Thursday, 8 August 2019

Like unicorns, the 'free market' doesn't exist

What we have is not capitalism, it’s corporatism. Under real capitalism, the free market would prevent the destruction of our environment. All our problems would be solved if we just returned to the good competitive capitalism. There never has been, is not and never will be a capitalist free market economy. 
  • Capitalism is meant to pivot around the free market. If the market were rid of government regulation then true competition would reign, with corporations battling it out to provide their goods and services to rational, all knowing consumers. This would provide stable and accurate prices and quality for goods and services as competition would aggregate supply, demand and pricing.
  • The success or failure of a company would be directly proportional to its ability to meet the needs of its consumer.
  • The recent failures – the bankers bailout, the corporatisation of government, the decline in social mobility – are because we do not have real capitalism. We are in fact in a post capitalist, state capitalist of fascist state. Whatever state we are in, it is as a direct and inevitable result of capitalism. 
  • Corporations themselves are rabidly anti-competition.
  • In Britain today, 97% of food purchased, is bought in supermarkets, with only four corporations making up 76% of those sales. In the US, 72% of food is purchased in supermarkets. As these figures continue an upward trend, we can see that monopolies are being created in food production.
  • If we take a look and test the theory that the consumer would benefit from this process of corporate battles. Since the 1950's, the percentage of the US household budget spent on food dropped from 32% to 7%. In the UK the proportion spent on food has dropped from 33% to 15%. With supermarkets making record profits, and household food budgets down, who is paying the price for our food? The answer is the farmer and the environment. 
  • Seventy years ago, there were nearly seven million American farmers, today there are two million. Now 75% of US produce comes from just 50,000 farming operations.
  • The free market has seen a few corporations rise to dominate the market, set their own prices and lead to negative social impacts. While some consumers might see a fall in the price of the food they are buying, they cannot be sure that they are comparing apples with apples and while perhaps benefiting as consumers, they are losing out as producers.
  • As seen above, it is not in the interest of the corporation to maintain a free market. The corporation has no reason to apply any kind of ethics whatsoever. Adidas employs child and sweatshop labor in the far east because it is cheaper than employing people on a living wage, with decent terms and condition.
  • Historically the government, the purported servant of the people has been the enforcer of rules necessary to restrain the ‘market’ from behaviors which from point of view of the corporation would lead to undesirable social outcomes.
  • In the US, by 2011 the largest thirty corporations spent more that year on lobbying government than they spent on taxes. 
  • In the UK, corporations with outstanding tax issues are currently in working groups with the to redraft the very tax rules they are doing their best to avoid. 
  • When corporations break the law, they are either not tried or given a fine which comes nowhere near the profits reaped by breaking the law.
  • Recently banks have instituted fraud on a global scale by simply making up the LIBOR rate, the base interest rate, at the cost of savers and pensioners and to the benefit of their traders who specialize in debt, not capital.
  • In 1950, corporate taxes made up 30% of federal revenues in the US. By 2012, this had fallen to just 7%. In the UK, Corporation Tax rates were cut from 52% to 35% over just two years between 1984-86 and has continued to be cut until it stands at just 21% today.
  • Corporations do not want any rules which stand in the way of making profit. Left unregulated, they would simply operate in ways which maximized their profits regardless of social outcomes. When we introduce a regulator, corporations seek to and succeed in compromising them. The issue is not to blame one or other of the players, but the game of capitalism itself.
  • The free market myth is nothing but a nonsense. It is a self serving nonsense propagandized by its beneficiaries.
In conclusion, not only is the market not free, but it never can be. It requires legislation to prevent rational corporate behavior which would undermine it, and any regulator (state or otherwise) will be corrupted by corporations seeking to influence them. The sooner we abandon this madness, the sooner we can answer the bigger question: how do we create a means of economic organisation which has the highest chance of meeting our social goals? We must abandon the myth of the free market, just as we gave up on Santa Claus and Unicorns – it is time to put away childish things so we can become grown up caretakers of ourselves, each other and the planet.

Friday, 2 August 2019

Start up business realities

While startup life seems glamorous at best when it comes to dizzying valuations, the truth of the matter remains that 70% of all businesses (with employees) fail within 10 years. Business failure is a harsh reality. While 80% will make it past that first-year mark, only about two-thirds of all businesses with employees are able to survive their second year. The fifth year? Just half. Ten years out? Just 30%. 

There are some specific reasons why these businesses are failing. 
  • You won't fail unless you entirely give up. 
  • If you don't put your customers first, the potential for failure skyrockets.
  • Regardless of your situation, find a good mentor who can help you navigate the stormy waters of any business in the current climate.
  • Focus on the long term. Do your best today.
  • Successful businesses deliver the most value. Find a way that you can under-promise but over-deliver. Always over-deliver. No matter what the situation. If you're looking for a fast buck or to get rich quick, you'll quickly find yourself at a dead end. 
  • If you can't connect with your target audience, your business will fail.
  • The truth is that it's hard to sell anything to straight cold traffic.
  • Businesses that lack authenticity and transparency will fail. 
  • Staying afloat is exponentially harder when competition is fierce.
  • It's easy to spend when the coffers are full. When the expenses spiral out of control, or a founder uses much of the company's money for personal or frivolous expenses, it's impossible for the business to survive.
  • When problems do arise navigating those murky waters becomes an impossible task for newcomers without real business world experience. Businesses need to build up their board of seasoned advisers, and founders need to find trusted mentors, if they're serious about longevity.
  • Your employee tribe and culture is crucial for long-term success.

When business starts to crumble ...

The feeling of riding the wave of a successful business career is so intoxicating, many wouldn’t image a time may come when things would go the other way round. This usually results in inexperienced entrepreneurs finding themselves in situations they’re not well prepared to face. Many entrepreneurs resort to making unwise decisions that only help them achieve brief relief and result in a worse situation. When you’re in that situation when things are not going as expected, decision making becomes critical. While a failed business is certainly not the end of the world, it is important to prevent the business from hitting the ground and stay afloat.

Here are some ways to react and handle things if you find your business is crumbling.
  • Keep your mind clear to enable you process your thoughts clearly.
  • Create new opportunities to get your business back on track by making new deals.
  • Accept temporary failures. 
  • Stay positive and look beyond your current situation. 
  • Focus on what drives you.
  • Ask for favors from others.
  • Think of the people you know that can help you and reach out to them.
  • Re-strategize your business plans.
  • Don’t keep anyone in the dark by pretending that everything is alright. 
  • Be bold and come out clean with everyone.
  • Treat your employees like your co-partners, and they would be glad to offer their help and contributions.