Forwarded from Barry Brooks
lnp3 at SPAMpanix.com
Fri Feb 23 11:52:29 MST 2001
Closing Inefficient Businesses
Sidney Shapiro, who wrote "I Chose China," was interviewed by Mark Cooper
on the Radio Nation program. When asked what he thinks about the Americans'
trade and friendship with China, he said "I think it's great. China can't
exist without the trade and friendship of America. ... It is ... very clear
that they had either bankrupt, or merge, or consolidate, inefficient
companies. In order to do that you have to throw people out of work."
The choice to close an inefficient business can be defended by the promise
of its replacement by a more efficient operation, but what kind of
efficiency are we are we talking about? What kind of efficiency do we want?
What if different kinds of efficiency conflict with each other? What if
efficiency conflicts with justice, happiness and stewardship. Should one
open cans all day to keep his can opener busy?
So long as money considerations dominate decision-making the efficiency
sought will be measured by the standards of risk and return on capital.
>From the money point of view the needed efficiency is simply to keep the
expenses of production down. Thus under the money rule, we have
productivity as a goal, and we waste resources whenever it can cut other
Efficiency in business (money) puts workers out of work, but then
inefficiency is needed to make jobs as we have done with the consumer
society's planned obsolescence, throw-away products, war, and unplanned
growth. We must maximize consumption to compensate for rising productivity.
The pursuit of labor efficiency has lead to resource use inefficiency and
the hyper- active growth economy.
Only when society supports activites that don't make a money profit can we
do all the work of caring and stewardship. Without support for
"unprofitable" labor the pursuit of money efficiency and market worship
will fuel the decline of of all other values and institutions.
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