Some great stuff here from Bloomberg on why everyone, everywhere has turned angry:
Das Kapital anyone? Much more angry at the link.
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THe answer is simple. Most have pissed the opportunities and time, they had over the last say 20 years into the wind. Now, they cant get back on the band wagon, as their lack of skills is keeping them out.
Its going to get much worse, as opportunities for growth evaporate. Despite the call for ideas and innovation to save the day. The problem is the humans have lost the skills. The Apps have taken over.
The error in your analysis there is that you’ve accepted the rhetoric that there’s a call for ideas and innovation.
Bullshit. That’s just rhetoric.
The real money is in speculation, ticket clipping, bullshit jobs and industries or corruption.
Skills you say? Real skills have never been so undervalued.
You are right. its just a mirage. (as is dawning on the punters)
Remember Turnbullshit, held as a model of a businessman, didnt invent or innovate anything, he just clipped a few tickets which confronted his path. this is the essence of the problem.
The opportunity and power has moved to those who can do and have a track record in the practical arena.
Melbourne guy.
I’d love to know the proportion of bullshit jobs out there.
Or is it easier to find the non-bullshit jobs.
I reckon a quarter of my role is bullshit because I have to attend to compliance (from legislation and regulation) because some bottom decile imbecile stuffed it up for all of us that now common sense has to be codified.
It’s the human condition we’re angry at.
Escobar
Yup!!! In Spades!!!! That’s why it is all so intractable and all teh calls here about lowering the value of the A$, although a desirable part of the process, are really a waste. Lowering the A$ will do pretty much zero to restore the nation as long as all the BS goes on!
There is a stack of ‘bullshit jobs’ out there, probably hundreds of thousands of them.
1. There are many people over the age of 50 doing bullshit jobs in both the Government Sector and also in the private sector. There is a mexican stand-off within many companies, due to the ‘generous’ redundancy packages these people would have to be paid to be made redundant. I know an example of one gentleman that has been doing ‘bullshit’ jobs since the GFC (he is now 59). He gets moved from project to project, review to review. The big global company he works for are simply hoping he retires, because if he elects to retire – then they don’t have to pay him out all of his entitlements (they are currently worth $450K if they make him redundant – after 33 years of service). Unfortunately many companies think it’s better to extract ‘some value’ out of someone working in a bullshit job, then have to explain to their global task masters why they are paying out $100m+ in redundancy payments. The same rubbish is happening in the public service too.
Then.. as mentioned… there is all the regulatory rubbish that happens too. OH&S Committees, Safety Reviews, etc. .
Funny/scary article about ‘bullshit jobs’: http://strikemag.org/bullshit-jobs/
“It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working.”
Gunnamatta Its all bullshit when you think about it.
I came out of the Federal court years ago with another young lawyer and we looked at each other and said ‘this is all bullshit isnt it?’ He did the honorable thing and took off into 50 acres of Tarkine Wilderness chowing down on mung beans for twenty years. I just opted for different bullshit.
I ditched law for industrial relations and sorting out agreements and intractable issues for some of the largest employers around. The issues that invariably drew the most heat were the ones I had earmarked as ‘bullshit’ and it didnt matter whether it was the Union side or management side there was always loads of ‘bullshit’ in the equation.
Chat with line managers and most often they wanted to chat about ‘bullshit’ the ordinary mug punters would want to bring up issues too, or union officials, and they were all ‘bullshit’. More than once I was offered some very good gigs but always held off with a little man in the back of my head saying ‘this is bullshit’
One day after resolving some particularly gnarly issues for one outfit involving a psychologist I shared a beer with him and basically downloaded my thought that it was all ‘bullshit’ – he told me he thought it was nearly all bullshit but that I should drop what I was doing and go and see if there was anything out there I thought wasnt bullshit.
I ended up working in TV business news media and print media (mainly bullshit) in Europe and the mid east and working offside for finance and investment types making sure their bullshit is tailored to the bullshitees (as we used to refer to them).
Eventually I come back to Australia and find a whole society sucking up ‘bullshit’ every time it turns on the TV or radio, opens up a paper.
Then I look at politics and think to myself ‘those men (and women) are talking bullshit’
For sure the powers that be have cottoned on to the fact that idle thinking types represent a danger. Their response has been to either make sure the populace is dumbed down or to make sure they are so deeply in hock that they will put up with loads of ‘bullshit’ just to service the debt.
Uncle Rupert has cottoned on to the fact that if you spread the ‘bullshit’ far enough then everyone thinks it is normal.
Of course we have bullshit jobs. Its Bullshit. Bullshit everywhere. Bullshit in the home straight by 8 lengths. Bullshit bowling a marathon spell from the Members and and Bullshit carving up the opposition with hard ball gets in the middle.
Management is bullshit, strategy is bullshit, 95% of the people you will ever meet are bullshit in the context in which you will meet them.
The one thing I will be explaining to my son and daughter is the view it is all bullshit, and why I have bent over backwards to avoid immersing them in it, to give them an out from the bullshit should they want it, in circumstances where they dont have to pay a bullshit ransom to some rent seeking bullshitter who think is they have a right to impose a bullshit tithe on others.
A bullshit free world. That is something to dream about.
Come on Wiley, I only read the other day about how Turnbullshit built a business empire! 🙂
Classic Gunna!
I guess I’ve been lucky (or maybe naive) enough to mostly see purpose in my labor, which is the main reason I love working in successful High tech startups, it’s the only environment I’ve ever found where nobody has any time for BS. Management’s not interested in BS corporate ladder games, customers wont pay for BS products (not from a startup anyway) and employees just want the gig to be successful, get in get the job done, IPO get the money get out. To be honest it’s the lack of BS that allows startups to succeed in markets where larger companies fail. Startups will fail every time they come up against an efficient larger player, which suggests the actual purpose of BS is to balance out the monopoly advantage that the larger player always enjoys.
Epic post WW – should go in the MB classics file, even if it is bullshit… 😉
China Bob, I’m in small tech companies as well, for the same reason
@WW
You sir, are a legend!
That pretty much sums up my view of life at the ripe old age of 40, and I’ve been carrying this view around for in excess of the past 10 years so far.
It’s all bullshit!
I said to my wife once that the only thing worse than being a hamster stuck running on the wheel of life and not even realising it, is realising that you’re a hamster stuck running on the wheel of life and still not being able to get the f#$k off!
Every so often I just give her the “Krusty wants out” line from the Simpsons and keep on running!
rich are richer because they have great ideas and great skills?
one can only laugh at this
A bit emotive don’t you think?
But then again, it’s in the title of the article.
the real problem is that (some) tech people who make more money than the average bloke think they are much better than them and not middle class
reality is that bulls^%&$ers who know nothing and do nothing make 10, 100 or even 1000 times more
even if we put aside wealthy owners, bankers, traders and speculators (who make big money) and focus onto tech sector examples are not much better: bill gates makes more in year of his retirement than hundreds of his brightest engineers and scientist who ever worked for him will make combined in their lifetimes … unfortunately for them they didn’t have mum siting on the board of IBM at some critical points of their careers
YES, the majority of it is all BULLSHIT, well said WW, couldn’t have put it better myself! Not enough to stir the masses though, unfortunately?!
Guys that article on bullshit is a Gunna article, from back in 2103.
I had saved it as well written. Kudos to him for writing it and me to having it on file.
I think its timeless.
it’s interesting to see “socialist” Latin America not suffering much from rising inequality. Middle class there managed to keep the wealth, now almost comparable to European levels of share
What countries DoctorX?
I’m not saying inequality is low but it’s improving in many places like Bolivia, Uruguay, Ecuador, Paraguay, Argentina … even in Brazil inequality decreased in last decade or so
Doc, inequality increased due to globalization depressing salaries of jobs that could be outsourced, many to Latin America. For example, Movistar (formerly Telefonica) outsourced customer relations to Latin America (judging by the accent to Perú or Ecuador). Those are lower middle class jobs that flew away. Eventually, as has happened in China and is now happening in Brazil, those countries become too expensive and their jobs are outsourced again. Of course at this stage we only have India and Africa so the final iteration will be AI. Lets hope their code has a kill-switch.
Nah, it’s because of the moslems!
Terrorists. … you mean terrorists.
Hitler summarises the problem so succinctly:
https://www.youtube.com/watch?v=RQVIeTLqgOw
EDIT: Those charts left out us Aussies – the wealthiest middle class in all the lands.
I didn’t think I’d ever hear a speech by Hitler, that sounded like it was written by Noam Chomsky!
That clip made me feel dirty,… for agreeing with hitler’s analysis of our current world order.
+1 far out, and in 1940.
You choose not to listen to Hitler because this is what you’ve been taught, and rightly so, because the elite would never want you to actually agree with something he said as he was an evil killer of corporate running Jews!
Good to see Murdock got a mention
Eyeopening. Really good speech.
He who wins the war controls history therefore I believe what we have been taught that Hitler was just a ruthless tyrant who wanted the Jews who controlled said companies, banks, newspapers dead! Hey, I suppose if he’d won we wouldn’t have the moslem problem in Europe.
Calm down Beelzebub
What’s the definition of middle class again?
Isn’t it good that we’re getting richer?
If you contend that we should have working class, middle class and upper class – then what’s wrong with more middle class becoming richer…?
Or are you saying that more middle class are becoming working (lower) class?
How are these bands defined?
?
I think the picture is more complicated. It is not just about wages but also about working conditions and job insecurity causing increased stress for the average person (whether you call them “middle class” or something else).
The Middle class is composed by people that are content with what they have but not with whom they are.
Tax assets not income
Middle classes the world over have had their assets destroyed in property booms gone bust. Australia is next in line. Prepare for a lot of anger on the home front as people hand back the keys to the beemer and take the second-hand commodore…
Nothing wrong with a used commodore. Best value for money in the county. Those who used to laugh at me for being a tight-arse will soon be looking for my advice.
No doubt….and the VF II is the best they’ve ever managed (still a shameless global warmer though). But try convincing the mums who have gotten used to the school run in an X5…angry, angry days ahead.
You brought your Commodore for reasons of Thrift ? !!!
I thought Bogans purchased them for their rear wheeled drive, burnout and circle work abilities.
https://youtu.be/Dq-j9TjxPR4
https://youtu.be/rdbMRwEpmxg
That’s not you in your Commodore @1.10 in on the second clip is it MB?
why are the moms in those X5’s so angry already – nearly as angry as men in ford territories
Older sports bikes (R1,GSXRs,Fireblades) are going for cheap these days if one is into Motorbikes…
Ford Territory rear wheel drive. … I’d be angry – as it’s just a jacked up Falcon Station Wagon.
EP, the omly difference is the colour. And the bent bits.
@Alby….MMS….Mega Mortgage Syndrome. Everyone has a very short fuse these days.
Slight tangent – but doing the school drop off the other day a mum in a Range Rover pulled onto the footpath, on the wrong side of the road, outside the school gate to let her kid out.
I was pretty angry with her.
Probably not as angry as she was with those inconsiderate SOBs in her way !
Very true. Another major issue to my mind is that most middle class that i know think they are entitled to multiple yearly overseas holidays and new car renewals and the list goes on… I keep on hearing that one should be rewarded for hard work and all which i understand but i just simply cannot understand where they are coming from as in burn savings on holidays or cars… As per MB above, the alleged tight arses will soon be asked for advice…
Paul
Some crazy reality going on there.
We want to enjoy our lives to the fullest – whatever that means for you and me. Life is relationships, experiences and memories.
Can’t begrudge those wanting to do it all and be rewarded for hard work.
But what of the hard workers in Thailand? Cambodia?
We live high on the hog.
Agreed Escobar,
i accept that we are all different but what usually bugs me is the lack of common sense and self restraint.
Just a tiny bit of both can get one ahead financially without compromising on rewards i guess but then again, as you said, we are not all the same and we all see rewards differently.
Do you hear the people sing? Singing the songs of angry men …
This commentary will be incomplete without our regular contributor and anger specialist, AngryMan.
Where are you AngryMan?
Cleaning up the pieces of your radio after another Pharrell Williams song?
Its nice to get a mention. Just another reminder I’m still alive.
Welcome back AM. Life’s not all bad as a grumpy old man. Within this sea of disappointment, I find some islands of joy. My favourites include:
1. Cutting off mercedes drivers in traffic
2. Swimming outside the flags
3. Using my annual colonoscopy as revenge on young successful doctors
4. Giving my condolences to any “proud” mother who tells me their son / daughter is studying to be a lawyer
5. Crop-dusting at the supermarket
6. Fucking with the minds of self-important, dumb people (ps. there’s a few inhabiting this site)
What’s on your list of favourites, good Sir?
Imagining inflicting wanton acts of violence on people in movie ticket queues who for some unfathomable reason need to have a war and peace length discourse with the ticket operator about buying a movie ticket. Then i get stuck behind those same people in the queue at the candy bar.
Many are now concluding that humanity has really made some poor decisions along the journey and though the ‘financial’ side and it’s increasing difficulty are surely being felt, other ‘things’ are demanding to be reconciled. Most of us can weather a ‘bad’ year and chalk it up to lessons learned, We really do struggle when a bad year becomes a bad ‘future’. Many are beginning to conclude that there will be hell to pay for what we have done.
““If you look over the entire … last 66 million years, the only event that we know of … that has a massive carbon release and happens over a relatively short period of time is the PETM. We actually have to go back to relatively old periods. Because in the more recent past, we don’t see anything [even remotely] comparable to what humans are currently doing.” Richard Zeebe of the University of Hawaii in a recent paper published in Nature”
http://robertscribbler.com/
Thats a good site. Scary, but good.
Thanks for the link to Robert Scribbler.
It should be required reading for every candidate for the coming election.
Both Philosophically and technically, we’re fucked.
The irony in studying suicide bombers, is that as a group, we are potentially no different – all striving together to extract resource, and then wipe ourself out (max power principle), no different in chemistry and as a super organism than a flower that will bend and twist itself to the trajectory of the sun, and push roots down to maximally extract the resource in the soil. So many theorists posit that living civilizations merely ‘flicker’, and simply flash in and out of being all around the universe.
Yet other theorists believe that technology can be harnessed to ride the universe, and potentially, that is what we are doing on earth in the first place.
Yet ethically, what makes human kind different from other species, is to Kierkegaard our ability to know that we know that we exist, and project an enhanced consciousness forwards and backwards, and to plan for ‘future’ and conceive of ‘history’. Does this awareness mean that we can create systems of survival? The Anthropocene – or epoch – that explains the idea behind a new period in which man is not merely within nature and prospering, yet is responsible for what nature and the environment looks like, is in its first stages. Yet, there are many ways to deal with settings – and until man can make peace with systems theory and equity, we may just continue to be yet but a flicker.
@ MB- Agreed. I don’t like being scared.
@ Bolstrood- I wish. This issue is so big it overwhelms them; the default to ‘avoid’ is not just complexity, but they are scared /worried too. Some industries are bigger contributors to the problem, but most of us contribute too. ‘They’ represent us.
@ Y-OK-Great points to ponder! The ‘program’ is for individually, each form of ‘life’ will flash on and then off with self reproduction along the way (hopefully). And humans are pretty tough imo but real frailties exist and specifically, like all creatures, if our habitat disappears, so do we. Recent events suggest we do a lot more than cup the candle flame.
“…Does this awareness mean that we can create systems of survival?” Note: I like this question as it can only have one answer. Many are convinced ( like Rex Tillerson, Exxon’s CEO) that we’ll ‘adapt’ and all ‘this’ is just an engineering issue. Many others expect ‘this’ to be well beyond our ability to manage and resolve successfully. I’d be more encouraged that a survival system might be assembled as I suspect ‘we’ have that capability, were it not for the astonishing level of denial that a problem exists.
In the world of global high tech business there’s only room for 3 profitable companies in any sector. That’s right THREE.
In a hardware oriented product:
the largest producer typically has market share of 50% and earns 80% to 90% of all profits from the sector.
The second typically has market share between 25% and 35% and generates around 10% of the sectors profits
The third player has market share of 10% to 20% and is typically lucky to break even
Everyone else in the sector looses money, they need to have a product that’s at least 90% as good as the number one so their development costs are similar to the main producer but their prices are lower and their market share is lower = no profits
IF you look at Software the situation is even worse because the dominant player often has 90% market share and takes 90% of the sectors profits.
Pharmaceuticals same story the dominant player takes most of the money.
Defense industries, even worse look no further than the Joint Strike Fighter.
For all the companies in a given sector the labor component of their product is similar, however the revenues are not similar and the profits are not even comparable, given these shifts it is inevitable that labor’s percentage of revenue must shrink. This is what we’re seeing and it’s what we’ll continue to see unless our needs and wants diversify.
I think of it as simply the natural consequence of herd behavior coupled with efficient manufacturing and global scalability.
Very good points, now take that philosophy and apply it to the share market, where every hopeful thinks they can make it to the top, using the ratshit management we typically find for a listed company.
99% are failures, using the money loaned by the shareholders to slowly prove your point.
It’s an interesting point to talk about the share market implications.
However, first let me say, from my experience nobody regulates controls or otherwise determines which company wriggles their way into the number one or number two spots. In reality it’s a combination of luck, hard work, focus and sometimes the follow-on benefits that might occur IF you attain the number one place.
Think for a moment about AMD vs Intel, in many ways AMD had the lead when the primary market for PC’s shifted from Desktops to laptops. They had the lead because power consumption was far more important in a laptop than a desktop and AMD’s power consumption Mip’s/W was about half that of Intel. Yet as we know they failed to leverage this transition into an increased market share instead they pursued the server market where they enjoyed no real advantage…and the rest is history. AMD could have displaced Intel in the laptop market but they didn’t.
Consider the Cell phone space. Ten years ago Nokia was number one with something over 70% global market share, they had a 5 pronged strategy to divide the market into functional segments and deliver progressively more functions for more money. Nokia absolutely ruled the top segment of the market in all countries except the US where this segment was owned by Blackberry. So we all know what happened Apple focused on the US market and delivered a truly innovative product the iPhone, in doing so they stole market share from Blackberry and Sony. Nokia management was in full denial, trust me they didn’t want to hear anything about iPhone and the last thing they wanted to hear was that their 5 staged market segmentation was dead because everyone wanted one product, the iPhone. In the end analysis the low end of Nokia’s business got stolen by the Chinese feature phones (similar function to a mid level Nokia but at half the price) and they’re high end business was ceded to iPhone and Android. Samsung (number 4 or 5 in phone in 2007) was very quick to see the impact that iPhone would have and basically worked with Google to create an Android clone of the iPhone. As we know the rest is history. Interestingly the value chains that support these manufactures rode their coattails to dominance. In Nokia’s days Nokia mainly used TI chips and TI(Texas Instruments) was the number one global phone chip set provider, However with the change over to Samsung we see the chipset volume shifting to Mediatek and Qualcom.
My point is the high tech market is highly dynamic BUT still delivers 90% of the profits, in the stable periods, to the dominant player.
@China Bob
The rapid victory of iPhone/Android over Nokia/Blackberry is a fascinating case study in a rising market phenomenon: network monopolies and multi-sided, winner-takes-all markets. As network monopolies gain market share, their monopoly power strengthens due to stronger positive network externalities.
Take Facebook for example. If more people use facebook, it becomes a more valuable service to current and prospective users: People use facebook because other people use facebook (same-side network effects). More people on facebook, means more eyeballs, and therefore more value to advertisers on the other side of the market (cross-side network effects).
Nokia and Blackberry failed to exploit these network effects, whereas Apple and Android succeeded. The latter realised that the phone wasn’t a product, but instead a platform that accrued value through open app markets. In this case it’s the cross-side network effects that dominate: more users means a bigger market for app developers, and more app developers mean more apps for users.
This also implies that one, either Apple or Android, will eventually come to completely dominate the market. My money’s on Android; their more ‘open’ app market makes it relatively easier for developers to get apps on the Android app market (more valuable to users -> more Android users -> bigger market for developers -> more apps -> ad infinitum…) Microsoft have finally caught on to this dynamic and are trying to move their business in this direction. Although it seems like half the company didn’t get the memo, resulting in schizophrenic product suites and market strategies.
Facebook is especially interesting because of the nature of the product they are selling: information. Its value grows exponentially when new sources of information are acquired. So companies in the information business, like facebook and google, simultaneously experience economies of scale and scope. So they scale vertically to gain market share and strengthen network effect, while scaling horizontally by acquiring adjacent complementary businesses (facebook were buying something like 5 start-ups a week at one point). The horizontal scaling increases the per-unit value of their product, and the vertical scaling allows them to depart from competitive marginal-cost pricing.
it is inevitable that labor’s percentage of revenue must shrink.
This is true.
Whose idea is it that the resources that a given human being gets (for their wellbeing) must be tied to the current market value of their labour?
Ideally we humans will perfect automation such that the value of a unit of labour approaches zero. With enough automation there would be no need for any human to work!
I ask again:
Whose idea is it that the resources that a given human being gets (for their wellbeing) must be tied to the current market value of their labour?
Markets, competition, automation and yada yada merely expose a long-standing flaw in the design of the system we have been running. Markets, foreign competitors and automatic weaving looms are not the real problem – they EXPOSE the real problem.
Interesting point however my main point was that’s it’s human nature to follow the herd.
Think about the smartphone market today, Everyone wants either an iPhone or an Android (with Samsung highly preferred), few if any people actually want a Windows phone ( I was in JBHiFi about a year back and noticed someone buying a high end Nokia Lumia, being curious I asked them why they wanted this phone…turns out they were clueless they had no idea that they that this phone wouldn’t run Android apps and promptly returned the phone once I pointed out its compatibility problems) Again my point is it’s human nature to seek the safety of the herd and that globalization just extends this phenomenon. Nobody is making the decision who will win BUT once a winner emerges we’re all on it.
As for the trend towards automation you’re absolutely right, Australian labor will either lead the charge or be crushed by the stampede…who ever said you have no choice?
Agreed that automation is catching up (and yes, those jobs that you thought would appear in coding? well they’re being automated as well!). Agreed that there are many over paid people who rate their skills and value to organisations much higher than they really are.
The future need is for executive thinking prodigies who can navigate comfortably across horizontal stacks inclusive of technology, resources, design, philosophy, history, psychology. Unfortunately our systems of education and development have essentially penalised people for wanting to be full stack experts, and now the flipboard is coming back the other way.
Back in my day it was common to study double degrees (ie 4 majors) across multiple stacks – engineering/law; arts/law commerce/arts science/arts etc. These types of learning environments promoted inter disciplinary solutions which employers require to succeed in the complex global market where ethics, philosophy and other virtues will become critical path skills sets in coming generations. But how often do you hear, ‘arts degrees are useless?’
Due to the complex nature of the world, when we have so many decisions to make each day (which adds to fatigue), yes, it is becoming too much to compute and make the best decisions at every decision tree. Our hunter gatherer brain was not designed to deal with so much complexity, and we are paying the cost for that, for the world we designed, requires human intervention and rational action. Within complex systems, today’s information asymmetry is not apparent due to access, yet due to lack of processing capacity. There should be 15 million MB subscribers, yet there are not, as most people have conceded defeat on processing the world we live in, and outsource their understanding to a limited gene pool of trusted soothsayers.
So where to from here? It could be that we start to go the AR route, where computer programs are developed to assist people in decision making. You may have a ‘helper’ that you outsource decisions to (beam me up Siri, quinoa or basmati?). Yet our psychology trumps us, people take it on themselves to make key decisions for themself, even when they are of life and death consequence, and even when they are the least qualified to do so.
This is the paradox of the human condition. Today, the world has never been so complex, yet people are emotionally least prepared to admit so, and plough ahead making poor decisions on their own behalf and on the behalf of the group on a daily basis.
It’s the tragedy of our democracy, that every man or woman on the street believes they are an expert on just about every topic from migration to climate change to interest rates, when they’re just not qualified. And this culture accommodates appointment of low level intellects to key portfolio and bureaucratic positions, when they just aren’t qualified to be in those roles.
CB, one of the most famous icons in history is the statue of David, by Michelangelo.
Passing that statue every day probably led to Niccolo Machiavelli penning his famous work.
Everyone has to go and see the “David”. It is a rite of passage for successful punters.
One man with a small stone and a sling stunned a Goliath. Then cut his head off.
For us, we just need to find the tools and apply them effectively.
“it is inevitable that labor’s percentage of revenue must shrink”
Then who are your customers going to be?
Is this your pragmatic observation, rather than an understanding of what enables transactions?
When you have no customers, you have no motive to bring product to market.
Your customers need a claim to your product, and you think it’s inevitable their claim will reduce.
If you have no customers, there is something else that is inevitable.
I’m not sure what the customers ability to pay for product has to do with their desires. Sure if you price where only the top 10% can afford your product than by default your market share will be less than 10%, but this can still be a profitable segment if you deliver something valuable and differentiated as in Blackberry’s share of corporate Ameicas phone market.
What I’m saying is that up to 90% of the market is supplied from one vendor. Microsoft being a good example, I’d has at a guess that those few devotees to Linux are not using because they cant afford MS product and neither are the Apple devotees.
End result I’m a little confused by your post.
If you’re suggesting the unit TAM (total available market) will shrink because jobless people simply cant afford toys I’d maybe agree but there’s no evidence of such a shift matter of fact the fastest growing markets for high tech trinkets are India and Africa, Given these huge population pools I don’t believe we’re in any danger of unit TAM shrinking.
“I’m not sure what the customers ability to pay for product has to do with their desires.”
Then let me help you out.
Customers’ desire are infinite, you can never pay enough wages to satisfy that. We call that latent demand.
Customer’s real demand, aggregate demand, is facilitated by their claim on the economy. They aren’t going to buy your product, take your product off the store shelf or floor, if they can’t afford i, or… have a claim to it.
If your customers are getting less and less wage share, how do you think they’re going to buy your product?
“Sure if you price where only the top 10% can afford your product than by default your market share will be less than 10%, but this can still be a profitable segment if you deliver something valuable and differentiated as in Blackberry’s share of corporate Ameicas phone market.”
Well we’ll call that the difference between a Ferrari and a Commodore.
I’m sure many more people desire a Ferrari, that actually own one. But realistically, they aren’t Ferrari’s customers.
They are Holden’s customers, at the moment. Some of these customers are probably Holden workers… then they will no longer be customer. Neither will the Thai workers making the Commodores.
“What I’m saying is that up to 90% of the market is supplied from one vendor. Microsoft being a good example, I’d has at a guess that those few devotees to Linux are not using because they cant afford MS product and neither are the Apple devotees.”
Slave labour making chips in Thailand .. or wherever.. are MS customers?
“End result I’m a little confused by your post.
If you’re suggesting the unit TAM (total available market) will shrink because jobless people simply cant afford toys I’d maybe agree but there’s no evidence of such a shift matter of fact the fastest growing markets for high tech trinkets are India and Africa, Given these huge population pools I don’t believe we’re in any danger of unit TAM shrinking.”
Manufacturers aren’t going voluntarily make a product surplus cuz they have a fetish over beating previous output targets. They make it because someone is going to buy it.
You think Indian wages will be a zero sum game for demand?
They theory is that diminished wages share is zero summed with increased profit share.
Say, Holden shareholders will buy more Holdens, equal to what ex-Holden workers in Australia can no longer buy, and Thai wages can’t afford. I reckon that’s a flight of fancy.
I reckon shareholders will horde earnings, Thai workers or former Australian workers can’t buy
Many more will desire Holdens, ala latent demand as stated above, but real demand will fall, even ‘inevitable’ as you say’. Thus TAM will forever drop ad we won’t even have any more Commodores.
Rusty, In theory I have no argument with what you’re saying, however I’ve lived too long in so called third world countries to not understand the game.
I’ve seen Indian men, whose families were genuinely hungry , yet he had the latest iPhone for him it’s a status symbol a sign that he’s made it in the world, he’ll see his kids on the street begging before he gives up that hard won status symbol. China is not much different, look at the special north Asian iPhone line, gold plated bling, they’re only available in China, Japan and Korea and they sell like hot cakes.
If global demand for high tech trinkets is shrinking than I’m the Pope.
If local Aussie demand for high tech trinkets is shrinking than I can understand it, Australia is just not that important and Australia’s share of global GDP isn’t just shrinking it’s collapsing, logically the demand Aussie forfit is just going elsewhere no biggie if you’re a global player, serious problem if you’re a local player.
“Rusty, In theory I have no argument with what you’re saying, however I’ve lived too long in so called third world countries to not understand the game.”
Then the ‘inevitable’ aspect is us becoming the 3rd world, ergo, why Donald Trump is going to be the 45th President of the USA….perhaps not so inevitable.
“I’ve seen Indian men, whose families were genuinely hungry , yet he had the latest iPhone for him it’s a status symbol a sign that he’s made it in the world, he’ll see his kids on the street begging before he gives up that hard won status symbol. China is not much different, look at the special north Asian iPhone line, gold plated bling, they’re only available in China, Japan and Korea and they sell like hot cakes.”
My wife is Indian, I think its known I work in wealth management and have seen many of this network come to me with this dilemma. I reckon the way to make easy riches is to sell status to Indians and Chinese.
“If global demand for high tech trinkets is shrinking than I’m the Pope.”
I’m not ultimately saying that. I’m saying the thing of equal and primary importance in a market is rich customers. Donald Trump assertions are that the US is valuable to China, Mexico and Japan, because it’s a market place of Rich customers, but American’s position _AS_ rich customers is being undermined by what has unfolded in China, Mexico and Japan.
Pro-market is not pro-business. A market places equal importance on producers and consumers. We’ve long lost sight of that.
He (and Australia) can deny China, Mexico and Japan access to rich customers, and someone can and will take their place. Global supply for high tech trinkets won’t shrink either, but the terms can, and will likely change. Then what are China, Mexico and Japan going to do? They aren’t going to uphold their economies with rich trinkets.
“If local Aussie demand for high tech trinkets is shrinking than I can understand it, Australia is just not that important and Australia’s share of global GDP isn’t just shrinking it’s collapsing, logically the demand Aussie forfit is just going elsewhere no biggie if you’re a global player, serious problem if you’re a local player”
Who are Thai GM workers going to sell Holdens’ to if not rich customers? They can be denied rich customers at a stroke of a pen.
In the last 24 hours… the Brussels terrorist attack and 45th POTUS winning 58 delegates in Arizona, have made this outcome more likely, the western world, and all its rich customers, implementing measures that deny the rest of the world access to rich customers.
A western producer, seeing that market to themselves and no third world labour competing against them, will be very likely to accept lesser profit share…
Thanks you for this post.
Now we know why Trump has so much appeal. Governments and their policies have allowed the uber rich to screw the middle classes, who were fooled into thinking they would be better off and it would only be the bottom 20% who got screwed. First they came for the textile and clothing workers, then the most labour intensive manufacturing, then the IT industry through 457 style visas, then agricultural workers through backpacker visa extensions, then the call centre workers, now the automobile industry workers.
What makes you think your job and income levels are safe?
“Now we know why Trump has so much appeal.”
His appeal is because he’s clearly on the side of the downtrodden.
http://fortune.com/2015/12/23/donald-trump-plan-tax-policy-center/
By 2017, the highest-income 1% of taxpayers would receive a tax cut of 17.5% of after-tax income [under Trump’s tax plan], and the top 0.1% — those with incomes of over $3.7 million in current dollars — would experience an average tax cut of more than $1.3 million, nearly 19% of after-tax income.
In contrast, the lowest-income households would receive an average tax cut of $128, or 1% of after-tax income, in Trump’s plan. Overall, on average, the proposal would would cut income taxes by around $5,100 per person, or about 7% of after-tax income.
Trump is also clearly on the side of Israel.
http://www.haaretz.com/world-news/u-s-election-2016/1.710188
Yeah! Fuck the bottom 20%, Sure,… but stop trying to root me in the arse.
Im hearing ya Brother,…Solidarity!
Well,… for the middle-class anyway.
Turnbullshit reckons it’s your god given right to ass rape all and sundry to make a dollar. No wonder people are angry.
I’m angry with low interest rates and high house prices.
There is a whole world of very smart and motivated people out there that can do jobs for cheaper. The ‘middle class’ in many ‘rich’ countries has its head up its dumb, lazy, entitled arse.
Priced up putting a small team of financial analysts together. Seriously looking into basing them in Karachi. Super smart, super cheap and super motivated. Could employ three of them for the same price as the office overhead per person in a Collins Street office building.
I remember back in the late 90’s when we moved big some development projects to Bangalore India lots of fat entitled middle class skeptics told us we were silly and even went as far as to accuse us of being un-American
Interestingly Skippy linked this article from Andy Grove yesterday…he was one of the unAmerican crowd fortunately for him his business was in the unique position of not needed to compete with the raising tide of cheap Asian competitors. Mind you I’d like to have the system he proposes in the article unfortunately it’s just not reality.
http://www.bloomberg.com/news/articles/2010-07-01/andy-grove-how-america-can-create-jobs
Interesting read. I too can’t see the ‘scaling fund’ getting off the ground and in the case of Australia there is nothing new to scale anyway – it is all legacy business who’s participants are moving offshore.
When 10 years of university and post grad, with 15 years of experience with top league players in a field doesn’t set you apart in the employment market from a guy in Pakistan happy to earn US$15,000 a year – a lot of jobs are going to disappear from the rungs earning four times that in the developed world.
Aside from an eventual (25 years?) mass currency devaluation – I can’t see a viable or fair solution – adaptation is the key response.
I am pretty sure borrowing as much as you can, supported by such a tenuous income stream to buy a house to rent to someone equally under the gun, isn’t the smartest move.
Aside from an eventual (25 years?) mass currency devaluation – I can’t see a viable or fair solution – adaptation is the key response.
What is “unviable” or “unfair” about not allowing it, as Andy Grove seems to have argued ?
Hey Guys, Joe Hockey, now departed, asked you all to marshall your Animal Spirits, borrow money and drag the country forward. WTF
I don’t think it is viable as capital and IP are very portable and will rightfully go where they are best accommodated.
I don’t think it is fair as it takes work away from the people who are the most competitive, giving their developing nations a chance. As we have seen in the last 50 years, billions of people can be moved up the ladder from such progress.
The waste involved in the mass-tariff that essentially promotes inefficient use of resources at great cost to the consumer doesn’t look overly fair when you compare the number of winners vs losers.
For example, subsidising Holden and Ford created an almighty mess that benefited a few at the expense of many. Who decides who gets to be the winner and loser from such intervention? Government?
I don’t think it is viable as capital and IP are very portable and will rightfully go where they are best accommodated.
Then why haven’t they already left ? Why didn’t they leave fifty years ago when things were much “worse” from their perspective ? Why wouldn’t they simply be replaced by the next person in line ?
I don’t think it is fair as it takes work away from the people who are the most competitive, giving their developing nations a chance.
Why ? Why couldn’t they do that work anyway and produce for local consumption ?
As we have seen in the last 50 years, billions of people can be moved up the ladder from such progress.
Yes, but the heavy lifting of that was done before globalisation started destroying the middle class.
The waste involved in the mass-tariff that essentially promotes inefficient use of resources at great cost to the consumer doesn’t look overly fair when you compare the number of winners vs losers.
Yeah. I guess that’s why a handful of already rich people have been huge winners while most have been losers as inequality has been steadily increasing in most western countries.
Who decides who gets to be the winner and loser from such intervention? Government?
Nobody is picking winners and losers. Businesses would be subject to the same conditions.
However, if we do want to pick winners and losers, then that is a decision of the people, through Government. Of course, to get the best outcome that means the influence on Government of things that aren’t people needs to be minimised, which has notably not been happening for the last few decades.
One of the reasons for the anger, I suspect, is the hiding of inflation by government statisticians for their own nasty reasons. Wage increases are linked to CoL increases, which if falsely under-reported, ends up impoverishing the plebs who get salaries. This is discussed below:
Ed Butowsky: Calculating The True Cost of Living
Why it’s much higher than we’re told/sold
Download podcast (March 20, 2016)
Yup. Nailed it.
The growth model is all well and good when there are empty continents to explore. Yet once you hit the outer limits the pie is constant and despite all other appearances you simply start a process of cannibalization. Whereas upwards wealth mobilization used to be possible, now it is more common to be mobilizing down, and only the well connected families stay at the top.
Higher wealth gaps in society are shown to be correlated to bad social outcomes.
For what is sure, when a man with a few million dollars is a different class of species to a man with only a few hundred dollars.
Wilkinson has a set of numbers worth looking at below
https://www.youtube.com/watch?v=cZ7LzE3u7Bw
So the whole world has turned angry? Geez I’ve been angry like this guy forever, nice to have company.
https://www.youtube.com/watch?v=WINDtlPXmmE