Archive for the ‘business’ Category

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Creative Destruction for Goldman Sachs

March 14, 2012

cMust read: Why I am leaving Goldman Sachs

Greg Smith, Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, has written a stinging indictment of the “culture” at Goldman Sachs. Refusing to learn any lessons from the recent derivatives crash, Goldman continues to think about its own profits rather than making money for its customers. This should be a wake up call for any of these customers who are in denial about Goldman’s “interests.”

Once again this represents a deep misunderstanding of “capitalist reality” by so-called capitalists. Where previously the error was in misunderstanding “spread the risk” to mean “give everyone a big piece of risk,” now the twisting of the old saw “what is good for General Motors is good for America” into “what is good for Goldman …” is based on the mistaken notion that the two companies stand for the same thing. Now, I don’t actually believe the first claim to be actually fully true, but I will take the intentions of that group of General Motors managers over that described by Smith at Goldman. When Adam Smith spoke of “self-interest” he did not mean “selfish interest.” See here. The recent government support for the auto industry has shown us how much larger “auto interests” are than just the companies themselves. “General Motors” in this sense includes the UAW. It includes the middle class jobs that result in retail sales, housing sales, state and federal tax revenue, et al. Virtual circles of capitalism. The Goldman approach only creates business cycles in which only Goldman appears to win short-term. Profit, profit, profit! forgets the word has other meanings. Profit from your mistakes means learning not gaming the system.

The Cluetrain Manifesto taught us that “markets are conversations.” I hope this is the beginning of a larger conversation that results in a market correction for Goldman. There can after all be an upside to “creative destruction” after all!

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Work as capital

March 1, 2012

I have been thinking about the nature of work a great deal lately. Perhaps because I am not doing any. It seems to me that one of the primary problems capitalist ideology has at the moment is a deep misunderstanding of the nature of work. Generally labor is seen as a business expense: the largest single expense that any company faces. This is simply incorrect. In exchanging labor for money the laborer more correctly gives the “capitalist” capital and receives a monetary settlement. By definition the laborer gives more capital than they receive. Labor productivity creates the extra value that is the actual basis of all business. You can have all the capital and product ideas you need, but nothing happens without labor. Or at least nothing truly productive. Finance is a world of its own. Certainly this is not restricted to the labor part of a business but extends throughout the “human capital” of the organization. Only raw materials are free of this type of capital, and strictly speaking this is also false since it has to be brought to a factory and can be done so only through human developed means. It is all about people!

Now the truly remarkable thing about this exchange of labor for money is that it also represents the basis of the other side of market economics: customers. Without labor exchange for cash there would be no customers for products. Thus labor dynamically creates value on both sides of the economic equation. Capitalism doesn’t work when labor is limited. Hmmmm Could this have anything to do with the economic realities of the moment. In response to to the housing bubble crash, businesses immediately started laying off labor–and the recession began. You get what you wish for. By treating labor as an expense, business sheds itself of its most dynamic capital and declines.

Economics is called the dismal science because it is insanely misdirected. It is not a science. It cannot be a science. It is only about people. It is only about psychology, and psychology is in worse shape than economics. This is of course overstated. They are only extremely spotty subjects marred by their deep misunderstanding of humanity. There are exceptions. Do you know whom they are??

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Corporatism. Things are better than people!

November 5, 2011

There seems to be a new meme for corporate America. Two Tv commercials feature credit cards as employees of the month! I find this both disturbing and tone deaf. Next up: customer service for the card, wait we did that last year when we discovered customers with cash were evil.

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Doc Searls on Ideas

November 5, 2006

Doc Searls is at it again. Read his Ten Ideas about Ideas.

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Notes on a few books

October 27, 2006

Should of course write this more often, but the “untimely” part of the name is part of my inherent nature.
Recent reads:
Henning Mankell,
One Step Behind

Swedish detective series about Inspector Kurt Wallander. Mankell brings to his novels the starkness and reality so well known to anyone who has seen a Ingmar Bergman movie, or read the delightful novels of Maj Sjowall and Per Wahloo. This books lives up to the series and says much more about people than it does about this particular murderer.

Steve Wozniak and Gina Smith,
iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It

Apple co-founder Steve Wozniak’s autobiography. Woz’s stories have always been a source of entertainment and inspiration. He lives up to his extraordinary image in this wonderful retelling of his life. If you have ever used an Apple, read this book. If not, read this book and then go buy one (you can have both a windows and mac!).

James Lee Burke,
Pegasus Descending: A Dave Robicheaux Novel

Burke’s latest installment in the Dave Robicheaux detective series. Burke is a very good writer and this is an apt example. Dave Robicheaux and Clete Purcell are vivid characters who live in the zone between law and disorder in New Iberia, Louisiana. There is a bit of hurricane in these guys.

Laurie R. King,
The Art of Detection

King is the author of two distinct detective series: San Francisco’s Kate Martinelli and London’s Sherlock and Mary Holmes. Here she somewhat combines the two as Martinelli investigates the death of an obsessed Holmes fan. It is always fun to read how she weaves the historical fictional Holmes with the current fictional one. We miss Mary, but not so much that it prevents enjoying the story.

The Arbinger Institute,
The Anatomy of Peace: Resolving the Heart of Conflict

The follow-up to Leadership and Self-Deception steps back in time to explain where fictional leader Lou Herbert found the basic principles of that first book. This is simply a great book. The issues discussed here, whether cast as family crisis (second) or business management style (first), are fundamental to humanity. These books should be read widely. One can only hope they would be understood widely.

Les Claypool,
South of the Pumphouse

Bass player and Primus leader Claypool has long had an interest in fishing and other, stranger, things. Here he combines some of both in his first novel. It may not win a book award, but it is damn funny. I have long enjoyed his music and look forward to reading his next book.

Andrew Vaschss,
Mask Market (Vintage Crime/Black Lizard)

The latest installment in Vaschss’ Burke series. We visit familiar landscapes and people, but are never disappointed in either. If you have never read one of these books, you owe it to yourself to jump in. While I recommend starting at the beginning and reading them all, I have always been impressed by the fact that you could read any of them and not miss a beat. I have never figured out how he can set the scene each time so completely without boring his regular readers—we are never bored here! Burke is a criminal as well as a hero, and we accept and delight in both.

Michael Connelly,
Echo Park (Harry Bosch)

By now you may have noticed that I tend to read both many mystery novels and the latest ones by a large group of authors. Add Connelly to that list. The detective here is
Harry Bosch of Los Angeles. In the last two installments Bosch has been back with the LAPD working on what television calls “Cold Cases” and in what the LAPD calls the Open-Unsolved Unit. Either way it is just plain good stuff. As a bonus we are reminded in the book about the release of recently discovered recording of Thelonious Monk Quartet with John Coltrane at Carnegie Hall. If I was to say it was maybe better than Connelly’s book, I think he would understand and forgive me. It is still a very good book.

Dick Francis,
Under Orders

This is the first book Francis has written since the death of his wife some six years ago. Thankfully his family encouraged him to write again. The return of Sid Halley, familiar to all Francis fans, is worth the wait. The world of horse racing in England probably cannot live up to the tales Francis has spun, but this book lives up to them. Halley has had the honor or repeat manifestations and the latest if not the greatest stands tall as a tribute to its author’s life and imagination. Thank you Mr. Francis.

Gordon S. Wood,
The Americanization of Benjamin Franklin

I actually listened to this book. Wood wrote the book on the American Revolution in 1969. I read it in pursuit of my degree. Here we get a wonderful explication of a very complex man. Wood explains how and why a man born in Massachusetts needed to “become” and American. It is a very interesting story and book.

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Self-Deception

August 22, 2006

Just finished reading Leadership and Self-Deception, by The Arbinger Institute. Very interesting book that should be read by everyone. It presents a very intriguing version of “being in the box” that rings truer than the usual usage. Much of it reminds me of Sartre’s “bad faith,” as well as my long held suspicion of “certainty.” I can see much of R.D. Laing’s Knots here as well. They have a new book out: The Anatomy of Peace: Resolving the Heart of Conflict. I will buy this book based on the quality of the first one, and its interesting subject. It is so easy to fall into the trap described in and so difficult to escape that trap. Good luck to you all.