Quotulatiousness

September 30, 2022

“To maintain the illusion of free, all our online activities are sinking into spam, scam, and sham”

Filed under: Business, Media, Technology, USA — Tags: , , , , , — Nicholas @ 05:00

Ted Gioia on the insatiable growth of predatory behaviour from providers of “free” content online:

The biggest trick the Devil ever played was convincing people that online stuff is free. But the Devil always collects, sooner or later — and we are starting to learn the actual terms of this cursed deal.

Consider some recent news stories:

  • YouTube has been testing users’ willingness to watch 10 unskippable ads on a video. And the ads aren’t spaced out. They come at you, one right after the other, at the outset — because Google wants to be paid first, even if the video sucks.
  • Nobody wants ads on iPhone, but they’re coming. Executives at Apple are allegedly planning to triple the ad revenue from phones.
  • “For some Google searches literally the whole screen on Google is ads.”
  • TikTok can track a user’s every keystroke, and Beijing has “access to everything”.
  • “Scams are showing up at the top of online searches.”
  • Snapchat has been forced to pay $35 million for storing and selling users’ biometric information without permission.
  • Even if you pay for ad-free streaming, Spotify inserts ads in podcasts.
  • Ads are coming to Netflix too.
  • Etc. etc. etc.

This is what happens when “free” really isn’t free — but consumers prefer to stay in denial. Go ahead and rob me, just make sure I’m not looking when it happens.

It’s even worse than that. Web users are now hooked on free — and like all addictions, this one is far costlier than you realize at the outset.

You have more leverage when you negotiate an actual price. When I cancel a paid subscription, the corporate provider always comes back with a special offer to get me to reconsider. But how much bargaining power do I have if I refuse to click on those “terms and conditions” that always come with the free stuff?

I’ll answer that for you — none at all.

How bad will it get? YouTube described its ten unskippable ads as a “test” — but this wasn’t done in a laboratory or with volunteers. They just forced it on users, and watched them squirm. And squirm they did.

In fact, one person reported a 12-ad blitz.

This wouldn’t be so bad if it was just one business or sector of the economy that played these games. But this is the de facto business model for the entire digital economy. To maintain the illusion of free, all our online activities are sinking into spam, scam, and sham. Everything from sending an email to sharing a photo gets monitored and monetized by big tech companies — and often you’re the last person to find out what the real price is.

September 26, 2022

“We’ve credentialed people for membership in a series of high-cultural-status groups on the basis of their ability to chant slogans and perform rituals; they are coreless”

Filed under: Business, Education, Politics, USA — Tags: , , , , , , , , , — Nicholas @ 03:00

Chris Bray on Vivek Ramaswamy’s book Woke, Inc.:

Vivek Ramaswamy was trying to close a deal, so he went to do some relationship building over dinner at an investor’s house. As dinner ended, the investor’s son came downstairs to greet the visitors, and he turned out to be a high school senior who was applying to Harvard. By the most remarkable coincidence, Vivek Ramaswamy is a Harvard grad, so the kid asked for some advice on getting in. Stand out, the Harvard grad told the Harvard applicant. Have something that makes you different than all the other applicants. Oh, the kid said, yeah — I got that. It turns out the seventeen year-old son of a venture capitalist had started a non-profit to fight against global sex slavery, which did indeed impress the admissions office and did indeed get him into Harvard. When Ramaswamy ran into the kid again, a few years later, he was shopping for Wall Street internships — and had moved on from the whole sex slavery thing, which had by then served its purpose.

Ramaswamy’s book Woke, Inc., a title published last year that seems to be gaining new momentum now as its author takes on corporate ESG posturing, accurately promises to take readers “inside corporate America’s social justice scam”, though I don’t love everything he offers as a solution. He clearly is reporting from inside: He’s a Harvard grad, a Yale Law grad, a former hedge fund employee, and a former pharmaceutical CEO. (Those credentials make you trust his argument, right?)

The thing the kid did, dummying up a quick thing to fight global sex slavery to get it into his admissions package, is a version of a maneuver that Ramaswamy finds all over the woke corporate world. The highly woke consumer products company Unilever is passionate about taking deep notice of intersectionality and serving women of color, and it partners with UN Women, “a nonprofit branch of the UN dedicated to advancing gender equality and empowering women”. Also, dozens of women who work on a Unilever tea plantation in Kenya were gang-raped in front of their families, an event that was coupled with a dozen or so murders, and Unilever declined to provide them with substantial support or assistance: “Unilever said the attacks on its plantation were unexpected and therefore that it should not be held liable”.

Unilever provides money to UN Women, Ramaswamy concludes, and UN Women provides Unilever with “moral cover for the Kenyan massacre”. Woke Unilever is a façade for, you know, Unilever. It’s a strategy, one example of many, and Ramaswamy argues that the “arranged marriage” between wokeness and corporate capitalism was born out of Occupy Wall Street: Here’s a check, now let’s stop talking about TARP and start talking about white privilege.

You should read Woke, Inc., so I won’t go on summarizing. But without going deeper into Ramaswamy’s argument, which reflects a series of increasingly familiar observations about social class and the function of wokeness, the point is the inauthenticity and shallowness of corporate social justice posturing, all of which is meant to protect the core of the project — to provide cover for business practices that might otherwise be criticized. It’s a show, a performative and manipulative posture. You could easily make comparable arguments about wokeness and power in academia, media, or government.

Now, to take all of this and pivot to an argument that will satisfy absolutely no one, if the social justice façade is a façade — shallow, performative, calculatedly purpose-serving — then there’s a good chance the branch managers of the globalist project will drop it when it slides out of fashion. The kid who, wanting a career on Wall Street, did the sex slavery nonprofit thing just long enough to get into Harvard: That kid is a middle manager now, and he’ll recite slogans about white privilege or not, as Current Thing demands, as long as the checks still cash. We’ve credentialed people for membership in a series of high-cultural-status groups on the basis of their ability to chant slogans and perform rituals; they are coreless.

September 24, 2022

PayPal shuts down the Free Speech Union’s account for some reason

Filed under: Britain, Business, Liberty, Technology — Tags: , , — Nicholas @ 03:00

Ellie Wheatley on PayPal’s arbitrary decision to cut off the Free Speech Union’s account without notice:

The irony of the Free Speech Union’s PayPal account being shut down is that it proves we are in need of the union more than ever.

The online payment company shut down the FSU’s account (thus making it more difficult for people to donate) without any clear explanation as to why it did so. The same was done to its founder, Toby Young, and his online newspaper, the Daily Sceptic.

The shame is, PayPal is an innovative tech company that has made transferring money almost seamless for millions across the world. You can donate money to an organisation within seconds; there’s no faff trying to find your credit card, or having to re-type your details for the twentieth time that week. It’s a brilliant service that has made life easier for many people, businesses and charities. PayPal is not a political company, it’s a tech company worth over $102bn, so why have they been banning other organisations from using their services?

Although PayPal said they couldn’t comment on the decision, they did proclaim that they “weren’t discriminatory”, but is this really true?

Is it unclear whether they shut down these accounts simply because they disagreed with what the FSU and Toby Young stand for. Although PayPal hasn’t clarified what exactly FSU and Toby Young did wrong, it appears that they must have breached their acceptable use policy. This includes myriad of things but the most prominent are hate speech and “misinformation” on topics such as the COVID vaccine.

Hate speech is one thing (although it seems that anything can be deemed offensive and hateful now) but “misinformation” about topics being a breach of policy takes us down a dark and sinister path.

Misinformation is a term that is often used to label content that goes against the elite or prevailing “groupthink” point of view. Questioning mainstream thought is unacceptable, and it breaches Big Tech’s policy, thus you can (and often will) be shut out.

September 14, 2022

Whisky – Scotland’s Water of Life

Filed under: Britain, Business, Government, History — Tags: , , , , , , — Nicholas @ 04:00

Tasting History with Max Miller
Published 13 Sep 2022

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September 13, 2022

The Boise Pride Festival’s “Drag Kids on Stage”

Filed under: Business, Media, Politics, USA — Tags: , , , , — Nicholas @ 03:00

I’m not sure I could accurately place Boise on a map, but the city’s relative obscurity doesn’t mean it can’t have a really progressive LGBT scene, including a special “Drag Kids” event planned for their Pride Festival:

Remember that California has just passed a new law, SB 1100, to protect local legislative bodies against “bullying” from people who do hateful things like disagreeing with them, and that the recent failure of another (spectacularly offensive) bill in the state legislature was the product of “harassment”, by which the author of the bill meant that the peasantry forcefully and persistently criticized it. And you should definitely read this two–part essay from Bat Cattitude on the technocratic presumption that disagreement with technocrats can only be dangerous extremism.

With that background in mind, consider a modest victory in the most dismal battlefield of the culture war, and then watch the response to it.

This one happens in Boise, a purple town in a red state. This year’s Boise Pride Festival was all set to feature an event called Drag Kids:

“Now it is time to see the kids”, sexy eleven year-olds shaking that dirty little moneymaker on the stage. So hot. So empowering!

[…]

Now, the Big Pivot: Boise Pride pays its bills by soliciting the support of corporate sponsors, so a bunch of corporations suddenly found themselves sponsoring the sexuality-incorporating performances of some hot little eleven year-olds. They quickly began to jump clear of the thing:

Because bigotry still prevails in Amerikkka, see, corporations aren’t brave enough to stand up and support the sexy eleven year-olds in their extremely hot sexiness. Atavists! Prudes!

Now, here come the politicians. The mayor of Boise, Lauren McLean, is Very Disappointed In You All™:

Slogan slogan slogan, slogan slogan, slogan slogan slogan. A spotlight on the critical need for a conversation about standing together!

If you challenged Mayor NPC to publicly identify specific pieces of inflammatory rhetoric that were important and central to the controversy, she couldn’t; she just knows that the “inflammatory rhetoric” box has to be checked, because Mean Republicans objected to something involving an LGBT event, specifics not important. Nor could she explain how sexy children represent the dignity of all people, or respond coherently to a discussion about sexual commodification and the erasure of childhood. She has a list of slogans. She deploys them.

September 10, 2022

The Land Rover Defender Story

Filed under: Australia, Britain, Business, History — Tags: , , , , , — Nicholas @ 02:00

Big Car
Published 27 Dec 2019

The Land Rover is Britain’s bullet-proof off-roader born out of Rover’s post-war desperation and became the indispensable go-anywhere vehicle. Like its famed bullet-proof ruggedness, Land Rover production kept going, and going, and going. But with a brief gap of 4 years, the Land Rover is still with us and looks like it’s not going away any time soon.
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September 6, 2022

Add the traditional English pub to the endangered list

Filed under: Britain, Business, Food — Tags: , , , — Nicholas @ 05:00

There is nothing to match the warm, cozy comfort of a proper English pub*, especially on those cold, wet days as evening falls. Traditional pubs have been struggling for some time as British preferences in entertainment, drinking, and dining have become more cosmopolitan over the years. The raw numbers of pubs has declined year-over-year for decades, but it’s looking like the winter of 2022/23 may be the worst time for pubs in living memory:

“The Prospect of Whitby ; Pub London” by Loco Steve is licensed under CC BY-SA 2.0 .

Simon Pegg’s wise counsel in Shaun of the Dead – “Go to the Winchester, have a nice, cold pint, and wait for all this to blow over” – has long been shared in GIF form whenever a new crisis springs into view.

Chillingly, this time next year, that may no longer be an option. To the Great British pub, the winter energy crisis represents an existential threat. And on the back of two years drifting in purgatory under lockdown, many pubs are facing a war of extermination.

The trade publication for pubs, the Morning Advertiser, makes for especially grim reading at the moment. Its pages are dominated by the energy crisis. It suggests that without urgent government intervention, more than 70 per cent of existing licensed premises will not survive the winter.

One “wet-led” pub – that is, a pub-pub (one that relies on the sale of alcohol to remain viable, rather than on burger stacks and artisan chips served on a slate hubcap) – illustrates this plight all too clearly. Until this summer, it had been paying 14p per electricity unit on a fixed energy contract. But it has now been quoted 83p a unit. It is hard to imagine any cost that could rise so vertically without dealing a mortal blow to a business balanced on the edge of viability. And it’s not as if heating and energy are optional extras during the winter. This is not a thriller, this is a snuff movie.

Pubs have always faced challenges, of course, going right back to the Civil War and the mirthless interregnum. Thanks to Cromwell’s war on harmless pastimes – such as bear-baiting, whoring and dice – you will rarely see him honoured on pub signs in the way you see a Royal Oak or a King’s Arms.

The First World War famously saw the introduction of last orders. This was to keep munitions workers working. It was one of those temporary, emergency measures that, like income tax, proved oddly barbed once in the flesh of the state. As the 20th century wore on, rationing and oil shocks tightened belts. And then, under Thatcher, the rise of restaurants, wine bars and other sub-pub drinking options diffused the economic benefit of those re-loosened belts.

Drink-driving legislation and smoking bans delivered a slow-motion one-two that left many well-established premises, especially in rural locations, reeling. And in the background, the steady drip-drip of anti-drinking propaganda from bodies such as Public Health England (now rebranded as the Health Security Agency) has done its damage, too. The public-health lobby sees drinking only in terms of abuse, while ignoring the social benefits, the knitting-together, the public mental health of England that the public house affords.

* The Scots and the Welsh may have issues with this, but based on my experiences of drinking and dining in pubs in all three countries, it’s the English pub by a country mile. Welsh pubs can be pleasant, but Scottish pubs outside Edinburgh remind me of grim old Ontario bars back when Ontario was still just emerging from the post-Prohibition no-fun-on-Sunday Orange Lodge era (“We’ll let you drink, but you must be made to feel guilty for it!”).

The Story of Woodworking on YouTube: 2005-2017. A Documentary About Sharing a Craft.

Filed under: Business, Technology, Tools, Woodworking — Tags: — Nicholas @ 04:00

Steve Ramsey – Woodworking for Mere Mortals
Published 2 Sep 2022

This is the story about woodworking on YouTube and how it got started. The first year of YouTube was mostly about sharing videos with friends, family and even colleagues, and on December 13, 2005 John Leeke, @John Leeke a historic preservationist made history by posting the platform’s first woodworking video.

Frank Howarth @frank howarth would create the first woodworking channel on July 8, 2006, followed shortly after by Marc Spagnuolo @The Wood Whisperer on Oct 18, 2006 and Matthias Wandel @Matthias Wandel on Apr 9, 2007.

The recession in 2008 contributed to only a handful of new channels emerging over the next few years. Ones who are still posting today include Carl Jacobsen, Colin Knecht, Chad Stanton, WoodWorkers Guild Of America, Chop With Chris, myself, Ana White, Jon Peters, Alain Vaillancourt, Stumpy Nubs, Samurai Carpenter, John Heisz, and Paul Sellers.

In 2013, the flood gates opened, ushering in the Golden Age of YouTube woodworking and maker channels (2013-2017), followed by the Influencer Era and the COVID era.

If you’ve been a long time YouTube viewer, I hope you enjoy this nostalgic look at the early days and if you’re new to the platform, maybe you’ll check out some of this early content. A lot of it might seem rough by today’s standards, but it was content made by a few passionate people for the sheer joy of sharing videos about woodworking.
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QotD: The fitness club

Filed under: Business, Environment, Health, Humour, Quotations — Tags: , , — Nicholas @ 01:00

Yesterday we looked at what happens when a cult becomes a movement. I said there are two fundamental, structural problems that arise. The first is that the leadership’s goals start diverging from, and eventually run counter to, the cult’s dogma. That’s where the eco-scam finds itself these days. It doesn’t bother the Green True Believers that their leadership flies around in private jets — see yesterday’s discussion of disconfirmation — but it does put a damper on recruiting. We’re a stupid, spoiled, star-struck generation, but even we expect our leaders to walk the walk for a mile or two every now and again.

The second problem, though, is: What to do with the True Believers?

Let’s return to the metaphor of the gym fitness club. As we noted yesterday, the real money isn’t in the hardcore people who actually do the exercising. It’s in all the lardasses who sign up, and keep paying the membership fee, but never actually go. This leads to the perverse-seeming conclusion that the best gym, from the gym-owner’s perspective, is one that stands empty — gleaming, never-used equipment that just sits there, one mute inglorious depreciation tax writeoff, un-maintained by no paid staff. See what I mean? The whole point of owning a gym — the cult dogma, as it were — is to get people in shape, but the optimal gym from the cult leader’s perspective is a group of perpetual fatasses, buying themselves workout indulgences at $75 a month.

I trust that the analogues in the eco-scam are obvious, so let’s move on. Even the most optimal-for-the-owner gym, though, is going to have a few True Believers who are in there day after day, grinding out sets and jogging on treadmills and doing whatever those CrossFit freaks do.* If you let them, they’ll take over everything. Ever been in a gym and seen a piece of equipment designed to isolate one muscle that you’d never think could be worked out in the first place? Congrats, your gym’s got a True Believer. Just stake out the Urethra-cizer for a few hours; you’ll see her; she’s unmistakable. She’s pushing 50 but has the body of a 20-year old, except made out of beef jerky …

… anyway, the point is, savvy gym owners know how to handle True Believers. You don’t buy ’em off with new equipment; you buy ’em off with new exercises. P90X is for pussies. Do Ultra-Kegels, and in just 60 days you’ll be able to lift an entire can of paint with your …

* Obviously I can’t write about gyms and cults without taking a cheap shot at CrossFit. They’re probably chock full of lessons on how to business-optimize your cult without letting it go mainstream, but I’m too terrified to look. Honest to God, there are some days where the only exercise I get is dodging and weaving away from the CrossFit cultists at the office.

Severian, “If the UFO Actually Comes, Part II”, Rotten Chestnuts, 2019-09-26.

September 4, 2022

Who was reading during Plague Year Two, and what format did they prefer?

Filed under: Books, Business, Cancon — Tags: , , , — Nicholas @ 03:00

In the latest edition of the SHuSH newsletter, Kenneth Whyte summarizes some of the findings of the most recent Booknet survey:

H/T to Marc Adkins who shared this meme at the perfect moment for me to steal it, file off the serial number and repost it here.

A few months ago, BookNet Canada, which does a lot of valuable research into the book market, released the 2021 edition of its annual survey of Canadian leisure and reading habits. It’s always an interesting study. I was slow getting to it this year because there’s been so much else going on. Here are the ten most interesting findings.

  1. Canadians have had plenty of time on their hands: 81 per cent report having enough or more than enough leisure. Pre-COVID, about 25 per cent of respondents said they had more-than-enough; during COVID, that jumped to about 35 per cent. The pandemic wasn’t all bad.
  2. Canadians read books more than they listen to radio or play video games but less than they shop or cook; 42 per cent of us (led by 58 per cent of the 65-plus crowd) read books daily; 35 per cent of the 18-29 age group read daily and 57 per cent of that cohort read at least once a week. Young people are no more likely to read books less than once a month than any other under-65 segment, which bodes well for the future of the industry.
  3. The statement “books are for enjoyment, entertainment, or leisure” received a ‘yes’ from 62 per cent of respondents, and a ‘sometimes’ from 34 per cent; the statement “books are for learning or education” received a ‘yes’ from 41 per cent of respondents and a ‘sometimes’ from 50 per cent.
  4. The top reasons for selecting a book to read are the author (40 per cent), the book’s description (30 per cent), recommendations (25 per cent), the main character or the series (20 per cent), its bestselling status (14 per cent), and reference needs (13 per cent). “Recommendations and the impact of bestseller lists have trended down from 2019 to 2021.”
  5. The love affair with print continues with 68 per cent of readers citing hard copies as their preferred format. Ebooks came in at 16 per cent and audiobooks at 10 per cent Interestingly, readers had a marked preference for paperbacks over hardcovers. Format preferences differ from age group to age group, with some evidence that the kids might not be keen on physical books:

I was interested in that apparent rejection of physical books by the 18-29 cohort so I looked back at the last two years of the survey […] The results are quite different, suggesting a methodological shortcoming (the survey sample is 1,282 adults so the margin of error will be large when you eliminate those who don’t read a given format, those without format preferences, and break the remainder down into five age groups).

August 24, 2022

“A spectre is haunting Britain – the spectre of whingers”

Filed under: Britain, Business — Tags: , , — Nicholas @ 05:00

A pub that was partially an inspiration for George Orwell’s description of the “perfect pub” is under threat from post-covid NIMBY complaints:

Google street view of the Compton Arms in Islington.

George Orwell’s favourite pub could be closed down because four neighbours have moaned about the noise.

A spectre is haunting Britain – the spectre of whingers. The dead hand of NIMBYism is felt on so many of our national crises, from the housing crisis to the “drought” to the energy crisis. The comfortably off classes have fought tooth and nail, all too successfully, in recent decades to block the building of anything – from houses to reservoirs – that might make life easier for everyone else. But their killjoy war on pubs might just be their most grating accomplishment.

The Compton Arms in Islington is the latest pub, still struggling in the wake of lockdown and now faced with soaring energy costs, to be threatened with closure over a handful of complaints. It’s been open since the 1800s. George Orwell drank there and it reportedly inspired his essay “The Moon Under Water”, published in the Evening Standard in 1946, which laid out his idea of the perfect pub. Now it has been slapped with a licence review by the local council after four neighbours complained that it was a “public nuisance” and posed a danger to health.

Given the Compton Arms was just voted the second-best pub in the UK by Time Out, with a review that hails its “seasonally led” “small-plates menu”, it seems unlikely to have become some den of criminal depravity. The furious explanation of Nick Stephens, the pub’s owner, seems more plausible – that some killjoys on this well-to-do Highbury side street got used to the pub being shut during lockdown and are now throwing their toys out of the pram.

“Our managers have gone to extreme lengths and worked their socks off to run the pub considerately (and exceptionally) – in spite of some more than challenging behaviour from some of the four complainants”, Stephens posted on Facebook. “A minority get used to the quiet then decide the pub that’s been there since the 1800s, that is an asset of community value, is now a nuisance.” He says that if this “minority of four” succeeds, the Compton won’t be financially viable “for us … or any other responsible operator”.

This is a story we have seen playing out time and again across the UK. An unholy alliance of whingers and council bureaucrats are shutting down and imposing punishing restrictions on much-loved pubs, stopping them from staying open later or blocking the opening of new venues over often ludicrous claims of noise and disruption. There seems to have been a particular flurry of this in recent months, following the end of lockdown and the entrenchment of working from home.

August 23, 2022

When the Great Reset turns into the Great Resignation, unexpectedly

Filed under: Business, Media, Politics, USA — Tags: , , , — Nicholas @ 03:00

Elizabeth Nickson is enjoying the spectacle of the Klaus Schwabs of the world being undermined by the rational actions of ordinary people:

Klaus Schwab’s slaves are quietly vanishing.

In the US, 52 million quit their jobs in 2022, which only added to the flood of 2021. 41% of the work force, when interviewed stated they were quitting, and another 38% were planning to. Mostly mid-career. That’s the ball game, baby, that is almost 80%. ABC Corp will be left with oldsters too tired to change and a bunch of kids looking to cash in and cash out as fast as possible.

Corporatists are in a bit of a flap, which is delicious to watch. Their Bible, the Harvard Business Review is scrambling to explain, to deconstruct, to propose ways to get them back, more money, more time off, more benefits. All of which would thrill trade unionists except that they won’t be getting their cut, their vig, their power base. No one is coming back, btw, Klaus, the UN and the CCP screwed the pooch, everyone knows about it, no censorship can hide the fact that their plans for us include pinning us in our matchboxes, hypnotizing us via screens and farming us like sheep with monthly allowances and Prime delivery of cricket paste.

HBR has therefore re-named this The Great Exploration, as a sop to the rapid individuation of the people they tried to turn into machines. Yeah, that’s not going to work either. No workshops from Tony Robbins, no retreats with Oprah, no courses, no sabbaticals, no Five Second Rule gal or Brene Brown explaining that investigating insurance claims is somehow spiritual, especially if you “fight” for the “rights” of the marginal, and give your next promotion to a person of color, preferably other sexed. Nope nope nope. It is over.

Target missed its earnings projections by 90%. Ninety percent. Ninety percent. The thing about being enmeshed in corporate culture is that you need a lot of stuff to be comfort yourself after the brutalism of your days. You can go home and wallow on your green mattress and lots of pillows with your achingly lonely pets. But when you’ve quit, and maybe sold your house and moved to a cheaper location and started farming, you don’t need more stuff, you have tasted freedom and a pox on all your big box stores. Instead of competitive co-workers, you have your dog, your family and friends, and an open road.

Bye-bye Black Rock. It looks like the hail Mary of ESG and DEI failed. In fact, it acted as a repellant. So obviously dishonest and a play to shame employees into submission, added to the manipulations of Covid, the lock-downs, the forced injections, the obvious sickening of your friends and family, bye bye.

I personally could not be more delighted, since I quit almost 20 years ago, reasoning that working in newsrooms was like entering a bee hive without protection. I look around my home place and there are a lot of eager new faces, young and thrilled, and loaded for bear.

August 21, 2022

QotD: The “social responsibility” of the corporate executive

Filed under: Business, Law, Quotations, USA — Tags: , — Nicholas @ 01:00

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose — for example, a hospital or a school. The manager of such a corporation will not have money profit as his objectives but the rendering of certain services.

In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.

Needless to say, this does not mean that it is easy to judge how well he is performing his task. But at least the criterion of performance is straight-forward, and the persons among whom a voluntary contractual arrangement exists are clearly defined.

Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily — to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country’s armed forces. If we wish, we may refer to some of these responsibilities as “social responsibilities.” But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not business. What does it mean to say that the corporate executive has a “social responsibility” in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price increase would be in the best interests of the corporation. Or that he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire “hardcore” unemployed instead of better qualified available workmen to contribute to the social objective of reducing poverty.

In each of these cases, the corporate executive would be spending someone else’s money for a general social interest. Insofar as his actions in accord with his “social responsibility” reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employees, he is spending their money.

Milton Friedman, “The Social Responsibility of Business is to Increase its Profits”, New York Times, 1970-09-13.

August 19, 2022

The DeLorean Story

Filed under: Britain, Business, History, Technology, USA — Tags: , , , , , , , — Nicholas @ 02:00

Big Car
Published 5 Jan 2020

There’s much more to the DeLorean Motor Company than Doc’s 88mph time machine in Back to the Future. It’s a story of a playboy founder with a meteoric rise, a story of hope and regeneration in an area torn apart after a decade of fighting, and of a cocaine smuggling fall from grace. Yes, this story has it all!
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August 16, 2022

“Penguin Random House is a vampire corporation”

Filed under: Books, Business, Law, USA — Tags: , , — Nicholas @ 03:00

Belatedly, as I was away for the weekend, here’s something from the latest SHuSH newsletter on the Random Penguin court case:

At the beginning of the millennium, Random House (pre-Penguin) had revenues of $2.3 billion (all US figures) and a profit margin of 9 per cent. At the end of the aughts, it had revenues of 2.3 billion and a profit margin of 9 per cent. It was the biggest publishing company on the planet but it had ceased to grow.

Growth matters, especially to Random House’s parent company, Bertelsmann SE, a public company. People buy shares in publicly listed companies because they believe the entity will grow and produce larger profits in the future, making the share price rise and the investor happy. That is the whole game for public companies.

When an asset at a public company does not contribute to growth it is dead weight. It needs to be fixed or jettisoned.

Bertelsmann decided to fix Random House. In 2012, it struck the richest deal in book publishing history, acquiring 53 per cent of Penguin Books, which it then merged with Random House to make the biggest publisher even bigger.

It was said at the time that the two publishers, with combined revenues of $3.9 billion, would be able to share costs, attract better talent, take more risks, offer new products, develop new markets, and otherwise innovate. Together they would have the scale to stand up to bookselling chains like Barnes & Noble and the massive digital players, Amazon and Apple.

It was a lot of hype, of course. Random House had its pick of talent, all the size it needed to negotiate with Barnes & Noble, and it would never be in the same league as Amazon. Markus Dohle, CEO of Penguin Random House, is lucky to get a mid-level account manager on the phone at Amazon.

But the deal went ahead and expectations for the new Penguin Random House were sky high. They had to be. Bertelsmann’s purchase price valued Penguin at $3.5 billion, or more than twenty times its annual profits of $171 million. Penguin Random House would have to be far more than the sum of its parts to justify that price.

Over the next several years, Bertelsmann doubled down on its bet, scooping up the remaining 47 per cent of Penguin in two separate transactions to eventually own it outright.

Did any of the anticipated magic happen?

The first full year of a combined Penguin Random House was 2014. Revenues were about $4 billion, and that’s where they’ve been ever since (leaving aside a nice bump in 2019, the year of Michelle Obama). Profits are up, which might be considered a good sign. But they didn’t grow as a result of the combined firm’s increased scale, new competitive muscle, better talent, new markets, new products, or innovations. As far as I can tell, the improved profitability was achieved the old-fashioned way: the payroll shrunk from a high of 12,800 to 10,800. Also, e-books and audiobooks improved the profitability of all publishers. And the Obamas each knocked one out of the park.

The point is that seven years down the road, Penguin Random House remained exactly the sum of its parts, minus 2000 workers. The acquisition was a big-time bust. Most of the $3.5 billion purchase price was wasted.

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