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The possibility of action against Martin Shkreli

Martin Shkreli has been in the news of late due to the interesting tactic of buying a biotech company and raising a drug price by approximately 5000%.  Pills which had started at $13.50 and had only risen about 5 dollars suddenly find themselves at $750 per pill.  While it is certain that there will be people out there who are prepared to pay that sort of figure in order to stay alive there will be a vast majority who simply cannot afford it.  If my life depended on pills that cost $750 each then I would be saying my goodbyes.  The likelihood that many potential customers would simply die is not good for the bottom line of any company.  First rule of business, as any insurance company will tell you, is maintain the life of your customers.

So with the likelihood that many people simply could not pay one has to wonder how profitable it could possibly be to raise prices so high, especially when it also leads to you becoming one of the most hated men in the world.  It may be that the figures do balance out and that Shkreli would really be able to lose a huge number of customers if enough people can afford to pay his exorbitant prices.  It may be that there are more nefarious purposes behind his actions.  A look into Shkreli’s past certainly suggests that nefarious purposes are not a thing that would slip his attention.

Shkreli’s success began when he was only 17.  He suggested a particularly savvy deal in biotech which turned out to be so savvy that it led to an investigation for insider trading.  Although the investigation did not find anything the continuance of suspicious circumstances accumulates a sensation of caution in relation to Shkrelin’s character.  He was later discovered using multiple twitter accounts to give the appearance that his investments were better value than they actually might have been.  For instance Fusion.net report a tweet worded “Damn Bruh, if Cohen is buying then your boy is buying too, nahmean.”

Fusion describe this as a seeming violation of securities law as well as of good taste.  They make no mention of any action being taken though.

The rest of the article makes interesting reading as it mentions Shkreli being accused by the Citizens for Responsibility and Ethics in Washington of making inaccurate and misleading statements about the effectiveness of drugs in order to improve his position in regard to short investments.

Additional suspicious behaviour includes a very recent case in which he was sued for 65 million dollars by one of his own companies for allegedly using their funds to pay back customer losses in another company that he had recently opened.  A tactic that has a flavour of Charles Ponzi all over it.

All told there are a lot of suspicious circumstances in Shkreli’s past which certainly seem to suggest that his approach is not the most ethical, but then can you really expect ethical behaviour from someone who is prepared to hike the price of a vital life saving medicine by 5000%.  There is a line between purely unethical behaviour and behaviour that can draw criminal sanctions.  So far Shkreli seems to have been quite free of criminal sanction but the question has to be considered, is this because he is an innocent who has never committed a crime, or is it pure luck?

The price rise he brought about seemed to have an immediate effect on the nasdaq biotech prices which dropped 4.41% on Monday.  If you were the sort of person who was in the business of short selling then you could easily see the value in being able to effect this sort of change.  It may be far fetched for someone with the limited set of thinking skills Shkreli demonstrates to anticipate the likelihood of major changes being announced in response to his actions but Clinton’s tweet was not completely unforeseable. Since then Shkreli has said that he will lower the price to one that is more affordable.  There are times in Shkreli’s past where he has made similar price rises to drugs; it would be interesting to see how the nasdaq was affected the last time he made a price rise of a couple of thousand percent.  Previously the rise was one that was only from about $1.50 to about $30.  That is an increase that could be imagined as being payable.  The current increase would make a year’s treatment for toxoplasmosis rise to over half a million dollars.  The benefits of selling things cheaply are obviously not easy to understand in the world of Martin Shkreli.

Certainly with the list of interesting incidents above you could imagine anyone who was deliberately trying to influence stock prices would be getting gradually bolder and bolder.  There is no doubt in my mind or the mind of most people that Shkreli’s ethics are more than questionable.  Could this be the time that legal action eventually succeeds against him.  It is difficult to say as I am not yet aware of legal action being proposed on the grounds of market manipulation.  The information available about Shkreli on the internet shows that he is often the centre of controversies and legal actions for various courses of action that have surprisingly received little legal scrutiny.

There are people out there who wish to try and pursue Shkreli on any charges whatsoever, attempted genocide is one suggestion that I have heard.  It seems that the evidence for a charge on market manipulation grounds would be favourable to anyone who is pursuing Shkreli.  It is true that he probably has access to some incredibly talented lawyers but in the instance of biotech stock dropping by 4.41% across the nasdaq he has had an effect on a lot of other very powerful people.  Where it may be that a blind eye is turned towards a lot of white collar crime the chances of that eye being turned full on in maximum scrutiny must be far higher where there are high powered victims of your actions.  It is often in reaction to the greatest rogues that major improvements to legislation and legal infrastructure are made.  If it hadn’t been for world war II there may have been no Human Rights Act or EU.  Perhaps Shkreli deep down inside felt that the world of copyright and patent trolls was so egregious that he needed to force the hand of politics to introduce legislation to deal with it.  Perhaps, but probably not.

Fixing the economy

It is no secret that the government depends largely on taxes in order to finance its management of the country.  Even if things were massively stripped back as is proposed by William Hague and his colleagues there would still be a need for large amounts of money just for simple administration and political process, let alone welfare, health, ordefence.  At present there are a number of problems with trying to raise funds through taxation.  Firstly there are a huge number of people who pay hardly any taxes at all.  I do not mean the wealthy and large businesses who can afford to employ clever accountants and tax lawyers.  I am referring to those who earn so little that their wages are not high enough for them to pay tax, or only a little tax if any.  For those at this poorer end of society the idea of paying taxes is simply not feasible because if they did have taxes imposed on them they simply wouldn’t be able to afford to pay them.  For those who are a little better off and earn enough to become a target for the tax collectors the payment of taxes is a great weight to bear; the demands of their lifestyles, living in areas where they can get higher paid work or the expense of commuting mean that they are barely better off than those who do not earn enough to pay taxes.

The idea of fraudulent benefit claimants has been used as an explanation for the lack of money in public coffers, as has the idea of families that have lived from generation to generation wholly dependent on benefits.  It has been stated over and over again that these actually represent a tiny minority of those who are supported by the welfare system.  In reality it is largely ordinary working people who are being helped out by the welfare system.  One figure I recently read showed that the majority of housing benefit claims brought out during a one year period had been claimed by families which would have been considered to be middle class by most people.  During the time when I was lecturing in London a large part of my income was from tax credits rather than my wages.  My employer tried to claim that I was self employed in order that I should also have to pay taxes out of my wage.  Luckily one of the subjects on which I lectured was employment law otherwise I would be bankrupt at the moment.  Despite this a very English tendency towards fair play might have prevented me taking advantage of this if my employer had not also fully agreed with the principles on which I relied to argue my position.

Unfortunately it seems the vast majority of us are in a similar position, child benefits, disability payments, income support between jobs and housing benefit when rents are simply too high.  On the one hand we fear our country’s economy collapsing but on the other hand almost all of us are reliant on our country’s generosity to maintain our meager standard of living.  We want spending on education, welfare, health, etc cut, but at the same time we need spending on these things to be increased in order to maintain the living standards that we consider to be adequate, or in some cases, humane.

While we pay taxes from our earnings we receive them back in various payouts.  Our real tax payments are probably far less in many cases once our income is adjusted in this way.  So we have a government reliant on taxes, yet the vast majority of people pay little or no tax, even receiving benefits as tax in reverse.  This does not work for anyone.  It does not work for those wealthy enough as to be paying large taxes and receiving no benefits.  It does not work for those receiving a demeaning pittance that barely allows them to eat and live.  It does  not work for those who are working furiously hard to keep themselves above water.  It does not work for companies who are relying on the public to have money to buy their goods.

It might seem somewhat contrary to say it works for no one.  After all there is plainly a lot of wealth around.  It must work for someone.  There are of course individuals who will be doing well out of any situation but well is always relative according to the context within which these individuals find themselves.  The feudal system of medieval England appeared to benefit those who lived in large castles with tapestries on the wall and roaring fires over which they roasted whole cows.  However, that is only in the context of the era.  It might be argued that they could not have had the same level of luxury in medieval England as we have in the modern day but progress is not just the invention of technological devices, progress is also political and social reform.  If those feudal lords had cared less for their own personal comfort and had instead tried to increase the educational standards of their serfs then things would have been different.  If they had focussed on trying to make the lives of their serfs better then they would have had a healthierwork forcewho would have been better able to produce more wealth from the land around them.  Admittedly we didn’trealisein those days that education and health could reap benefits broad enough to change the world but today we have the advantage of knowing that these things can change societies.  We have the benefit of having seen it happen.  Yet we still fail to put great enough investment in because we have given over our whole societies to a fatally flawed faith in the wisdom of money makers acting in their own interest.

The free market is one simple idea.  One idea that could have come from the head on one man, yet an idea on which most of humankind is relying to achieve a better future for us all.  It is an idea that works, at least it works in certain contexts and certain environments with certain variables.  Similarlymarxismworks in certain contexts and environments with certain variables.  Religion works in certain contexts and environments with certain variables.  Rather unfairly they are popularly derided now while the free market ideal is theflavourof the day.  In their time they were ideas that were very useful for those in power to build and maintain their power.  This is yet another parallel they share with the free market.  The lesson to be learned is that circumstances change.  The great thing about government is that regulation deals with changing circumstance.  The ludicrous thing about government is that overwhelming faith in the idea of the free market leads to the idea that regulation should be reduced as much as possible.

If the free market was a cathedral then regulation would be the buttresses.  Any builder can tell you that the ideaof building a cathedral of greater purity and majesty to tower above all other cathedrals is not going to be helped by removing the buttresses that marr its purity.  You may end up with smoother greater expanses on the walls but only for so long as the walls remain standing before they fall.  Nowadays we are so used to the idea of buttresses on a cathedral that we consider them to be part of the beauty and part of the design but when they were first conceived they were a compromise to hold the buildings up against gravity, arguably the will of God trying to pull them down.  Regulation might be seen as petty bureaucracy getting in the way of business but over time regulation becomes part of the beauty of the entire system.  Nostalgic old lawyers would tell you this straight away.  They still have so much nostalgia for the past that they continue to use Latin terms and dress in 17th century wigs.

So despite a lifelong disdain for those who are usually in political power I find myself infavourof regulations.  The tendency when wealth is not guided by regulation is that it ends up being hoarded.  Thomas Piketty has told us how the wealthy families of several hundred years ago barely needed to get up in the morning to see their wealth grow at a faster rate than inflation.  Those who were wise enough to buy extrahouses thirty years ago are now living comfortable lives on the rents of whomever lives within those houses now, while people now can’t afford to buy one house.  Them that’s got shall get, them that’s not shall lose, so the bible says and it still is news.

This brings me back to my starting position.  Governments need money.  Money comes from taxes.  It is therefore vital that as many peopleas possible can afford to pay as much tax as possible.  Ideally as many people as possible should be earning so much money that they can afford to throw it at civic projects with joyful abandon.  Instead we have a situation where those who have proven themselves to be most adept through nature and nurture at clinging to and amassing wealth, are the ones who are expected to pay the most tax.  In the case of companies we also have rules written into the Company Act 2006 which state they should do whatever they can to keep as much of their wealth as possible by whatever means possible within the law.  Although I am certain that last condition is more implied than stated.  Unfortunately for everyone loopholes are legal.  If they weren’t legal then they wouldn’t be loopholes, they would be crimes.

Naturally the closing of tax loopholes is important but more important is the encouragement of greater levels of employment and security for the greater number of people.  I hardly think that the most utilitarian view would be that the greatest good of societylayin ensuring that the largest companies could gather as much power and wealth as possible while thousands ate fromfoodbanksand fell into worse health while all the hospitals were being closed down.  The more people who are working, the more people can afford to home themselves, feed themselves, educate themselves, etc,etc.  Irritatingly I find myself sounding very much like any politician at this point.  The main difference being that the current crop of politicians have a solution to getting people into work that they don’t seem torealiseis not going to work.  The solution being offered at present is to take away as many advantages as possible because if people have no food to eat and no clothes to wear then they will be forced to find a job, thereby increasing employment.  Unfortunately they will be so desperate for a job that they will undercut other folk who are already in employment who will then lose their jobs to make way, so will have to also be encouraged back into work.  Mind you the solution for people taking jobs that pay too little is to take away more advantages so that they are forced to find better jobs.  If this wasn’t stupid enough already then the fact that there are not enough jobs for all those looking for jobs in the first place probably won’t have the impactto make it seem even more stupid.

Naturally it is not possible to simply tell employers to give jobs to those who need them.  Things need to be done gently for a start.  Employers cannot necessarily afford to employ huge numbers of people.  There must be reform to the way the stock market works to prevent large companies being punished for employing people and rewarded for dismissing them.  There should be encouragement, politically, economically and publicly to companies who take on extra workers.  There should of course also be greater encouragement for those who are seeking the jobs.  Not the stick that is currently being used but rather a carrot.  Give greater benefits to those who are working in educational possibilities.  Good managers are well aware that people appreciate recognition in thework place.  This is not because they like praise or pats on the back, this is because they assume it will lead to greater opportunity.  Not greater opportunity to take on more responsibilities and stress, greater opportunities to get into positions where they can make positive changes, earn more money and lead a more fulfilling life.  It is true that far fewer managers seem to understand the whole complexity within the equation but this is something that should be regulated for.

CPD should be offered to all workers; there will be many workers who will not want CPD, it is probable that these workers might prefer to be in different jobs.  The free market solution to this is to show them the door and let them work it out for themselves.  That should not be the solution in a society that is aiming for the greatest overall profit and utility for all.  it is because people fear losing their jobs that they never speak out truthfully about how they feel and it is for that reason that so many workers are disgruntled and doing less than stellar work.  It is in the interests of companies to have the best and most suitable workers, and it is in the interests of government to aid the companies in achieving that end.

Ideas such as making difficult to claim benefits also do not work.  The harder it is to claim benefits the more likely it is that claimants will not give up their benefits, especially for jobs that offer little security.  When there is a spate of zero hour contracts across the country then there will be a great many people who will actively avoid gaining such work for fear it will make it more difficult for them to keep their benefits without having to wait for a protracted period to open a new claim.  Even if it works out in theirfavourfinancially they are unlikely to see this because, lets face it, if the intricacies of economics were so open to them then they would not be on the dole, they would be holding down positions atcanarywharf.

Ultimately there are many ways in which employment can be encouraged when a government accepts that not all citizens act according to the idealbehaviourhoped for by free market theorists.  When the citizenry of a nation is looked at from ademographicallevel then it is probable that starving people will encourage some to find work and to progress into better work.  But we are not numbers, we are people, and people are not that easy to predict.  What is easy to predict is ideal economicsituations.  Economics in general is very difficult to predict because situations are complicated and there are many variables.  However once almost all variables are reduced until all you have is more people in more employment, earning more money and paying more tax, then you don’t need to be Keynes to see that this means more money for government.  That is easy to predict, but it is the individuals within thework forcethat are beyond the ability of so many politicians to understand.

An ethical way to invest in the most ruthless of moneymakers

It can be hard to make a living in modern Britain. Contrary to the prediction of Bertrand Russell we have not all been freed from the bonds of labour. The arrival of labour saving devices has not given us the freedom we expected. Robots apparently do not even threaten jobs, according to some reports each robot leads to the creation of three jobs for those who need them. Given that labour saving computers need constant attention to clean up viruses and malware and find solutions for the bloat of new updates this might not even seem surprising.
Mind you it is possible to buy your way out of the daily grind and thus leave your days open to pursue more fruitful ways of making a living. For the average person perhaps, the promised future in which machines would do our work for us has not arrived. For those who have the money to buy their tickets to freedom from hard work it is quite possible. Obviously a substantial amount of money would be needed to manage this, maybe a decade or two’s wages for most people. A lot of people have managed it. Sometimes they only succeeded because they inherited the requisite amount but others have worked their way into the position through their own cunning and ruthlessness. For some people the very act of buying one’s way out of work becomes a job in itself, even an obsession as they become wealthier and wealthier.
You may have worked out by now that it is the world of shares, stocks and financial trading to which I refer. If you can work out which businesses are going to be successful then you can become wealthy. If you can work out which ones will simply keep on a level then you can potentially bring in an income sufficient to keep afloat. For a lot of people who have to spend their days sweeping, building, digging, driving, painting, vending, etc, there is one obstacle that can prevent them making a living through this method. Aside from needing to learn the esoteric intricacies of entering the world of stocks and shares there are ethical considerations that many find hard to overcome.
Naturally one makes investments in order to earn money. A lot like the days when banks offered reasonable levels of interest except that the levels possible with a good investment can be far more interesting. In order to make money the investment must be in the sort of company that is likely to make more money and pay out dividends. With a free market in which regulation is kept to a minimum the more successful companies are also the most ruthless companies. They are the companies that don’t mind chopping down forests full of undiscovered creatures; they are the companies that don’t mind sourcing their products from unregulated factories where the age of the workers does not concern the owners, or the materials used might have been mined at terrible cost to the environment and the miners; they are the companies that see the law as a set of rough guide lines that can be interpreted in many ways, and if by chance that interpretation was incorrect the payment of a fine will be all the recompense necessary.
There are of course many successful companies that have far more ethical processes than these but those are the companies that must work extra hard to compete with the less ethical companies. The odds are that they will be paying their workers the lowest prices they can get away with and they will pay their taxes wherever is most convenient, as well as cutting costs by expecting their staff to do excellent jobs with old and malfunctioning equipment. Once again I may have painted a picture of a less than desirable company to hitch one’s ethical karma to.
Of course there are many flavours of business, but if a person wishes to buy shares in a company then the companies that are floated publically on the stock exchange do largely fit into these two categories, and for many people with the intelligence to work out where their money will get the best return these ethical shortcomings are unreconcilable. This is one of the reasons why many people never succeed in buying their way out of logging, farming, welding, bricklaying, fishing, etc. For these people the idea of sitting back and letting the money flow in from all these dubious business practices is as unacceptable as sitting in a bedsit on the dole waiting for junkies to come and buy heroin off them. Here we see a potential meeting of morals between the middle classes and the so called scroungers that Ian Duncan Smith is so intent on destroying.
For the people who are still earning their money without supplementation from shares it might seem as though they are the ones left behind by Bertrand Russell’s prediction. They look on the travesties conducted in the name of business and just hope that one day regulations will be put in place to prevent such practices and in the mean time they hope that perhaps consumers will choose companies with fewer ethical violations. They see the banks distorting markets and losing billions only to be bailed out by tax payer’s money and have little recourse beyond tutting and grumbling in the pub later. They would vote for a government that would sort it all out but the political parties have little difference between them and place GDP so high on their scale of priorities that they aren’t going to be the ones to sort it out unless a critical mass of public opinion forces them.
Getting such a critical mass of opinion in a nation is not an easy job for anyone. Pressure groups and charities work hard to force businesses to be more ethical and for governments to create better legislation, but it all blends together into the buzz of daily news. The political parties canvas to gain voters but as the last election showed no party can even gain a majority at present. Since then the political landscape has become even more fragmented. It is difficult to align the wishes of an entire nation so government ends up controlled by whoever has the loudest voices. These are media organisations with their own business interests which tread the delicate path between success and failure just as any other large business.
The solution to the problem of poor ethics in business for all those who have been trying to keep their hands and their morals clean, is the solution that goes immediately against their instinct. It is by investing in the very companies which have these terrible practices that they can guide them towards better ways of doing business. In day to day running of these companies the board of directors makes business decisions based upon rules that are set out in the Companies Acts. These rules suggest they ought to think about broader issues and their effect on their environment but only really so long as they don’t let it stand too badly in the way of returning maximum profit to the shareholder. However the secondary input that guides their decision making is the input of investors at any meetings they attend.
Given that the entire country proves to be problematic even for the Prime Minister to lead or control it makes sense that ordinary people would only be able to make the world better in smaller ways. Start with the world in front of you. At a certain point one begins to realise that doing the washing up or the vacuum cleaning is quite satisfying but makes no real long term impact on the world and the problems that afflict it. Conveniently if it is possible to save or raise even a small amount of cash it is possible to step into those companies that appear in the newspapers every day. Those things that people vote to change in elections can be changed from within the companies themselves. Admittedly it is still necessary to have the backing of many other like minded thinkers, but far fewer than in a public election. Alternatively simply raising enough money can give one investor the voting power of many.
Without the force of legislation there are few ways to change the behaviour of a company. Consumer action works to an extent but is often easily exhausted and difficult to affect by repairing company behaviour. Only by getting power inside a company itself can one be most assured of getting close to having a positive influence over the way that company conducts its business. By attending shareholder meetings one stands a far better chance of meeting other shareholders and of affecting their thought processes. The more shares a person owns and the more ruthless the company in which they have bought the shares, the more potential for good they can create in shareholder meetings. A side effect of this method of trying to make a better world is that those dividends are received by the people who are working hardest to prevent the companies in question from doing any further harm. That is the way to buy into Bertrand Russell’s prediction without breaking one’s moral principles.

Advice for modern business

A change of tack today.  I am sure I have begun posts before by reminding folk that I am not a fan or corporations.  However today I have advice for business.  I often don’t say anything to people because whatever I am thinking simply seems too obvious, I later discover that the point I would have made was actually never considered by the person with whom I am speaking.  It occurred to me today that the usual polemical debate going on between the two sides in this issue might be a sign that many people did not realise there is a middle path other than compromise.  Most business owners are simply too busy working to give deeper consideration to the environment in which they operate.  This is why there is a necessity for academics to have think tanks in which they address issues on economics, sociology, etc.  Today I therefore offer the following advice to the corporations of the world, and in fact anyone else who wishes to find a gap in the market.  If it is followed then the result should be profits, happy people, healthy world, and even a change in my opinions.

 

The main aim of modern business is to make profit. If it weren’t enough that this is the desire of the business owners and board it is also enshrined in law by the Companies Act.  When making decisions there is a set of priorities to which the decision makers must adhere.  When it comes to things that affect the environment and greater society there is little more than an optional footnote to consider.  If that weren’t enough to upset people even customer satisfaction ranks well below profit.

 

Naturally this rule is very easy to enforce.  People like profit.  People like profit to such an extent that it even blinds some of them to avenues by which they might obtain more profit.  Many of you will be aware of the psychology experiment where children were left alone in a room with a plate of sweets and the promise of being allowed two if they could resist the temptation to take one.  For those who do not know this experiment there were two ways in which the children approached the task.  Some of them distracted themselves, playing with toys or looking elsewhere.  Others obsessed on the cakes, staring at them until they could no longer take the tension and had to have one.  The ability to focus on other things turned out to be a valuable trait in later life.  Being able to consider long term benefit over short term benefit helps many people in business and also in their personal finances; imagine where we would all be if we could not prepare for our old age.  One of the theories put about concerning the demise of the Neanderthal was that it lacked our ability to think in the long term.  It always feels necessary to obsess on the bottom line in business, but this is what stops one thinking ahead.

 

It is a constant complaint read in the business press that thinking in the short term is a continual source of trouble, from businesses being ill prepared for the future to the entire financial collapse.  With larger businesses the fault is difficult to pinpoint as even when the managers care about the long term they have to balance this against a a multitude of smaller issues, the most obvious of which being that many of the little people can only make enough money to live a decent life if they throw away their ethics in pursuit of bonuses.  When I worked in retail I lived in a culture of customer service where the company insisted we believe in making the customer happy and at their ease at all times.  We also had to balance this against the company insisting we must always make more money and compete against other stores in an effort to achieve an unobtainable bonus that had the same chances of being won as the carbolic smoke ball company planned for their £100 reward.  It didn’t matter how ethical the company was because we weren’t permitted the luxury of our own ethics.  Nor did I believe the company’s ethics had been seriously developed.

 

The result was that our business did reasonably well but superficially skimming the web revealed that hundreds of people hated us, hated our stores, and even hated us approaching them.  The reason this continues is all down to profit; until the enmity is reflected in the bottom line none of the directors will think to do anything about it. Unfortunately at that point the share price starts diving into a horrible spiral from which many companies fail to recover.

 

The profit motive itself can be damaging to further profit. 

 

The biggest profits are those being made by banks and utilities, the two most hated types of organisation must be the same.  A lot of people are moving to building societies to escape the first, entire towns are going solar to escape the second. 

 

Goodwill can be difficult to get.  Obtaining new customers is traditionally reckoned to cost about five times as much as retaining old customers. At present though we are in the middle of a worldwide, highly publicised financial crisis. In addition to this we are more connected than ever.  People don’t even get out of bed before they have read the concerns of their friends and acquaintances.  Many of those concerns are about greedy companies, greedy politicians, corporate mismanagement, environmental disaster, extinction, etc.  Goodwill is rapidly ebbing, bad will is snowballing.  Groups manage to gather hundreds and thousands of signatures on anti corporate petitions in a matter of hours.  Perhaps these petitions aren’t as effective as the public are hoping, but how long will the public put up with that before upping their game.

 

This might all sound like bad news and negativity but many of the greatest entrepreneurs do not recognise such a thing as bad news, only untapped opportunity.  When people turn away from one paradigm in droves, they turn towards another.  Apple’s Tim Cooke recently told his shareholders that if they didn’t like Apple’s decisions then they had the option to sell their shares.  This was reported as being in reaction to disgruntlement over maintaining environmental standards that were not reflected in profit.  Tim said that Apple did not use profit as its main motivation.  In my opinion he meant that Apple did not use short term profit as its main motivation.  The respect he gained by making the statement will translate to future sales.

 

The only way to succeed in a competitive market is to stay one step ahead of the competition.  This is easily done in the current business environment.  Where there are a huge number of disgruntled customers the obvious course of action is to give them what they want.  The big reveal is that this isn’t being done because companies don’t know what they want; worse, they think they do know.  It is in general a race to the bottom in prices. In corporate philosophy this is the best method to ensure continually increasing profits.  That is not what the people ultimately want though.  Whilst it is easy to sell things when they are cheap and often things are horribly overpriced, there are other concerns about which people are bothered. The whole conspicuous consumption thing is built into us by our evolution but that does not mean it is beneficial for us in the modern world.  Some trees will keep growing taller until they collapse under their own weight when they are put in an indoor environment.  We will keep handing over cash for junk as long as it is at a good price because we have the built-in desire to consume and compete.  We are as likely to destroy ourselves as the tree because our evolutionary urges use as little thought as the tree despite our ability to think.

 

We are only just beginning to think at a wider angle.  We are only just beginning to focus in the long term.  This is a great opportunity for business because a broad field is about to open in which the fallen behemoths of the corporate world will lie, destroyed by their inability to adapt with the same flexibility as their customers.  When the public are unhappy then it is obvious their desires are not being met.  Wherever businesses are thinking about how to protect their future they should realise that if they have something people want then they are going to be in demand.   What people are now concerned about begins at the bottom of Maslow’s hierarchy of needs; their safety is paramount, they need a healthy environment to live in; their family is important, they need to leave a world for their children; their health is important, they are beginning to learn that so many substances developed in recent years are damaging to health; their egos are important; they don’t wish to see that they are on the bottom rung of the social hierarchy while a minority sit in extravagant luxury at the top.  Ultimately their spiritual needs are of importance and these are not supplied by filling the world with Tarmac and burning the forests any more than any of their other needs.

 

If you think it is business as usual when the world is changing all around you and there is disgruntlement en masse then you are not going to be in business for long. If you learn to anticipate and recognise the turning of the tide before your competitors then you may be one of the heroes of the future world just as Henry Ford was one of the heroes of the past.  I am not going to patronise anyone by describing in easy to follow steps how to start a business for the changing world; some businesses will succeed and some will fail, the same as it has always been.  I just wish to point out that supply should meet demand and that the public is now demanding something that is being supplied by precious few entrepreneurs.  

A new business model for a new world

A new business model for a new world.

I have recently been asked by my employers to write blogs for the college.  Their idea is marketing of the college I believe but I am a thinker and I believe in making my writing interesting and informative.  They do manage to make me write the occasional couple of blogs that are essentially for the purposes of promoting some piece of college news but when they complained that the direction I was taking was not relevant to the college’s mission statement and direction of focus I gave them relatively short shrift and explained that social media is not an advertising platform, it is about engagement and they have hired me for the fact that I am an educated academic not for the fact that I use a lot of social media.  As such I will write blogs that touch upon interesting items of relevance to the subjects in which I teach or which I am studying.

If they wish to get someone to simply post adverts I think they would be far better off hiring a conventional marketer on a lower wage than that of a law professor.  Having said that I think my current wage is possibly too low to attract a marketer in London.

Anyway, I have been doing my thing and writing a few blogs, unfortunately as many of the topics on which I write are pertinent to the courses we offer at my college I have taken to publishing such blogs there.  I kind of felt cheated by this as I wish to provide content for this blog and all those who watch it.  So I have decided that whenever I blog anything elsewhere I will provide you with a link to the site if I believe it is appropriate for the style in which I write here.  Some of the blogs will stay put on the CSBM blog, Capital Concepts, and of course a few tech oriented ones will go to my other blog, pcmakto.  I will also link you to the new pcmakto blogs as they are quite interesting.  In fact all of my blogs are quite interesting but I will let you find the other CSBM ones yourself if you so wish.  I just thought I  would let you know the state of affairs in case you were wondering why I keep reblogging other people.  They are all me.  It is complex in my head.

The link you see above is to a blog I wrote the other day on the changes away from short termism towards long term strategic planning that are becoming prevalent in larger tech companies.  As such it is probable that I should be publishing it on the pcmakto blog rather than here, I may have to reblog it there, so confusing.  Anyway, I examine the choices that are being made by Google and Microsoft in combining their software and devices to be built to match.  The recent appointment of Marissa Mayer as Yahoo CEO has been interpreted by many commentators as being a move towards more products rather than services so maybe they will start taking this approach as well.

I think my interpretation of the progression that is being made has a certain novelty in that I have not read anyone else making a similar interpretation.  If this bears out and I am correct then I will be quite pleased to be the first to see it happening.