Date: 2024-12-21 Page is: DBtxt003.php txt00019884
Initiative
The Opportunity Lab Resource Map
Material from 2017 ????
Peter Burgess
- (A) ...(1) PEOPLE
- .........(2) COMMUNICATIONS
- (B) ...(3) ORGANIZATIONS
- .........(4) MARKETS
- (C) .. (5) CAPITAL
- (D) ...(6) KNOWLEDGE
- Accelerators (5)
- Connectors (10)
- Experts (7)
- COMMUNICATIONS (4)
- MARKETS (6)
- ORGANIZATIONS (8)
There is 1 CAPITAL referenced Financial Capital (2)
I have looked very hard at the OppLab Resource Map (August 2017)
The purpose of this 'resource map' looks something like the mapping of the socio-enviro-economic system that is the foundation of TrueValueMetrics (TVM) that I have been thinking about since the late 1970s!
There are two (2) major issues that I have with the presentation:
- (1) In terms of the State and the functioning of the global socio-enviro-economic system, there is more missing than there is present;
- (2) There is no clarity about how the socio-enviro-economic system actually works.
In this instance of the Resource Map (August 2017) there are:
- * ... 26 people named in 4 categories ... accelerators / connectors / experts / communicators
- * ... 15 organizations named in 2 categories ... organizations / markets
- * ... Under KNOWLEDGE there are 9 IDEAS
- * ... Under CAPITAL there are 2 IDEAS
There has been a very long history of socio-enviro-economic PROGRESS involving:
- (a) PROCESS
- (b) ORGANIZATION
- (c) MEDIUM OF EXCHANGE
- (d) PROGRESS
For most of history ... say, until the last 300 years or so ... the degradation of NATURAL CAPITAL was small relative to the vast scale of NATURAL CAPITAL. and natural systems were strong enough to maintain an equilibrium between degradation and natural remediation. With the beginning of the 19th century and the industrial revolution, this changed in a dramatic way
An important driver of PROGRESS has been the accumulation of KNOWLEDGE
KNOWLEDGE has been applied to design and deploy technology / engineering to make PROCESS more PRODUCTIVE. One of the biggest improvements to PROCESS was the use of fossil fuels to produce steam and then to use steam for transportation and later, the generation of electricity. This resulted in a massive improvement in quality of life for PEOPLE but eventually degraded the environment on a scale that has only recently been recognized.
ORGANIZATION and ORGANIZATIONS have also been important in enable PROGRESS.
In ancient times the building of the pyramids in Egypt was only possible because there was ORGANIZATION. There was also ORGANIZATION in the armies of these ancient societies. In modern times it took ORGANIZATION and big ORGANIZATIONS to build and run railways and operate heavy industry like the iron and steel industry. One important enabling for of ORGANIZATION has been the Joint Stock Company and related stock markets. In the last few decades it has been financial engineering that has favored big organizations. Big ORGANIZATIONS now dominate the global socio-enviro-economic system and it is the efficiency of their PROCESSES and the design of their PRODUCTS that determine how efficient that system can be and the PERFORMANCE of the system. On balance over the past century big organizations have improved PRODUCTIVITY and PROFITS while not paying much attention to the amount of damage that they have been doing to SOCIETY and to the ENVIRONMENT.
For many years the industrial revolution had a positive social impact as well as a major economic (financial) impact. The negative environmental impact was ignored, and a free market, competition and an absence of legal and regulatory oversight meant that there were terrible workplace abuses .... but on balance, the system delivered progress.
For several decades after the Second World War there was a balance between the wealth being accumulated by investors and owners and the wealth being accumulated by 'workers'. But about 50 years ago this changed and the quite good balance between profit progress and social progress was disrupted. It started a perfect storm that has lasted until now.
By the 1960s, there was an emerging focus of 'financial engineering' to complement physical engineering that had driven the industrial revolution. Sometimes it was referred to as the new 'knowledge economy' but the evidence suggests that it was something somewhat more sinister. The merger and acquisition (M&A) frenzy of the late 1960s referred to as the GoGo years came to an abrupt end and was followed by a mild recession. However, in 1973 the OPEC cartel took control of the global crude oil market and the price per barrel of crude went from around $3.00 a barrel to around $13.50. This precipitated a global economic crisis as big as anything that had ever been experienced before with every country in the world seriously .affected in way way or another.
Oil exporting countries like Saudi Arabia, Iran, Nigeria, Venezuela and others amassed huge dollar surpluses, while countries that were net importers of oil were faced with major financial constraints. There was a major adjustment in the trajectory of international development with negative consequences.
In the USA there was huge disruption. Gasoline shortages and gas prices doubling and tripling in a matter of months caused demand for gas-guzzling American automobiles to drop while demand for fuel efficient car imports to rise. The American automobile industry has struggled ever since.
But more broadly, most of American industry was energy inefficient essentially subsidized by low price abundant domestic energy ... mainly coal, oil and hydro. with the OPEC induced crude oil price increases, all energy followed, and American industry was faced with increased costs which rapidly translated into higher prices in order to maintain profits. To the extent possible companies offset higher energy costs with lower quality, lower wages and relocation to lower tax and lower environmental standard locations. Even so, there was massive cost push inflation which resulted in prime interest rates around 18% and even higher. Neither President Nixon, President Ford nor President Carter were able to do very much in the face of the OPEC stranglehold on global energy prices.
In retrospect it is surprising that the OPEC cartel was able to achieve such a powerful position. One would have thought that major nations in the world would have stepped in in some way to stop this. Such an intervention never happened, and why is never discussed. I think the reason is that there were powerful interests that may not have liked the idea of a cartel organized essentially by Arabs in the Middle East, but were very happy to see the price of crude oil increase. Countries like Britain, the Netherlands and Norway were very happy with the outcome because of their investments in North Sea oil which would have lost money at the pre-OPEC lower price, and of course the international oil companies ... Shell, Esso, BP, Mobil, Chevron and the others ... all of whom stood to gain from the price increases.
In the end it was President Nixon that made it possible to resolve the cost push inflation crisis ... but it took more than ten years to come into effect. Nixon started the process of normalizing relations with China so that by the early 1980s is became possible for American industry to start closing its factories in the USA and outsource its products to be made in China. Now profits could be increased while at the same time the price to consumers could be stabilized. President Reagan enabled this process in part by deregulation and in part by weakening labor unions. President Reagan has been credited with improving the American economy, but this is largely wrong. Yes ... inflation was reduced to more normal levels, but a process of favoring profits over people was set in motion that has continued up until this time .............
The idea of less regulation by government is popular by most in the business community and has been aggressively marketed so that many ordinary citizens have adopted the same view. In reality government regulation is vital to a healthy society and a healthy environment because the behavior of business has almost always been about making more and more profit no matter what the short and long run consequences to everything else.
When I first visited Canada and the United States in 1960 I was appalled at the environmental degradation ... places like Sudbury, Ontario and Butte, Idaho for example ... and the Connecticut River, the Hudson River and the three rivers converging at Pittsburgh all of which were full of industrial detritus and totally devoid of fish..
Most of the coal mines in Pennsylvania went into bankruptcy in the 70s and 80s and the mines were abandoned. These abandoned mines are still polluting the water that flows into the Susquehanna River and on into the Chesapeake Bay. Remediating this pollution has to be done from the public purse because the law allows business to make profits and then go in bankruptcy and walk away from the environmental damage they have done and will continue to do. There are all sorts o similar stories. Without regulation business behavior is good for profits but everything else is ignored.
Another example of Reagan era deregulation was the 'Savings and Loan crisis' ... an early indicator of the willingness of financial institutions to behave in ways that enhanced profits no matter the morality and ethics by doing essentially anything they could get away with. The great recession some 20 years later had many of the same characteristics ... and the determination of finance sector lobbyists to eliminate as much regulation as possible suggests that this deep foolishness will be ongoing.
Sadly much of the regulation (and the framework of law) that exists in the late 20th century and into the 21st century is very sloppy, and requires a lot of work in order to deliver rather little benefit. A lot of this regulation should be improved so that it has a better performance. In general, in much of modern politics, the people concerned have neither the motivation nor perhaps the ability to do this work.
All of this is aggravated by an appalling lack of accounting and accountability in almost every area of the socio-enviro-economic system. There is a strong feedback associated with the profit performance of business, the growth of the economy (GDP) and the performance of capital markets ... but there are no feedback loops to encourage better behavior with respect to impacts on society and impacts on the environment.
My academic background is engineering, economics and accountancy. I graduated from Cambridge in 1961 and became a Chartered Accountant in 1965. There have been huge changes in the relative power of nations, industries and segments of populations. Owners have done very well. Many workers in the richer countries have done less well while many workers in poorer but growing economies have started to do much better. The system is lurching from crisis to crisis with very little understanding of what is actually going on and how it can better be managed for the general good. Much of what is being done is making the situation worse and conventional economic ideas and political processes seem to be incapable of understanding let alone fixing the major issues facing us all
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DEAR FRANK .... .... OUT OF ENERGY AGAIN ..... LETS TALK ABOUT 'FAIRCOOP / FAIRCOIN / ... ALSO HOW TO ENGAGE WITH CHRIS MACRAE'S AGENDA ... AND PERHAPS SOLVE RICKEYFARM MINISTRIES' PROBLEMS ...