Posts Tagged ‘business’
“Corporation: An ingenious device for obtaining profit without individual responsibility”*…
Take a look at any given corporation’s registration docs, and there’s a good shot you’ll see the address 1209 North Orange Street.
Spanning less than a city block in Wilmington, Delaware, this nondescript office building is the official incorporation address of 285k+ companies from all over the world.
On the surface, there’s no reason that Delaware — home to blue hens and Civil War monuments — should be a corporate paradise. It’s the second smallest state in America, and the 6th least populous, with just 986k residents.
Yet, nearly 1.5m businesses from all over the world are incorporated there, including 68% of all Fortune 500 firms. Among them:
In the early 19th century, every company had to be incorporated (legally established) in the state where they conducted business — and beholden to that state’s tax codes.
Post-Industrialization, huge firms like Standard Oil and the Whiskey Trust began to consolidate fractured markets. To combat this, many states set up laws aimed at regulating monopolies through heavy taxation.
But New Jersey saw an opportunity to cater to industry.
In 1891, the Garden State adopted an extremely generous corporate tax law that “would allow business to do as business pleases.” By incorporating there, a company based in another state could save big on taxes and enjoy perks like unlimited market expansion.
A flood of conglomerates took up this offer and New Jersey earned so much from taxes that it was able to pay off its entire state debt.
Pressured to incentivize businesses to stay, other states offered their own lenient corporate tax policies.
In this so-called “race to the bottom,” Delaware emerged victorious.
Adopted in 1899, the Delaware General Corporation Law “reduced restrictions upon corporate action to a minimum” and promised to maintain the most hospitable business enclave in the nation — a place where corporations could frolic in the open fields of capitalism, unencumbered by income tax, bureaucratic policing, and shareholder litigation.
In the ensuing decades, many other states (including New Jersey) reneged a bit on their corporate leniency.
But Delaware didn’t peel back.
Today, the state is still the incorporation zone of choice for corporations. The climate is so favorable that even international firms seek respite there.
What exactly makes Delaware so enticing?
Nearly 1.5m companies are incorporated in one of America’s smallest states; find out why at: “Why Delaware is the sexiest place in America to incorporate a company.”
* Ambrose Bierce, The Devil’s Dictionary
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As we peek behind the veil, we might recall that it was on this date in 1939 that John Steinbeck’s The Grapes of Wrath was published. The story of the Joads, a poor family of tenant farmers driven from their Oklahoma home by drought, agricultural industry changes, and bank foreclosures forcing tenant farmers out of work. Fleeing the Dust Bowl, the Joads set out, with thousands of other “Okies,” for California, seeking jobs, land, dignity, and a future.
The date was timely: four years earlier– on “Black Sunday,” this date in 1935– one of the most devastating storms of the 1930s Dust Bowl era kicked up clouds of millions of tons of dirt and dust so dense and dark that some eyewitnesses believed the world was coming to an end.
The term “dust bowl” was reportedly coined by a reporter in the mid-1930s and referred to the plains of western Kansas, southeastern Colorado, the panhandles of Texas and Oklahoma, and northeastern New Mexico. By the early 1930s, the grassy plains of this region had been over-plowed by farmers and overgrazed by cattle and sheep. The resulting soil erosion, combined with an eight-year drought which began in 1931, created a dire situation for farmers and ranchers. Crops and businesses failed and an increasing number of dust storms made people and animals sick. Many residents fled the region in search of work in other states such as California (as chronicled in books including John Steinbeck s The Grapes of Wrath), and those who remained behind struggled to support themselves…
source
“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”*…
In the U.S., more than $250 billion a year is spent on advertising; globally, the figure is more than half a trillion dollars. So, it would seem there’s a basic question worth asking: does all that advertising actually work? The ad industry swears by its efficacy — but a massive new study tells a different story…
Have you ever been puzzled by something that’s supposed to be true, but you didn’t quite believe it — and you didn’t have the evidence to challenge it? But then, one day, the evidence appears! Today is that day. From Freakonomics (@Freakonomics), “Does Advertising Actually Work?“
The link above is to Part One, which focuses on television advertising; for a look at the new sheriff in town, digital advertising, see Part Two.
* John Wanamaker, pioneer of the modern department store and gifted merchant and marketer who helped define the modern consumer era
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As we ponder persuasion, we might note that, history would suggest that some advertising has worked even better than expected; case in point: on this date in 1959 the Barbie doll was introduced (at the American Toy Fair in New York). Ruth Handler (co-founder, with her husband, of Mattel), created Barbie as an “aspirational” (i.e., grown up) alternative to baby dolls. She adapted Barbie from a German doll, Lilli, which was based on a German cartoon strip– and which was sold as a “racy” item, primary to men in tobacco stores… Amped via Mattel’s sponsorship of The Mickey Mouse Club (Mattel was the first toy company to use television advertising), the figurine was a huge smash…and was followed by Midge, Skipper, and– enfranchising a set of men perhaps beyond those who felt bereft when Lilli became Barbie– Ken.
“Gain not base gains; base gains are the same as losses”*…
When inventor Frederick Banting discovered insulin in 1921, he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save lives. Banting’s co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1. They wanted everyone who needed their medication to be able to afford it. [see here]
Today, Banting and his colleagues would be spinning in their graves: Their drug, which many of the 30 million Americans with diabetes rely on, has become the poster child for pharmaceutical price gouging.
The cost of the four most popular types of insulin has tripled over the past decade, and the out-of-pocket prescription costs patients now face have doubled. By 2016, the average price per month rose to $450 — and costs continue to rise, so much so that as many as one in four people with diabetes are now skimping on or skipping lifesaving doses…
Why Americans ration a drug discovered– and given free to the world– in the 1920s: “The absurdly high cost of insulin, explained.”
* Hesiod (See also Proverbs 28:20: “he that maketh haste to be rich shall not be innocent”)
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As we ponder pleonexia, we might send healing birthday greetings to Edward Lawrie Tatum; he was born on this date in 1909. A geneticist, he shared half of the Nobel Prize in Physiology or Medicine in 1958 with George Beadle for showing that genes control individual steps in metabolism. During World War II, his work was of use in maximizing penicillin production, and it has also made possible the introduction of new methods for assaying vitamins and amino acids in foods and tissues. Tatum and Joshua Lederberg (the winner of the other half of the 1958 Nobel award), discovered genetic recombination in bacteria.
His discoveries were made freely available to the scientific community.
“You don’t win friends with salad”*…
The best meal I had all pandemic cost $1.14 and took about 90 seconds to make. It was a Margherita pizza inhaled in the car on a desolate day in late April. I know the precise cost because my husband is the chef who made it: 61 cents for a few slices of fresh buffalo mozzarella, 24 cents for the San Marzano tomatoes and salt, a quarter for enough basil leaves to supply the rest of the menu’s needs for free, and just 11 cents for the dough, made from a mix of top-shelf imported Italian flours. In normal times, his restaurant sold a Margherita for $20, but he could get away with selling it for $10 and still reach 10% food cost.
We are a nation in the throes of an unprecedented eight-month pizza binge that shows no signs of abating. Multiple pizzerias in Los Angeles reported a 250% rise in sales on Election Day, and on Thursday, Papa John’s reported quarterly same-store sales growth of 23.8%. For months now, the underlying forces for the sustained pizza craze have been as hotly debated within the restaurant industry as the election results have been parsed by professional pollsters. Stress eating is a major cause; quarantine-induced failure of imagination and the return of three major-league sports within weeks of one another over the summer certainly didn’t hurt.
But the actual reason that doesn’t get nearly enough notice is that pizza is one of the few genres of food that is actually more profitable than — and almost as addictive as — booze. Fries and fried chicken — not wings, but tenders and drumsticks — are the only other foods that come close. If that reminds you at all of the suggestions that await you on Grubhub and Uber Eats, well, that’s what’s left of the menu when restaurants lose their alcohol sales and are forced to fork over a third of their gross revenues to delivery app commissions. There are not a lot of foods where taste collides so perfectly with profit: Pizza stands alone…
But times are nothing if not desperate, and the financial case for making a pivot to pizza is anything but ambiguous. Tens of thousands of independent restaurants have closed permanently since March, but independent pizzerias listed on the delivery app Slice have seen sales grow 60%. The chain Marco’s Pizza, which just opened its 1,000th location, in Kissimmee, Florida, has seen sales surge roughly 50% every week since mid-April, according to the consumer data analytics firm Sense360. The pandemic has even breathed new life into the forgotten Pizza Hut chain, which reported a 9% rise in U.S. same-store sales last quarter despite the July bankruptcy of its debt-saddled biggest franchisee, NPC International — which said in a filing that its Pizza Hut division’s 2020 earnings (before interest, taxes, depreciation, and amortization) had exceeded its internal forecasts by a factor of eight. And mediocre pizza behemoth Domino’s, which was starting from a much higher base after reporting 38 consecutive quarters of same-store sales growth, reported a 16% uptick in same-store sales in its second quarter.
The losing side of this stark new restaurant reality is a virtually endless list, but the unequivocal biggest loser has been the so-called $15 salad genre embodied by the fast-food cum tech unicorn Sweetgreen, which recently announced it would be laying off 20% of its corporate staff in its second round of post-outbreak job cuts. Hard numbers on this mostly privately held category, which includes Chopt Creative Salads, Just Salad, Fresh & Co, and True Food Kitchen — all of which have at one point been hailed as the “next Sweetgreen” — were easier to come by in more prosperous times, but the few out there are ugly. Sweetgreen sales fell about 60% during the eight weeks after the first shutdowns, according to Sense360, and the one publicly traded chain in the salad business, Toronto’s Freshii, reported a 51.4% plunge in its second-quarter sales…
Learn how pizza won the pandemic—and Sweetgreen got left behind: “The Death of the $15 Salad.”
* Homer Simpson
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As we savor a slice, we might send well-preserved birthday greetings to the man who was ultimately responsible for that getting that especially- delicious tomato sauce to your pizzeria: Nicolas Appert; he was born on this date in 1749. A confectioner and inventor, he is known as “the father of canning.”
In 1795, Napoleon, who famously understood that an army travels on its stomach, had offered a prize of 12,000 francs for a method of preserving food and transporting it to its armies. Appert, who worked 14 years to perfect a method of storing food in sterilized glass containers, won the award in 1810.
Interestingly, that same year (1810), Appert’s friend and agent, Peter Durand, took the invention to the other side. He switched the medium from glass to metal and presented it to Napoleon’s enemies, the British– scoring a patent (No. 3372) from King George for the preservation of food in metal (and glass and pottery) containers… the tin can.
“The heart and soul of the company is creativity”*…
Creativity doesn’t have a deep history. The Oxford English Dictionary records just a single usage of the word in the 17th century, and it’s religious: ‘In Creation, we have God and his Creativity.’ Then, scarcely anything until the 1920s – quasi-religious invocations by the philosopher A N Whitehead. So creativity, considered as a power belonging to an individual – divine or mortal – doesn’t go back forever. Neither does the adjective ‘creative’ – being inventive, imaginative, having original ideas – though this word appears much more frequently than the noun in the early modern period. God is the Creator and, in the 17th and 18th centuries, the creative power, like the rarely used ‘creativity’, was understood as divine. The notion of a secular creative ability in the imaginative arts scarcely appears until the Romantic Era, as when the poet William Wordsworth addressed the painter and critic Benjamin Haydon: ‘Creative Art … Demands the service of a mind and heart.’
This all changes in the mid-20th century, and especially after the end of the Second World War, when a secularised notion of creativity explodes into prominence. The Google Ngram chart bends sharply upwards from the 1950s and continues its ascent to the present day. But as late as 1970, practically oriented writers, accepting that creativity was valuable and in need of encouragement, nevertheless reflected on the newness of the concept, noting its absence from some standard dictionaries even a few decades before.
Before the Second World War and its immediate aftermath, the history of creativity might seem to lack its object – the word was not much in circulation. The point needn’t be pedantic. You might say that what we came to mean by the capacity of creativity was then robustly picked out by other notions, say genius, or originality, or productivity, or even intelligence – or whatever capacity it was believed enabled people to think thoughts considered new and valuable. And in the postwar period, a number of commentators did wonder about the supposed difference between emergent creativity and such other long-recognised mental capacities. The creativity of the mid-20th century was entangled in these pre-existing notions, but the circumstances of its definition and application were new…
Once seen as the work of genius, how did creativity become an engine of economic growth and a corporate imperative? (Hint: the Manhattan Project and the Cold War played important roles.): “The rise and rise of creativity.”
(Image above: source)
* Bob Iger, CEO of The Walt Disney Company
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As we lionize the latest, we might recall that it was on this date in 1726 that Jonathan Swift’s Travels into Several Remote Nations of the World. In Four Parts. By Lemuel Gulliver, First a Surgeon, and then a Captain of Several Ships— much better known as Gulliver’s Travels— was first published. A satire both of human nature and of the “travelers’ tales” literary subgenre popular at the time, it was an immediate hit (John Gay wrote in a 1726 letter to Swift that “It is universally read, from the cabinet council to the nursery”). It has, of course, become a classic.
