Monday, 30 June 2014

Macro Level Trends – “Macro-Technologies” - The Google Car: True Auto-Mobile or Intelligent Parish Pod ?

The previous web-log highlighted the manner in which a new era of 'neo-capitalism' appears to be heavily orientated toward the ongoing deployment of 'macro-technologies', enabled by the web.  

This achieved by a coterie of typically Californian IT industrialists running mega-cap corporations, with immense personal fortunes and close Wall Street connections; who may today be viewed as the eco-socio-economic arbiters of the global, inter-connected 21st century.

Technocratic Influence -

Just as Russian oligarchs weigh control over global raw material flows at the low-value end of the industrial supply value chain, so today American technocrats seemingly orchestrate the high- value end of the chain: with demand creation and satiation through web related hardware and software which subtly but powerfully alters the perceptional and behavioural dynamic of people and generations.

Thus it appears that the modern world, specifically the professional and leisure activities of its inhabitants, leads directly back to Palo Alto and the broader Silicon Valley; through the increasingly immersive screens of smart-phones, tablets and laptops. The entrenched “enabling” cyber-brands of Microsoft, Apple, Google, Amazon, Facebook et al, could be regarded as contemporary religions given associated faith and tribalism, with web links to the 'cloud' which itself resembles the on-highness of the god-head within ancient religion.

A Much Altered World -

The past 30-40 years has obviously seen massive socio-economic transformation via IT and the web, and as its cause and effect snowballed ever onward, so the pace of change appears to grow exponentially; the observations of Moore's Law seemingly spreading from the domain of the micro-chip into everyday life.

The outcome an increasing absorption of the individual, crowd and mass, as today the once far-flung reaches of academically prosed 'hyper-reality' morphs into 'augmented-reality' and so eventually simply experienced as the world's innate reality.

[NB This suggests that increased global urbanisation even nature itself (an ever more 'protected' entity) will ultimately become a designed experience for the masses].

Previous web-logs have illustrated the manner by which post-modern philosophy has sought to re-interpret the modern world given the influence of man's constant remaking of his world, with the topic of “hyper-reality” upper-most.

Technological Hyper-Reality -

This pertains to mankind's ever deeper creation of wholly manufactured perceptional experiences, especially prevalent from the very early 20th century onward with the invention of basic cinematic film, thereafter the sound aligned 'talkies', the arrival of film-studio derived theme-parks, 3-D film, the spread of home-video and the arrival of the internet and mobile communication 'streamed' increasingly faster (2G/3G/4G) so as to provide personal on-demand consumption satisfaction downloaded from the virtual world and increasingly providing 'augmented reality'; whether a person be in work, personal task or leisure modes.

Resulting from the identification of such increased “hyper-reality” by the late 1960s post-modern theorists arrived at the notion that perceived reality had itself become so complex that the natural world had been subsumed by a man-made realm. A realm so detailed and convincing that it could be viewed as analogous to an (unfoldable) 'map' which had expanded so much in breadth and detail it meta-physically overlaid the natural world beneath.

Stated half a century ago, at a time when the dream of the internet was only embryonic, this man-manufactured 'overlaid map' has emerged from analogy to fact, on physical and behavioural levels, satellite, drone and vehicle technology has allowed Google to compile the physical via Google Earth / Google Maps, whilst correlated personal, crowd and mass movement (dynamic maps) has been captured via the self-provision of personal locational data.

Data Driven Commercial 'Bed-Rock' -

Early coastal located civilisations saw mankind seek to build dwellings upon local bedrock, recognising that temporary shifting sands / soils were not practicable, long-lasting solutions.

Now that the web is engrained into much of global society - as well recognised by (an arguably 'Big Brother'-esque) Google - the data gleaned from its web inhabitants could be said to have formed a new bedrock upon which a new era of e-commercialisation may be founded.

Hence, a prime topic over the past decade or so pertains to the opportunities and challenges of those new and extended business models, imagined and created far beyond the current conventions of: online communications (personal, select audience and mass), socialising (personal and mass), personal ordering/shopping, personal dating, personal banking etc.

The willingness by virtually everyone to wholly participate in the web created world has (at the cost of oft over-looked privacy) been utterly stupendous as individuals, groups, SME's and large corporations, all seek to either positively promote themselves or at worst not become left-behind.

This unrivalled level of participation in the cyber-world, means that the world can be materially and philosophically re-invented, or at least cyber-evolved, so as to possibly extend the realm of a necessarily commerce-centric hyper-reality.

Deploying Corporate Cash Hoards -

Unquestionably since the mid 1980s, even with the 1999 bubble, the general 'tech sector' has been commercially prolific as both society's enabler and for specific firms recognised as the stars (recipients and benefactors) of modern capitalism.

The accrued massive cash reserves sat within tech firms' balance sheets has attracted increasing activist pressure so as to ideally return said cash to shareholders, or at least direct cash into rational new growth opportunities.

As of Q1 2014 these cash reserves verses debt (so net cash) stood at:

Microsoft: $87.67bn cash vs $23.48bn debt ($64.19bn net cash)
Apple: $41.4bn vs $16.96bn ($24.44bn net cash)
Google: $57.28bn vs $8.4bn ($48.88bn net cash)
Amazon: $8.67bn vs $3.15 ($5.52bn net cash)
Facebook: $12.63bn vs $0.39bn ($12.24bn net cash)

As is obvious, these five info-tech companies alone have an immense spending power of $155.27bn, with as seen Microsoft leader in absolute terms and Facebook leader in relative terms. With also as seen these two firms latterly expanding into newer operational arenas: Microsoft's ongoing technical integration with Ford Motor Co (as with the Sync system) and Facebook's acquisitions of Oculus (for virtual reality interactivity).

Shaping the Future -

In recognition of the quarter upon quarter cash-accruel trend, and the eventuality of massive cash hoards, many tech firm founders, shareholders and CEOs have since well before 2008 been exploring ways in which these mountainous funds may instead be invested into new products and service projects.

Projects which promise to fundamentally change the face of urban life through the subtle and not so subtle 'soaking-in' of new technologies into the innate socio-economic fabric of everyday life; now called 'the internet of things'. Most obvious that of public and private infrastructure under the broad remit of (sustainable and intelligent) living and correlated urban planning, with the ultimate ideal of the 'Smart City' moniker.

[NB This ambition influenced by the United Nation's Habitation section, with the UCLG attempting to create international standards].

External Exploration and Learning -

Given the risk potential of such an ambition to privately held and publicly listed enterprise, such technology leaders seek to absorb captured learning from similar attempts elsewhere. Such attempts typically by cash rich 'far-horizon' governmental policy-makers, such environments viewed as alternative new 21st century icons instead of building ever taller sky-scrapers, a 20th century icon.

Experiments of 'smart cities' have been ongoing for decades, perhaps the first proper that of Tsukuba Science City in Japan during the 1960s. However post the Kyoto Protocol effort of 1997 and partial ratification in 2005, various governments have sought to create such “future towns”. Ecologically conscious with at their heart - beyond building pollution constraints - intelligent transport networks. In many cases, and as an ideal, the town/city itself dedicated to a high-value, research-led, hi-tech manifesto. (So akin to Tsukuba and indeed the various remote specific research towns under the old Soviet Union regime)

In recent years it has perhaps been Abu Dhabi's Masdar City complex in the United Arab Emirates, which has offered the best learning. Though its development and expansion was slowed by the regional fall-out from the 2008 crisis, it has progressed apace, though still under—capacity, and continues to be utilised for the feasibility assessment, both of its system parts and its meshed whole.

Masdar was created as ''clean-sheet' planned city under the general direction of Foster and Partners, who like most blue-chip architectural firms, have long recognised the policy importance of urban planning across both EM and AM regions; with aspects of idealised 'clean-sheet' “e-enabled” new town planning to be retro-fitted as practicable into established and inevitably slowly decaying old infrastructures.

Masdar's eco-city credentials demanded that a new 'intelligent' mode of transportation be adopted. So its piloted a tailored version of a generic PRT system ideal; utilising automated vehicle 'pods' which are electronically, self-guided along specific pathways. (The term PRT has a broad definition in application but its ideology tends to use a primary non-stop route with secondary sidings for stop-off points).

However, the cost of the PRT system's extension was deemed uneconomical with instead supplementary travel within the city's walls provided by electric-powered small cars and buses.

Given the self-guided PRT and conventionally driven electric car programmes, it thus appears probable that the merged result – indeed ambition - at some future point is that of a self-guided electric car.

The Driverless Vehicle Ambition -

The concept of a 'driverless vehicle' is hardly new, long part of science fiction and presented as a research ideal by GM in its 1950s Futurama exhibition. The 1970s saw initial Japanese effort, but it was not until the 1980s that Mercedes-Benz's robot-car created from the pan-European EUREKA Prometheus project (1987-95) achieved major performance milestones in 1994/95

As a new century successor ambition to Europe's Prometheus effort, in 1994 the US government through DARPA offered $1m “Grand Challenge” prize-money for new entrants test efforts in Mojave Desert. This was part of its own robot vehicle focus. No course completions prompted a $2m prize for 2005 with various entrants and vehicle types successfully finishing. Re-run in 2007, but with an altered course to reflect the title “Urban Challenge”, requiring far more computational intelligence given the need to obey traffic laws; six teams completed the course. In 2012 and 2014 DARPA chose to focus on more specific technology challenges aside from the driverless ambition.

Thus since 2007, with the apparent proven ability to create urban-safe driverless vehicle control systems, research has continued with transition from the 'pure' to the 'applied', across academia, in-house within technology companies and as joint effort ventures.

The EV as Driverless Enabler -

Research projects to date using standard vehicles point to the fact that the complexity and cost of transforming the base engineering of ICE powered cars into driverless cars is high if not prohibitive.
Moreover, given the heavy computing power required, the electrical energy for which in mobile mode (laptop, smart-phone, tablet) is drawn from a lithium-ion (L-ion) battery, Silicon Valley entrepreneurs have long sought to create the ideal mobile battery-pack by way of the EV.

So, since 2003 we have seen a strategic push by Silicon Valley to reach this ideal 'mobile battery' product destination by way of the apparently eco-positive electric vehicle (EV).

Tesla Motors operates as an unabashed technology disruptor to the conventional internal combustion engine's undoubted primacy in automotive transport. Its business model has been planned as multi-faceted and growth orientated, as with manufacturing the firm using a typical progressive funding model from initial high price/low volume to eventual low price/high volume, the expansion of a battering 'super-charging' network, whilst also selling its zero-carbon credits to external VM corporations, and also seeking to sell or gain royalties from its e-tech IPR from external parties.

Beginning with the deployment electric motors within a Lotus sportscar chassis in its 'Roadster', the to the provision of L-ion battery-packs for volume manufactures' own limited series E production runs, to the creation and sale of the Model S, the showcasing of Model X and 2017 scheduling of the “Bluestar” higher planned volume model. More recently stating its intent to offer its electric power-train technology knowledge to new partners. Thus seeking to operate as both vehicle manufacturer and presumably licensee of what it sees as very specific (ie legitimately protectable) e-tech intellectual property rights. Furthermore, the promise that Tesla owners will be allowed to use the Tesla super-charging for free forever, appears empty given commercial realities or eventual possibility of the network's sale to an external enterprise.

[NB exactly what Tesla purports as its own IPR is unclear, especially given the long history of electric cars and the relative simplicity of the power-train and control systems, which conventional manufacturers have well understood for decades and deployed in their own hybrid drive systems].

Lastly, Tesla Motors has stated that it too has ambitions toward driverless models, which together with mention of an electric truck type vehicle provides obvious prompts toward fleets of self-guided delivery trucks in urban areas.

It is then a fundamental fact that Google and Tesla have a heavily vested shared interest – even if not formally stated - in targeting the mass adoption of small urban “infrastructure intelligent” electric vehicles.

Internal Exploration and Learning -

Thus the question set and topic explored is that of the time-frame and cost required to achieving true practicability for a self-guided (driverless) EV.

Such new-age travel ambitions have obviously been ongoing for some years, the epicentre being the Californian web of firms that wish to continue the e-based innovation path that has essentially constructed the 21st century.

As seen, a raft of innovations from Google Inc demonstrates its intent to inter-connect ethereal web and physical worlds, indeed at every level of the physical, across: the Nexus smart-phone, Chrome laptop, Google TV interface, Nexus Q entertainment module, cyborg-type 'GoogleGlass' (augmented reality spectacles which prompt privacy concerns), the healthcare directed Google Contact Lens (as part of the [somewhat propogandist sounding] “quantifiable self” movement).

With of course the driverless concept 'GoogleCar' recently promoted as the apparently realistic future of urban mass mobility, from its 'sci-fi' roots.

This apparent watershed in automotive mobility was showcased in prototype form on May 18th 2014 with the Driver-less 'Google Car'; the result of years of internal exploration and learning.

This vehicle stems from Google's original sponsorship of the research undertaken for the DARPA Challenge in 2005. That team was formed of Stanford University's own post-graduate academics (led by Sebastian Thrun, now at Google) together with Volkswagen of America's own Electronics Research Laboratory; both located in Northern California.

DARPA 2005 was the second running of the driverless car 'grand prix' from its origination the year before, with no successful completion. The Stanford-VW alliance chose to utilise a VW Toureg given its drive by wire control features and large internal and external dimensions and payload, for the carrying and fitment of a heavy five-fold sensing and analysing system: Gyroscopic / GPS / 'LiDAR' (combined laser and radar), Wheel Sensors and Video-Camera, plus the much smaller masses of the physical actuators required for robotic steering and gear shift. The team took first place.

Having learned much, the 2007 DARPA (Urban) Challenge was undertaken using a smaller but still spacious Passat Estate/Wagon. Compared to 2005 the very different “sophisticated interaction” requirements of a cityscape environment meant far greater sensing capabilities, with the need for regulatory 'road-craft' compliance necessitated heightened real-time analysis in data processing, thus adding greatly to previous learning. The Stanford-VW team took second place.

Thereafter Sebastian Thrun moved to Google so as to lead the next phases of development toward an eventual goal of commercialisation. The more advanced and yet technically simpler system of a LiDAR and Range Finder operated by software named 'Google Chauffeur' has been installed into various other models of test car (Toyota Prius, Lexus RX450h and Audi TT) which have had two then one passengers to physically intercede if the system fails. By April 2014 Google claims that such tests have covered 1.1 million kilometres without problems, stating that one 'at fault' incident was the result of human driver error, not the system itself.

But as of May 2014 a wholly new concept vehicle arrived: the urban friendly small driverless EV,
the 'Google Car', cosmetically unlike a standard small car, using a bubble shaped body, seemingly a colour-in-mould skin finish (like a personal e-device) and a friendly pet-like 'face' to provide personification and so immediate emotional attachment.

Vehicular Stepping Stones -

The Californian technology leaders seek to create what they see as the natural evolutionary step to the current use and thinking around urban personal transport.

That urban journey starts with the modern Micro-Car seen by French offerings by Aixam (long since a popular form of urban and suburban travel, especially amongst older drivers). Then onto 1998 and Daimler's launch of the modern micro-car, the Smart ForTwo (its platform used for various off-shoot models such as the Cross-Blade (ltd edition) and sporting Roadster, aswell as various concept models). The first modern clique of rudimentary, limited range but functional electric micro-cars arrived, the most famous/infamous being the G-Wiz, superceded by Renaults' Twizy.

[NB Polaris Industries of the USA acquired Aixam in 2013 as part of its own strategic intent for its own expanded electric vehicle range].

From the late 1990s on, western society witnessed the large demand and increased supply for mobility scooters, catering to the better independent mobility care for the disabled of all ages and (pre-2008) buoyant government social funding for the ever larger numbers of elderly and obese people.

With such historical demographic change (already experienced in Japan) plus the rise of single occupant households, vehicle manufacturers such as Toyota, Honda, Nissan, GM and Chrysler created motorshow concept 'pods', either wholly in-house of with parters such as Segway, so as to provide apparent glimpses of the shape of things to come.

This seeming convergent trend then towards eco and specifically electric mobility, tied to the ideal of greater in-travel productiveness - is what underpins the ideology of the Driverless 'Google Car'.

New Build Process Opportunities -

For the most part, the history of the automobile sector was to satisfy the previously ever growing western 20th century demand for vehicles of all various types. Accordingly, the associative manufacturing model, and so general business model was around the generation of high volume and so low cost encompassed by the 'Budd' pressed steel method; a system still very much the case for what is now a highly global market, and wholly effective for the demand expansions across China, India, Brazil, Russia and EM elsewhere. Capital spend intensive, but very effective during long phases of GDP development, and indeed central to such prosperity.

However, for the west macro-conditions have undoubtedly profoundly altered since the 1960s heyday, with the dual effects of far greater eco-consciousness – influenced by California, but technically led by Japan and Germany –, what is seen as reduced car-demand by incoming generations (a function of their own disposable income levels) with reaction to changed transportation perspectives and methods – most obviously cycling and maintained public transport use within cities; albeit relative to the general decline of public-purse infrastructure spend in favour of private-sector spend.

As seen by the success and impact of Toyota's hybrid powered Prius and now near full hybrid model range, conventional cars have altered accordingly within the restrictive envelope that is the reality of the long new product development timespan. Other corporations include Jaguar Land Rover's now entrenched use of lighter aluminium structures, whilst Ford has adopted the same technology for the 2014 F-series large pick-up truck (a truck ostensibly using sports-car materials). Most manufacturers now well used to undertaking various non-core, but macro-associative, research and development projects in hybrids parallel and series), battery development, electric-drive motors, body structures, chassis systems and holistic alternative vehicle packaging; with of course progress determined by technical and funding restrictions. So the conventional car has itself leaped forward

However, with the unprecedented macro effects of the Kyoto Protocol and post-2008 western labour surplus, the auto-industry and its investors have also recognised the very real need to progress what historically has been called 'niche' engineering and manufacturing. So as to effectively locally develop, build and supply more targeted types of vehicle, typically urban specific.

Instead of centrally locating a huge pressed-steel manufacturing base to serve a single country, its neighbours and foreign exports, the system itself has been reverse engineered to 'go back to basics' in serving distinct geographical locations and user types.

As described in previous weblogs, this micro-orientated approach became obviously known as “micro-factory supply”, with the complementary adjunct of internal sales channels, elongated to “micro-factory-retailing”.

Various companies have been formed to explore this perspective. At one end of the product spectrum is Pheonix, Arizona based 'Local Motors', combing the artisan aspects of the US eulogised local workshop and the trend of web-enabled open-source design, with apparent philosophical edict of “global design, local materials and local energy” with strategically aligned local municipalities; presently located upon aboriginal land and offering the tubular framed on/off-road Rallye Fighter (a Baja buggy type car). At the opposite end of the product spectrum the outcome of the UK's Gordon Murray Design in Surrey, with creation of the T25 and sibling variants (later called 'Motiv'); a truly compact city car with a 3-seat, rear engine layout. Critical was the creation of the 'iStream' build process. The rights to the project reportedly sold to Japan's Yamaha in late 2013, with expected launch in 2017. Like the Arizona car, it uses as steel space-frame with composite outer panels.

The fact is that for all the communications hyperbole and trendiness, the basis of 'micro-factory-retailing' is simply that of yesteryear niche (limited edition) vehicle building, specifically that championed by pre-war Grand Prix cars (Auto Unions etc) and adopted for wider use by Italy's Carozzeria Touring in its client specials.

The system of largely hand-built vehicle frames and powertrain, chassis, electrical and trim installations, provides for the lowest vehicle company start-up costs possible, especially with (unlike Touring's use of specialist high-end components of the time) the use of off-the-shelf generic OEM parts from tier 1 and 2 suppliers.

[NB This same approach has been deployed for the establishment of local vehicle companies in 'pioneer investment regions', such as that seen in Mombasa, Kenya].

The fact is that the apparent “reverse engineering” of the modern auto-industry is little more than fall back onto well established and proven simpler lower cost and critically “CapEx lite” design and construction methods.

Nevertheless, it is this same system which investment-auto-motives believes that as a notional 'sector disruptor' is being investigated by Google, so that it can itself fund the home-grown creation of an unconventionally simple, 'function-first', driver-less town buggy.

Reformatting for a 3rd Urban Travel-Space -

As regards personal travel (ie non public transport), historically towns and cities had effectively two speeds, either by motor vehicle (fast) or walking (slow), with the intermediate functionality of the bicycle (per speed and comfort) typically heavily marginalised in most places besides The Netherlands and pockets of similar elsewhere.

However, climate control concerns regards vehicle pollution plus the promoted popularisation of the bicycle as short-hop, healthier, (necessarily so) low-cost travel solution, has increased provision for cycling routes in major cities over recent years.

This essentially created a new, and still growing, dedicated 3rd travel space. A lane separated either physically or by (blue) colour demarcations from potentially very dangerous motor vehicles on standard roads and the risk of danger to pedestrians on pavements/sidewalks.

Though the lanes have been to date dedicated as “cycle lanes”, they would prove useful to other mid-speed apparatus which provide “intermediate speed” travel (say 10 – 30 km/h). In fact it is often the case that recognising their danger to pedestrians, where practical, mobility scooter users seek to use traffic-separated cycle lanes as the best suited pathway.

Given the impact of rising cyclist numbers and the now society entrenched use of mobility scooters, it seems advantageous that cycle lanes be fully utilised as more broadly defined 'intermediate lanes'.
As has been the case with inner-city planning policy, this largely achieved by re-apportioning space from that of roads and paths to cycle lanes.

This 3rd space then offers a new travel zone for what could be a new mode of intermediate speed transport, typically named the “mobility pod”.

Small in foot-print and stature, enclosed, weather-proof and moderate comfort, such concepts effectively update the era of post WW2 affordable, low powered bubble-cars which faltered as they were not wholly suited to conventional road systems. Had a 3rd space been made available their evolutionary rise and not fall may have been the case, but the fact was that automobiles and oil production were two of the pillars of the post-war economic boom, comfort and speed the two driving factors.

However, today whether as part of the economic decline of the west, or as part of its eco-leadership actions, the “intermediate lane” looks to become an increasingly important aspect of personal, urban, data-intelligent, transport networks.

This it seems is the unstated big picture thinking behind the Driverless 'Google Car'.

Conclusion -

It is suggested that Google's ultimate aim is to create a business model which is able to sell to today's automotive manufacturers a packaged system of data-rich, real-time information to enable the apparent dream of the safer, productivity enhancing driverless car.

This may indeed be the case.

However, it seems to investment-auto-motives that the natural path for Google is not to sell, lease or franchise its eventual driverless car capability, but instead seek to gain most value from users by operation the system itself.

To this end it is expected that Google and others will seek to create the conditions by which ecologically focused urban planners will naturally lean toward the advantages provided directly by Google.

To do so Google will be seen to continue to lobby international governments (presently 5th biggest lobbyist) with soft-power assistance from, to invariably demonstrate how its commercial offering is the most direct and efficient plan to allay overtly high carbon footprint fears and the likelihood of not reaching 2050 climate change goals.

Thus it seems almost inevitable that Google will argue the point for its more or less full control of a new intra-urban / intra-suburban driverless vehicle system (at first spanning taxis and short-term rentals) so as to “ensure the climate change targets are achieved”.

Though the publicised driverless 'Google Car' was explained as only a rudimentary buggy – suggesting an evolution toward the package of the conventional car – the fact is that such a simply manufactured, lightweight and inexpensive buggy type car (cross-breeding the city-car, mobility scooter and motorshow 'concept pods') is the perfect vehicle type for flexible urban passenger movement.

To this end, given the convincing business case of low cost ((low capex, mid labour) local manufacture, and the highly profitable potential of leased private and public “e-cars” (running probably over e-upgraded, retro-fitted urban roads with per mile or per kilometre tolls), it would appear a commercial imperative that Google would infact seek to 'own the urban road' into the future. Possibly doing so through an array of sub-divisional and joint-venture companies, each providing a specific part of the value chain across the overall whole: from plug-in charge to travel charge.

From a simplistic strategic perspective then, for very good commercial reasons, Google Inc appears to be happily transferring from the information super highway to 'e-enabled' urban byway.

To this end, the driverless car will very probably be more network-intelligent, local parish buggy than conventional car, especially so if Google effectively re-configures the actual streets of a global-wide yet also intrinsically local real world 'Monopoly Board' given the hyper-real, overlaid world-map it has already created.

Monday, 16 June 2014

Macro Level Trends – Modern Capitalism – An Evolutionary 'Mobius' System.

With the present tenor of 'Inclusive Capitalism', the previous weblog questioned as to how the thought leaders of capitalism would be able to re-orientate the western (and global) capitalist structure to appease the mass throng of an increasingly agitated public.

From the demonstrations seen in Rio de Janeiro using the Football World Cup as a publicity platform, to what may be a new 'passive-aggressive' attitudinal stance by many affected as 'non-economic' beings elsewhere (especially the young), the need for a re-balancing of economic fortunes has been well understood by leading economic actors.

That change appears to happening, albeit slowly, a new 'flip-side' to capitalism which promises much.

Thus the system, though ostensibly of fixed philosophical shape with the economic circularity of money at its heart, might be now considered a Mobius System, whereby - as per Euclidean theory – the same directional looped route may be travelled, yet with the in-built ability to swap onto an obverse path.

End of One Era -

In the West and Triad region, with the previous era template between 1948 and 2008 effectively exhausted, perhaps the most important action - indeed arguably the only option open - was the creation of QE, able to notionally “pump” but in actuality 'trickle' new inflationary liquidity into the US, UK, Japan and an awaiting Europe, to counter-act the necessary post-crisis deflation required to compete upon a now much revised global stage.

Whilst such liquidity was indeed pumped into Wall St, The City and Marunouchi / Otemachi - with a planned long-cycle reaction of 'demand pull' underpinning stock, bond and derivatives purchasing (reaching across safe and now even 'junk' instruments), the reality as seen is that the process of feeding broad portions of that liquidity into the real economy is an onerous and time consuming effort.

The financial crash effectively re-configured the financial and operational fundamentals of western business: whether from the balance sheet perspective with high unserviceable debt, a cash-flow basis requiring dramatic overhead reduction, likewise necessary given retracted banking facilities, the reality of postponed client payments (this creating a 'prompt payment discount' effort) and so a “down the line” effect throughout all supply chains.

In essence the after-effects of 2008 could be likened to that of a commercial fitness test for Western and Triad businesses.

That slow process – six years thus far – is very painful for all people directly effected, and people wish to become economically active once again; yet rationality and emotionality must be distinctly separated if new green shoots are to be sustainable.

Western banks have been publicly lambasted by politicians, business commentators and the public for their apparent lackadaisical efforts to channel nationally budgeted 'Lending For Business' monies into the real world.

But to use an agricultural euphemism, if such precious new finance were simply “broadcast into the air” without meaningful commercial assessment of the specific entities involved, it would be a real economic travesty which would raise the spectre of a new crisis in latter years.

Instead the funds must be necessarily “seed drilled' into fertile soil”, with what is effectively new seed money (for all enterprise sizes) targeted at specific businesses which themselves are best operationally attuned to their changed environment or are able to grasp new market opportunities in today's much altered commercial landscape.

Hence, here and now the process of due diligence is more critical and so more detailed than ever before, and given the scale of commercial change at a level never see before. Thus the lengthy time period endured stems from an unfortunate but necessary rehabilitation phase

The same is true for the logical convincing of private equity, sovereign wealth funds, pension and insurance institutional funds, dedicated regional / sector or them fund managers and now even the average person given regulatory moves to improve self-directed financial management.

Today whether fixed-income lender or equity stake-holder, there is a necessary fundamental re-assessment of those contemporary commercial engines which are set to create new value.

In effect, the 2008 to date period could be seen as a parallel to the beginnings of modern capitalism, but with a new egalitarian promise.

Back to the Beginning -

Throughout human history, for good or ill, it seems that the profit motive of gain has been the prime central underlying philosophy. For the most part, the process of civilization thankfully inducing humanity to transform its inter-relationships from the simplistic territorial 'spoils of war' of barbarians, to the somewhat awkward and generally inefficient practice of gifting and bartering to the establishment of ever more meaningful and trusted transactional currencies from about the 6th century BC onward, until today.

The true landmark however came with the instigation of the joint stock-holding company format.

Financial and general historians will no doubt continually debate the finite origins of the concept. Whether it effectively stems from the “Société des Moulins de Bazacle”granary windmills in mid-13th century France, the creation of the “The Company of Merchant Adventurers to New Lands” in England in 1553, Russia's “Muscovy Company” of 1555, England's “East India Company” chartered on the very eve of 1601, or the more commonly associated effort of “The Dutch East India Company” in 1602 as a central pillar of the simultaneously established Amsterdam Stock Exchange in The Netherlands.

[NB the latter seen by most as the foetus of today's global capital markets mechanism, which though viewed by some as in contrast to the edicts of Middle-Eastern 'Sharia' and Asian 'Participatory' Finance, is in actuality very similar, given the sense of mutual ownership and shared effort and responsibility; so negating the abhorrence of “usury money-lending”].

As colonial interests geographically widened so did the very idiom of created, sold and bought shares of a specific company as opportunities apparently arose. In 1606 “The Plymouth Company” was formed, succeeded by “The Virginia Company of London” both of which which sought to settle and reap from new North American ventures, whilst its own associated long excursions south to Caribbean Bermuda became formalised into “The Somers Isles Company”.

Widening the Net... -

Across the core commercial districts of Europe, the Americas and Singapore and Hong Kong, as commercialism appeared to grow exponentially thanks to agricultural imports, innovative industrial applications and because of both slave and cheap labour, so did of course the availability and choice of stock-holding possibilities.

This so for the fortunate (tho' periodically unfortunate) aristocratic elite, a finite upper class and a broader 'upper-middle', as inherited feudal and agricultural wealth alongside newer mercantile wealth was directed to promising commercial ventures.

With a Deeper Trawl -

The very nature of an ever expanding regional stock market dependent upon proof of concept via attractive company dividend payments or capital growth (or indeed both) to an ever broader uptake audience, the expanding range of commercial “projections” targeted at an ever expanding audience who themselves saw the advantages of partial company ownership.

The model was set and has been maintained even through the severe upsets of early “Tulipmania” and the “South Sea Bubble”. Though in fact many lesser known smaller contractions and collapses having greater consequential ripple-effects as the mass middle-classes became ever more entwined. When the life-time savings of 'old maiden aunts' and even whole families were wiped-out the hollowness of such investors' intrinsic remote trust in others, whether family associates or 'professional' advisors, became all too apparent as their middlemens' own remoteness from the true forces within market dynamics was itself experienced.

Nevertheless, even with such horror stories (which exist to this day), as new wealth was generated and accumulated - assisted by both international trade and economy-boosting / national debt-management 'money-printing' – so new opportunities appeared in an ever more complex industrial and consumer society. It was that very complexity, the increasingly separated and additionally created portions of the overall systemic value-chain, serving ever greater volumes of goods and services, which drove value creation.

To the Peak of the Cycle... -

Returning to stock-market realities, as seen investor interests and so share-prices eventually driven beyond sound fundamentals and 'fair value' by the interests of the many, private and professional. Ranging from the entrepreneurial moguls who over-hype their activities in search of investor support (and often personal exits) to desires of the partly informed average person seeking not to become left behind during the pronounced phase of economic expansion, to eventually the cliché of “dead-set” stock tips from the 'in the know' taxi-driver.

...And Renewed Beginnings -

Thus through both rational value-seeking and (ir)rational growth-storytelling aswell as long cycles of fair value from economic growth, plus the inevitable value gains to be had from “irrational exuberance”, the joint-stock company (via exchange) proffers much to the informed and ironically even uninformed (to a point). And with modern capitalism's ever broadened activity realms and deepened global base, thanks to real and virtual technology and humanities' demands for comfort and convenience has itself grown ever more convincing; even if an imperfect economic model.

Whereas the EM regions of old had to be settled, often migrant populated and wearily physically exploited, in the 20th and 21st centuries the foundations of new EM regions are fundamentally established, with their own homeland bourses and increasingly active participation by western multinationals; today seen as the spiritual (and sometimes commercially derived) successors of the initial crop of truly publicly orientated stock-holder firms.

Importantly, whilst stock-markets convey a most vivid image of capitalism and associated wealth via the media's portrayal (from everyday news reports to 'The Wolf of Wall Street' et al), the very same environment obviously serves; even with periodic contractionary dis-service. Most he systemically critical plethora of institutional pension and insurance firms, so as to provide for the future of people's financial needs individually and en mass by way of present liabilities.

But perhaps the more historically meaningful cornerstone – indeed foundation - of capitalism is the endemic notion of private property; that dream arguably more realisable for younger EM populations than for many today in the West.

The Automotive Sector -
As seen, the joint-stock format was well entrenched by the beginning of the automotive age in the late 19th century and early 20th century. Thus many of the early associated new enterprises were spawned from either the direct selling of inaugural private shares in all new start-ups, or by the offering part of a new venture free-float (private and public) from well established industrial firms.

[NB whether they be coach-builders, railway vehicle makers, bicycle and/or motorcycle manufacturing companies or indeed general industrial firms with internal capabilities to enter the new automotive sphere in cars and trucks]

In most instances, as with likes of Ford, the Dodge Brothers, Nash (to a degree), Buick, Durant and Chrysler in the USA private investors (and often investment banks themselves) sought to back specific entrepreneur's who had proffered realisable product and business plans; especially those who had learned along the way in those early days.

Though, as ever, where there was a flood of new money seeking-out promised returns, there was also chicanery, especially toward the enthusiastic but less knowledgeable.

Whether from founders themselves with little more than 'snake oil' propositions or from contriving and conspiratorial board members seeking to either oust the founder or undertake a 'cut and run' through misappropriation of investor's monies. Or indeed consecutive disingenuous behaviour by by those who saw the ongoing possibility of 'sucking dry' monies via successive start-ups and intentional collapses: the accrual of funding...implausibly incurred expenses...operational run-down and ultimately 'fire-sale' liquidation...with for the most ardent, the possibility of re-purchasing the bust firm's assets at heavy discount to re-run the entire money-grabbing and money-shifting ploy all over again with a new founder, a new set of enthusiastic investors, a new set (or indeed previous set) of employees.

The Era of Auto-Investment Stability -

By the 1930s there had been a great shake-out of the once nascent and volatile automotive sector, both in North America and Europe. The era of mass mobility had begun and the stratification of the general market had become increasingly marked, between a basic functional device (Model T) and a luxury status symbol (Hispano-Suiza) with a myriad of product levels between.

Post WW2 businesses improved yet more with the likes of “Whiz Kid” executives applying considered knowledge, so serving their customers demands whilst operating more efficiently, and generating new profit margin improving offerings via specifically applied technical and specification progress to gain model-line differentiation upon a 'next model year' basis, whilst simultaneously driving volumes and scale efficiencies through consumer credit and optimised common-part engineering dictums.

This golden age spanning post-depression 1934 to 1973 unsurprisingly served automotive stock-holders very well indeed, with the purchase of additional stock at depressed prices in 1940/41 all the way through to the Middle-East induced Oil Crisis, which itself actually spurred well aligned European and Japanese auto-stocks.

Social and Competitive Disruptions -

For various western auto-producers, and their auto-stock holders, the 1970s was value destructive. A a combination of the macro-effects of the oil shock upon regional economies, ever growing inflation vis a vis productivity declines generated 'stagflation', with the reduction of real earnings for many employees (especially in old industrial sectors) creating unrest and so the rise of union disruption.

As seen by Chrysler's collapse and Chapter 11 re-emergence, and by British Leyland's demise, dissection and divestment, the late 1970s and early 1980s were troublesome times for the old guard auto-players, their previous thunder stolen by the market relevance of ever improved Japanese vehicles still buoyed by a strengthened but still relatively weak Yen.

As Toyota retaught GM how to build some of its own re-skinned and re-badged models and generally improved cars at the Californian NUMMI plant, and Honda did likewise for its 'alliance-partner' Rover at Swindon in S.W. England, those auto-investors who had recognised Japan's constantly improving potential did well thanks to the ongoing climb in both domestic and western market sales, the slow strengthening of the Yen and the strong annual land asset-base re-valuations in Japan.

Into Another Boom -
The mid 1980s once again saw new economic traction in the west as the overt 1970s Keynesian governmental spending (criticised as “voodoo economics”) was reigned-in under the guise of 'Reaganomics' in the USA and 'Thatcherism' in the UK. Whatever the nomenclature, the pro-markets stance enabled by financial deregulation such as the 'Big Bang' in London, the ongoing de-nationalisation of industry and conversion of building societies into fully-fledged banks prompted a new investment and economic boom, most profoundly experienced in the price surge of all classes of property.

The automotive icon of the age was the BMW 3-series (E30), the vehicle which essentially made BMW the company it is today. It was viewed as the embodiment of “European chic” by American East Coast Manhattenites and Bostonians, the intentional intellectual opposite in size, weight and quality to Detroit's offerings. That highly influential 'Ivy League' favouritism spread demand westwards and eastwards across the Atlantic into the UK and Europe, and the little BMW – not Porsche (as forever quoted) – actually defined that period and long after by the size of its adoption. Whilst Europe's own parallel epicentre trend came with the second generation VW Golf GTI (1G/A2).

The 1990-91 Gulf War stifled overall growth, with what is in retrospect an over-reaction upon the broad economy, but did manage to calm both stock and property speculation. However by 1994 western economies had regained strength and with it a further relaxation of credit availability.
The undoubted reflective icon of this period was aimed at the American masses, with broad demand for the pick-up truck based SUV, seen with the Ford Explorer (and later bigger Expedition sibling) and Chevrolet Tahoe and (9th generation Suburban).

In the land where historically for the 'Average Joe' “Bigger is Better” since it is seen as a mark of social success, along with the viewed safety perceptions of SUVs, the 1990s and early/mid 2000s were an undoubted boom period for Detroit, even through 9/11...right up to 2008.

Consequences of Financial Avarice -

However, as has been felt so harshly, the American (and latter European) public and indeed business had been riding an ever inflating self-serving credit bubble, one which itself allowed for overt financial machinations and scandals such as ENRON. But it was not just bankers who were “dancing whilst the music was playing”.

Whilst many were culpable of creating and disseminating ever more "toxic" CDOs based upon associated phantom mortgages, it should be noted that the seemingly never-ending party also amongst the 'Average Joe' grew the popularity of property equity withdrawals, so as to buy ever more profligate fashion and leisure orientated consumer goods, including of course the car.

Onward Again, From Here to Eternity -

The obvious irony being that presently, whilst EM countries themselves go through the economic spasms of internal reform so as to regain lost competitive regionally and globally, even after the melt-down of 2008 and slow re-build to date, the USA retains its power if not strangle-hold) on capitalism.

If Wall Street never sleeps, then capitalism never stops.

Presently investment-auto-motives views the new renaissance of capitalism as standing upon three apparent pillars:

1. Re-Construction of the 'Old' Physical Economy 
2. Continued Construction of the Cyber Economy 
3. Merging of 1 and 2 within 'Augmented Reality'

The former consists of those companies which though battle-scarred have survived the after-effects of 2008. Of what ever size, multi-national to national SME to one-man-band, these are enterprises which – typically through conservative attitudes, business methods and much pain - have been able to endure in core socio-economic B2B and B2C sectors. In various cases able to seize the moment with efforts to grow through the acquisition of weaker competitors.

The latter is of course related to the advent of the net-connected, cyber-age whereby the dual aspects of both increasing productive connectivity through the growing 'internet of things' and personal and group 'augmented reality' offers wholly new realms of enterprise and investment opportunity; now being explored and tested by many in the California's 'Silicon Valley', London's 'Silicon Roundabout' and various other IT hubs around the world. It is recognised that much is simply on-line behavioural alignment via ever more screen-based enablers; such as the branded smartphone app which replaces the local restaurant's junk-mail menu and the once required telephone call to order delivered take-away food.

But it is the promise of the ability to increasingly and seamlessly merge these two physical and cyber-worlds through the 'internet of things' which then provides for yet further advancement of what may be termed neo-capitalism.

The New “Merged World” -

Efforts such as the recently availed autonomous 'Google Car' set the direction and tone behind the efforts to establish neo-capitalism.

Such innovation seeks to become far more than technology disruptors. Hence the perceived psuedo-prophetic words from the likes of Bill Gates, (the late) Steve Jobs, Jeff Bezos, Larry Page et al; individuals with access to so much money, the process of capitalism puts the power of socio-economic change directly into their hands. 

This now well entrenched technocracy seeks to proffer major social and behavioral change. In the case of the Google Car adding to personal productivity levels and transport safety. 

The consequential argument is that much of today's physical, man-made, infrastructural environment will demand a massive scale of re-modernisation; especially so in western lands which largely originate from the late 19th and early 20th centuries. The fundamentals of our immediate city-scape environment will need cosmetically subtly but nonetheless powerful alteration so as to itself “enable the e-enablers”. The world around us substantially re-imagined and re-configured.

The Take Away -

The gold rush times of the 19th century saw hoards of people chase the promise of the next big gold strike, but the real immediate and long-lasting was gained from those individuals and joint-stock companies which were able to sell the specifically required items to the hoards of gold-panners and gold-miner, aswell as offering the aligned commercial and respite services sought.

There will undoubtedly be many more rich strikes within the still burgeoning e-economy, amongst the plethora of 'modern-day miners' of BitCoin extraction and elsewhere.

Yet equally so, it looks to be those real-world re-alignment opportunities that provide greater prospects.

Paradoxically the original ancestors of today's joint stock shareholders had to fund very risky but potentially lucrative ventures to far-flung destinations. But today, the veritable hold of mankind over his ever more self-created world and domain means that value prospecting and achievement should be theoretically far more attainable, if one can avoid the 'fool's gold'.

To End -

The promise of a Mobius-like 'Inclusive' Capitalism which maintains its directed progress along an obverse path is compelling; exactly how it pans out remains to be seen in future years.

But what is equally compelling is the manner by which capitalism itself is directed, and from a simple “macro-tech” overview of points 1,2 and 3, twenty-first century western (and global) "neo-capitalism” appears a truly powerful phoenix.  

Monday, 2 June 2014

Macro Level Trends – Capitalism Revisited – Platters of Platitudes or True Re-Imagination

Tuesday 27th May saw various power-brokers and thought leaders from across a wide spectrum meet at The Lord Mayor's Mansion House and The Guildhall (here in London) to discuss the role of global capitalism into tomorrow.

The event named “Inclusive Capitalism” is the support event to 'ICI' (the Inclusive Capitalism Institute) a non-profit organisation which seeks practical ways to “renew capitalism as an engine of economic opportunity and shared prosperity”.

A broad international array of speakers and attendees participated, spanning: British royalty, an ex US president, seniors from the IMF, BoE, SWFs, consulting groups, academia, varies types of large finance houses (retail banking, institutionals and investment banking), holding companies, sector specific corporations, trade union umbrella bodies, national and regional governments and financial press; all hosted by the current Lord Mayor.

The Re-Emerged Right vs Left Debate -

The heart of the global establishment invariably stands centre-right within the political spectrum. Necessarily so as to effectively purport the advantages of capitalism, which though noted by Winston Churchill as structurally imperfect, has largely submerged communism (and the threat of world wars), and which even after the 2008 financial crisis is still seen as the singular pathway remaining for humanity's progress.

It has largely proven itself as a system for improving the lives of the impoverished, even if today for the mass of the western middle-classes the model itself has either stalled. That the establishment does indeed seek to re-energise profit-making is the logical panacea, since prosperity is the 'naturally correlated' (ie free-market) outcome of ever more economically integrated human activity. Capitalism offers the many to participate in various forms, most notably as employees, or as entrepreneurs and both directly and indirectly within the stock market, itself acting as a key instrument in the allocation of funds and thereby dedicated human effort. Yet this same establishment also recognises the need to provide financial stability and improved socio-economic input from presently disenfranchised western economic beings.

Uninvited naysayers – who range across the remnants of the left-leaning 'occupy movement' (with its overtly propagandist slogan “we are the 99%”) to fully entrenched life-long socialists to the poor working class through to the growing non-WASP ethnic-minority groups - will undoubtedly publicly or privately highlight their viewpoint. That no matter how seemingly socially acceptable representatives of 'power families' appear – primarily the Windsor royals (nee Sax-Co-burg, nee Witten) and Rothschild (historically closely allied to European royals) – the same old power structure remains.

Many of these groups have either intellectually arrived, or led, to the conclusion that capitalism is little more than a conspiratorial 'smoke and mirrors' socio-economic system, consisting of a closely orchestrated banking-political-military-industrial-media mechanism to push the Judo-Christian 'western agenda' so as to gain worldwide power. All to the detriment of the masses. This conference then little more than a staged play, or at best soon to be forgotten 'lip-service', designed to placate the now disenfranchised broad masses (from old senior managers to young graduates). All so that the 'squeeze 'em dry' process can re-start in a more amenable guise to entrance the marginalised worker. But that any future gain of the average individual will once again be comparatively minuscule given the realities of 'the western condition' compared to the worldwide reach of the profiteers.

Reality of the Shattered Middle Ground -

As with most oppositional stances, any rational concept of an optimal, morally legitimate, position lays somewhere in the middle ground. Somewhere between the hyper-competitive right to the hyper-idealistic left, in which a natural equilibrium of effort and reward is achievable on personal and social levels.

A sound and functioning middle-ground, devoid of the ill-will and surreptitious guerilla machinations that actually goes on in supposed civil society as people strive to better their lot.

Yet what is true – far from such Mansion House meetings of very the hard-working but highly rewarded, highly cosseted and often very 'removed' - is the fact that the average (wo)man who was once stereotyped as riding upon the “Clapham Omnibus” now seethes about the fact that not only can he/she not afford to live in suburban districts (such as the 're-gentrified' Clapham), but that increasingly he/she cannot afford to live in those areas to which in the past have been viewed as socially improving, aesthetically pleasing and so educationally character-building.

Furthermore, many others are physically trapped, and so very psychologically constrained, by the fact that they cannot even afford to take public transport, so become geographically contained within what appears to them to be an evil intention of 'top-down' social engineering.

This the British, European and American reality today, in which the long-term personal experiences for millions demonstrate what is viewed as an innately immoral unfairness to modern society. The worst aspects of which lays well under the socio-political radar, and only surface through anti-votes such as that seen in Britain with UKIP.

That financial frustration has a tremendous impact upon all facets of a person's life, yet paradoxically the resulting frustration and anger is more often than not masked beneath the increasingly thin veneer of 'social-normality', so creating internal turmoil. This effects people of whichever ethnic background, but at least typically closely knit minorities tend to have social cohesion and mutual support.

Whereas ironically, social disenfranchisement (and long term alienation) has perhaps become especially pertinent for portions of the indigenous middle-class; those who were brought-up on the specific edicts of education, hard-work and deferred pleasure for a better tomorrow.

The trouble is that this deferral now appears ever-lasting, the promised pleasure foregone. Especially true for what may be termed the middle-class intelligentsia, far beyond the walls of academia, themselves long betrayed as important but under-appreciated component parts of capitalism, but upon whose specific and generalist knowledge progress relies.

A strong middle, which acts as a central hub of stability for society, can only exist where there is general social cohesion, even if not respect or warmth, across the three seemingly everlasting class levels. But the middle itself is now viewed as a shattered ideology from a notional golden yesteryear which in retrospect itself for appears somewhat of an illusion.

Ultimately, yet another part of the western post-modern 'grande-narrative' lost and awaiting, if possible, foundational re-building.

Fundamental Issues -

The prime concerns for much of the west are:

- Income Levels: wide inequalities and inconsistencies
- Industry: divestment and collapse of various mid-value industries
- Industry: loss of associated knowledge (R&D to hands-on)
- Regional: disparities as a consequence of regional 'vacuum'
- FDI: partly replaced by foreign interests over past 30 years
- Policy: partly replaced by debt-funded 'phantom' employment
(eg public-sector, charities and NGO employment)
- New Vacuum: resulting from necessary 'phantom' de-staffing.
- Population: economically, rationally and emotionally disenfranchised by “the system”
- Education: need to question various structures, methods and practices
- Education: need to question of many participant's personal dedication
- Policy: transitional process from education toward employment / entrepreneurism
- Commerce: proportionate imbalance even within services sector.
- Commerce: proportionate imbalance of high value research
- Commerce: proportionate imbalance of high value manufacturing
- Social: return of personal privacy (a now eroded endemic human right)
- Economic: true “Capitalist Renaissance” vs Managed “Proto-Socialist” Decline
- Leadership: corporations as de facto emergent global powers
- Leadership: corporate autocracy vs corporate social responsibility.

These just a few elements of the transitional process in 'western future-forming'.

Reduced 'High-Value' Western Contribution -

Whilst the west obviously maintains various advantageous 'high-value' capabilities which lead the world, it is perceived that this portion of economic contribution may well have remained flat or even declined over the last three decades in proportion to the actual broad economic whole of everyday activities undertaken by western countries.

Two factors appear to have made this the case, when supposedly better education and training for an expanded mass of participants should have been raising the 'high-value capabilities' of western states.

Firstly, the overt economic boom period existing largely between 1985 and 2008. This credit-fuelled, property-price driven 'party' induced overt wage-price inflation as a partial consequence of financial deregulation. Though seemingly rational upon an introspective pan western regional basis it arguably over-inflated the true participatory value of many mainstay activities; ranging from brick-layer to PA to dentist. Whilst the housing boom (even including periodic 1992, 1999, 2001 contractions) invariably through the demand-pull of housing credit effectively lifted the income of the masses, it also served to starve funds from more truly rational and value-adding science and innovation and efforts; with perhaps only the special relationship between Silicon Valley and Wall Street gaining true support and momentum. Other countries efforts too little too late in comparison.

Also, very probably the case that potentially 'high-value' activities that had been associated with those mid-value industrial sectors either “hollowed-out” or divested to EM buyers, were ostensibly lost, aside from very specific, narrow academic explorations.

Keeping it in the EM Family” -

The last twenty-five years have witnessed many EM nations individually and collectively undertake a veritable economic leap-frog into a truly new era. Not just toward economic, technological, social and political modernity (though many millions are still yet to gain) but with it the sense of truly redressing the age-old notion of international inequality vis a vis the west. The G20, EM trade pacts and academic and industrial alliances illustrate the efforts for 'global reform'.

However, the recognised reality for the west is that its once broad and deep semi-controlling connections to the slowed but still growing EM nations, whilst in tact appear increasingly weak, as EM leaders co-create with each-other utilising modern principles and technologies previously gained from western corporations; the re-nationalisation of Venezuelan oil a prime example.

Because of the very size of EM populations and the rise in standards still to be provided for many, it may be the case that having imported much knowledge and technology over the last decade, that the economic value to be created and extracted, will be done so internally within EM nations; especially so now that many countries must shift from investment-led growth (naturally aligned to foreign joint ventures to capture modern plant and offer quality goods) toward internal consumer-led growth (the majority of the spoils expectedly retained domestically).

So whilst the west promotes its role of high-value services and manufacturing, and its role regards global environmental guardianship, the disturbing fact could be that western participation within the global whole actually diminishes.

This was seen previously as ex-colonial nations such as India in the mid 1960s bought-in western know-how and previous generation technology (eg Austin Oxfords and Fiat 1100 cars and taxis. Those same vehicles were manufactured with only small changes and utilised in society on the for many decades as the Indian firms producing the cars gained strong profits on a captive markets.

Whilst this era of specific market protectionism and internal exploitation of such domestic markets is no longer the case - with most EM nations seeking to lower tariff barriers to enable cross border trade and so nurture their own strong competitive capabilities - such 'mutual inwardism' does obviously serve the vested co-interests of specific regions. Thus such complementary intra-trading and manufacturing scenarios formed officially or unofficially, and already a stark reality across SE Asia and South America, even with efforts such as the US's Pacific Pact, could well lead to the ongoing erosion of western influence, trade enablement and so western wealth creation.

Thus then another well recognised, but unstated concern, amongst the corporate leaders and bankers attending the Inclusive Capitalism conference.

If indeed (heaven forbid) today's well inter-connected global world of trade does indeed not further integrate, but disintegrates across 'new-power' vs 'old-power' regional lines (not ideological lines); then the west will be forced to rely ever more upon its presently disenfranchised peoples.

Starting Over via “ICI”-

Importantly, the western establishment well recognises the need to address ongoing mass populace dissatisfaction. Obviously no coincidence that this seminar has been run during what appear the first stages of economic renewal, the financial markets massively buoyed by QE but awaiting the intrinsic true economic traction or the real economy.

Using the the acronym “ICI” is seemingly a subtle attempt to regenerate examples of past success and capture broader cultural diversity.

It has knowing cognitive association to the yesteryear UK chemicals (and multi-play) company which both innovated, created value and spread worldwide wealth from its homeland roots, during its era as a progressive conglomerate player it was admired as a force for good, both operationally with the likes of strong research base and best practice methodologies, and for spreading wealth across diverse local industrial and agricultural communities as far apart as NW England and rural India. And for the older generation refers to the crop of yesteryear 'good eggs' such as its ex-head Sir John Harvey-Jones.

ICI” also is the acronym for a number of culturally influential associated bodies, such as the 'Islamic Counter-Terrorism Institute', 'International Compaq with Iraq', ' Istanbul Cooperation Initiative', 'Institute of Cultural Inquiry', 'Institute for Competitive Intelligence', 'Institute of Cooperation of South America' and the 'Investment Company Institute' of America).

[NB Conspiracy theorists will also cite the 'International Commission on Illumination', as pertaining to association with (the supposedly all powerful) “illuminati”].

The “Inclusive Capitalism” Agenda -

As seen “ICI” seeks to both find alternative methods by which to remould capitalism, principally to be seen as more 'new age' responsible and in doing so eliciting greater 'fresh thinking'.

In essence the grand mission is for major investors of whichever ilk (pension funds to hedge funds to private equity) to ensure that all attendees, but perhaps especially so the executive and management teams of individual corporations and firms, recognise the need to re-mould capitalism as a force for good.

Thus the notion is that of an extended CSR , across what investment-auto-motives terms a “3-D perspective”. Encompassing consideration of those critical macro, micro and time-line issues across:

1. Macro – greater cohesion and clarity within global economic frameworks, geographies and demographics ...(on what investment-auto-motives terms the 'vertical plane' of today)

2. Micro – strengthened cohesion of critical commercial ties from initial project assessment and investment through various stages and phases to 'end of life' value re-capture...(the 'diagonal plane')

3. 'Chrono'- logical – increased consideration of cause and effects upon future generations and people's into the distant future...(the 'horizontal plane'...literally the 'chrono-logical').

The forum the idea of creating a more intelligent and conscientious economic culture, with as vital input, an understanding of how the successful socio-economic case studies of Germany and Nordic countries can possibly create platforms for renewed western economic systems.

Thereby promoting a greater sense of inclusive capitalism.

Main speakers at the IC forum naturally reverberated the same sentiment – it was after all a talking shop for that very cause – but there were other more esoteric takes.

At its most extreme, as purported by economist Jeremy Rifkin, this sees an emergence of 'near zero marginal cost' enablers, primarily via the “precipitating agent” of the internet, which powers massive productivity gains.

This connectivity so moulding a mentality of a “new sharing economy”.

Critics of such a future would call such a world little more than psuedo-communism given a capitalist slant. With no or little financial gain for the contributors / sharers; in effect a multitude of no or low pay 'cottage industry participants', increasingly over the global level as cyber-space becomes increasingly dominant.

Thus this supposed new form of 'turbo-capitalism' instead reflective of the low marginal costs which underpinned the USSR's ideology, and which eventually sapped people's enthusiasm and energies so stagnating socio-economic progress.

Those who are historically attuned will well recognise the parallel the west has today with that of Eastern Europe a century ago, whereby the once prosperous Prussian lands and Austro-Hungarian empire entered a socio-economic tipping-point into disarray and eventually communism once its capital saw new opportunities further afield in Western Europe and North America.

A concept too far?

The social dynamic of even London today appears that way.

At times with its mass cycling, the influence of the smart-phone as a tool to socially influence the screen-fixed, often unthinking “easily-led” amongst both the hooded and huddled increasingly tribal youth and the 'cyber-grouped' middle-aged. Plus especially the effects of a camara-phone wielding antagonistic society which (akin to stasi informers), means that London and elsewhere appears to mimic the worst aspects of the communist years in Warsaw, Budapest and Belgrade.

The “ICI'” Influence -

To add basic insight of the meetings apparent importance, the BBC states that when combined the financial fire-power of the attendees adds up to $30 trillion; approximately one-third of the world's investable assets.

To highlight the once prevalent power of the industry as a force for good, the IC forum's sponsors include the Ford Foundation, established by Edsel Ford in 1936 but long since separated from the auto-corporate. Given its long-standing social influence it inevitably has close ties to the US government, and obviously seeks to promote the USA's the soft-power hopes within the 21st century.

Reviewing the Structure of Capitalism -

Here investment-auto-motives posits that one and all should start to consider the very 'bones of capitalism', so as to better understand the often nebulous ideology which moulds our society.

What was previously termed western capitalism, now global capitalism, is a complex system of interactions, both individually within and symbiotically.

Actions and reactions plying across the four notionally distinct worlds of 'financial services', 'main street' (both physical and cyber economies), the 'socio-political' all set within the broad context of the 'inter-geo-political'.

These realms act upon each-other in a myriad of inter-relationships, individually with domino-effect upon neighbour, and collectively during strong winds of positive or negative change and so outlook.

However, with regard to investment decision-making,the constant 'investor' perspective is the interpretation of a specific market's innate dynamic.

This consists of: available liquidity vs price vs perceived value.

Very simplistically, it appears that necessarily so, the historical process of capitalism is that of a process of ever fragmenting and more detailed commercial activities set within an ever growing volume of challenges/opportunities on a per head demand; valuation driven by the apparent “scarcity or balance of resources”.

Thus, expectedly so, the nexus of Adam Smith's and Robert Malthus' theorems which underlay “the dismal science” which it turn compels investment thinking toward the satisfaction and creation of demand and supply.

A Final Pause For Thought -

The staging of the IC conference is highly positive.

However, the citing of exemplar cases present and past invokes the idea of an easily achievable goal, when the restrictions and expectations of the real world will make any such journey harder than expected.

The 'guiding light' countries of Norway, Sweden, Finland and Germany are socially, culturally and structurally very different creatures to the likes of Britain, the USA or much of Southern Europe. Northern Europe's evolution into mutually inclusive, fair, modern societies stem from many reasons and critically core value systems which at heart have intrinsic central identity systems.

Likewise, 'guiding light' businesses such as Britain's John Lewis Group (which is ostensibly employee owned, and so provides for group participation and motivation) because of its self-determination, tends to better withstand economic recession given the willingness of staff to align to management's requirements. Critics will say that reliant upon recycled free-cash-flows and fixed income debt notes, such firms invariably operate as self-serving 'clubs', and are effectively closed to major structural reforms that would boost operational efficiencies and profits, and being remote from the accessible realm of publicly quoted stock markets, in good economic periods, act instead as an eventual constraints on true value creation for broader society.

Furthermore, there are those who view today's times as a modern-day parallel to the socio-economic climate which gave rise to the historic origins of the 19th century cooperative societies. If Wall Street and The City and the network of nation-wide big businesses cannot be trusted to best serve the people, then time to create new cooperatives; to philosophically replace the morally defunct Co-op, itself largely subsumed by 'Mammon'; and undermined by its sloth-like historic executive structure wholly unsuited to a very much changed operational environment from its yesteryear heyday. Such highly valuable social enterprises were born from the need for workers to escape the local foodstuffs and goods monopolies of local robber barons, and did indeed bring far greater fairness in local trade, wider availability of choices and so life-style improvement for the many who joined such co-ops. But today (with very few rural exceptions) no local monopolist rules the conditions of local trade, and instead hyper-competition such as the 99p shop, the £1 shop and Dollar stores providing exceptional value for basic goods compared to only twenty years ago thanks to imported goods and globalisation. No new local co-op start-up could hope to match such purchasing and distributing power, unless much finance was injected into such a national campaign

Exactly how to re-shape the primary activities and outcomes of capitalism, so as to still promote proportionate endeavour and reward, yet also ensure that those in need are better served, is an age old dilemma.

Whilst the 'guiding light' cases do offer partial assistance, western capitalism (beyond the 'Valley' and 'Street') and guided by past political will, has already demonstrated its lost opportunity to create the type of and level of 'high value' activities, supported by well educated peoples, needed to maintain its role within the concept of global capitalism, itself increasingly influenced by EM capitalism.

This watershed could make for great change

But any simplistic notion of philosophically and practicably stepping onward from the seeming mass notion of capitalism as an unfairly tilted, 'zero-sum' game (with sharply contrasting winners and losers) toward some kind of truly even 'Nash equilibrium' (wherein all gain from rational choices), is ultimately a fatuous hope.

It would be little more than a farce if the IC forum were seen to offer such an outcome. It well recognises the complexities of capitalism and its participants across the social spectrum.

Platters of platitudes ? No.
True re-Imagination ? No

As ever, case of “ongoing work in progress”.