Tuesday, July 10, 2012

Corporate Communists: Lies they tell us


Corporate Communists: Lies they tell us

“Sun is the source of all energy and money!!”

An elementary truth we all learn in our kindergartens and nursery schools, but have I stretched it beyond its’ limits of elasticity? Maybe I have or maybe I haven’t, the patient minds will reserve their judgements until they’ve read the last word written in this piece, while the impatient ones’ will already be testing their grasp of slang. But why have I made a statement so out of context in its’ literal meaning than the heading it follows? Honestly, two days after the idea and the statement were first conceived in my mind, even I don’t remember! But let us get started with the content matter of this piece of Newtonian virtues and who knows, by the end of it I just might remember!

For someone actively working on a five year plan, doing background work before he starts the ground work for his foray into hardcore politics, I have been keenly following the current US political scene. With elections looming large, it is interesting how the political situation is deteriorating fast into a misleading media campaign, cut off from the reality of achievements of previous regimes, but concentrating more on maligning names, making anti-logical statements and giving impractical suggestions. The concept initiation point for this current write-up happens to be one such statement.

Businessmen are like sponges; put them in an economy and they soak up all the money in that economy. The only one who thrives in a community is the most powerful businessman in it, who if left un-checked, leaves everybody else poor. They are like leeches; sucking riches until everyone else is reduced to being paupers. Given these facts, which I shouldn’t need to argue but unfortunately I will have to, I was attracted to dissect one of the “Corporate Communist” strategic statement floated around by one of the candidates, “Riches flow from top to bottom.” Now I will not only take apart this statement, but also explain “Corporate Communism” all over again, and finally sum up true “Capitalism”.

Let us start with an example of a franchise model so popular these days, something I personally believe is detrimental to “True Capitalism” if left unchecked and allowed to deteriorate into “Monopolization”. This time for a change, let us take the example of a fast food chain rather than my favourite, grocery stores. If the above statement were to be true than that would mean, a thriving fast food chain provides jobs to people, and the salary people get paid by working in that chain means money is flowing from top to the bottom. In addition, another argument that can be forwarded in its’ favour by the proponents of such a ridiculous theory will be, “More profit the fast food chain will make, will create more jobs, and will improve salaries of those already employed by it.” But do these arguments hold any real pulp-and-water or are they simply air-inflated balloons of hypothesis?

To answer these questions let us first analyse how a franchise system works. In a franchise system you own a business selling the actual product but you pay a fixed sum to another party which allows you to use their name and symbol atop your business. You sell only what that franchise lists as its’ products while the franchise name helps you in getting easily identified in public, due to their better marketing scheme. But has the franchise actually paid anything to the owner or the employees? To answer this, let us raise another question, “What if there was no franchise?” And perhaps even ask ourselves, “Why and when do franchises open another outlet?”

The answers to the last two questions are not only fairly simple but also set up the framework for the previous question. A franchise opens an outlet, or licenses someone to use their brand name and symbol, when it is assured of getting a fixed minimum return. In simple words, only if there is a market for their products will a franchise open its’ outlet, or only if it is assured of a fixed minimum sum will it license someone to use their brand name. So are franchises actually giving anything out of their pockets to the people they license or employ, or are they taking their cut out of the profit earned from a community? While much of the question seems to have already been answered by the previous lines, let us consider an example minus franchise to answer the remainder.

If there was no franchise but a market full of customers to be tapped, anybody in that community will have equal opportunity to set up a small business and employ people for associated works. The businessman will earn the entire money of the community, use the money for expenses including salaries of employees, and keep the remainder as his/her profit. Still the same number of jobs will be created as will be under a franchise scheme, but no one will be taking a cut on top like a franchise does. So what happens when a franchise comes into the picture?

Firstly, due to cheaper pricing of commodities and better advertisement, franchises wipe out smaller businessmen from the market, thus shrinking not only the opportunities of smaller businesses, but also rendering many more jobless than what they will eventually employ. The decrease in production cost of the businesses under franchise scheme fails to benefit the licensees as the margin and much more is taken back by the franchise in the way of licensing fees. At second stage, a thriving franchise chain in an area means smaller players who cannot afford heavy licensing fees cannot compete with the franchises and hence in no position to open own businesses. This is simply a loss of business opportunity. So do the franchises create business or employment opportunities or cut them out? I guess you can answer it on your own. So let us carry on with the rest of the bits.

The second part of the myth is that more a corporation will profit, more money and employment opportunities will be created for the working class. Let us try to figure out the truth by continuing from the above example only.

First of all, those who have worked in a franchise fast food outlet and those who still know someone working in such an outlet, ask this question, “How much have their salaries increased over the last five years for the same job?” and then ask, “With the inflation rates and price rise, are the products of their franchises still costing the same that they did five years ago?”

If you find the answer to the second question is that the prices have gone up, and then realize in answer to the first question, “Most of the people who were working in the outlet have either switched jobs or are barely earning more”, then ask yourselves, “Where is the increased profit going?” Do you think the profit is percolating down to the masses in the form of pay increase or new job opportunities?

While the pay increase part would have already been answered by the previous questions, as far as the new job opportunities is concerned, they are created when the market size increases and not because of increased profits. And if market size is increasing than if there were no franchise, the job and business opportunities will still increase but a lot more people will have an opportunity to own their own small business, and then employ the same number of employees that a franchise chain will, and perhaps even more.

Now in the light of all that we have discussed so far, let us analyse the statement that started all this discussion, “Riches flow from top to bottom.” Does anyone still think money flows from top to bottom, or do you think the top carnivore (Big corporations) eats up everything or anything at the lower levels of food-chain (the small businessmen and opportunities for ordinary people)?

As I say, “Businessmen are like sponges!”

Now the last thing left to be discussed in this article is our new kindergarten truth, “Sun is the source of all energy and our money.” So let me get down to the basics of this one.

Sun is not only the source of our atmospheric warmth, thus affecting climate and season cycles, but also the source behind wind energy and rainfall, which is so important for hydro-power projects. Wood and biomass derived fuels, including all our fossil fuels like coal and gasoline, Sun is either directly or indirectly the source of origin of all these. This is what makes Sun the source of all our energy. But how does Sun become the source of all our money?

Well, the answer is relatively simple for this one. All the foods that we eat, Sun is directly responsible for their creation, be it of vegetarian or of non-vegetarian origins. Our clothes, if they are made from natural fibres then Sun is their source, and if they are of plastic origin, then their production process, just like that of every conceivable article that we use in our daily lives, from tooth-brush to SUVs’, must utilize some source of energy, be it in the form of electricity or heat. And as we just discussed, sun is the source of all energy sources. Thus everything that sells in our markets has a big influence of sun in their production process. Thus sun is not only the source of all our energy, but also of our money.

If I was to put the same thing philosophically, then I’d ask, “When all the money that we are earning by our hard work is coming from sun, how many of us would like a cunning businessman to take a cut out of it and then claim he/she is the one who is giving us money? How many of us would like to do all the hard work that makes someone else rich while we get paid in peanuts, and then someone has the audacity to claim it is he/she who is giving out money to the workers?” Personally, I’d rather have my own small business and employ a few hands than work in a big business and get paid. I can never stand those who steal away opportunity from others and then claim to be the providers of the society. I don’t know about you but I am sorry, “I wasn’t born a slave!”

Those who forward the lame argument that “Riches flow from top to bottom” are nothing but Communists in the garbs of Capitalists, hence I call them “Corporate Communists”, and it is not hard to understand my logic. Like “Communism” where everything is owned by the Government and people have no opportunity to own their own business and succeed, in “Corporate Communism” everything is owned by a few big corporations, who are actively supported by the corrupt politicians (Read: “Our employees running our governments on a four/five year contract that we can withdraw in next elections and thus fire them”). Just like “Socialist Communism”, in “Corporate Communism” ordinary people have no opportunity to own their business. All they have is an opportunity to work as an employee of a big business chain.

It’s time ordinary people wake up and realize how their freedom is being slowly and slowly stripped away from them. About a couple of centuries ago, thousands of Americans laid down their lives so that their kids and posterity can enjoy freedom, equality and rights. The “Bill of Rights” was written with blood and sweat of ordinary people. Now their posterity has forgotten their sacrifices and lost their good work. Now Americans have acts like “Patriot Act” and politicians who tell them, “Riches will flow from top, just keep working as wagers and forget about being your own bosses.” And if you think I am being unfair or biased with my criticism then let me say a few words about Indians too.

Many Indians died during freedom struggle so that their friends and posterity can live free, and enjoy and cash in on opportunities. Those martyrs belonged to every caste and religion. Thousands of Indians from every caste and religion have since died in various wars protecting the sovereignty of India. And how do Indians repay them? Well, now Indians support politicians who want them to kill people belonging to other religions or castes. Now Indians vote for politicians who want to sell India all over again to foreign businessmen so that ordinary Indians can work as underpaid wagers while the foreign businessmen take all the profit out of Indian economy. Will the money really be flowing from top down, or will it be flowing out of India?

So does this mean countries like US, European Nations, Australia are not capitalist anymore? What defines the limits of Capitalism and when does Capitalism degenerate into Communism (Corporate Communism)? The answers are fairly simple, so much so that I can put them in a few statements, which I will, however more pertinent question is, “Is everybody willing to accept the truth or are they going to question my credibility because of race, religion, nationality or social standing, or just out of their own jealousy?” I cannot answer this one for anyone reading this, but let me answer what I intend to answer.

As I’ve noted in my previous write-ups, what occurs in nature belongs to the society, and in a Democracy where Government is just a caretaker of resources, it should be managed and exploited only by the Government, for example minerals, water resources, etc. What is produced by inputting human labour and expertise, like agricultural produce, processed minerals, finished products, etc, should be available as free hold opportunities for public. And in a true capitalist tradition, the Government should set up industries to compete with private businessmen, thus not only creating jobs, but also adding a source of revenue for the exchequer, thus reducing the burden of taxation on working citizens.

Now that leaves only one question to be answered, what in “True Capitalism” constitutes a business opportunity for small ownership, medium ownership and corporate ownership? For the ease of answer let us divide businesses into three categories: Production units, Retail sector, Services sector. Hereon, the distinction is a piece of cake. Let me dig into all three one by one!

a) Production units: These are the basic blocks of an economy, the source of business for all other sectors, source of all job opportunities after Government, directly or indirectly. Whether it involves simply a processing and purification of raw minerals, or a complex manufacturing process yielding finished products, this sector can be open for all kinds of businessmen, depending upon the kind of production set-up. If the production set up involves “Research and Development” as an integral and important feature for constant product improvement, like in case of Electronics, the only business houses fit to own such a production line have to be Multi-Billion Dollar Corporations like Sony, Samsung, etc. If the business involves producing a patented product, without the need of R&D on the part of production house, like Textile industry, the production houses could be owned by big, medium or small businessmen alike. When the products created by a business are consumer end commodities, irrespective of whether produced under a patent or a license, like branded garments, soaps and cosmetics etc, the production houses should be medium or small businessmen owned, serving local economies. Any involvement of multi-national corporations in this kind of business is nothing but unfair business practice aimed at wiping out smaller businessmen, and hence can be classified as nothing else but “Monopolisation”.

b) Retail sector: This sector involves the distribution and marketing of finished products and should solely be small businessmen owned. Any kind of franchising in this sector is nothing but “Corporate Communism” and “Monopolisation” and hence detrimental to the health and well being of society. Thus no retail chains!

c) Service sector: This sector involves the provision of services to public. While basic services like electricity, licensing, health, water supply and most of public transportation should solely be provided by the Government as it is the responsibility of the Government to make sure the society is fit, able to participate in productive activities like work, and gets basic necessities fulfilled, other areas like communication, inter-state and international transportation etc should be left open for all kinds of businesses depending upon the investment involved in owning and running a unit. For example, a post office shop, a mechanic shop, an electricians shop, a carpenters shop, restaurants etc should be only open to small businessmen with no chain ownership allowed (except franchising as I am going to explain below). Businesses involving bigger investment like Hotels, construction companies etc should be open only for medium businessmen with no international ownership allowed. Huge investment involving sectors like aviation, shipping etc should be open to both medium as well as big business houses. The investment involved and finance available will auto-determine who will own what.

I am sure, the above mentioned points amply clarify the limits that determine what constitutes “True Capitalism” and what will degenerate capitalism into “Corporate Communism”. Now let me touch on the issue of franchising as left open for further discussion above.

Franchises like McDonalds, Burger Kings, etc are not a bad thing or detrimental to society if they follow a strict code as I am going to explain right now. The concept of franchising should only involve permission, in the form of a license, which allows a small businessman to use the brand name and logo, and allows him to stock and sell that brand’s products as his/her exclusive in a market. The brand should in no case buy out the small businesses, or club an entire chain of businesses together to assist them in cutting costs that give them undue advantage over smaller businessmen selling similar products without a brand name to back them up. There is a reason why it needs to be like that.

Franchise name gives a business a niche in the market. It is similar to buying branded clothes; everybody in the society cannot afford to buy branded items and those who can’t, they buy cheaper products. Franchise products are meant to be sold as niche products and not like everyday commodities. If someone wants to enjoy a McDonalds burger, than he/she should be paying more than what he/she would were they to dine in an ordinary fast food joint or restaurant. The moment McDonalds’ burger becomes cheaper than the smaller restaurant’s product; it means the smaller business will close down. That is one business opportunity less in the market! If a small businessman wants to sell a branded burger, he needs to pay extra as franchising fees, charge extra as selling price, and only cater to a niche population that can afford to pay for the taste. This is the only fair business practice which will be good for the society. Any other way is the wrong way and constitutes, not “Capitalism” but “Monopolisation”!

I guess I have covered enough ground in this boring piece which is getting lengthy now. I think it’s time for me to leave the rest to you guys to figure it out.

Enjoy Fatal Urge Carefree Kissing “Amanpreet Singh Rai”..