Date: 2024-05-15 Page is: DBtxt003.php txt00007132
LinkedIn Dialog
Group: Toronto Sustainability Speaker Series
Discussion: Is the growth in manufacturing just an illusion of sustainable economy?
Burgess COMMENTARY
Peter Burgess
Toronto Sustainability Speaker Series 3,531 members Member Craig A. Ruark, LEED AP (BD+C) Unfollow Craig A. Is the growth in manufacturing just an illusion of sustainable economy? Craig A. Ruark, LEED AP (BD+C) Dir. of Business Development at Nevada By Design Top Contributor This is what I have been talking about of the last two years. Figuring Out This Renaissance | Barberbiz deanbarber.wordpress.com So I am fast coming to the conclusion that this notion of a “manufacturing renaissance” in the United States is just a matter of semantics and maybe I should just let it go.But here’s the deal: I k... Like Comment (5) Unfollow Reply Privately1 day ago Comments 5 comments
Peter Burgess Peter Burgess Founder/CEO at TrueValueMetrics developing Multi Dimension Impact Accounting Slowly, ever so slowly, people are starting to talk about the changing relationship between employment and manufacturing. There have been massive changes in productivity over the past thirty years because of improved technology, but I have not seen a massive amount of economic analysis about what this is going to mean for society and the broader functioning of the economy. There was a time when labor (people) was a key constraining factor on producing goods and achieving progress, but that changed in industrialized countries about 50 years ago, and now there is a massive surplus of labor relative to the goods and services that people need. Worse, there is reducing demand because fewer people have the money to buy things that they would like. Massive amounts of money have been created by the Central Banks in the last five years, but relatively little of this has been used to finance the real things that the modern economy needs. The Trucost organization has been working for a number of years to help understand what is going on in the economy at large and the simple takeaway is that few industries are currently profitable when the externalities of the businesses are taken into account. How inconvenient is this. My own work suggests that Trucost may be erring on the side of optimism rather than the other way round. Over a period of several decades there has been a massive change in productivity brought about by investment to make productivity happen so that profits would increase. Almost nothing has happened to address the externalities that are increasingly deteriorating the quality of life of people and the environment in which we live and the environment that must sustain us into the future. So slowly we are talking more about the question of productivity ... but until we make use of better metrics I anticipate that we will avoid any change to the same old same old that has been getting the world economy into more and more of dysfunction. Peter Burgess ... TrueValueMetrics Multi Dimension Impact Accounting Delete 23 hours ago Peter Burgess Peter Burgess Founder/CEO at TrueValueMetrics developing Multi Dimension Impact Accounting Slowly, ever so slowly, people are starting to talk about the changing relationship between employment and manufacturing. There have been massive changes in productivity over the past thirty years because of improved technology, but I have not seen a massive amount of economic analysis about what this is going to mean for society and the broader functioning of the economy. There was a time when labor (people) was a key constraining factor on producing goods and achieving progress, but that changed in industrialized countries about 50 years ago, and now there is a massive surplus of labor relative to the goods and services that people need. Worse, there is reducing demand because fewer people have the money to buy things that they would like. Massive amounts of money have been created by the Central Banks in the last five years, but relatively little of this has been used to finance the real things that the modern economy needs. The Trucost organization has been working for a number of years to help understand what is going on in the economy at large and the simple takeaway is that few industries are currently profitable when the externalities of the businesses are taken into account. How inconvenient is this. My own work suggests that Trucost may be erring on the side of optimism rather than the other way round. Over a period of several decades there has been a massive change in productivity brought about by investment to make productivity happen so that profits would increase. Almost nothing has happened to address the externalities that are increasingly deteriorating the quality of life of people and the environment in which we live and the environment that must sustain us into the future. So slowly we are talking more about the question of productivity ... but until we make use of better metrics I anticipate that we will avoid any change to the same old same old that has been getting the world economy into more and more of dysfunction. Peter Burgess ... TrueValueMetrics Multi Dimension Impact Accounting Delete 23 hours ago
Craig A. Ruark, LEED AP (BD+C) Craig A. Craig A. Ruark, LEED AP (BD+C) Dir. of Business Development at Nevada By Design Top Contributor Peter, your analysis is precisely what I was looking for when I asked the question. (And I think that comment was important enough to post twice...LOL...I love technology.) But seriously, technology is the key factor to this change. Because of the decrease in labor intensive jobs we have lost a significant means by which people of all skill levels can earn a living. As you point out, if people are not earning a living they cannot afford to purchase which in turn drives down the demand for goods which then drives up the cost of production and the sale price. I advocated on my blog (Sustainably Verdant), that we need to re-think how we not only employ but the whole economic system of wages and/compensation; perhaps doing away entirely with currency. The infrastructure in the U.S. today (and around the world), is old and starting to fail. Cities, counties, states and the federal governments cannot keep up with the maintenance and replacement due to the high cost associated with the Union Contracted labor. There are thousands of able bodied workers who would like to earn a living but cannot because of bureaucracy and the union education requirements for even minimum skilled labor. I could go on but the point is, change needs to happen. Like Reply privately Flag as inappropriate 22 hours ago
Peter Burgess Peter Burgess Founder/CEO at TrueValueMetrics developing Multi Dimension Impact Accounting Craig ... sorry about the double post. Technology is wonderful when it is working well, but problematic when it is not. My Internet connection was in the process of going down! It is good that you are concerned about the dysfunction of the modern socio-economic system, but it is possible that my concern is even deeper than your own. The problems are systemic, and engineers know that when you have a systemic problem, fixing only one thing that is wrong when there are many, is not going to change very much. I am an enthusiast for entrepreneurial problem solving ... but entrepreneurs must be working on ideas that are going to make things better. The decline of the US economy has been 50 years in the making ... and the profit incentive that worked so well for more than 200 years started to work against the general good of the US economy around 1970. First almost free energy started to have a cost. Crude was just $3.50 a barrel in 1970 and other energy types in the USA benchmarked against this low price. The whole of the old US built environment was designed around virtually free energy. Now fossil fuels are benchmarked against crude at around $100 a barrel. In this environment many US industrial processes are uncompetitive ... and nothing to do with the labor cost. Second, the USA has had a huge trade deficit for ever, (with the exception of the 2 World Wars) but this deficit has ballooned in the last 30 years as technology has made logistics much easier to manage. I cannot understand how the US$ maintains its value ... until I look at all the other currencies around the world! The deficit has grown as companies have moved their operations from the US to lower cost and more profitable overseas locations where workplace conditions are often dangerous and appalling environmental behavior tolerated. Thirdly, we have allowed government entities around the world to become essentially bankrupt. Many of the services reasonably expected to be delivered by government (like infrastructure maintenance, decent education, social safety nets, etc.) are unaffordable because the non-governmental economic activities are not paying into the system at a high enough rate. This is a global problem ... not just an issue for government entities in the USA. As long as the profit motive is the only incentive in play, this type of finance and corporate behavior is to be expected. I argue that the externalities have to be brought into the analysis of business performance in a way that is as rigorous for impact on people and impact on the environment as there is rigor around money transactions and reporting of profit. 'When you change the way the game is scored, you change the way the game is played' Peter Burgess - TrueValueMetrics Multi Dimension Impact Accounting Delete 18 hours ago
Craig A. Ruark, LEED AP (BD+C) Craig A. Craig A. Ruark, LEED AP (BD+C) Dir. of Business Development at Nevada By Design Top Contributor Peter, you once again are hitting the proverbial nail squarely on the head. I agree one-hundred percent. I think the one word that you may have been looking to use is GREED. Like Reply privately Flag as inappropriate 16 hours ago