Posts
"... Nothing will truly improve until Ignoromics* reduces and more people challenge Poweromics ... in your last blog, the following summed things up well:
#79 Random_thought ... "No-one with their hands on the levers of power have any intention of doing anything at all to make the world a more equal place (or fairer place)"
# 86 armagediontimes ... "If they have what you want then you will need to fight, just as they are willing to fight in order to maintain their power/control."
And I believe this crisis has got much further to go before we reach this point (in the UK at least - due to a large dose of apathy) I'm afraid ... and things will be far more desperate when it does happen ... however history says 'happen it will', but I believe (and hope) it will happen in different ways to the past ... (i.e. not wars - as it's a 'battle of values' that transcends nations - which will be powered by the internet ... as the internet will eventually change everything, including politics and power - we just don't now exactly how, or when) ...
I was particularly interested in one of comments you've made in this article ... "Martin Weale thinks that if you measured the 1958 data the same way we measure it now, that first quarter fall would be "probably the worst quarterly economic performance since the 1926 General Strike." ... as perhaps history is pointing to one of the ways 'poweromics' may be challenged (around the world?) in the future ... [e.g. take a look at the great quote in my previous blog 'For evil to flourish, all it need is for good men to do nothing' for instance too].... " (Post 32 leanomist)
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A fellow blogger questioned the use of GDP as a measure of success too ...
"... as borrowing money from overseas providers and then converting it (mostly via government deficit spending) into wages and thus GDP is what has given the illusion of well-being over the last few years .... I am far from convinced that national units as they stand are relevant any longer, but if we must persist with a nationalistic perspective, then a better indicator of our economy's performance would be the balance of trade in goods and services (and perhaps net investment income - but not recoverable capital flows for securities etc). This comprises, in the broadest terms, the national "profit and loss" account" ... Looking at this measure, the economy has been operating at a "loss" since 1997 the greatest annual loss being in 2007 - just before the year of horrors - (and for quite a few years before then). This economy has been sick for a long time - it's the illusion of ever-growing GDP that has been the problem ... (I know there are all sorts of reasons why this analogy is strained), but UK plc has been operated like a company patting itself on the back for increasing its sales figures but failing to notice the spiralling costs they have needed to achieve the growth. Result - the bottom line goes to hell in a handcart and only when the bank manager calls in the inevitable overdraft does it dawn on them that they are in big trouble ... Moral - looking at GDP without balance of income stats. is a dangerous practice ...." (Post 42 Raulmagister)
To which I responded, and highlighted a few earlier insights too ... "an argument well put. I was also particularly interested in this too as it aligns well with one of the simple Leanomics tests too (called the BUTS test) ... and it adds a little more sophistication to the "T" term too ... take a look a previous post below which was made back in June, as I think it supports your point too ...
'In a global economy only those capable of offering (and exporting) things other nations want will survive in the long run. This country lost this concept some years ago and/or wrongly believed financial services were the answer!
'Leanomics', a much wider and far more holistic form of 'economics', looks at community factors too ... such as individual well-being and community contentment, as well as the sustainability of enterprise and the environment. For example, one simple Leanomics test, called the "BUTS" test, can create a great deal of insight by looking at debt alongside the capability of the community to pay it back.
B=Borrowing
U=Untapped talent
T=Trade deficit
S=Stress
Trade deficits, untapped talent and stress all negatively impact on a nations ability/capability to pay back debt, and what do these look like at the moment ? I'll give you a clue - terrible!
We have got into huge debt, sold the family silver, demoralised people, stressed people out, created a broken society, overburdened our children (and our children's children), and still have the 1940's baby-boom to come (with a poorly funded pension system).
Nothing has changed, it's just becoming increasingly clearer (and/or harder to hide!) ... I think MrTweedy summed up the situation very well ... just to re-iterate ...
" ... If Germany, China and Japan invested their surpluses in their own economies, and they successfully uncoupled from the US and the UK, it would leave the US and the UK high and dry ... Without foreign investors to buy gilts and treasuries, our governments would struggle to afford their spending plans, and we would struggle to afford our imports ... Britain and the USA would need to find exports to sell to China, Germany and Japan. But just what would Britain sell? I can't think of anything, seeing as exports of bank loans, insurance and defence manufactures were Britain's only trade surplus during the years preceding the economic crisis. North Sea oil is not what it once was. The search continues for Britain's magic exports" ...
... and as I also raised in one of Robert Peston' previous blogs ... ' so tell us the robust plan to pay back all the extra debt we're taking on and at the same time create 21st century products and services that ...
1. People around the world want and are willing to pay for
2. Will create millions of jobs in the UK, and
3. Will systematically reduce our trade deficits and national borrowing ...
Next question ... how are we nurturing and accelerating creativity/innovation to develop these new products and services? Next question ... how are we adopting 21st Century leadership and management to enable both the above? I've been in meetings with Ministers and the CBI - and guess what ... when difficult questions like these are asked they are all 'weighed, measured and found wanting' ..." But are you really surprised ? ... We can't trust them with their 'expenses' ... never mind the 'economy' ! ....." (Post 48 Leanomist)
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A fellow commentor also questioned the future of economics and the robustness of our economy, as efficiency levels continue to grow and products/services can be provided using less effort (and by other parts of the world) ... "... we need continual growth to create jobs, especially as we now make things using less and less human labour year on year through the continous efficiency business demands to remain competitive and generate profits. Are we in need of a new model now...?" (Post 52 Jericoa)
So I went to elaborate ..."a good point and a good question ... I believe the answer is partly in how we re-define value, and how we alter/accelerate the way we innovate & improve ... freed up resources/capacity should be used to innovate and create even more value (ie. identifying & providing new/better products and services, as well as continually improving the way we provide current ones) ... e.g. the book 'Lean World' is all about this and explains the leadership / management practices required to do this too (which are mostly common sense, but unfortunately completely opposite to mainstream UK/US practice). Take a look at my post on Stephanie's blog yesterday which I've summarised here below (or at 'Lean World' - you can read it online at Google Books* too) ...
... 'I tend to use the word 'innovation' in relation to new (and better) products / services that provide more value to people / communities (e.g. warmth, transport, food, shelter, entertainment ...) and 'improvement' for finding better ways of creating it (e.g. more efficient means of production) ... when one looks at the innovation in relation to new potential products/services the possibilities are actually vast (which is what entrepreneur's see), and in terms of efficiencies the opportunities are also great too (e.g. using 21st century practices and technology as you have quite rightly pointed out) ... 21st century enterprises will be the ones who marry both of these together properly (ie. more resources are continually needed than are freed up) and communities should (if this is done right) benefit from both (which is what the book 'Lean World' points out)' ... and I hope this helps goes some way to answering the question - and I don't mind if 'leaders' use this in their answer ... so long as they act upon what they say ..." (Post 69 leanomist)
