ECONOMICS: THE POLITICS OF
Something's wrong in the work place!
Economic upheaval and political revolutions arise from this ancient but still contemporary concern. What's wrong? The present forms of capitalism and democracy deny a harmonious, productive business environment for employer and employee. A better system is needed.
But there IS no better system.
A better system and our future rests on a better understanding of democracy and capitalism. The improved understanding will bring the benefits and responsibilities of these problem-solving systems into the work place on a daily basis. AESOP, a corporate entity, proposes a new system of human organization. This computerized system is for any human activity that produces goods or services, public or private. Aesop, the system, automates democracy and capitalism to maximize individual creativity and motivation.
The means of implementing automated democracy and capitalism requires agreement on what each means. Central to each is the value of human time and how it is used.
Capital literally means "from the head," and arose as an economic term to describe a system which rewards people for their effort rather than for their birth (feudalism). Capitalism grew in power and popularity because it solved more problems faster and produced more wealth. When people are rewarded, problems decline and comfort increases. The American Civil War was a struggle between capitalistic and feudal economic systems.
When human beings are rewarded for their inspiration and perspiration they benefit themselves and their society. A capitalist economic system promotes and rewards people for using their heads. In a particular country, the quality of and benefits from capitalism reflects how humans use their heads and spend their time. Employing the word "capitalism" in any other sense than rewarding people for their efforts is semantic and moral dishonesty. If the policies do not promote individual capitalism then the economic system will suffer from unsolved problems and reduced production.
Capitalism per capita, or individual capitalism, is the best form of capitalism. It emphasizes the role of the responsible individual in creating his wealth and destiny. Often unappreciated is the human glory and self-esteem that comes with solving problems, a spiritual component of capitalism that is ignored and downplayed. When people are rewarded for using their heads, fewer problems remain and more needs are satisfied. Bystanders benefit from not having to consider the problems of others when these others are encouraged, rewarded and required to use their own heads for their own problems. The rewards of individual capitalism are not possible without fulfilling the responsibilities of being a productive individual.
Capitalism per capita rewards one according to one's production. Literal capitalism, reflecting one's creation of wealth, bestows ownership of the created goods and services for consumption or retention. Capitalism per capita is using one's head and receiving one's profits.
Capitalism per capita is not capitalism for a fewer few. The latter privatizes the legal laws for economic privileges which leads to strife and destruction. "Capitalists" who misuse the system to break up companies and generate unemployment should be called "decapitalists," for they effectively decapitate production.
Aesop is a management approach with principles and programs for a better work environment. An integral part of Aesop's motivational system is splitting the profits equally among the job producer, the project manager and the company. This can only be achieved in a cost-effective manner with computerization of invoice creation, project management and bookkeeping. Without computerization, the administrative cost of fairly and capitalistically dividing the profits reduces the profits.
Aesop's real time profit awareness implements individual capitalism. Each worker knows at all times the potential, present and final profit in his actions. When a project is written up, the potential profits are readily viewable. Besides providing immediate feedback on profits, this real time profit awareness constitutes an objective, standardized assessment of performance.
At the time of invoice development, profit awareness assists the project manager in negotiating profitable contracts. Should the customer offer a lower price to the manager, or vice versa, the manager knows the profit window. On a job-by-job, day-by-day basis, all units of organization within AESOP--from individuals to the whole corporate entity--know their performance and profits in an objective matter-of-fact manner.
Aesop achieves this automatic management by "front-loading" the administrative sequence to eliminate human management after the initial write up and completion of the job. On the surface, this front-loading seems to impede serving the customers efficiently. However, the elegant simplicity of "one key does it all" reduces the project preparation time below comparable manual processes, which are more problem-prone. Furthermore, because things are done right the first time, the repeat customer saves times on each project. This front-loading for self-management eliminates the need for the traditional top-heavy management bureaucracy as discussed in the later section, "The Vanishing Manager."
As a word, democracy has as many meanings as the common cold has causes. Semantically, many users summarily package or categorize their position with democracy in a manner akin to politicians wrapping themselves in the flag. Demagogues effectively auction off the meaning of democracy to the the loudest audience. To minimize semantic dishonesty one needs to analyze the etymology of the word to find a meaning that has not strayed through popular misuse.
Literally, democracy means "divisions of people rule"--demes cratia. When people are optimally divided to rule on their problems, both in group size and in time cycles, people have fewer problems. If unsolved problems are present, government of, by, and for the people requires better divisioning of the people and better frequency in selecting rule-makers. The primary benefit of optimal democracy is a problem-freer world.
The divisioning in time should be possible, when needed, on a daily or per diem basis. Anarchy or mob rule comes from excessive divisioning of time into cycles of democracy too short to solve problems. Opposite of anarchists are problem-solvers for life (kings, dictators, and presidents) who are extreme examples of infrequent cycles of democracy. Ultimately, all people have had some form of democracy with different cycle lengths; the overthrow of the English, French, Russian monarchies are examples of unscheduled, lengthy cycles of democracy.
The rewards of better democracy--fewer and fewer problems--are not without the responsibility of investing time into the process. The invested time leads to the time-savings of fewer problems. Better democracy--per diem or daily--is possible only through computerization of rule-making. An ideal computer program would select the best available problem-solver for the need at hand.
Aesop is a system for solving human problems. It optimally institutionalizes democracy and capitalism in the work place to select and reward the best problem-solver for the problem at hand. On a daily basis, job and project managers are automatically selected and rewarded based on merit. Elevation to office coordination with its rewards is again based on objective quantification of the ability to solve the range of problems present in the office. Selection to management of larger units of responsibility is based on the ability to respond effectively to the problems present in larger units.
An instance of democracy at work is the right of each worker to attach his name to the list of those qualified to do a job. If you think you can do it profitably and want the rewards of a more productive effort, there is nothing stopping you. By placing your name on a list of self-qualified employees, you will be automatically chosen as primary or secondary worker when the need arises. If you are more profitable than others on the list, the computer will automatically move you to the top of the list: the customer will be served better, i.e., the best problem-solver will be selected.
Corporately, AESOP will evolve into a multi-level hierarchy of nine regions with each region having seven subregions. Each subregion will have nine districts that parallel congressional boundaries. The districts will be subdivided into seven communities having up to nine zip code areas. The zip code areas will be further divided into sub-units if democratic description and solution of problems would benefit people at a more local level.
In a sense, neighborhood block watch committees are an attempt at achieving democracy below the zip code level. However, participation and benefits are minimal. Current neighborhood actions lack integrated upper levels, regular meetings/elections and quantified rewards. As AESOP evolves new services an operation can be profitably supported in a smaller geographical area.
Requiring and rewarding self-management creates efficiency in solving customer or in-house problems. The instances of a person abdicating responsibility because "it is another person's job" are not present (e.g., union definitions of and restriction of labor), because one's profits are debited when one cannot solve a problem and must rely on another for assistance or training.
Time and Problems
Democracy and capitalism go hand in hand; in fact, they are twins: the best form of practicing politics and economics. Democracy selects the best problem-solvers, and capitalism rewards them. People will not work to solve problems if they are not rewarded, regardless of whether they are management or non-management.
When more than one person creates new wealth or solves old problems, the division of profit is crucial. If management obtains an unfair portion of the wealth, the workers will not work optimally, and vice versa.
What is a problem? Anything that wastes human time. Problems cause unhappiness. Problems can be the lack of a widget, a poorly built widget, the need for a better widget, or the inability to interact with widgets--death. Problems inversely affect the quality of one's time and life: the more problems, the less free time and the lower the quality of life.
Problems can be quantified by (1) the time they waste if they persist and (2) the amount of time required for their solution. People prioritize solving problems based on the time wasted and the time required to solve them. A problem wasting twenty hours and requiring one hour to solve should be selected in place of trying to solve a Don Quixote dilemma of reversed dimensions.
Democracy is the best way to select problems for solution, and capitalism is the way to motivate people to solve them. Profits, within this context, are absolute, not relative and subject to marketplace gambling and risks. A profit is the difference between the wasted human time of an unsolved problem and the time cost to solve it.
Time and problems are related in more than a figurative sense. How problems affect one's time and money is readily recognized by most people. Less well-known is the origin of the related word "currency." Currency derives from the expression "I'll pay you what your time is currently worth", i.e., "What is the currency of your dues?" The association of currency with time and the role of time in problems (cost/solutions) is viewed by this writer as a strong argument for economics as a problem-solving discipline with a basic language of time and problems.
In currency-based economic systems, one receives money for rendering goods or services to another. One receives time from the buyer in the form of currency for one's expenditure of time. Economically, the exchange of goods and services through money is an exchange of individuals' time at solving problems ... or should be.
People buy others' goods and services because it is easier and more cost effective to pay for another's time than to take the time to do it themselves. Regardless of the medium of exchange--dollars, lira, baskets, gold or electronic transfer of funds--people are bartering their time in solving problems. When transacted with currency, one is using a vehicle whose namesake is time itself.
Currency is a reservoir of time. When cheapened its economic value declines: you can't motivate people to work at solving problems if you don't pay them or pay them with something that has no power to buy the time of others. As the rate of cheapening increases, people spend more time speculating on alternative reservoirs of time; stocks and bonds on one end of the economy and basic foodstuffs at the lower end of the economy.
Computerized Problem-Solving and Rewards
Aesop's on-line, real-time profit awareness is an objective quantification of what a person's time is worth relative to others' time. Because this profit awareness is adjusted to an hourly profit or loss, each worker has a sense of what his time is worth in terms of creating or saving time. With this objective system, you cannot be over- or under-compensated relative to what your current time is worth! Individuals, like companies and countries, cannot stay in business if they are over- or under-compensated.
Profits at AESOP are divided three ways: the immediate job producer receives a third of the profit, the organizer of the project containing the job receives a third, and the AESOP executive hierarchy receives the last third. AESOP, Inc, which owns the operations and software, receives half of the final filtered profits.
An individual's profits (after deductions for elected benefits) purchase shares in the Employee Stock Ownership Plan for which AESOP is named. The value of the shares is based on the average hourly earnings of the employees contributing to the plan. Dividends are paid from the lease earnings on equipment purchased for expanding or improving service. This recycling of profits directly into the operations from which they came is a form of employment security and career opportunity. The shares of ownership have a unique name--Lifehours. "Lifehours" reflect AESOP's pursuit of a problem-freer life by objectively quantifying the quality of human time in solving problems. If one's lifehour is worth twice the average in reality of solving human problems then one should have twice the Lifehours in current ownership and consumption of human wealth. Failure to reward the problem-solvers leads down the path to more problems, not fewer.
AESOP's Lifehours are the reservoir of one's excess labor beyond immediate need. They serve as a reservoir or pension to be gradually drained when one can no longer work after retirement. With one's savings tied to the productive value of human life, personal, group, and company activities are reviewed more closely. Do they increase the real value of one's current time or merely cheapen the symbols of time, e.g., dollars, social security, and minimum wage? All too often people have accepted symbols of value that were worth less than they seemed to be. When people realize that only increased human productivity increases their wealth and security, then they will turn away from self-cheapening symbols and activities. By promoting self-management, self-education and self-enlightenment, a democratic and capitalistic process synergistically raises the value of the whole society.
The relationship of time and problems are the jigsaw pattern from which all human activities are cut. One can view existence as a matter of time and problems; this view provides one with a unifying clutter cutter for organizing and rewarding human activity. Human beings are puzzles cut from this interlocking pattern of time and problems with only a thin veneer distinguishing us. Race, color, sex, religion and nationality are superfluous differences.
The relationship of time to problems is the equivalent of Mendeleev's Periodic Table of the Elements. This table, published in 1869, showed the relationship of the chemical elements. New elements were quickly discovered. Similarly, if one constructs a periodic table of life predicated on time and problems, one can quickly discover new solutions to old problems. The key to this new table is realizing that all problems have two dimensions: time wasted and time to solve. When problem costs and solutions are quantified in human time then the relative importance of different problems is readily apparent.
The Vanishing Manager
During the 1980's, half of middle management positions disappeared as a result of computers allowing upper management to understand and direct production without intervening levels of decision-making. Unfortunately, this computerization has resulted in capitalism for a fewer few. Through computerized decision-making, the role of management decreases with automatic delegation according to need and ability while rewarding according to success. Rather than the state withering away--as Marx said--the need for a distinct class of middle managers withers.
Regrettably, most computerized decision-making concentrates problem-solving power and rewards in the hands of a declining number of top managers. This is capitalism for a fewer few. It is counter to the democratic, capitalistic nature of computers which are information systems that can quickly split pennies.
Operating systems and security software too often protect the privileges of upper management. Security features increasingly preclude improving the software to produce more income. Many software application packages cannot run on networks because the security features of the network consume too much computer memory. With additional levels of security, efficiency decreases in developing and using software to solve problems. Eventually, the programming of computers for autocratic management will leave no memory for production; even then, a dedicated hacker or disgruntled employee can break the code.
Each worker, through experience and inclination, becomes well qualified to handle a particular set of problems. Under AESOP he becomes the manager for projects centered on these problems. AESOP has an honor system which eliminates the need for costly, ineffective security controls. However, what the honor system giveth, the audit trail and punitive policies taketh away.
Aesop does not attempt to prevent people from making mistakes or being inquisitive; however, the automatic audit trail, punitive policies and self-determination discourage activities which most security systems attempt to prevent. The self-management approach eliminates unnecessary, and ultimately ineffective, programming costs as well as the need for network security management costs.
Computerized management eliminates the need for many bookkeeping and accounting functions. For instance, an on-line time clock creates the entries which are read by the payroll program. The time clock eliminates the need for human management of payroll. Similarly, beginning and ending a job completes (1) the billing and accounting for the customer's charge and (2) the worker's performance and reward record. Automatic and standardized project management reduces the need for a distinct class of project managers. Management becomes diffused, permeating all areas of activity.
The on-line policy and procedure manuals eliminate the need for a human resource or personnel department, because each person is aware of his worth and performance on a job-by-job and minute-by-minute basis. Co-workers negatively affected by a worker's failure to perform can educate the worker in a few keystrokes and document the feedback. This feedback affects the worker's bottom line. Those who cannot be profitable must either work better or accept lower wages to reflect the value of their life hour at work. Annual performance reviews, common in most companies, pale in comparison to job-by-job review and monthly raises based on profits.
The need for training is greatly reduced. All business areas have on-line tutorials and assistance, as well as progressive training lessons for on-the-job learning. Specific assistance can be obtained from any qualified co-worker but the time is billed against the learner's accumulated earnings. The progression to more complex jobs and projects requires successful and profitable performance on the building blocks.
The quality of democracy and capitalism determines problem resolution in an economic system. Chronic unsolved problems indicate inferior brands of democracy and capitalism. Historically, when decline begins it usually continues. Why? The primary policy-makers, decision-makers and problem-solvers benefit from preserving the status quo. Regardless of what anyone says or argues, the politicians are responsible for a rise in human problems and a decline in life quality. The undemocratic decapitalists do not understand the self-defeating impact of tolerating deviations from democratic capitalism, that is, democracy per diem and capitalism per caput.
A "democratic capitalist" strives to equitably divide the gained wealth according to the degree of contribution. Only computerization permits the splitting of pennies which the crux of capitalism and democracy demand. The crux of both capitalism and democracy is the divisioning of profits so that all involved parties profit, that is, advance, go forward. Like the words capitalism, democracy and currency, "profit" should be used only with its original and literal meaning.
If I use a gun, a briefcase or a monopoly to steal from you, the ill-got money is not a profit. A true profit exists only when a problem is solved and a time-savings is realized. A true profit exists only when everyone benefits, and when the living standards of the involved individuals go forward. If a person raises enough corn to live until the next harvest but ferments and distills it into booze and dies because of starvation, there is no profit. Misuse of the word profit will foster transactions that regress an economy.
The divisioning of profit is essential for better capitalism, that is, capitalism per capita. And, democracy per diem is necessary to elucidate the laws which promote problem-solving by rewarding individuals according to their capital contributions--that is, using the perspiration or inspiration which their heads can provide. In a truly capitalist democracy, people are rewarded fairly and promoted according to their ability to solve problems, thereby creating wealth for themselves and others.
If newly created wealth is not fairly divided among those who contribute to its creation, the commonwealth will decline. Disgruntled members, who feel undercompensated in tangible products or intangible acknowledgement, will minimize their efforts. All will suffer from this lower economic tide. The overcompensated workers will encounter the tax and social burdens of the underpaid or under-encouraged.
A democratic capitalist believes in enlightened self-interest. He does not steal with a gun, a briefcase or a monopoly. Democratic capitalism limits wealth to those who rightfully deserve their share.
Democracy and capitalism go hand in hand through the common denominator of dividing people and the decision-making process to rule on dividing profits among the people according to their contribution to the profits. Aesop is a computerized system for:
divisioning people to solve new and old problems according their abilities on an optimal and flexible time schedule,
This software system can increase and improve democracy and capitalism in all decision-making processes, both private and public.
Something is wrong in the work place. Economists and politicians fail to understand the nature of time as the keystone to holding a society together. They fail to select and solve problems to improve the quality of human time.
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