Thursday 14 May 2009

Modern business practices are a millstone to quality!

The mantra of all modern business is buy buy low sell high. This is after all is the modern basis of profit. The problem is that this mantra does not necessarily lead to profit for all, and, infact, usually leads to negative profit for the consumer! This is the fundimental problem with the modern concept of profit.

There are two types of profit (as I consider it), there is the type of profit where all parties involved profit (positive profit) and the type where the person selling the goods profits, at the expense of the person buying the goods (negitive profit). The problem is, modern business does not seem to really care wether profit is a positive or negitive profit so long as it is a profit to them.

See my point yet?

Positive and Negative Profit

Now, I can think of lots of arguments around this topic, the most obvious being that "positive profit is an illusion". Well, lets give an example of positive profit (just to prove it exists):
  1. Person "A" can't cook but loves to sew and has an abundance of clothes. Person "A" doesn't want to learn to cook, but person "A" wishes to eat.
  2. Person "B" has a surplus of food (he/she loves to cook) and the food is of low value to them because they can't use it, but person "B" hates to sew.
  3. Person "B" can exchange food for person "A"'s clothes. It always leads to a positive profit because "A" receives something they need and so does "B" and both only lose what they do not need / require.
This is of course describing a bater system. Though, in theory, money can equal this system by someone external to the two parties (fair and impartial) setting a price for both goods based on effort put in to produce the goods.

So, this is prositive profit. It does exist. The profit here is for all, even if only one side is receiving goods and the other money (e.g. in the case of person "A" buying what he needs with money.. in theory person "B" can at a later date use said money to buy clothes).

What money allows is for a delay between "selling" and "receiving true compensation".

If I came to you today and said "If you give me that egg, i'll give you this note saying i'll work for 1 hour in exchange which you can use at any time to get 5 hours work from me" and you though that was a fair exchange for your egg so took the paper. If then you didn't have a job for me for 6 months, you would not expect in 6 months time 1 hour to last 1 minuet instead of 60!

This is what happens with money though! The value of it is constantly changing. If you have one pound today, it might buy you an egg, but in the future, it might buy you two eggs? or more likely half an egg. For the same amount of work provided. Therefore, money is a huge enabler of negitive profit!

This is how people who control the money remain "rich" and the population remain "poor". Whilst at the same time, keeping the population motivated (in theory) to work and collect money. It does mean that people within the population can become relatively richer than their neighbour by the amount of work applied.

Money does have many positive aspects (after all it needs them), but, modern business constantly tries to exploit the negative aspects of capital. This is "because discuised negitive profit is an increased profit to the seller/business because they receive both their own share of the profit and the consumers share as well". Not every business deals "directly" with negitive profit, it is of course obvious that you would not want to deal with a company offering a negitive profit (once you are aware of it). So, the negative profit is normally applied in a fashion which makes it either "indetectable" without the full facts or applies it internally within the business (in the form of unfair sharing of rewards). Many instituation hide behind the complexity of money as a way to ensure that negitive profit continues to flow in the correct direction (to them).

Companies can also themselves be the "victim" of negitive profit (for example "Piracy" results in a negative profit for businesses). Companies can "choose" negative profit in the short term (with themselves as the victim) in order to recieve a larger negative profit in future (with themselves as the victor). This can be a valid way of attracting new customers, but at the end of the day no matter who is the victim of negative profit it always has a negative effect! Two negative profits, distributed equally in both directions does not lead to an equal positive profit!

Why? because whilst whichever party is suffering from the negative effects they are bound to pass on those effects to who they deal with or just suffer themselves.

So, business is always trying to pay less for more.. this either leads to people being "ripped off" (wether they are consious of it or not) or to people the quality of products and services falling as people trie to undercut one another for the business (again, leading to negative profit all around).

Too tired to explain it in more detail, or go into all my considerations... post comments please!

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