The Economic Model

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Status: In Progress  |  Genre: Memoir  |  House: Footsteps, yarns and little fibs
Economies should tick along sustainably but there is water in the petrol!

Submitted: October 23, 2016

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Submitted: October 23, 2016



It’s mind numbing stuff to watch Clinton and Trump vying for the top job in the US of A. Time will tell how any new regime will perform but if you look at the whole process you have to wonder if mankind has evolved over the last four or five thousand years. Personally I don’t find politics interesting or enthralling and I would be happy if that lot didn’t appear in our media. But the thing about the US of A is that they have this capitalist economic model that other countries, well their politicians, think is better than any other model.

Certainly we in New Zealand have emulated the American model which has not left us in a very good place. Back in the fifties and sixties, the country was pretty much a caring society, and during a time of so called social welfare, there was investment in infrastructure. The worrying trend now is the rich are getting richer and the promised trickle down is simply hot air. There are too many areas where we are not performing well as a country. Here they are in no particular order.

. Violence against women and children.

. Child poverty.

. A general health services.

. Mental health.

. Substance abuse.

. Binge alcohol consumption – akin to substance abuse.

. Infrastructure – many areas from power reticulation to roading.

. Public transport.

. Housing including emergency housing.

. Youth suicide.

. An increased dependence on volunteers to fill the gaps.

. Racism.

. Overcrowded prisons.

. Under resourced police force.

. Fuzzy judicial system.

. Issues involving political correctness.

Now why am I blaming the American model for all this? In a word, contracts. Back in the day, I employed wage workers, who worked a forty hour week, had fixed amounts of sick leave and holiday pay. They had one little intrinsic thing extra that is not seen as much today - pride in their work and their workplace. Forest managers were regularly sent on ‘man management’ courses and the overriding important feature of jobs in those days was ‘job satisfaction’. Pride was lost when we were forced to introduce contracts. Back in the day, contracts were fair because every aspect of the job was properly quantified by calculating the actual amount of work involved, that is the a reasonable expectation of output when factors like rest time over and above scheduled breaks, walking time, travel time are included. There were extras to the costs of available manhours in a year, remembering contactors have to add in sick, holiday and downtime into the equation. I was required to make those calculations and I tried to make them as detailed as possible. We would then call for tenders, and if we took the highest price, I knew the contractor was ripping us off, but if we took the lowest price, we might have been winning, but the contractor would not make money and possibly withdraw from the contract. So we took the price nearest to the one I had calculated.

Now the focus became on output and with quality just above the minimum required by the quality control guidelines, so pride went out the window and it became a numbers game. More output could be achieved by doing longer hours, thus compromising safety standards! Workers saw no advantage in doing anything extra than stated in their contract, which ends up stifling initiative and innovation. Nowadays companies and corporates don’t want to go through the drudgery of properly quantifying work, work study as we called it, instead it is done by negotiation. How can you negotiate a price if you don’t know the exact parameters? What happens is a corporate will call for prices and the competitive nature of work means contractors will undercut others – unless they collude – and the corporate accepts the cheapest because it is a money game now. We all know that the cheapest is not necessarily the best.

Similar to other countries, our government divested itself of enterprises such as railways, electricity, forests, communications and to some extent, health services, with the promise of reducing taxes. The claim was that those enterprises weren’t running sustainably so they were sold off ‘to reduce debt’. Nobody thought about fixing the sustainability problems or that once sold off, there would be no backup for another time. And if debt was out of control, who got us into that mess? None other than the happy politicians!

The demise of those government, potentially income generating, enterprises brought forth the advent on the consultant. I know one consultant, who really didn’t know shit from wild honey, but he earned the equivalent of a wage worker’s weekly wage in a day, and all he did was source information from Google! Consultancy firms evolved with flash new offices the cost of which was added to their fees, so at the end of the day, the dismantling of the government enterprises hasn’t resulted in a lower burden for the honourable taxpayer.

We are in different times to those halcyon fifties and sixties and while I have a dim view of the recent economic model, employment contracts are a good thing because if written up well, they explain the responsibilities and rights of both parties, but flexibility should be included. Likewise having work carried out on contract is a good thing because the cost is known before the work starts, but the work content needs to be evaluated properly, not figured out on the back of an envelope! Likewise there is a case for consultants, but competent consultants who take responsibility when their advice or work is found out to be not up to scratch. It is possible to do much better!





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