Tuesday, 28 December 2010

Tuesday and 2pointfive_age_of_man contemplates the New Year

Aiming to be looking over this view by mid June 2011,
Crete, Hersonissoss
Started Tuesday 28th December 2010.  Evening about 7.30 pm

Today has been a quick thaw outside.  The diary of Samuel Pepys' for the 27th December 1667, hints at the economic crisis of his day.  The government unable to carry out the King';s wishes.  Defence budget arguments between Pepys and the Guards supporters echo defence review stories of today.  Bankers are broke and everybody is keeping their money, no different to bail out and non-lending of today.  

Another day looking through the past year's plus and minuses.  The year 2010 for me as for a lot of people has been one of change.  A desire for work-life balance is still one of those goals.  Two major realisations are wanting to work smarter and the fact I might have outgrown certain ways of working.  So how am I going to move forward in personal affluence or should I aiming for that happiness that the King of Bhutan has been on about ?  I'd like to be greedy and have both.

So, economic outlook around  me reference to Kindle.  I am encouraged by Harvard Business Review (HBR 28/12/10) article "Investing in the Post-Recession World" that the recession is officially over, but agree with the sentiment it's difficult to see the wood for the trees and the way forward.  I am also in agreement with article "Learning how the economy really works" (HBR  28/12/10).

I have a fundamental problem with economic theory and policy.  I can't understand how growth can be used as a measure of the health of an economy which relies on finite markets and resources.  The premise ultimately drives boom and bust since ultimately I cannot see sustainable infinite growth.   As a life scientist, complex ecological relationships I find relatively easy to understand.

The analogy of a Coral reef to economies in that it produces a stable ecosystem based on the available resources and inputs.   It has  internal economy based on carbon exchange  ie simplistically big fish eat little fish, little fish eat big fish when the big  fish dies and become big fish and so on.  When the requirements of life are satisfied the organisms involved reproduce and crucially survive.  If there is not enough resources in the coral reef it remains static in size at best. The coral's plankton are constantly being released another site and another colony starts in isolation.

The ancient Greeks  practiced something similar.  The understanding of the finite limitation of resources sprouted colonies across the Mediterranean.   Modern day Marseilles (Masillia) the largest port in modern France. Syracuse the home of Archimedes the greatest ancient technologist, who was killed by a Roman soldier unaware of his asset value. How lucky Werner Von Braun was and how much the American economy has benefited from NASA's direction.  My favourite colony name, Emporium is in  Spain.  Literary meaning trading place and also echoed in the Victorian Emporiums.  Woe betide anybody that attempted to return and upset the mother colony.  They were greeted with slingers-out whose job was literally to sling stones at anybody that attempted to return .  They also had a very non-Roman aversion to "luxuria".

Globalisation resulting in the interdependence of all markets I find a very worrying factor for my personal wealth.  President Obama has already stated his belief that the American economy is so important that it drives the world and the world needs to work to make America successful.  We seem to have created the equivalent of a super-organism in our economies.  There will always be the potential that the super-organism deadly plague or virus, real or .  The economic effects of an actual plague in the middle ages restricted "growth" for centuries.  The Gaea hypothesis does not necessarily give humans any greater value than other organisms.  It all depends which direction your looking, where your chair happens to be placed in the universe in order and when you choose to  blink.  Unfortunately I may have opened my eyes at the wrong time.

The British Empire had it's own problems with a globalisation as a concept.  The Dundee was essentially a one trick pony with it's reliance on the Jute Industry in the 19th Century.  Outsourcing to India virtually put economic development into a slump and on hold until it re-discovered it's civic pride and confidence and called itself the City of Discovery.

Britain has itself on a macro level been hit by a similar bout of outsourcing. The decision to turn ourselves into a service economy by Mrs Thatcher's advisers was fundamentally flawed as it did not take into account historical examples and cycles.  I can speak from personal experience as my father was one of the small business men who became entrepreneurs more through necessity than choice as companies rationalised and made redundancies.  He finally retired a few years ago after 25 years of working for the bank's profits as they "helped" small businesses.

So my mission and trick for the next year is to try and decouple myself from the super organism.  I like the coral reef analogy for business.  It is one that  I pondered two years ago when I was holidaying in Crete.  when I arrived back I ran out paper trying to come up with a A4 plan of action.  I ended up painting the dining room wall white (12 foot by 12 foot) and then proceeded to produce my largest "food" web of ideas to  date.  I went as far as investigating the costs of setting up a limited company.  I purchased some web-domains with a view to e-commerce.  However, I could not at that time see a viable business idea,  although I could write a business model.

In the 90's when again there was a crisis in the economy.  I was finishing a period of research in agriculture sponsored initially by ICI then Norsk Hydro into the use of foliar fertilisers and their potential to reduce nitrates in  groundwater.  This was perceived to be a big problem as Nitrate Sensitive Areas were being designated and farmers potentially could be fined if the groundwater limits were exceeded.  The cost fertiliser was a major input and should have been enough encouragement to modify farming practice.  This was an interesting time as  water companies were starting to be privatised.  The legislation stipulated that they owned every form of water that fell out the sky or was fossilised in the ground.  Private boreholes were no longer private.  If,  however, the water turned up in the wrong place (ie flooded your house) it was not the fault of the water company.  Environment consultancy was in it infancy since there was no legislative or company morality/citizenship imperative to do this.

I stopped after a few months as it was personally not sustainable at the time, although I did have the benefit of a Business-link training day from a "retired"/resting businessman.  I found I could write a business plan and spreadsheet just as easily as the business guru, turning it into hard cash was the hurdle.  Now it is dominated by very large consultancies. That was in the days when sustainable and development were not bedfellows.

I even became a founder member of the Telecottage association.    After a journey across country to the National Agricultural Centre at Stoneleigh I met my fellow new frontiers people. After a morning of listening to the group founders I felt a sense of depression.  This was in the days of dial up modems, the Internet hadn't been officially invented.  This was essentially a Business club/Breakfast network.  You agreed to buy your office supplies from A who sold you the computer that you dialled up C, with who spoke and  then used the  envelopes to send you the invoice for the time spent talking to you.  The money did not seem  to be be coming from outside the closed group and the circle seemed to rely on pyramid principles.
this was supposed to give a route to resuscitate dying rural economies.  A Google search now turns up an address in Devon with no website.

Is this time to try the teleworking route again? Are the costs involved now cheap enough to make IT  just a business tool and not an end in itself?  Is the hammer cheap enough to bang the nail in to stop the house falling down?  Maybe.

The Portfolio career (multiple job or income stream) may finally come of age.  In order to make this work for the small business person who may have to work also part time, radical tax arrangements may be needed.

The idea of a monthly personal PAYE account for small businesses has been considered.  Tax credits banked in  a virtual account that could be drawn to smooth earnings streams throughout the year would be useful.

If you are going to fine banks, fine them on the length of the trading cycle over which they judge small businesses' cashflow.  They need  to take some of the risk rather than have their cake and eat it when they bankrupt a business.  After all there are 300,000 bank account holders who will need employment over the next five years.

Remove the disclaimer to any blame from the front of accounts prepared by qualified accountants and make them liable for any sins of omission and policing sharp practice especially by large companies who pay small ones on 90 days or when they choose or never.

This would be very simple if ..... we have a Tax IT system fit for purpose.  Oh to be a manager of a PFI!    

So back to the picture at the head of the blog.  If I am sitting in that cafe on the beach front the momentum of two years planning and thinking may have come to some workable conclusion.

Yes, I will be sitting in that cafe!  I already have the logo and philosophy!

I sketched this as I  sat in a Taverna
I had gone to Crete to
recharge my batteries.  However, I
seemed to be rushing
about when I should have let
the wind blow
and recharge my batteries


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