, that it is unhealthy, and unfair, to let the well-being of a human being depend, so completely, on his job.

Just as many cells are born into an existing organism, and then grow, mature and function, for a while, as an integral part of this organism, and, just as these cells grow old and die, long before the organism as a whole dies, so do people take part in the essential production processes of an industry for a relatively short period of time. Many people will be laid-off, dismissed or placed on a pension, long before the enterprise itself dies. This is another parallel with the world of living existence.

Actually, there are examples, where a multi-cellular organism may "die", or, at least, lose its identity and coherence as a unit, without the death of all its members. Some multi-cellular organisms are so tentative in their organisation and inter-dependence, that, indeed, the individual cells still have the capability to retain their existence, even, after the demise of the multi-cellular unit.

Our enterprises, organisations and most social groupings and institutions are, indeed, so tentative and transient, that the viability of the participating members has not become completely locked into the existence of social or enterprising organisations. However, we can find many examples in human enterprises, where the death of the multi-individual unit would, indeed, completely destroy the viability of each individual member. Look at a space-flight, where a small unit of highly inter-dependent crew members owe their continued existence to the integrity of the space capsule, as well as the functional organisation of the small social unit.

In spite of the many remarkable parallels between the cellular organisation of a single, multi-cellular individual, and, the multi-individual organisation of a social entity, such as a civil institution or commercial enterprise, we should keep in mind, that we are dealing with significant differences as well.

The single cell is completely determined by its organic "make-up", which is the structural and functional differentiation it has undergone under the influence of its genetic code, and, even, after it has reached an adult stage of total integration within the unit of an "organ", cellular behaviour is still completely determined by the anatomical and physiological regulatory mechanisms of the cellular code and the genetic instructions of the multi-cellular unit as a whole.

The human being does not obtain its expertise through an anatomical or physiological specialisation under the instruction of the genetic code, but, the human being chooses this specialisation in function as an act of the voluntary will. It requires a voluntary effort to obtain a skilled expertise by study, training and experience, even, if the voluntary choice is augmented by social pressures that urge us to "become", at least, skilled in some field of expertise or trade.

The regulatory mechanisms between human beings are largely voluntary contracts, created as the result of a conscious will and a sophisticated insight into the mechanisms that are taking place within a social environment. Social regulations are not the result of direct, genetic instructions, but, the genetic code provides the possibility, and the opportunity, for such a voluntary and deliberate organisation of the group as a whole, conceptualised in the mechanisms of a "cultural code".

However, these differences do not preclude the possibility, that a group of human beings can, indeed, become, in essence, a single, living, multi-individual unit. We have to examine, very carefully, what kind of a life this multi-individual being lives, and, what important values or cautious reservations we detect, especially, when some people advocate, unthinkingly, that, either the single individual, or the social unit as a whole, has a higher priority or right of existence.

We will have to be very careful, indeed, that we understand the meaning of a multi-individual symbiotic unit correctly, and, we will see, that this multi-individual social unit should serve, first and foremost, the basic living conditions, or existential requirements, of the participating members, but, sometimes, the dependence of the participating members on the viability of the unit as a whole, is so overwhelming, that the requirements of the social unit are beginning to out-weigh the requirements of the individual.

An emphasis on the priority of individual existence should, therefore, not lead to a superficial disregard for the existential requirements of such a supra-individual unit, because there are great benefits for all of us, if we keep such a unit in a good state of health, and, vice versa, there may be great harm and suffering, if we neglect to keep this multi-individual unit in a good state of repair. It all depends upon the degree to which our individual existence has become dependent upon the existence and integrity of this multi-individual or supra-individual unit.

We should not enter, here, into a discussion about the balance between the requirements of the individual and his social environment, because this is a complex field of concerns we have addressed throughout most of our writings. We like to come back to the focal point of this discussion; the comparison of the behaviour of business-enterprises and living organisms. Let us focus our attention, now, upon the relationships between the people or participants within an enterprise. Let us analyse their relationships and inter-dependencies within the business, where a number of people have found "work", as well as their relationships with people who fall outside the concerns of a particular enterprise.

From time to time, we will compare the behaviour of the entrepreneurial unit with other social units, and, we will emphasise the many advantages, as well as less desirable features, associated with an enterprise that is allowed to seek, freely, its own mode of operation and its own level of complexity.

Before people engage full-time in an enterprise, the members of such a unit must have experienced, many times, the "feeling" that a certain activity "has possibilities". Let us go back in our imagination to the time, when the first larger societies came-about as a result of people's needs to live closer together and to become more cooperative. Arable lands had become scarce due to increasing numbers of human beings, and, we can picture a situation, where many people were already engaged in chores that were important for society as a whole.

Life had become more difficult, because it was not so easy, anymore, to go into the woods and pick a few berries, fruits or nuts, or, to hunt a small animal. The gathering, distribution and storage of food required now "planning", and, when planning a more complex task, there is always the possibility that someone seizes upon a clever idea to do things easier or better.

In the small, nomadic tribes, where a few dozen people have to carry-out a number of relatively simple tasks, we assume, that the leader was primarily responsible for assigning tasks and organising the details required for these tasks. When societies became larger, a greater number of people would exist together, more or less at an equal hierarchical level, and, while many tasks were still organised in overall outlines by the leadership, (which would assign certain individuals the responsibility to organise a certain task in detail), it is reasonable to assume, that a measure of innovation, initiative and experimentation came to the fore in the execution of this task.

In this way, we visualise, that task-differentiations may have taken place between people, who occupied roughly the same hierarchical level, while the earlier task-differentiations took place under the guidance of the leader, and were part and parcel of the pecking-order or hierarchical stratification that always exists in a small community. In a small social unit there would be much less lee-way for a personal initiative, because such an initiative or novel behaviour would be looked-upon with a great deal of suspicion by those, who were sligthly higher in rank.

This "freedom" to engage in more innovative behaviour by essentially equally placed individuals, may have been one of the reasons, why the sense of being an individual within society, or, a person with his own will, rights and range of possibilities, appears to constitute a rather late development in the repertoir of conscious awarenesses. It depended upon this measure of individualised initiative and freedom of action, which is a prerogative and beneficial by-product of the larger social organisations.

We will not try to discuss, here, in detail, the reasons, why a larger society allows a greater degree of individual freedom than a smaller one, because we have discussed these matters extensively before. Let us merely recall, that the sense of individuality arises, only, after the security of the larger society has been established. After establishing the existential security of a relatively large, conglomerate social entity, tolerating sub-groupings with different cultural backgrounds within its boundaries, the individual members were given a greater degree of freedom of movement and expression, as they established intensive contact with peoples from different cultural backgrounds.

This situation suggests many possibilities for the awakening of entrepreneurial activities, because an individual, who learned to communicate with a number of different groupings with little or no contact between them, will see many complementary needs that could be exchanged to everyone's advantage.

In the more complex societies, the possibilities for such exchanges of goods and services became so numerous, and, so many different activities were going-on at the same time, that the leadership was tempted, time and again, to withdraw from any effort to organise and regulate each individual enterprise, but, the leadership, in particular, the leadership of the overall, larger society was still called-upon, whenever a dispute arose between enterprising individuals.

It is easy to see, how such a process of mutual exchanges leads to expectations on both sides. When communications are difficult, an atmosphere of distrust, together with a feeling of having been deceived, arsises easily. Contacts between social groupings which had not been brought-together by the super-structure of a political unit or empire, were even more prone to deteriorate into an outbreak of hostilities, and, time and again, the tentative efforts to come to a mutually agreeable arrangement of exchange, must have been spoiled by misunderstanding or deception, and, the atmosphere must have slid, once again, into an attitude of violent confrontation.

We have not made the traditional distinction between manufacture and trade, because we feel, that these aspects are so inter-twined in the entrepreneurial effort, that, for our purpose, we may consider these aspects together under the activities of the enterprising organism, regardless, whether this enterprise represents the acitivities of a single human being, or, a large corporation with an extensive network of communication and transportation links.

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Chapter 4

Content

The rewards of laying fruitful contacts between essential strangers.
The need to keep fraudulent practices to a minimum.
Possibilities for far-sighted leadership.
Mechanisms of profit.
The ability to absorb losses and set-backs.
The quality of foresight.
A business venture may be rejuvenated by a "leadership transplantation".
The limiting factor of "complexity".
The possibilities of computerised information in our modern times.
A review of the evolution of leadership.
The need for a generally accepted code of conduct and a system for settling disputes.
The strange power of "wealth".
Conflicts between commercial and social objectives.
The phenomenon of "employment".
Mechanisation, industrialisation, and a rising rate of consumption.
Class-divisions.
The "Socialist Reformation".
Socialism and Marxism.
The Western Social Democracies.
How to prevent a clumsy, stagnating, anxiety-ridden bureaucracy.
Problems associated with a centrally planned economy.

The point is, that ever-changing circumstances of contact, social integration, travel and communication open-up many varied possibilities for a voluntary and mutually beneficial exchange of all sorts of goods and services. Those, who venture out from their own society and learn to communicate with people from different cultural and ethnic origins, will be most sensitive to these possibilities. If the leadership does not step-in after such a contact and exchange has become important and a powerful influence upon society, the activities of manufacturing and trade seek their own level of intensity through the forces of supply and demand. Then, we have, in essence, a situation of "free-enterprise".

Because of the fact, that the activities of commercial exchanges are vulnerable to misunderstandings, deceit, fraud and extortion, the leadership of every society where a measure of free-enterprise has been allowed to flourish, will have to create a package of rules and regulations in order to keep fraudulent and exploitative practices to a minimum.

When trade and manufacture flourish, the rapid accumulation of wealth and power into the hands of the most successful entrepreneurs, introduces the possibility to tax this wealth for the benefit of the leadership and its government. The society as a whole may benefit from the mechanisms of levying taxes, as long as the leadership is far-sighted and beneficial to society.

The most successful business-ventures are the first to come under a measure of "government control", and, often, the leadership will take such activities completely over, if the "national interests" are considered to be at stake. In our modern, complex societies, the activities of more and more enterprises, in particular, the large, multi-national corporations, have become a matter of concern for the social environment as a whole, and, we see, therefore, an increasing involvement of the State with these enterprises. The trend towards government involvement in the mechanisms of trade and manufacture can be seen from an early stage in the history of the larger societies.

The reason why commercial enterprises can establish a mutually beneficial exchange between essentially isolated population-groupings, is, of course, based on the mechanism of "profit". It is logical, that such activities have to be rewarded to such an extent, that people can be engaged full-time in carrying-out these activities. The enterpriser requires sufficient "cash-flow" to sustain his needs, making it possible to maintain his position in society with a certain ease. (Cash-flow does not necessarily mean a monetary income, because we are still discussing, in essence, the processes of "barter" or "exchange".) Indeed, if a venture is successful and trade or exchange is rewarded with a high demand on both sides for the exchange-process to continue, one will be able to accumulate assets very rapidly.

True, these assets may have to be used, at least, in part, to defray necessary expenses, such as the purchase of raw materals, or the goods that have to be traded, or, to hire helpers for the tasks of transport or armed guards to defend against marauders. Sometimes, money and other assets are needed to bribe influential people, or, to ensure against the loss of a vulnerable cargo by spoilage, ship-wreck and other hazards.

The possibilities for growth and expansion become enormous, whenever the processes of manufacture and trade can take place freely and without severe impediments, but, the risks remain high. There are constant worries, and, every successful business entrepreneur will testify to the fact, that he has devoted many years of hard and uninterrupted work and worries, before he finally arrived at a measure of wealth, security, power or stability.

Indeed, a business seems to have to grow to a certain size, before it becomes stable. It must have enough "staying power" to off-set a number of major set-backs, and, it must have enough power to discourage threatening or disruptive competitors. The trend for each business enterprise is to carve-out a niche in this sea of economic existence possibilities, and, to adapt to this niche as precisely as possible, and, yet, the enterprise has to remain flexible enough to change with the circumstances.

A very important feature in the viability of an enterprise is the quality of foresight, or, the "anticipatory grasp" of its leadership upon the prevailing circumstances. Then, a business can react to a change, before its full impact is being felt. Here, we see, once again, a number of parallels with living organisms.

If an enterprise becomes very successful, the efforts required to make substantial profits become relatively easy. The leadership, in particular, the heirs and successors of the leadership, are now entering a well-established business, and, they often lack the experience of having to work hard or to build-up a business from scratch. They tend to take it easy, and, they are often good-willing, but naive. They make serious mistakes, become defensive, and, as a logical result, the business-venture starts to stagnate and decline. Its viability is then rapidly diminishing.

This is another parallel with living structures, but, as an interesting side-line, we see, that a business can be renewed, or rejuvenated, if incompetent leadership is replaced, in time, by experienced and hard working people. Because the lines of organisation in a business are man-made, it is possible to renew these lines of organisation and "transplant" an efficient "genetic coding" into the business by appointing a new leadership. In the complex, multi-cellular organisation it is not possible to effect a similar transplantation of its genetic instructions. Adaptation is only possible by the mechanisms of natural selection, or, through adopting different, more appropriate attitudes and practices through the adaptation of cultural guidelines.

The latter is, in essence, a reflection of the principle of adaptation through behavioural flexibility. By living wisely, we may reduce the stress upon the organisational mechanisms and essential functions that maintain the living community of the cells in our body, but, we can not really replace any of the vital functions and organisational patterns, in spite of the ability to transplant organs surgically.

The commercial enterprise facilitates an inter-action between people by exchanging complementary goods and services. These exchanges take place, as a rule, between groups who have otherwise little contact with each other. The exchange of complementary goods and services becomes important by producing items people need and become dependent upon, or, items, that increase people's ease or pleasure of existence. In all these enterprise activities, the success is measured in the capital, assets or property that accumulates as a result of these activities.

Originally, severe limitations were placed upon the growth of a commercial enterprise by the work that had to be done, as well as by the complexity of the organisation that was needed, because a very complex organisation becomes unwieldy, confusing and impossible to know in detail for a single individual. The development of mechanisation, where energy from the environment could be channeled to do a nearly unlimited amount of work, together with the development of computerised information-gathering and -sorting facilities, has removed, in essence, any limitation upon the growth of a lean and viable enterprise.

Let us look at these processes a little more in detail, because, if we can visualise, why, and how, a small, one-man venture can grow into a multi-national corporation, we may appreciate, also, the changing role and influence of a business-enterprise on its social environment. In the very small society, there is no division between tasks or functions, hierarchical differentiation, or leadership obligations and prerogatives, because all these aspects are inter-woven, and, the activities and behaviour-patterns of each individual is determined, primarily, by his or her position in the hierarchy and the organisational qualities of the leader of the small grouping.

Later, when more freedom of behaviour was tolerated in the larger social entities, many minor forms of behavioural differentiation and mutual exchanges became possible, but, once again, we should visualise the transition to a full-time entrepreneurial business as something that took place very gradually. In the beginning of these behavioural innovations, many obstacles were present which discouraged these trends. There was always the possibility that the contacts would sour, and the mechanisms of force would, again, replace a contract of voluntary exchange.

When the leadership started to relinquish, to some extent, its direct involvement in the organisation of tasks and the exchange of complementary chores, it still had to keep a watchful eye upon these entrepreneurial activities, because there were problems on all sides. First and foremost were the problems associated with the need to maintain a behaviour of fairness, trust and honesty, and, regulatory laws and regulations, as well as judicial mechanisms were created to deal with conflicts between people doing business with each other.

In the initial phases, enterprise had to be nurtured and protected carefully, and, only after a code of ethics and a system of judicial settlements had been worked-out, could individual or free-enterprise really take-off. Then, a whole series of new problems arose. Often, the opening-up of trade and commerce had such a powerful influence upon society, that the leadership became, once again, directly involved in the regulation or the running of such activities.

The accumulation of large assets or enormous wealth became a strange form of power, which represented a challenge to society and its leaders. This led to shifts in the structural organisation of the leadership, and, sometimes, the political or social leadership came into the hands of powerful entrepreneurs. However, it became quickly obvious to each and every leadership, that an important source of revenue had developed, and we see a long and tenacious struggle to design a system of fair and acceptable taxation, where, at least, a portion of these profits would be transferred to the leadership and its institutions, either, for redistribution amongst the poor, or, for the financing of projects which would benefit the society as a whole.

In spite of attempts to re-distribute the wealth created by economic activities, it has always seemed nearly unavoidable, that the members of a socially integrated entity would drift-apart by the differentiation of the population into a small, wealthy, ruling elite, and a much larger segment, which became increasingly dependent upon, and exploited by, this elite. These trends towards social polarisation are, indeed, very strong, and, they are a direct result of the fact, that some people achieve economic success as entrepreneurs, while others become workers in the field, or labourers in a factory.

As soon as a business-venture becomes too large to be handled by one individual, we see the beginning of a differentiation in function and position, together with this pernicous process of differentiation between the rich and the poor. True, the earliest expansion of a business may be in the form of a partnership, but, it is difficult to find someone, who is able and willing to acquire half the business. It is far more likely, that the owner, (the individual who started the venture), needs specific help with one or other aspect of the business, and, the easiest way to accomplish this, is to "hire" someone for a specific function, and to pay him or her a specified amount of money for this task. We also know, how quickly such a hired worker becomes dependent upon this income from his employer, and, we know, all too well, how uneven the power-relations between employer and employees tend to become.

As the business enterprise grows, more and more people are hired to do specific jobs, or to take care of specific functions and problems. The owner becomes, now, a "leader" in a specialised society of business activities. He assigns the work to the workers, and, he ordens his small, socially integrated unit into a hierarchy of functions, specifically designed to accomplish one thing; the efficient manufacture of a desirable product or the provision of a needed and appreciated service, so that more and more people are enticed to subscribe to the products or the services that are being provided.

Before the introduction of mechanisation, a severe limitation arose for the large-scale production of any one specific item or service, because all the work had to be done by human hands. However, the introduction of the machine, which could function faster, more efficiently and without the need to stop for a rest, opened-up the world of mass-production. The rate of consumption increased dramatically, at least, in certain pockets of the industrialising world. The rate of production increased with mechanisation and allowed people a measure of freedom from hard physical work, and, there is no doubt, that mechanisation has made it possible to grow more food, to manufacture more items and tools for a majority of people, and, there is no doubt, that the living standards of ordinary citizens rose significantly as a result of mechanisation and industrialisation.

Consumption increased, and, so did the ease of living, the standards of health and education, as well as the life-expectancy of ordinary citizens. A complex web of beneficial and less desirable factors came to the fore as a result of the processes of industrialisation, mechanisation, and, more recently, the "information revolution". However, we see, once again, that the benefits are not distributed evenly over the societies of the world, and, even in many industrialised societies, these processes have a tendency to increase the gap between the rich and the poor.

Yet, as we mentioned before, many societies managed, indeed, to let these benefits come to a great majority of the people within society, at least, temporarily, but, such a just and healthy distribution of the benefits of mechanisation was accomplished, only, after painful revolutions, disruptive clashes between groups or social "classes", together with many adjustments in attitudes, laws and regulations, as well as prevaling opinions within the societies that were involved in the rapid, evolutionary developments of industrialisation and mechanisation.

Time and again, it was necessary to correct the inequities and injustices that sprang-up as a result of these changes. We have seen, how many writers and thinkers urged a fairer re-distribution of the wealth of society, as well as changes in the relationships between employers and employees. Some social movements advocated a radical return to a State-intervention of all enterprises, because of the apparent inevitability of the rise of elitist exploitation and class-divisions, but, it is interesting to note, that the "Schism" within the "Socialist Reformation" led, only, to a limited application of the most radical forms of social change.

Socialism in its most radical and militant form, Marxism, worked best in societies that had become hopelessly stagnated and lacked the ability to reform themselves through legislative changes. The militancy of Marxism, its emphasis on class-warfare, together with its dictatorial power-structure with a centrally regulated economy, was also instrumental in bringing-about many social changes and legislative improvements in societies that were not directly under their control. We see here, in essence, a sort of social "Contra-Reformation" at work in those societies, which escaped from a violent Marxist Revolution, and, it allowed, quite successfully, the continuation of a measure of economic free-enterprise, while the excessive accumulation of profits and wealth was taxed progressivley away, and, was used to re-distribute incomes and create socially more just and equitable conditions.

In the "Western Democracies", we have recognised, by and large, the phenomenon of the rapidly developing inequality between entrepreneurs and workers, and, many labour laws have effectively counter-acted this trend towards social disparity. Many countries have managed to create a reasonably fair system of progressive taxation, where the most successful citizens of society are saddled with the largest tax-burdens, but, where they are nevertheless allowed to live a life-style of elitist exclusivity and privileged conditions.

We have recognised the many difficulties associated with enterprises that are managed by government, in particular, in complex societies. In a small society, the leadership can oversee all the details. It can make reasonably intelligent decisions, and, it can inspire workers to do their best for the good of the community, but, in a complex situation, the leadership is incapable of overseeing all details. Many decisions turn-out to be wrong or unimaginative, and, the government becomes a clumsy, stagnating, anxiety-ridden structure of bureaucrats.

If the leadership given to manufacturing plants in a centrally planned or guided economy is inefficient and contradictory, morale suffers, productivity declines, and resentment builds. This is a nearly insurmountable problem for every large and complex society with a centrally organised or "planned" economy. The intentions are good, but the efforts fail because of the technical difficulties associated with the gathering, ordening and digestion of so many data, as well as the guidance of so many bureaucrats with their own ideas and vested interests.

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Chapter 5

Content

The lean and efficient organisation of large corporations.
The contrasting objectives of profit and communal well-being.
The requirements of social justice.
Relationships between an enterprise and its social environment.
Governments still have to learn to become more efficient.
The impediments of existential anxieties.
Why it remains so difficult for governments to take-over the functions of large business-concerns.
The dangers of frantic consumerism.
Tracing, briefly, the transition from a mechanism of barter to the use of credit, or "money".
Problems with barter transactions; fluctuating needs and evaluations.
The role of a "standard commodity".
Something that can "flow", easily, from hand to hand.
The "promissory note", and the functions of a "coin".
The problems of standardisation and the lure of deceptive practices.
The role of credibility and authority when trusting a currency.
Our inflationary times.
Why inflation may be profitable for the "big borrower".

Multi-national corporations seem to be much better at organising economic activities than governments. Why is this? The primary reason lies in the fact, that, any business-venture by a private individual or group of people has to "earn its keep", by balancing expenditures with sufficient revenues from sales, and, if there is a problem accomplishing this essential balance, the business-venture streamlines its operations, cuts its costs, changes its line of products, works harder to find buyers or make a better product. If not, it goes out of business.

A task or project organised by the leadership of society does not have as its primary objective the sale of a product, or the creation of a financial profit. On the contrary, the projects with which the leadership has to be concerned, are communal chores that improve the quality of life for everyone, such as the security of the nation as a whole, or the well-being of its individual members, the level of essential food- and energy-supplies, the level of justice, health and education, etc. These communal objectives require financing, just as any enterprise, but, the "consumption" of these services is easily taken for granted by the people, especially, because they do not have to be paid-for "on the spot", or, "over the counter". Such government sponsored tasks are often less desirable as a business project, but, they are nevertheless essential. People have to pay, then, for these services through their obligatory tax contributions.

Public concerns, such as law and order, communal defense, essential supplies and services, the functions of the judiciary, the educational system, the services of health and welfare, they all cost money, and, in our modern societies, we also require agencies to monitor pollution, stimulate a more even distribution of economic enterprises throughout the nation, institute minimum standards of social assistance for people who are sick or out of work. All these activities have to be carried-out in order to maintain a measure of social justice and stability, and, all these agencies of government tend to become unwieldy, huge and inefficient bureaucracies.

Let us not forget, that, we, ardent free-enterprisers, have to have a healthy society in which to operate our business-ventures. People have to be able and willing to buy our products. They have to want to work in our factories, and, we have to be able to engage in trade and contract negotiations with other people, inside or outside our country. We have to have some assurance, that violent conflicts will not disrupt everything; that the society will protect us, if our enemies want to rob us and confiscate our assets.

The viability of an enterprise, together with the ability to hold-on to our assets, rests on the principles of the "social contract", where we all, rich and poor alike, obey the rules of legally acquired ownership. If we become unconcerned about the factors of social justice, essential equality, as well as a sense of well-being for a great majority of the people in our societies, we can expect to be driven ever deeper into a defensive position, which harms our business-ventures and poisons the relationships of trust upon which trade and commerce depend.

In a free-enterprise society, we should not forget, that we can pick and choose those areas of economic activity which show the likelyhood of a healthy monetary return, while the necessary but unprofitable chores of society have to be carried-out by goverments, or, they are performed by other people for the benefit of society, with government financing. Therefore, the concerns and activities of a private enterprise can, and have to be, primarily, geared towards this balance between economic activity and financial reward, because, after all, the private enterprise has no other sources of income, except in special circumstances, when a government may entice the establishment of a business by grants or tax-concessions. The concerns of government-sponsored tasks and projects are primarily geared to perform all the necessary functions that keep a society healthy, happy, and on an even keel, and, these activities will have to be financed by obligatory contributions, or "taxes".

Of course, this does not absolve governments from the need to concern themselves with efficiency. Since there is no constant threat of bankruptcy, it is logical, that the tasks of government are carried-out with a much higher level of "bureaucratic complacency". The leadership can always raise more monies by imposing more or new taxes upon the people, whenever expenditures are rising and the bureaucrats are running short of cash.

However, the fears of bureaucrats for their jobs fuses the entire civil service, so easily, into a massive, inert and highly redundant structure that costs enormous amounts of tax-payers monies, without giving society much value in return. A sweeping reform of the bureaucracy becomes so difficult, because nobody can oversee this complexity anymore, and, all bureaucrats become experts at justifying the importance of their particular job.

Most bureaucrats spend a number of years in the same post, and, while they build-up a valuable expertise, they also become sensitive to the possibility of being made redundant. They are motivated, therefore, to work in such a way, that their position and job-security become enhanced, and, we all know, how difficult it is to prune a Civil Service. It grows by leaps and bounds, but it seems hardly ever possible to reduce its size significantly. The size of the bureaucratic work-force becomes an ever greater burden upon all tax-paying members in society, including the business enterprises, which have to generate, largely, the economic well-being upon which all government activities rest.

Certainly, a large corporation shows, also, a tendency towards bureaucratic complacency, especially, in times of prosperity and affluence, when the need for a lean efficiency becomes less obvious. However, it does not take long for a private enterprise to realise, that fortunes have turned-around, and, soon, it becomes imperative to re-structure the leadership and give it the authority to bring the enterprise back to a level of profitability. These are painful processes, but, survival dictates the need for such purges, and, as a result, the large, private corporations and businesses have made far better use of modern organisational techniques and computerised data-processing compared to governments, and, for this reason, the large multi-national corporations are organised far better, far more efficiently, and, they are, therefore, far "healthier" as "living structures" of human organisational abilities.

This is one of the major reasons, why it is nearly impossible for governments to take-over the functions of a large private corporation, even, if social needs and the will of the people would encourage a change from private to public ownership. Until we recognise, clearly, why governments are falling so short of their good intentions, and, why they create a bureaucratic nightmare of chaos and inefficiency, we should resist the tempation to call for ever more government involvement in, or take-overs from, the world of economic enterprise.

However, the fact, that private industry can do almost any complex task, now, far better than our governments, does not mean, that we should leave these tasks, their execution, or the policy decisions of economic development, entirely in the hands of private enterprise. We are beginning to recognise, more clearly, that the simple motive of profit for operating and expanding a large business-enterprise may have less desirable consequences for the society in which this business operates, and, perhaps, for many of the others societies and human concerns as well.

We have become aware, how the requirements for profit tend to drive-up the demands for consumable items to unnecessary and harmful levels, far beyond what we need, and, we know, now, to what extent such a frantic atmosphere of consumerism contributes to the problems of rapid resource depletion, as well as the accumulation of toxic waste-products.

Frantic consumerism is also responsible for a rapid escalation of tensions between the affluent nations, and those who are poor and getting further behind. We see, how the existential requirements of the larger businesses have developed a clever but ruthless advertising industry, subverting the minds of the people from an attitude of reason and common-sense, to a mindless emotionalism of egocentric gratification and sensual pleasures.

The time has come to realise, that the unbridled and unchecked motive for profit, together with the ever-escalating cash-flow requirements of the larger corporations, tend to enslave us all in an atmosphere of frantic consumerism, which is not only unhealthy, but, also, highly unjust to those who are starving, as well as to the generations that are still to come, because they will have to live with the pollution problems we have created and left behind. The time has come to realise, that these problems can not be solved simply or easily; by advocating that "governments take these large corporations over". We know, that a wholesale application of government take-overs would be disastrous, and, besides, some of the worst polluters with chemical and radio-active waste-products are concerns that are already under government control.

What do we have to do, then? Before we try to give a precise answer to this question, let us examine, first, two very important developments, which we have not discussed as yet. First of all, we want to trace, briefly, the transition from a barter society to a society, where the system of credit becomes, eventually, expanded to the use of a standard commodity; a currency, or, a universal credit-note or bank-note; paper money. Secondly, we should examine, whether or not the development of a publicly owned corporation, via the route of publicly owned stocks or shares, holds indeed the promise for a greater degree of integration between the existential requirements of a business-venture and the needs of social justice and individual well-being.

Once the process of the voluntary exchange or barter-trade finally flourished, (after the leaderships of societies were able to enforce the principles of lawful ownership, as well as the right to refuse an exchange), it must have become apparent, that it was sometimes very difficult to match supply and demand. If an enterprising individual "sold" his services or products for other commodities he needed, it must have become clear, how easy an element of unfairness started to creep into these transactions.

For example, the first individual to come along and offer me an item in exchange for my products, has a good chance to offer me something I can use, but, the next person has less of a chance to offer me something useful in exchange, because this need may already have been filled. The second trader would, then, have to trade first with someone else, who could give him what I want, and, after that, he could then come back to me in order to try, again, to make a trade. However, he may find that he is already too late.

There is another problem with barter. It is very difficult to establish the criteria of value. My needs and requirements change constantly, and, what I want in return for my products may also change rapidly. A deal I made a little while ago, may not satisfy me anymore, and, I may refuse the same deal, which I accepted only recently. Obviously, in the name of fairness and equal treatment, we should avoid such arbitrary fluctuations in the evaluation of a commodity. However, if we would accept a lot of items we do not need, we are saddled with the additional effort to barter those items for something else.

The situation becomes a lot easier, if there exists one item that would always be acceptable; a "standard commodity", e.g. a measure of grain, or any other valuable item, which would have a constant and equal value for the people of the small community in which the processes of barter and trade were developing. Indeed, we see, that the processes of barter and trade were quickly measured against a standard commodity. This facilitated, not only, the process of trade, because the need for a precise match between supply and demand was now somewhat lessened, but, it also allowed each item to be "valued" in terms of a certain amount of grain, or, whatever standard commodity was in use. In other words. Every item could then be expressed as a quantity of the standard commodity.

This was a great step forwards, and, this system was quickly expanded to a system of credit. In stead of actually lugging the grain, here and there, an item was now given in exchange for a "note of credit", which is a piece of paper stating the right to lug a certain quantity of grain from a central warehouse. Sometimes, it would be desirable to do just that, but, it would often be much more convenient to leave the grain where it is, and use the credit to "buy" something else. I could, then, give a part of this letter of credit to the person, who sold me something, as payment for the item I bought.

This process or system of credit needs something that can "flow" easily from hand to hand, and, we see, here, the evolution of the universally accepted and validated "promissory note", or "bank-note". However, before the mechanics were worked-out to make such a system acceptable on a large scale, we see another, closely related development. Such promissory notes or partial credits could be easily forged, and, it was, therefore, not really widely in use, until our modern times with our paper currencies.

However, before paper monies and other securities became widely used, a currency system was established with the help of small, easily handled and standardised coins, made from a precious metal. The idea was, that the coin represented the value through its content of a precious metal, as noted by its nominal value, and guaranteed by standards of weight and purity. This coin could, then, be swapped for another item, or, it could be exchanged for a measure of the standard commodity.

Standardisation was a serious problem, however, before social leaderships realised, that, the only way to end confusion and the ever-present temptation to deceive and tamper with the coins, was to manufacture these coins themselves in closely supervised "State Mints". This enabled leaderships to guarantee the value of their coins or currency, and, to prohibit the manufacture of coins by anyone else outside their own State-owned Mints.

Let us think about this for a moment, because it is, indeed, very important to realise, that, the only reason, why trade and commerce really flourished after the introduction of the currency system and other monetary innovations, was the credibility and the authority of the currency or money in use, and, it is clear, that credibility and authority of the currency was, and still is, a direct measure of the trust and confidence people have in their governments. Only when merchants could trust that they would receive in actual value, whatever the coin or money represented to be worth, only, then, could trade flourish, because, only then, was there the necessary confidence, and trust, to make business transactions worthwhile.

How does this compare with our own times, where each affluent, free-enterprising nation has accepted the inevitability of the erosion of the value of its currency? Why does it seem impossible for governments to guarantee their citizens, as well as all those who work or trade on the basis of a fixed monetary compensation, that the value or the buying power of their earnings and savings will remain constant? Why is every citizen now cheated on his income, unless he has an automatic clause or adjustment of his income to the cost of living, or to the level of "inflation"? Why do governments seem powerless to change this situation, or, is it largely the result of their own fiscal policies?

Here, is an even more penetrating question. Is it really in the interest of modern governments to combat inflation completely? Is it not to their benefit to let inflation continue, sufficiently under control to avoid upsetting too many people, but, eroding, nevertheless, the monetary value of their currencies, in order to lessen the real load of their debts?

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Chapter 6

Content

The "Great Depression"; mechanisms and consequences.
An increase in the supply of money, and the creation of "work".
Why everyone became dependent upon a process of rapid economic expansion.
Saving money became meaningless because of inflation and rising expectations.
The expense of financing a debt-load.
A case of neurotic pre-occupation.
The high price of consumerism.
The difference between "sobering-up" and a "reckless competitive effort".
Establishing a condition of social justice within our means, and, with a balanced budget.
The concept of "public ownership"; an analysis.
Problems for the small investor.
Problems with achieving and maintaining an early retirement.
Does "public ownership" socialise, or democratise, a large corporation?
The stock-market is no instrument for social justice.
The powers of a monopoly.
Abdicating the "gold standard".
There are many aspects of the phenomenon of inflation.
Conservation through a hike in price penalises the poor and increases disparity.
Back to the requirements for social justice.
Governments have to become as efficient and cost-conscious as a lean and fit business-enterprise.

Until the Great Depression, governments honoured, by and large, the principle, that their currency should be covered by "real value", usually measured in gold, but, one of the factors contributing to the great depression of the early thirties, was a lack of money in circulation. This aggravated the problems of a stagnating economy, which had been damaged by rampant protectionism, unregulated financial transactions, and wild speculations on the stock-markets. Ever since the infamous "crash" of October 29 1929, our politicians and economic advisors have discovered, that they could "lubricate", or stimulate, their economies by increasing the money-supply. Once the practice of borrowing monies, increasing the money-supply, creating large public-works projects, etc. had been established by nearly all major industrialised governments, the phenomena of inflation, rapid economic expansion, rising levels of consumption, and rising levels of public and private debt, were inevitable.

Business expansion was rapid, because technology and money made it possible to mine and harvest resources more quickly, and, the rapidly rising incomes of many millions of people created huge consumer demands. Everyone became dependent upon the processes of rapid economic expansion. Businesses had to have larger "cash-flows" in order to remain flexible and competitive, and, many items became relatively cheap, as more items were being produced.

More and more consumer items came into the buying range of the ordinary workers, who, with the help of organised labour-unions and the increased automation of the larger enterprises, were able to earn ever larger incomes. These large incomes made the workers, at the same time, more dependent upon their earnings, as the prevailing attitudes in society shifted from a philosophy of "saving for a rainy day", to a philosophy of; "spend it all now, because next year your income will be even higher, and, if you save, inflation will erode the buying power of your money".

The phenomenon of inflation was slowly becoming more obvious. First, inflation was only a few percentage points a year, and, it was relatively easily off-set by a rising level of real income and buying power, but, many affluent nations have now a difficult time to keep the rate of inflation under control.

Inflation, increasing social benefits, such as unemployment and sickness insurance, made saving even less necessary, and, also, less meaningful. Actually, many people let themselves be goaded by constant inflation and advertising pressures, to borrow more, just like their governments, and, they were then saddled with debt-loads that depressed seriously their standard of living.

For decades, the economy could keep expanding, as more and more people and governments were willing to keep increasing their debts, but, sooner or later, this process comes to a halt. The individual consumer learns, quickly, how expensive it is to finance a debt, and, he comes ruefully to the conclusion, that he has been trapped into a web of financial obligations of his own making, and, he realises, that he lives a rather poor, unhealthy and jittery existence, in spite of a relatively large income and an apparently sumptuous life-style.

Chronic financial worries, together with a constant pre-occupation with consumerist desires, make the affluent individual weak, introvert, neurotic and unconcerned with the plight of many other people, who still live in poverty and substandard conditions.

In a way, the citizen with the high debt-load profits from inflation, just as his government, because, in spite of the interest payments on the borrowed monies, the borrower pays back the capital with money that is getting worth less and less. This is the primary reason, why governments do not really object, when their currencies depreciate. Without inflation, and, without the ever-rising tax-revenues from expanding and inflated economies, governments could not afford to sustain their irresponsible fiscal policies of adding to the public debt without any firm intention to reduce, significantly, the outstanding debt-load. No wonder, that the attitude of saving has disappeared, and, that those citizens, who still practice saving, are considered to be "odd" and out of touch with reality.

We all have to realise, that we are deluding ourselves, and, that our political leaders are deluding us, if they, or we, think, that this spiral can continue forever. Already, we see severe strains upon our modern, affluent societies, and, it is not difficult to see, into what direction these societies will evolve.

I do not pretend that we can predict, with any degree of accuracy, what events are going to happen in the near future, but, we see, already, that the forces of economic expansion are grinding to a halt. Unemployment is increasing, and, this makes consumers more cautious about spending. Many people are beginning to see the high price they are asked to pay for their consumerist attitudes, and, many people are beginning to see the difference between those consumer items that make a real contribution to the quality of life, and those that are useless, superfluous and wasteful junk, pushed by a relentless advertising industry.

In spite of continuing wage-increases for those, who are working, and, who are organised into powerful unions, many people experience an actual decline in their standard of living, and, many people seek, actively, to live better with less income by abandoning the frantic search for excitement, consumption, ostentatious life-styles or expensive travel-plans and other hobbies.

While saving is nearly impossible because of inflation, people are beginning to see, how much better of they are, if they keep their income free from the burdens of regular payments for previously incurred expenditures. People are beginning to demand, once again, good quality products, and, they are prepared to let glamorous junk stay where it belongs; unsold, in the warehouses and on the parking lots of the car manufacturers.

Will it be possible to reach a new level of stability, with a reduced level of consumption and better quality products in a voluntary and relatively easy process of adjustment to a less ostentatious life-style, or, are we going to see violent social conflicts, when frustration and resentment dissipate the last vestiges of common-sense? It seems futile to speculate about such matters, or, about the numerous possible happenings that may determine the direction our societies will be heading into, but, it seems reasonable to believe, that we need a much better insight into the reasons, why the economic processes are faltering, and, how we can improve social justice without perpetuating the fallaceous spiral of rising expenditures and rising levels of essentially unnecessary consumption.

Let us return to our main theme, and discuss the role of business in society. Let us now examine, what the concept of "public ownership" means, whenever members of the public can own shares in a company. What does this mean for the relationships between the public and the corporation? At first sight, we could come to the conclusion, that this is the way to go, and, that we should encourage the members of the public to become shareholders; to participate in the processes of the corporate bond- and stock-markets.

Some politicians think, that this participation will make the public more aware of the needs of their country, because it makes the people "co-builders of their nation", and, these political leaders believe, that such a practice will elevate the sense of participation and patriotic loyalty of the public. They also believe, that this process will lead to a democratisation of the corporate world, and, that it will make corporations into better citizens of society.

However, if we think about it, and, if we analyse these expectations carefully, we see, that they are illusions, because they do not take into account, what happens, when a large number of people trade stocks and bonds on a market. Why do some people believe, that a corporate ownership by a large number of shareholders will, somehow, make the corporation more responsive to society as a whole? The accountability of a large corporation remains strictly to its shareholders, and, the one common, over-riding concern of all stockholders, large or small, is the question, whether or not the corporation shows a profit; whether or not the shareholders can look forward to receiving a dividend on their investments.

Shareholders are not the least bit concerned, whether or not the corporation is a "good corporate citizen", and, the "democratisation of corporate ownership" has little or no influence upon the existential requirements of this company, nor, on its relationships with the community at large. Besides, there is the same trend at work that is visible in all free-enterprise endeavours; the rich are getting richer, and the poor lose-out. These mechanisms also apply to the acquisition of shares, because the poor or average wage earner is seldom successfully involved in this process.

The stock-market is a jungle, where the small investor, relying upon "expert" advice of his broker, eventually loses-out, because he will sell, when everone else sells, and, he buys, when everyone else does, too. Only those individuals, who have the courage, and the intelligence, to decide for themselves, whether or not a certain stock is good value for money, stand to gain. If an individual is not able to judge for himself, whether or not a share is priced right, he or she has to rely upon brokers, and, their advise will always be "in phase" with the prevailing and fashionable opinions.

If you want to buy a car or any other consumer item, and, if you do not know anything about it, how do you know, then, whether or not you are getting a good buy? If you rely on the salesman to advise you, you will buy what he wants you to buy. The average, small investor, either as an individual relying for advise on his stock-broker, and, collectively, as a member of a mutual fund, has, too often, been the loser, and, consequently, he or she is not inclined to trust his earnings to a stock-market, a broker, or a mutual fund.

If an ordinary citizen lends his money at a fixed rate, he knows, at least, that the nominal value of his bond will not decline, and, he knows, that he can count on the fact, that a certain percentage of interest will accumulate. However, for most people in an affluent, inflation-ridden society, even, the purchase of savings-bonds makes little sense. If a small investor saves his money for a year, he is lucky, if he can buy the same item with this bond at the end of the year, as he could at the beginning. He is lucky, if the rate of return keeps-up with the rising costs of living.

Most people are not really in a position to save enough money during their early working career to be able to retire early, and, entirely on the strength of their savings and the returns on these savings. The only people, who may be successful this way, are those, who have built-up a successful business during their working years, e.g. a farm. This farm or other business may represent a sufficient value, and, it may bring-up a good price when it is sold, and, these people may then be able to retire on the interest which this capital can generate. However, an accelerated process of inflation may ruin the best laid plans for an early retirement.

The only sensible way to plan an early retirement in our inflation prone societies, is to plan a way of life that reduces, substantially, the dependence on income, and replaces this income with the fruits of a totally different, nearly self-sufficient way of life. This type of retirement still means "work", as well as planning. Besides, it requires life in a rural setting, and it is not "easy", and it certainly is not everyone's idea of retirement. Most people are still relatively young, if they are attracted to this type of life, and, they have little, if any, investment income. Those, who try a life of frugal self-sufficiency when they are older, but inexperienced, are often disappointed with the hard physical work and the broad range of skills required, before a measure of success can be achieved.

However, this is an aside we really do not want to discuss any further, because our main topic, here, is to see, whether or not public ownership of a large company "socialises" or "democratises" such companies. We have seen, that an open market for corporate shares that can be traded on the basis of supply and demand, is extremely unattractive for the small and inexperienced investor. He usually loses his shirt, while the professional investors or the big corporations with large share-holdings in their own or other companies, are able to benefit from the fluctuations in the prices of stocks and bonds.

As always, in the free and open market-place, even without illegal or immoral price manipulations, the gains tend to be made by the rich, the powerful, the clever and the intelligent investors, while the small investors quickly lose their monies, as they are dependent upon the advise and services of their brokers. In addition to having their own experts, the large investors get much better service, at a much lower cost, compared to the small investor.

The stock-market is not at all an instrument towards "socialisation" or "democratisation" of the corporate sector, but, it is becoming, increasingly, the playground for large financial transactions, mergers and take-overs. The result is a steady decline in the number and diversity of small corporations and businesses, while the really big, powerful, multi-national corporations become, gradually, the only players in the markets of stock and shares, as well as the markets of consumer goods and services. This means, that prices become less dictated by the forces of supply and demand and the influence of genuine competition, but, prices tend to be dictated by the power of a monopoly.

Consumer markets are increasingly divided into "spheres of influence", or "territories", where the giants leave each other alone and enjoy a near-monopoly in their relationships with the consumer. If the consumer does not have a real choice anymore, and, if the apparent diversity is, in reality, nothing more than a front to make people believe that they have a real choice between independent producers, then, we have stumbled upon another major factor contributing to price-rises.

We have seen, so far, that one undisputable cause for the erosion of the value of money, is an over-supply of money, brought into circulation by governments. This money is not covered or backed, anymore, by some sort of a "true value", except what this money can buy in the markets of the nation. The moment our governments retreated from their guarantee to back the value of their currencies with a certain standard commodity, such as gold, they abdicated one of their primary responsibilities and funtions of government and leadership; to be a guarantor for the value of their currencies.

Government were forced to abdicate, publicly, this responsibility, because, in practice, they had already tampered with this guarantee a long time ago. Slowly, they had allowed more and more money into circulation, insufficiently covered by a gold-reserve, and, they relied on the mistaken belief, that not everyone would want to exchange their paper monies for gold at the same time.

When people began to realise, that this guarantee had been eroded by the fiscal practices of their governments, they started to demand more and more frequently, that their money be converted into gold, and, the governments had no choice, but to declare, openly, that they could not back-up their currency anymore with gold. The crises of confidence always occurred as a result of some public event, which every intelligent citizen knew about because of the efficient distribution of news through the media, and, therefore, people's behaviour became synchronised and they began running to the banks at the same time.

However, the price of a certain item is only partially determined by the need for, or availability of, a product. As people get more money in hand without a correspending increase in the number of items that can be purchased, the increased competition for the items that are available will drive the price up. If competitors in the production of these items have been eliminated, the price can be set arbitrarily by the remaining producers, depending upon the need of people to buy their products, or upon the amount of money people have in hand to spend on their requirements and luxuries. Prices can not be pushed downwards, then, by a competitor, offering better value for money, but, prices can only be driven-down by a general turning-away from a product, whenever the public has become dissatisfied with a poor quality and high-priced product.

The main point we want to emphasise, here, is the fact, that the phenomenon of "inflation" is only partially due to the devaluation of a currency as a result of irresponsible fiscal policies. Another major reason is the falling-away of competitive pressures by the elimination of competitors. We see, that companies, as well as governments, abuse shamelessly the power of a monopoly, and, they will sell an essential commodity, or service, at a much higher price than is necessary to make a reasonable profit.

We will not discuss, whether the prices of e.g. oil or natural gas are now too high, not high enough, or just right. Whether or not other nations sold their raw materials too cheaply in the past, will not concern us, here. Similarly, let us leave the question alone, whether the price-rises are a manifestation of a much greater level of independence from the dominant powers in the world, or, an indication of a much greater dependence by the consumer on this type of non-renewable energy than was the case in the past. In spite of all these unanswered questions, it is clear, that all these factors play a role, and, the price of an item depends on our need for it and our ability to pay.

Certainly, it makes sense to conserve these non-renewable resources as much as we can, in order to leave some of it for future generations, and, one way to cut unnecessary consumption is to make it more expensive. However, the technique of conservation through a hike in prices always penalises the poor. Besides, a price-hike should not benefit, primarily, those who own, process, sell or control a commodity that is in demand.

We see, on many occasions, that the forces of supply and demand, or, the techniques of conservation through an increase in costs, are aggravating, or, even, precipitating great disparities between the rich and the poor. Free-enterprise and social justice are very uneasy companions, indeed.

We are back, again, to the principles of social justice; of guaranteeing everyone a minimum level of decent existence, and, as a good free-enterpriser, you are suspicious, that I am going to jump on this ever popular band-wagon to take more from the corporations and give it to governments; to be divided amongst the poor and cure, thereby, all social ills. You are suspicious, because you are convinced, that this strategy will not work. You know, that an ever-larger tax-bite will only make corporate life more difficult, will increase unemployment, and will contribute to an economic slow-down, while the government bureaucracies will grow another notch without producing one iota more in the way of benefits for the people. If you think that way, rest assured, that I fully agree with you, but, the question remains; what then?

You are probably reasonable enough to see, that the corporate sector alone can not, and will not, cure the social poblems of society, because the criteria of productivity and profitability are so completely different from the requirements of social justice. You would like governments to become as efficient and as cost-conscious in their organisation and structure as the "corporate society", which has to keep fit and lean in order to survive. If governments and politicians would be willing to take a good look at the mechanisms of healthy corporate existence, and, if they would be willing to teach the members of their "corporation", (which is the society as a whole), some of the hard basic facts of the need to be frugal and productive, you would find it easier to develop a measure of respect for political leaders and their government bureaucracies, would'nt you?

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Chapter 7

Content

Bureaucratic efficiency is related to the problems of transparence.
We all should be able to inform ourselves about everything that is going-on in government, as well as in the social environment.
Information at the touch of a computer key.
The question of "privacy".
Transparence, and the question of business competitiveness.
A careful introduction of the ideals of universal transparence.
The right, and the need, to justify an attitude of trust.
The right to secrecy and privacy takes a back seat to the rights of well-being.
A considerate balance between conflicting interests.
Are our own actions "above board"?
Can lack of employment be solved by doing things deliberately in a less efficient manner?
The privilege to have "time off"; to explore and develop ourselves.
No person in his right mind will deliberately do something "the hard way", unless it is done as a sport or challenge.
The quality of life.
The need to take the bull by the horns.

I agree with you, and, it is time for people, all over the world, to demand a much more efficient and open government. We should insist, that our leaderships and the elected representatives of the various Legislative Assemblies, begin to compile a full inventory of all necessary information to give themselves, and us, at all times, a comprehensive over-view of every important aspect in society, including the bureaucracies themselves. We should be able to tell, at the touch of a computer key, what is going-on, how many businesses, individuals, government agencies and other organisations exist in society, what they are doing, how they are inter-acting with each other, how they function internally, who belongs to what, what sort of financial transactions are going-on in every organisation, between people, as well as within and between government departments.

Computer networks are already employed by large corporations to give themselves immediate access to all kinds of information the corporate leaderships need to make sensible and timely decisions, and, it is high time, that our political leaderships apply the same techniques to government bureaucracies, as well as the various resources and inventories of their societies.

I notice, that you are questioning, in an attitude of surprise, whether I am really advocating such a radical intrusion upon, or, even, complete abolition of, the right to privacy. You are horrified at the idea, that everyone can know at the touch of a computer key, how much you earned, how you spend your money, how much your company took-in, what is going-on in this company, and, what kind of contacts and relationships are taking place between you, your company, your suppliers, your clients and your competitors. (Provided, you still have any competitors, because I picture you as a really large corporation.)

You may object, that it is totally impossible to conduct business this way. "It is ridiculous, that competitors should be able to know everything that is going-on, what kind of business deals are in the making, and, what sort of technical short-cuts we have developed, often, at a great expense. Our competitors could then simply use these innovations for themselves without it costing them anything".

It is logical, that your first reaction to the ideas of total openness within society, not only, between individuals, but also, between corporations, governments and leaderships, is negative and incredulous. It sounds like a completely hair-brained scheme, impossible to enforce, and, it raises the frightening spectre of "big brother watching". Many of us will fear, that this total transparence gives powerful people, governments or leaderships, the ability to check on us, while we can not reciprocate by checking on them.

We have extensively elaborated, on previous occasions, the reasons, why such a total transparence in society is the only reasonable way to restore mutual trust. We have also outlined, that such a high level of transparence must apply scrupulously to everyone, as well as to all individuals and groupings in society, and, we have to watch, indeed, for unfair advantages that may result, if tranparence is not uniform and a true, two-way street.

Certainly, the introduction of such a radical departure from current thoughts and practices will require careful planning in order to avoid major tensions and injustices. Let us, for the time being, just give some serious thought to the possibilities we can see, when it would, indeed, be possible to check-up on everyone's wheelings and dealings, financial transctions or plans, and, we may begin to like the idea a little better.

I am convinced, that this uniform and complete transparence is the only way to overcome the problems of corruption, stagnation, secret privileges, unfair treatment, as well as other discriminatory, irresponsible or criminal practices. What is so wrong with letting other people know, what you own, what your income is, how you acquired your belongings, how you spend your monies, what you plan to do? What is wrong with that, if you can get the same information about everyone else, and, if you have done nothing wrong, shameful or illegal? How else can you trust your neighbours, unless you can verify, at any time, where they get their money from, how much they have to spend, what they are up to, etc., etc. But, if you want to be able to check everyone around you, then, you have to allow others to check on you, because they have the same right to justify their trust in you, as you have the right to justify your trust in them.

True, initially, you may lose a competitive advantage, when you have developed a particular expertise at your own expense, and, we have to look, closely, at these aspects, just as inventors, writers and other creative people already enjoy a measure of protection under legislation that gives them the exclusive right to use their own products, at least, for a certain period of time. Technical expertise and other advantages may qualify for similar treatment under patent-laws, but, we should not allow any exceptions to the right to know, because such exceptions will invariably become a center for suspicion and will mushroom into fierce legal disputes and become a source for conflict.

How far does the right to know go? Do we have the right to pressure someone to tell us his or her thoughts, or, to reveal certain private activities in detail, which may concern such physiological functions as sex, hygiene, etc. No, because such details have no relevance for inter-personal relationhips, and, there should be a shell of privacy, because such a shell of privacy is needed for psychological comfort. However, if any of our actions involve the well-being or rights of others, the right to secrecy and privacy takes second place, as is already the case in the investigation of criminal offenses. We will always have to balance, carefully, the rights of an individual against the rights of someone else.

We have emphasised, briefly, the purpose of complete transparence and the inventorisation of all relevant knowledge and happenings, in order to make sensible and comprehensive decisions possible, and, to create a true atmosphere of trust and good-will in society. We will come to the conclusion, time and again, that such a radical transparence in society is the only way to prevent corruption, inertia, inefficiency and incompetence. Even the process of competition and competitive bidding will be fairer, if we can see, exactly, why a certain firm can offer a better price than others, and, such a system of openness in accounting will prevent any irregularities, such as bribes, kick-backs or hidden commissions.

We will have to give a lot of thought to such radical changes in society, before it will be possible to endorse them wholeheartedly. If we find ourselves arguing against such a high level of transparence, let us ask ourselves, frankly, whether or not we have something to hide. Are we against it, because we have acquired some of our assets and privileges illegally, or, at least, in a manner, that is not quite justified. Are we worth the monies we receive? Do we get kick-bakcs, or, do we enjoy a privileged status with powerful friends, with or without bribes and favours?

I am convinced, that many of us are against the ideas of total transparence, not, because we have something to hide, but, because we feel uneasy with the concept, that everyone else would be able to look at us and get information we consider to be private. We have lived for such a long time with the idea, that privacy is one of the fundamental human rights we need in order to relax and live happily.

Certainly, we all need a quiet place in order to be ourselves and to relax and reflect upon the events in our lives, as well as the awarenesses we have experienced, but, this does not mean, that we need to conceal our income, assets or contacts. We do not need this kind of privacy in order to live privately and relaxed.

Our governments, societies and business enterprises need to begin a serious dialogue to consider the merits of a gradual but complete shift to openness and transparence, in order to restore an atmosphere of mutual trust, to facilitate the identification of injustices, to speed-up a process of communication and mutual understanding, and, to cut out the ever-present temptation to corruption, exploitation, inertia, inefficiency and incompetence. This means, also, that we should be able to identify, clearly, whether or not a particular job is necessary; whether or not it is carried-out efficiently; whether or not there are redundancies which cost money and give us little or no value in return.

Many people will object to this kind of radical efficiency, because they argue, that this will aggravate the already serious problems of unemployment. "If we cut-out all jobs with a questionable productivity and replace the workers with machines, we will aggravate unemployment enormously. Who will then support all those unemployed? What are you going to do with these people? Is it not much better to slow-down, or, even, reverse the trend towards automation and institute a policy of full employment, even, if it means, that the product or the service will be less efficient and more costly?"

"Is it not much more important to keep people working and making money, rather than having super-efficient bureaucracies and industries with hardly a soul woking in them, while a majority of the people are doing nothing, are unhappy and frustrated, and have to live on hand-outs? Is this not a nightmare situation that is socially far more explosive than a little job redundancy and inefficiency?"

I do not think so, because we can not, as a matter of principle, accept an inefficient way of doing something, when we know, that the same task can be done better, quicker and with less effort. This idea goes so fundamentally against the evolution of human nature, that we have to throw it out as fallaceous and completely inviable, in particular, as a long-term solution. Man's mastery over the environment, his security, his standard of living, as well as the entire cultural evolution of all his acquired knowledge, skills and artistic achievements, have only been possible, because man sought always, relentlessly, to do his chores better, and, to organise his maintenance-tasks in the most efficient way. Only, then, could man escape from the day-long drudgery to secure his food and his safety. Only, then, could man look after the tasks of living a life of health and well-being.

Man became man, because he, eventually, managed to carry-out all the necessary tasks of staying alive in only a part of the day, and, because he had, then, some "time off" to explore the world around him, to think about his experiences, and to communicate with his fellow members.

No person in his right mind will do something deliberately the hard way, so that it costs him more time and effort than is necessary. It just does not make sense, and, every sensible human being would rather complete the tasks to be done as efficiently as possible in order to have time to do something one likes to do, or, to do something else that also needs to be done and makes a contribution to the quality of life.

What would have happened, if people at the beginning of the break-through of mechanisation and industrialisation had said; "This is a bad development, because it throws too many people out of work. If we resist these new-fangled ideas, everyone will have plenty of work to do". Our quality of life would certainly not be what it can be today, if we choose wisely between the many conflicting and contradictory options that are available to us.

There can be no doubt, that we have to face squarely the problems of inefficiency and job redundancy, because these problems come-up, not only, in the context of automatisation and computerisation, but, also, in regards to the many useless and unnecessary products that are currently being manufactured. Many companies and corporations, and, many more people, have staked their livelyhood and financial security on the ability to sell a product, or a service, which is, in essence, a superfluous and somewhat harmful luxury we could very well do without. Are we going to say, that we should continue the production and consumption of these unnecessary items, just because so many people depend on them for their jobs and income?

Of course not. If we discover, that we do not need, not want, or are better of, without certain products, or certain economic activities, then, we have to adjust to these new insights and changing circumstances, and, the sooner we take the bull by the horns, the more useful and the less stressful the adjustment will be. Just because it is difficult to face the problems of real unemployment and job redundancy squarely in the face, our politicians are always going back to the old but failing methods of artificial job-creation and public spending programs, but, the only result is an ever-increasing debt-load, a faster rate of inflation and impoverishment, as well as a rising level of discontent.

No, we have to learn to face the hard but old realities, once again. We have to learn to admit to ourselves, that we have consumed in the past few decades, far more than is justified. Our level of consumption was not justified in terms of our own efforts. Many of us received a monetary compensation that was in excess of what our efforts and contributions were really worth. Our level of consumption was highly unjustified in view of the inequality in living standards throughout the world, as well as in view of the rapid exhaustion of resources and the gigantic pollution problems we are creating with these high levels of consumption.

Our affluent levels of consumption are not fair in relation to the poorer nations, nor to future generations. Yet, are we going to go our merry ways, just because we do not want to throw more people out of work? Are we going to keep concealing the real level of unemployment, which is so much larger and more important than the nominal levels of unemployment?

The real level of unemployment becomes apparent, when we consider as unemployed, everyone who really does not contribute a vitally necessary function to society. The longer we postpone a realistic appraisal of our situation, now, and evaluate the direction we are heading into, the more disruptive and painful the adjustments will be, when, finally, the circumstances will force us to adapt, very quickly, to existing realities.

.......

Chapter 8

Content

How can we change from a consumer-oriented society, to a society that is frugal and just?
A number of pertinent questions.
We do not have to be motivated by financial gains.
Power is rarely a matter of sheer force.
The psychological mechanisms of a motivation.
The pernicious influence of advertisements and a commercial bias.
The "Faith of Economic Redemption".
Look around, and see how bad things are.
The "economic momentum" is a gigantic mill-stone around our necks.
Distinguishing between, what we need, and, what we want.
Our dependence upon a "cultural code".
A plea to the ardent enterpriser and the successful businessman.
A move towards unilateral transparence.
No confrontation, but, a transformation of the instruments of economic power to an instrument of social justice.

"Fine", you will say to me, "tell us, how you would like to change from a consumer society to one that is frugal and just, maintaining itself at the basic level of necessities, while having enough energy to correct injustices and carry-out the radical reforms you outlined in your ideas about complete transparence. Tell us, how you could integrate all societies of the world into a more or less harmonious unit, where each society and every individual will have the same opportunities as anyone else. How are you going to start such reforms? How are you ever going to get the people to cooperate with you, if you advocate, at the same time, a drastic cut-back in the ability, as well as the right, to consume?

More specifically, how do you see our role as a large or small business-venture in this brave, new world, with its many radical changes in relationships and levels of consumption, including the global integration of peoples and their governments? Do you foresee a gradual change towards central planning, or, will there be room for personal initiative and a small financial reward on an individual level? How will you ever motivate people to work hard for the common good, if you take away, at the same time, the incentive of personal earnings or spending-powers? Are you not living in a dream-world?"

I agree with you. It sounds rather utopian, and, it is easy to get carried-away with our own visions of a better world. Yet, let me just say, that these ideas have been worked-out, in much greater detail, in other essays, and, these ideas are based upon a thorough analysis and understanding of human nature. One of the most important conclusions we have come to, is the fact, that man does not have to be motivated by financial gains.

I am firmly convinced, that the financial motivation is of secondary importance, and, that it only comes to the fore-front as the primary motivator, if other satisfactions and motivations have been blocked or removed from realisation. Man is much easier motivated by the sense of power, or, as a more tempered motivation, by the sense of influence that comes with being accepted, or admired and looked-up to.

We do not have to look far, to see, how our youngsters are primarily motivated by the lure of fame, the satisfaction of being good at sports, or some other achievement; being good at playing a musical instrument, acting, or, at studying, mastering a language, etc. This accomplishment gives them a measure of social acceptance, as well as a reason or justification for their position in the social environment, and this level of acceptance may, indeed, become, on occasion, a source of fame, admiration, influence and power.

Power is rarely a matter of sheer force, in spite of the fact, that a more primitive organisation, such as a gang of youths, often, rests on the power of brute force or intimidation. In the organisation of criminal behaviour, the need to prevent a fatal leak of information, makes it inevitable, that a brutal attitude of intimidation comes to the fore in order to enforce a strict code of discipline, but, fortunately, our societies are developing increasingly into a direction of openness and democratic leadership, where the governing bodies do not impose their will with force upon the peoples, but, where they reflect, genuinely, the choice of a majority of the people.

The motivations of social acceptance and the excercise of influence are far more important motivations for working hard and efficiently than financial gain, but, if many people become locked into a frustrating social trap, partly, voluntarily, partly, persuaded by prevailing social pressures, it is logical, that the lure of financial gain becomes the sole motivator, because money is, then, the only resource that can open this trap, at least, temporarily, and, money is the only tool that can buy a few moments of freedom. This freedom comes, either, in the psychologically soothing experience of buying a wanted item, or, in the physically soothing experience of consuming a drug, such as a narcotic or alcohol; or, it comes with the ability to purchase a travel ticket or a vehicle to escape the place of drudgery, confinement and frustration, even, if it is only for a week-end.

However, this does not mean, that we have to consider it inevitable, that affluent man has to be stimulated by the lure of high earnings and high levels of consumption. If it would be possible to restore a measure of common-sense and openness to our societies; if we could give people, again, a logical and genuinely satisfying outlook on life; if we could curb the constant pressures of the advertising media, the merchants and stimulators of the drive to consume, modern man could enjoy and experience, once again, a sense of genuine freedom, just because he does not consume half as much as he does now.

It is time, that we take a hard and sobering look at the attitudes and living conditions of people in our affluent societies, and, let us consider, carefully, what the public media and their constant commercial pressures of advertising have done to the attitudes, expectations and living habits of the average citizen. We see, that the consequences have been enormous, if poorly recognised, because the constant lure of advertised products, consumable items, but, also, the lure of sensual pleasures and sexual titillation, or, the primitive emotions of violence and hatred, are the main reason, why the behaviour of the modern, affluent citizen has become so strident, so blatantly egocentric, so distorted and neurotic, so dissatisfied and undisciplined, while living amidst a wasteful abundance of everything.

These advertisements, together with the constant commercial bias in all the mass-media, are a result of the need of corporations and all sorts of enterprises to maintain their sales volumes, and, if the attention and buying enthousiasm of the public starts to sag a little, it has to be whipped into shape by constant and frantic advertising.

Not many people will agree, as yet, that the influence of commercial interests has pervaded, completely, all the activities of our affluent societies, and, not many people are, as yet, willing to put the blame for our miserable attitudes, our weak minds and neurotic dependencies, upon this gigantic influence of the commercialised mass-media, because so many of us still think, that the salvation of social ills and communal unhappiness lies in further economic expansion, as well as in the elevation of the frenzy to consume by another notch.

It is time to see the complete fallacy of our Faith in the Economic Redemption of society, and, we need to regain a footing of common-sense, where we learn to appreciate, once again, the sense of freedom that comes with the adoption of sensible attitudes and a frugal life-style. We can not solve the problems of chronic frustrations and tensions by whipping the economy, once more. We only aggravate the problems by temporarily soothing the rising expectations of people with a larger income. Within a short period of time, the same frustrations will surface again, and, it will have become, then, a little more difficult to change direction and pull ourselves up and away from our neurotic, consumerist dependencies.

If you think, that this picture is exaggerated, I would like you to look around, and note all the activities, communications or transactions that are going-on around you. How few, if any, of these transactions are competely free from a commercial influence or bias? Every one of the reporters and journalists who bring you the news over the media, have jobs which they want to hold-on to, and, this means, that they have to report the news in such a way, that they keep their readers, editors and owners of the mass-media, as well as their sponsors, happy. None of the programs are, therefore, completely free from commercial or existential concerns. Neither are the reporters and journalists who work in a "government service", free to report the news, exactly, as they see it.

Few of us have the possibility, or the luxury, to even question the validity of our present economic systems, or this "momentum" generated by these economic activities, because we all depend upon these economic activities, regardless, whether we are wage-earners, government officials, elected representatives, pensioners, or welfare recipients. We all depend on the continuation of this economic momentum, and, this is the reason, why we become so anxious, so tense and flustered in our thinking, if someone dares to suggest, that this whole economic momentum is a gigantic mill-stone around our necks, perpetuating misconceptions and injustices. We can not afford to think this way, because, when doing so, we invite a catastrophic collapse of the entire system, and, what then?

The point is, that the system does not have to collapse, if we think about it seriously and carefully, and, the sooner we learn to diagnose the ills of a system accurately, and, the sooner we learn to apply a truly effective therapy, the more likely we can save the system and restore its health and viability. We do not want to cut-out all consumption and all industries, because we need many sophisticated industries and activities to help us master, efficiently and effectively, pollution and contamination problems, especially, those of a complex and long-term nature. We do not want to abolish consumption, because we need to consume a certain amount in order to satisfy our basic requirements.

We are saying, however, that a solution found in the continuation of present trends, is not a solution at all, because it merely soothes, temporarily, the frustrations of the affluent citizen, while it ignores completely the plight of the poor.

We still have the ability to postpone significant changes, but, by doing so, we increase the risk, that these changes will become so uncontrollable and so devastating, that we destroy our technological expertise and industrial capabilities completely, whenever they do occur. Then, we will, even, lose the ability to provide ourselves with the basic necessities, and, we will be completely helpless against the devastating attacks of widespread pollution and contamination. We may, then, suddenly have lost the ability to survive as a species.

If you think, that these are gloomy possibilities that have been exaggerated for the sake of making a point, I invite you, once again, to look around and see for yourself, what the results and consequences would be of all-out warfare with nuclear weapons. You will agree, that the inability to feed and protect ourselves against a highly polluted and radio-active environment, will mean, that we are not going to survive. Look, how dependent we are already on our technology and large-scale production processes. Could you survive, if you would be placed, suddenly, barehanded, in the woods? We do not even talk about the defense against contaminated rain water, soil or polluted air. How are you going to survive without tools or knowledge?

I know. Our only defense against such gloomy prospects is a shrug of the shoulder; "If it happens, it happens. What can I do to prevent it?" Indeed, in this simple and flippantly uttered question lies the answer. The road towards preventing a fatal degree of destruction and devastation lies in the development of our collective insights, as well as our collective will, to avoid such a disaster.

Once the catastrophe is happening, it is too late, and, we will, indeed, be impotent spectators, regardless, how great our understanding and insights may be at the time this catastrophe is taking place. We have to learn to see problems realistically, and, we have to be willing to look for long-term and definitive solutions, regardless, how difficult and irrealistic it may seem to expect a measure of success.

To help us start a discussion of, and an appreciation for, the complexity and magnitude of the problems we face, when seen on a global, international scale, we can begin with a gradual opening-up of our societies, our enterprises, as well as our relationships in general. Let us see, whether or not it is possible to bring-about a genuine dialogue between the peoples of the world.

You, business people, you belong, also, to the peoples of society, and, because of your business sense and expertise, it is reasonable to expect leadership qualities in you. Perhaps, it is possible for you to leave your protective shells and try to communicate, again, with your opponents in society. Perhaps, you can make a uni-lateral start in an attempt to improve the atmosphere of trust, by opening-up your accounting books completely; of your corporations, as well as your personal life.

Many of you are so big and entrenched in your secure positions, that it is difficult to see, why a complete disclosure of your assets, profits, contacts, marketing techniques, the income of your executives and employees, etc., why such a complete disclosure should harm you in any way. You know, what I mean; a degree of disclosure that goes far beyond your quarterly reports; a level of disclosure that would give your critics and those, who are suspicious about extra-ordinary corporate profits, a chance to examine, in detail, your accounting procedures, your tax contributions and declarations, your financial management, as well as the level of income of all your personnel, including top executives.

Such a move towards genuine corporate and private transparence would have an enormous effect upon society. After a period of disbelief, the people would be finally convinced, that there is a measure of honesty left in the corporate world, after all, and, people will be convinced that a business has to make ends meet, just like any other household in society.

It would also allay fears of people and their political leaders, that many of you have become so large, that you have escaped from the controls of any one particular society, and, that you have become "above the law" by your secrecy and the ability to transfer funds internally and internationally; from one division to another, hiding huge profits and sustaining specific projects at enormous costs for the sake of gaining power and control.

People will see, that we all are members of society, with basically the same needs and the same fears, and, you may, once again, obtain a measure of influence and credibility in society. At the moment, you are feared and hated, because you are unknown, hidden behind the massive fortresses of your corporate structures and private security.

I am not advocating a policy of confrontation with you, but, I hope to persuade you to become, once again, responsible leaders in our social environments. I hope, that our politicians, bureaucrats and elected representatives will be amongst the first to look around in your organisations, once you have opened the doors to truly intensive scrutiny, and, I hope, that they will finally learn from you the secret of efficient management, frugal, cost-saving policies, as well as the techniques of computerised information gathering, storage and retrieval.

How much can we learn from you. Generations of competitive strife have made you into lean, hungry, but powerful and viable organisations, and, we need you to survive in our modern world. Please, help us to initiate a trend towars global integration and justice. Is it so difficult to acknowledge, that our consumerist pockets of affluence contribute to the tensions of injustice and pollution? Is it really necessary for you to continue, collectively, this devastating advertising campaign? Would it not be better, if we all could adopt an attitude to consume only what we need, in order to bring a measure of equality to all peoples, and then, we hope, that there is something left-over for a little luxury for everyone?

Please, do not support those corrupt leaderships that suppress and exploit their own peoples; who accept your bribes and protection in exchange for their permission to let you exploit an under-developed area. This is a situation of essential injustice. We all have a responsibility to ensure, that a leadership of the people truly represents the people and is beneficial to them. If the people are too poor, and too ignorant, to know, how to elect a government, let us help them to acquire, at least, a basic minimum of education and living standards, so that they can make their decisions with a measure of understanding and dignity.

The large multi-national corporations are now amongst the most advanced, most sophisticated, most viable organisations in the world, and, we are going to need your help, if we are going to make the world a better place to live in. Your expertise and organisational talents will be essential in helping the people adopt somewhat different attitudes, away from frantic and unnecessary consumerism. More sensible attitudes will, eventually, elevate the viability of us all.

You will have to become more responsible, not only, for the viability of your own organisation, and the people who work for you, but, you will also have to take upon yourselves the responsibility for the well-being of all people in your social environment, because you will find, time and again, that there is no effective leadership besides your own.

Is it so strange to contemplate an eventual, if gradual, fusion between the structures of government and those of the multi-national corporations? Slowly, the circumstances will force you to take into account the factors of social justice, a just peace, as well as long-term viability, which are now, perhaps, considered to be the exclusive domain of political leaderships, while governments will have to adopt the highly efficient, globally integrated and sophisticated organisational techniques of the multi-national corporations, if they ever hope to become truly efficient and honest leadership structures for the large, conglomerate societies of the future.

.......

Summary

1. It is an obvious right to hold-on to the fruits of one's labours.
   Property rights, and the tendency towards disparity.
   Questions about the rights of ownership.
   Problems associated with inherited assets and privileges.
   Basic principles of social justice.
   Ownership nearly always involves "hard work".
   A philosophy, changed by the results of mechanised labour.
   Questions about the right to advertise and influence.
   A matter of efficiency.
   Arguments in favour of "free-enterprise".
   An erosion of the drive to work hard.
   The many negative aspects of government interference in economic matters.
   A scenario for social decay.
   
   
   
2. Free-enterprise and labour-unions.
   The trend towards business-cartels and multi-national corporate "gigantism".
   The rich will always represent a minority.
   Continuing the free-enterprise argument.
   A reflection upon the attitudes and opinions of ardent free-enterprisers.
   Problems can not always be blamed "on the other side".
   What is a business?
   A review of the origins of socially integrated or cooperative behaviour.
   The benefits of specialising in a specific function.
   A "voluntary exchange" of goods and services.
   Basic free-enterprise thinking.
   Business "gigantism", before the advent of industrialisation.
   Disparities in power relationships.
   The ability to bargain "collectively" with an employer.
   Specialised functions that are not tied to the hierarchical order.
   The basic principles of business viability, or profitability.
   
   
   
3. The vulnerability of being dependent on a large volume of sales.
   Parallels between a business enterprise and a living organism.
   Constantly changing conditions of existence.
   The quality of "adaptability".
   The characteristics of symbiosis, parasitism and predation.
   The phenomenon of competitiveness and "corporate predation".
   Is an enterprise really a living organism?
   Further parallels.
   The life and death of an enterprise.
   Obligatory inter-dependence in specialised social units.
   Specialisation through genetic encoding or cultural mechanisms.
   Rights and priorities; basic questions.
   A review of living conditions at the beginning of "Civilisation".
   Origins of task-differentiation or specialisation in function.
   A strict hierarchical order, and the inhibition of entrepreneurial tendencies.
   The freedoms associated with a large-scale social organisation.
   The emergence of the possibility to exchange goods and services.
   Coping with the problems of suspicion and deceit.
   
   
   
4. The rewards of laying fruitful contacts between essential strangers.
   The need to keep fraudulent practices to a minimum.
   Possibilities for far-sighted leadership.
   Mechanisms of profit.
   The ability to absorb losses and set-backs.
   The quality of foresight.
   A business venture may be rejuvenated by a "leadership transplantation".
   The limiting factor of "complexity".
   The possibilities of computerised information in our modern times.
   A review of the evolution of leadership.
   The need for a generally accepted code of conduct and a system for settling disputes.
   The strange power of "wealth".
   Conflicts between commercial and social objectives.
   The phenomenon of "employment".
   Mechanisation, industrialisation, and a rising rate of consumption.
   Class-divisions.
   The "Socialist Reformation".
   Socialism and Marxism.
   The Western Social Democracies.
   How to prevent a clumsy, stagnating, anxiety-ridden bureaucracy.
   Problems associated with a centrally planned economy.
   
   
   
5. The lean and efficient organisation of large corporations.
   The contrasting objectives of profit and communal well-being.
   The requirements of social justice.
   Relationships between an enterprise and its social environment.
   Governments still have to learn to become more efficient.
   The impediments of existential anxieties.
   Why it remains so difficult for governments to take-over the functions of large business-concerns.
   The dangers of frantic consumerism.
   Tracing, briefly, the transition from a mechanism of barter to the use of credit, or "money".
   Problems with barter transactions; fluctuating needs and evaluations.
   The role of a "standard commodity".
   Something that can "flow", easily, from hand to hand.
   The "promissory note", and the functions of a "coin".
   The problems of standardisation and the lure of deceptive practices.
   The role of credibility and authority when trusting a currency.
   Our inflationary times.
   Why inflation may be profitable for the "big borrower".
   
   
   
6. The "Great Depression"; mechanisms and consequences.
   An increase in the supply of money, and the creation of "work".
   Why everyone became dependent upon a process of rapid economic expansion.
   Saving money became meaningless because of inflation and rising expectations.
   The expense of financing a debt-load.
   A case of neurotic pre-occupation.
   The high price of consumerism.
   The difference between "sobering-up" and a "reckless competitive effort".
   Establishing a condition of social justice within our means, and, with a balanced budget.
   The concept of "public ownership"; an analysis.
   Problems for the small investor.
   Problems with achieving and maintaining an early retirement.
   Does "public ownership" socialise, or democratise, a large corporation?
   The stock-market is no instrument for social justice.
   The powers of a monopoly.
   Abdicating the "gold standard".
   There are many aspects of the phenomenon of inflation.
   Conservation through a hike in price penalises the poor and increases disparity.
   Back to the requirements for social justice.
   Governments have to become as efficient and cost-conscious as a lean and fit business-enterprise.
   
   
   
7. Bureaucratic efficiency is related to the problems of transparence.
   We all should be able to inform ourselves about everything that is going-on in government, as well as in the social environment.
   Information at the touch of a computer key.
   The question of "privacy".
   Transparence, and the question of business competitiveness.
   A careful introduction of the ideals of universal transparence.
   The right, and the need, to justify an attitude of trust.
   The right to secrecy and privacy takes a back seat to the rights of well-being.
   A considerate balance between conflicting interests.
   Are our own actions "above board"?
   Can lack of employment be solved by doing things deliberately in a less efficient manner?
   The privilege to have "time off"; to explore and develop ourselves.
   No person in his right mind will deliberately do something "the hard way", unless it is done as a sport or challenge.
   The quality of life.
   The need to take the bull by the horns.
   
   
   
8. How can we change from a consumer-oriented society, to a society that is frugal and just?
   A number of pertinent questions.
   We do not have to be motivated by financial gains.
   Power is rarely a matter of sheer force.
   The psychological mechanisms of a motivation.
   The pernicious influence of advertisements and a commercial bias.
   The "Faith of Economic Redemption".
   Look around, and see how bad things are.
   The "economic momentum" is a gigantic mill-stone around our necks.
   Distinguishing between, what we need, and, what we want.
   Our dependence upon a "cultural code".
   A plea to the ardent enterpriser and the successful businessman.
   A move towards unilateral transparence.
   No confrontation, but, a transformation of the instruments of economic power to an instrument of social justice.

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