Wednesday 1 July 2015

How do you lead a free market?

 My question is: How do you lead an industry with the necessary vision to keep everything as lean and everyone as efficient and productive as possible?

How do you incentivise:
  • manufacturers to innovate, in order to not have to rely on marketing and engineered obsolescence to sell more product than is needed
  • infrastructure builders to share resources, in order to save costs which can get passed on to the public,
  • service providers and workers to specialize, and not spread themselves too thin, in order to avoid the "jack-of-all-trades" trap and rather to do one thing, and do it well and proper, 
  • and everyone to charge the fair price that will give them the majority of the market share right away, without having to wait for competition and market forces to force them to charge less. (As a bonus, less competition will in turn reduce market fragmentation and overly redundant standards and infrastructure.)

Also:
  • how do you get the banks and governments to buy into and play their part in this big picture of efficiency, and
  • the public, to understand how it all fits together and to understand the voting power of the money in their wallet
Money which represents value and abundance, which they will ultimately have more of, to spend on more useful things that will have been invented in the absence of companies just churning out more versions of the same made-to-break items...

In a nutshell, how do you institutionalize a distinction between necessary and unnecessary work? Does unnecessary work have a place in our society?

I have a lot more to learn, share, ask, and debate on this...

2 comments:

  1. RE: "Does unnecessary work have a place in 'our society'?"? \\//\\ *We* are not a hive mind. We are individuals. I believe the saying goes, "Different strokes for different folks." Surely one man's unnecessary, is another's mega-mando! <> RE: "and everyone to charge the fair price that will give them the majority of the market share right away, without having to wait for competition and market forces to force them to charge less. (As a bonus, less competition will in turn reduce market fragmentation and overly redundant standards and infrastructure.)and everyone to charge the fair price that will give them the majority of the market share right away, without having to wait for competition and market forces to force them to charge less. (As a bonus, less competition will in turn reduce market fragmentation and overly redundant standards and infrastructure.)" \\//\\ Not to be confrontational or any type of way, but I don't think you understand the point of a 'free' Market. The entire point of it, is competition- with supply and demand regulating the market, competition is what CAUSES efficiency.. RE: "market forces to force" - I'm going to say 'force' is exactly/completely the opposite of the proper word in this context. The whole point of the market being FREE- is that all parties may trade Voluntaryistly, without any third parties **FORCING** them around.. (who I can hire, how long they can agree to work, how much I have to pay them, where and when we can operate, who I have to buy my supplies from. Forcing you with their guns to hand over a cut of all the value you produced, and so on and so forth. governmenT is completely incompatible, mutually exclusive to a Free Market. governmenT is synonymous with corruption and inefficiency. .. Businesses on the other hand, are synonymous with efficiency!, because if they weren't, a more fit business would replace them (provided it were a free market and not a USPS or California Lottery or Cox Cable or SDGE power type of situation, which is not anywhere near to a free market, as unclE saM says with 'his' guns that you are NOT ALLOWED TO COMPETE with those 'non-businesses' I guess I'll call them.

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  2. Thanks for your comments... you made me realize that I need to set the context better.

    On Unnecessary work: Surely we can try to establish a universally acceptable definition? Moving a pile of sand from one place to another and back, unless that space was critical for something else, or the action was intended to test some equipment, the work was unnecessary?

    On free market and competition: Here's a story. South Africa needed 10 undersea cables costing us $2bn, before this free market pressure drove down the cost enough. 2 or 3 cables, costing $500m would've been enough. If the first movers charged less, we wouldn't have 10 cables today. The SA public is footing the bill, had not say in the matter, and yes, it is thanks to free market pressure and competition that we can afford connectivity at all - but the same could've been accomplished by good leadership from the first movers - or exceptionally good leadership from the government - meaning if they could get the first movers to act in the best interests of the country, without going dictatorial... getting the first movers to charge what would eventually be the free market price, out of their own free will, and to continue charging it without eventually abusing their resultant monopoly position... Yes, I guess I should start with that story - and I have several more, similar ones.

    On the "Free market force" - the force of competition. Yes, it's free... but if all your competitors are going to put you out of business unless you innovate or play along, then you are being forced, don't you think?

    I agree that governments are inefficient - because they don't have competition to keep them in check... (except from other governments :-D) - the point and question of my essay is - what does it take to make a government efficient? There is something better than competition, and that is visionary leadership and insight... achievable through good data... but will be near impossible as long as individuals stand to gain from gaming the systems already in place.

    My mind is not made up on whether having 10 things where 1 or 2 could've been enough, is always better than just having the 1 or 2... imagine if those 1 or 2 could've been as efficient and good as if there had been 10, and that the products only have to carry the admin & staff overheads of 1 or 2, instead of 10, and those other 8 could've done something better, to move us ahead a little faster? :-)

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