Saturday, April 28, 2012

Time is Money, Part Three: Who Will Win, Generosity or Greed?

In the previous posting of Time is Money: A Choice of Paradigms I described the two paradigms of living. One the aboriginal lifestyle where money is not required for life and living, the other community living in cities and nations where money is an essential for life and living. My conclusion in that article skews positively towards the paradigm of the aboriginals. This conclusion is reinforced by my observations of the economic environment of the world presently and the country I am living in currently, Malaysia, where like in most Third World and developing countries labour laws are only good for collecting dust and there is no such thing as minimum wage. However despite my conclusion I know that it is impractical to draw a solution to give up life in the cities for the simplicity of life in nature. In fact with human population now in excess of seven billion it may be impossible for nature to sustain 100's of millions of little colonies. It is obviously much more practical and efficient to bring resources to people in concentrated locations then to have so many little colonies compete for ever shrinking natural resources. Thus living in modern communities as we are today is not a choice anymore. Whatever solution that is discovered to create a more just and equitable society must be found in the context of national lifestyles and economic models.

As a side thought, it is interesting to ponder that for the most part of human history which is figured to start at the prehistoric time of 200,000 years ago, we lived as nomads and in small communities living off the land. It was not until between 6,000 to 5,000 years ago that the first human townships formed in Sumeria (Iraq) and the Indus Valley. The advent of agriculture brought about the development of these first townships in the world. Invariably where the ruins of the first towns were uncovered (in Sumeria and Mohenjodaro-Harappa), currency in the form of metal seals and coins were discovered. These early currencies made barter more efficient. At that time there would have been more aboriginal societies then towns. I can conceive that these first towns may have been experimental and like how even today we take to major innovations with a measure of apprehension, the same must have been true for the majority of the nomadic populace at the time. Obviously the experiment was a success and more and more people began to live in towns, some of which eventually turned into cities and ultimately into nations. In line with the innovation of cities and nations money evolved to its present day status as the purveyor of wealth.

Money of course evolved out of barter trade. It made trading more efficient for obvious reasons, and also allows us to accumulate wealth in a way that barter trade could not. Accumulation of wealth by saving and storing money made quantifying an individual's wealth easy. Therefore the evolution of the classes rich and poor. Entire industries that have nothing to do with necessity but everything to do with luxury have spawned to further define these classes.

Coming back to the thought of creating a more just and equitable society; this is still the inherent goal of all human societies, except that presently this goal has been subverted by the monster called greed. I don't think money is of itself evil, money has simply been hijacked by greed, which if we look at closely is the source of most of the problems infecting human society today. Lack of resources, exploitation of labour, crime, degradation of the environment, inflation–all these can traced to the greedy monster who not only infects those in the upper echelons of power and wealth, but even the lower rungs of society. In general, contemporary human society only pays passing tribute to the humble, virtuous and generous whereas we are totally enamored by the glitzy high life of the wealthy and powerful. For many of our youth the 'high-life people' are their role models of who they aspire to be. Case in point; just about everyone admires Mahatma Gandhi–his thoughts and philosophy are often quoted–but how many of our youth aspire (or are inspired by their community) to be another Gandhi or to live his lifestyle? Compare that hypothetical figure of population to say the CEO of Citibank and you can get a glimpse of why the world is as it is today.

No, I am not a communist. To me communism is a failed experiment in extreme socialism. Communism took the adage "power corrupts, absolute power corrupts absolutely" and proved this truth beyond a doubt. Many of the countries in the world that turned to communism in the early and mid 20th century espousing its ideal of equal distribution of wealth among the population ended up creating some of the most corrupt tyrant leaders in history. They threw away human rights, ruled with iron fists, enjoyed unaccountability and murdered dissidents. When greed infects communism the effects are far more disastrous compared to what we can see happening through capitalism. I am nevertheless a socialist through and through as most monks are, but I am not averse to capitalism in its ideals of allowing people to accumulate as much money as they wish through industriousness so long as there are safeguards against capitalistic exploitation.

Capitalistic exploitation is greed for as much profit as possible with no regard for social responsibility. In modern corporations this exploitation mainly comes from getting away with paying as little wage as possible for employees, using the cheapest possible processes for making products even if they are dangerous and proven detrimental to the long term health of employees and the environment; and dumping polluting wastes from industry indiscriminately to reduce the cost of treating pollutants to make them safe before dumping. Basically greedy capitalism cares only for bottom line profit margins no matter what the cost is to the social and environmental fabric. So much of the problems that we are facing in the world today with regard to livelihood stems from businesses without a heart. When love (or social responsibility) is not present in business and law, the demons of greed and subjugation reign supreme.

Most of us still idealize living in a harmonious utopia. Though we have to put up with the whims of Earth's natural grumbling once in a while, we do have the notion that as civilized and intelligent beings, humans can make such a dream come through. We have been trying to do this for eons and it continues to be the inspiration behind the formation of governments. Governments of Nations are usually formed on a base of positive ideals, and invariably one of these ideals is always eradication of poverty. Poverty is the universal devil that almost all politicians whack to drum up support for themselves. However eradicating poverty is a much harder dream (some politicians will secretly say impossible) to accomplish compared to building a multibillion dollar defense system. This makes sense if we understand that in a society infected by greed, the fear of loss is a major concern. Thus spending on defense, even excessively, makes good sense. So is it really possible to eradicate poverty from the face of our planet, or is this just a pipe dream? Many will say dream on, but I believe in dreams and I think it is possible, but only with the help of governments and businesses with a heart; for it is love that makes generosity a joy of life.

Generosity is about having and maintaining contentment in life. A content heart beams in peacefulness, richness in the enjoyment of living, harmony in relationships, inspiration for ideals and dignified self-respect for oneself and others. Generosity is about the giving of effort or sacrificing for greater good beyond self interests. People who are addicted to charity know that the spiritual ecstasy that one attains from the act of giving is its reward. One of the wonderful aspects of generosity is that it has nothing to do with money. Rich, poor, junior, senior, sick or healthy; anyone is capable of generosity of some kind. If businesses adopted generosity they will flourish from employee loyalty, trusted and respected branding, respect and protection from society. Of course they will have to sacrifice some of the bottom line in profit and plough it back to its stake holders (the community the business serves), but what goes around, comes around. Indeed generosity is also about optimizing business by investing in goodwill. This means that the businesses can still flourish and prosper by being generous. Generosity is not about depriving oneself of luxuries if that is what one desires, it is about caring for the society one is in; about not ignoring their needs and interest. It is about working out real win-win situations. This is what generosity in commerce and business can potentially create. It may mean not becoming super-wealthy, but wealthy enough.

Anyone who starts a business has a choice; either they maintain the principle of generosity or the principle of greed. In todays business environment, unfortunately, experts scoff at win-win situations. They say it is impractical. They say the business world is a brutal one, one of fierce competition and cold-hearted uncompromising profit taking and profit keeping–where the more profit the better. The big greedy multinational corporations have even taken greed to a new level. They too acknowledge the benefits of being generous and they don't want to lose out on these benefits. However with greed firmly planted in their organizations the idea of giving up profits is a super taboo. A solution for the greedy appeared when they realized that to get the reciprocal benefits of generosity they don't have to be really generous, they just have to make a show of generosity–enter CSR. Corporate Social Responsibility (CSR) is the big buzzword along with Environmental Responsibility.

CSR as an extra-business entity is not required for businesses and commerce with a heart. Community welfare concerns are as important to them as their business, in fact they go hand in hand as part and parcel of business. There is no need to make a big show of doing charity to the community because businesses, commerce and community form important supporting chains within social ecologies that are curcial for balanced and prosperous living as a whole. Giving generously off profits as social responsibility and for goodwill in the form of government taxes, employee benefits and donations are accepted responsibilities of persons or groups getting rich off their community. Compare this to the big corporations that earn profits in the hundreds of millions and even billions but give out paltry sums back to the community. Greedy corporations insist that their sole fiduciary responsibility is to their share holders who are only happy when profits are on the up and up. The stake holder's (read the larger community) welfare from whom they depend on for business is the concern of the governments, not even slightly theirs. When they have to make contributions to their stake holders, usually out of compulsion rather than generosity, they like to make a big deal out of their contributions and command recognition for their feigned magnanimity by insisting that their CSR is a selfless favour to their community. They also milk as much as they can out of their CSR by paying for media coverage (if they can't get if for free!) to turn it to a brand marketing exercise on top of the tax breaks that they can claim from governments (so they are not really spending anything out of goodwill, but simply fulfilling a need begrudgingly). Then to reduce further cost of CSRs even very rich corporations will insist that their lowly paid employees contribute their personal funds, time and effort for 'the good cause'. Thus in adapting with times greed has become more sophisticated as feigned generosity.

The very fact that there is such a thing called CSR shows just how removed commerce and business are from societal welfare. It used to be natural for the rich business community to be magnanimous in charity without need for recognition because they understood that the if the giving stops the getting will eventually grind to a halt and bad blood will result between the business people and community at large. Today large corporations can get away with lots more greed through their multinational operations where the can hide their greed by exploiting corrupt governments in other countries where human rights laws are negligible. When you live in a Third World or Developing Country you can see this very clearly. Since there is no such thing as minimum wage, apart from super-well-paid top administrative executives, other white and blue collar employees are squeezed for effort with as little pay as the corporations can get away with, notwithstanding their growth in profits.

Greed of course is not a sustainable mechanism in any ecology. Over collection and hoarding of resources concentrated in a small elite group who disassociate themselves from the greater community will eventually become detrimental to the elites themselves. When a tipping point is reached in exploitation, uprisings occur in communities that are unfortunately brutal and anarchist against the elites. This scenario has played out countless times both in ancient times and even today–the Arab Spring Revolts are all simple working class people trying to uproot the greedy and cruel out of their society.

It is without a doubt that greed will eventually strangle itself, especially now with the cry of the exploited becoming deafeningly loud as populations increase and resources become more and more limited. In the end the greedy will have to ask themselves, how else and where else can they hide all their excesses. To date we still haven't discovered another habitable planet that one can escape to, instead our world is getting smaller with larger populations and connectivity created by technology. Eventually even the greedy will have to acknowledge that they are part of a social ecology that can only thrive if equitable balance is achieved. No matter how much wealth the greedy have at their disposable they cannot, try as they may, stay apart very long from this ecology.

The bigger question is what would we replace the current systems that encourages greed with? We must acknowledge that all the current economic systems that is in place can easily be exploited by greed. It is useless to have painful revolutions only to replace one set of greedy elites with another who can get corrupted by money and power under the same system. Granted that the current economic models available to us, when used according to their ideals can be the solutions, so instead of 'reinventing the wheel' we simply use the current models with some modifications so elements that represent generosity are factored in place with their ideals better guarded and implemented. The solution must also be global and not given to choice by National governments. A global solution will require some sacrifices in the convenience of business and commerce. However if we are committed to a utopian future we will realize that sacrificing for the greater good of community which is a cornerstone of generosity, are sacrifices worth the effort. If we can accept this, then the battle is already half won and a brighter and more equitable future is on the horizon for our kind.

In the next article on Time is Money I will give my humble two cents on a solution that has been brewing in my ponderings.

Saturday, August 27, 2011

Time Is Money, Part Two: A Choice of Paradigms



That time is money is not a natural phenomenon but a man made condition. I believe this because we can live perfectly well without it. All one needs to do is to learn from people who live-off their natural surroundings. Even today in the modern and civilized age there are people who still live in jungles, deserts, by mangroves and marshes, on mountains and all other kinds of natural surroundings; yet do not need money to live full and fulfilling lives. If anything money may be a luxury to them but is something that they can live without.

Aboriginal people can live life without money because Providence does not put a price tag on their required resources. They might have to walk some distance to fetch water daily for their living, whereas we have the convenience of piped water that we have to pay for. For energy, they have to go and collect wood, while all we have to do is to turn on a switch. Aboriginal people have to be very careful with their food so they do not waste it since it takes quite a bit effort to collect, hunt or grow it before processing it to something edible; but for us in villages, cities and towns food is all around us even out of season or foreign foods. All we need is money to buy it and we usually buy more than we need. From these simple comparisons one can surmise that money is a conveyor of convenience, that, it is a fruit of progress in the evolution of human civilization. If this is the case we should expect that the quality of civilized city life be much better than living as aboriginal people. Yet this may not be necessarily true. I believe the concept that time-is-money skews the quality of living in communities. It has created a pursuit for wealth that has turned money from a convenient form of barter to something very different–capitalism.

Aboriginal folk and we national people live in two different paradigms. They live in a paradigm where there is no need for money and we, where money is a living and life essential. The effect that money has on time in one paradigm and the lack of it in the other has created two modes of living. The former has created the rat-race for more and more wealth, and the other oblivious living. Pondering these two paradigms makes me wonder if the development of money is actually progress or otherwise.

Two striking differences appear when aboriginal communites are compared with cities. The most obvious is their size. Aboriginal communities are naturally smaller than cities. They are more akin to villages but may be even smaller than that category. Their constraints in population is simply ecology. So much land can only provide so much resources for so many people. If their community grows beyond the capacity of their environment, then a natural split in the community occurs and groups diverge for the sake of equitable distribution of resources. Modern cities emerge by efficient provision of resources to its community by the means of commerce. Thus the more efficient a city, the bigger its community. It is the advent of money that makes commerce efficient, because people and businesses can get paid for their effort and that wealth allows citizens to procure whatever they need or want. In an aboriginal society money can be a choice or even be irrelevant because it does not need to be used to procure basic needs which is free for all, less the effort to acquire. Aboriginal communities are based on cooperation of the entire population working as a team to collect all the necessary resources for everyone.

This brings to mind the second striking difference between these two kinds of community. This difference is the dearth or complete lack of stratification in the aboriginal communities compared to the communities in the cities. Stratification in a community are its hierarchies or classes. The rat-race of modern living driven by time-is-money creates classes and caste, rich and poor and the phenomenon of poverty. How does time-is-money create all these conditions? I will base my reasoning of the answer to this question by first imagining simplistically how an aboriginal society works.

Aboriginal societies are based on cooperative living. All able members of the society work together to gather resources. Men and women have their distinctive chores and all of them work together. This kind of living for them is not a choice but an imperative. By working together and sharing their effort everybody benefits from efficient gathering of resources. Whether it is defending the community or collecting water, all chores are considered equally important for the community. In such societies its members have no need to stand out higher economically from others since they depend on each other to share resources. Even the leaders of these societies fulfill a role out of necessity instead of status and their lifestyle is the same as the other members of the society. Thus apart from age and gender there are generally no other significant stratification in aboriginal societies. Everybody is cared for by others, nobody is richer or poorer than anyone and poverty is a consequence of natural disasters, not the lack of personal wealth.

Modern cities however are a wealth of class and diversity. Glorious opulence and abject poverty can exist side-by-side in the same community. Poverty in cities have nothing to do with the lack of resources, instead it is the lack of wealth to purchase resources. By my observed evaluation class stratification in modern cities is caused by the distribution of money based on the worth of an individual's time. In most national economies every individual's time is valued differently without taking into account the value of the work that they do ( can any economist out there explain this phenomenon?). For instance nobody will deny the important work that janitors do. Their work is as crucial to the functioning of a city as that of the policemen, harbour masters or the mayor, yet janitors are among the least paid workers. In an aboriginal society the janitors work will be considered the same worth as everybody else's, but in most cities in the world they earn so little that they may not be able to afford the most basic standard of living. I believe such situations are the product of capitalism which is the contemporary driver of economy in most countries. In practice capitalism condones this disparity in wealth distribution, though in its ideal capitalism is often touted as the panacea for poverty and breaking class stratification.

Capitalism evaluates worth of time based mainly on intellectual, academic, social and even political acumen. While capitalism gives freedom for any member of a community to accumulate as much wealth (through commerce or business) as they can muster based on their effort and ingenuity, it does not condemn exploitation as a means of generating wealth. If exploitation is present, which it usually is in capitalism, the gap between have and have-nots will be wide enough for class consciousness to perisit. Thus the birth of a disharmonious city where money is controlled by the elite and powerful; and time along with effort is exploited from the lower and middle class of the city.

Poverty and class stratification of society has been the stuff of communities for ages. The effort to create an utopian and truly fair and equitable society is an age old striving. It has been and continues to be the cause for the rise as well as the fall of Empires, Kingdoms and Nations. Capitalism is simply the modern purveyor of greed, which used to infect the Kings and Dictators of the old ages. Yet the struggle continues for fairness and equitability. Whether this can be achieved through capitalism is still an experimental notion. If utopian communal living is to be accomplished through capitalism then someone has to find a way to exorcize greed from it. Otherwise if we wish to enjoy utopian life on Earth the answer may lie with the ways of the aboriginals instead of the academic and financial experts whom the world depend on for solutions, thus the choice of paradigms.

Thursday, August 18, 2011

Time is Money, Part One : Remember Time is Money said Ben Franklin



I was pondering the adage that time is money. Wikiquotes revealed that the adage is from an advice given by Benjamin Franklin (one of the Founding Fathers of The United States) to a young trader way back in 1748. He actually said, "remember time is money". Today parroting time is money is such a cliche that one might be forgiven for taking its personal significance for granted. In a sense since we have to fork out money to pay for so many things in life on a timely basis (daily food, weekly groceries, monthly bills, mortgage, annual taxes, etc.) we scarcely need reminder that time is money. Really though, I wonder how much money my time is worth. How to quantify it? Right off the top of my head I came up with some simple calculations, I also did some research on the internet to find out if there were formulas out there that we could use.

The most simple formula that I figured out is basic maths. Take your mortgage divide 30.5 and that is the minimum wealth to make per day to keep a roof over your head until the mortgage is paid off. Take your total basic monthly expenses and divide it by the same and that is how much you need to make per day, even on Saturdays and Sundays, to maintain your lifestyle. Refining this calculation to be more effective means one would take the actual money producing hours, i.e. average monthly work hours or industry hours and divide it with the total basic monthly expense and your minimum per hour dollar amount is revealed. Here is a simple formula I created to determine this.


$/h(V) = Monthly Expense (including tax)(M) / effective hours of work (not including commute time)(W) multiply with 22 (Average workdays in a month)

V = M / 22W

This simple formula can be useful especially if you are deciding to start your own business and are wondering how much the minimum income is that you need to make per hour. This is a good figure to have in mind to reason or justify expenses in time and money in the pursuit of business leads or marketing.

If you have a monthly salary, then the formula is much more simple. If income does not exceed expense than you are on an even keel. If effective money making time is your bosses money, if you are comfortable with the work you are doing and the company is financially bullish the fact that time is money is usually an ignorable fact. However if expenses (this should also include those pesky bank charges and credit card interest and tax) exceeds income then time becomes more than money, it also becomes stress! Especially when those monthly bills or phone calls start coming in. It also means it is time to ask for a raise, find another job, get into business yourself or the quickest solution, axe spending.

If you are interested in finding what your time is actually worth there is this article on 'Running a Business' in about.com that can help you figure it out. Here is a quote from the article.

"How much is your time worth?
Have you figured it out? If not, you should. To figure the minimum, figure out how much money you're making per year and divide it by 2,000. To figure the maximum, consider how much you make for your most productive time -- closing a deal, a speaking engagement, billable client time, etc. Somewhere in between there is the real value of your time.
There's a saying which I recall reading somewhere (I thought it was Harvey Mackay, but I haven't been able to track down the quote):
Don't pay someone $25 an hour to do $7 an hour work.
Plug your own numbers in there. Maybe it needs to be, "Don't pay someone $50 an hour to do $20 an hour work." You're the first number. Whatever your time is worth, think about each and every activity that you're spending time on on a regular basis. Could you outsource it to a bookkeeper, a virtual assistant, a web designer, a copywriter, a part-time employee, your spouse or even one of your kids? It's very difficult for most entrepreneurs to relinquish that control and delegate, but it's one of the best ways that you can ultimately increase your income while decreasing the number of hours you work."


Here is the link to the article: Time is Money, How much is your time worth? on About.com. About.com also has plenty of resources on time management and advice on starting businesses. I find about.com more relevant than wikipedia most of the time.

In 2002 a British university professor created a mathematical equation which concluded that the average British minute is worth 10 pence for men and 8 pence for women. With inflation since 2002 and the current economic doldrums of the West these figures are probably higher. If you want to calculate that figure the formula is available in an article that appeared in CNN Tech. This is the formula V=(W((100-t)/100))/C, click here to find out how to use it.

While these formulas may all be useful academics, the bottom line is how does the statement that Time is Money effect you. Are you comfortable with it? Do you loathe it? Do you enjoy it? Or does it make you run in circles? If you are not really sure and want to gauge yourself on exactly how you stand with the adage Time is Money, there is "The Time is Money Test". It is true or false test put together by inc.com that can help you uncover your standing. It is designed for business owners but unfortunately, does not come with an evaluation. It can be useful nonetheless. Click here to go the test.

It is interesting that Benjamin Franklin's advice was "remember time is money".  I think these days, especially if you own your own business, the reminder is not so necessary. How to make time work for our money instead of money work for our time is more cut-to-the-chase relevant. There are plenty of advise and courses out there, online and realtime on this. If you want to share a link that you found especially useful on the subject of time is money, or good time management practices do share it in the comments. Your thoughts on this matter is welcome too. My next article on Time is Money will be from a psychological perspective.