Posts Tagged ‘industry’
“Not all private equity people are evil. Only some.”*…
But as Rogé Karma explains, that could be enough to cause big trouble, as a large and growing portion of our economy is disappearing behind a veil…
The publicly-traded company is disappearing. In 1996, about 8,000 firms were listed in the U.S. stock market. Since then, the national economy has grown by nearly $20 trillion. The population has increased by 70 million people. And yet, today, the number of American public companies stands at fewer than 4,000. How can that be?
One answer is that the private-equity industry is devouring them. When a private-equity fund buys a publicly traded company, it takes the company private—hence the name. (If the company has not yet gone public, the acquisition keeps that from happening.) This gives the fund total control, which in theory allows it to find ways to boost profits so that it can sell the company for a big payday a few years later. In practice, going private can have more troubling consequences. The thing about public companies is that they’re, well, public. By law, they have to disclose information about their finances, operations, business risks, and legal liabilities. Taking a company private exempts it from those requirements.
That may not have been such a big deal when private equity was a niche industry. Today, however, it’s anything but. In 2000, private-equity firms managed about 4 percent of total U.S. corporate equity. By 2021, that number was closer to 20 percent. In other words, private equity has been growing nearly five times faster than the U.S. economy as a whole.
Elisabeth de Fontenay, a law professor at Duke University who studies corporate finance, told me that if current trends continue, “we could end up with a completely opaque economy.”
This should alarm you even if you’ve never bought a stock in your life. One-fifth of the market has been made effectively invisible to investors, the media, and regulators. Information as basic as who actually owns a company, how it makes its money, or whether it is profitable is “disappearing indefinitely into private equity darkness,” as the Harvard Law professor John Coates writes in his book The Problem of Twelve. This is not a recipe for corporate responsibility or economic stability. A private economy is one in which companies can more easily get away with wrongdoing and an economic crisis can take everyone by surprise. And to a startling degree, a private economy is what we already have.
America learned the hard way what happens when corporations operate in the dark. Before the Great Depression, the whole U.S. economy functioned sort of like the crypto market in 2021. Companies could raise however much money they wanted from whomever they wanted. They could claim almost anything about their finances or business model. Investors often had no good way of knowing whether they were being defrauded, let alone whether to expect a good return.
Then came the worst economic crisis in U.S. history…
Read on for a bracing account of: “The Secretive Industry Devouring the U.S. Economy,” (gift article) in @TheAtlantic.
* Paul Krugman
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As we clean our glasses, we might spare a thought for Ivy Lee; he died on this date in 1934. A publicity expert and a founder of modern public relations, he was among the first to persuade business clients– foremost among them, the Rockefeller family– to woo public opinion. Ultimately he advised rail, steel, automobile, tobacco, meat packing, and rubber interests, as well as public utilities, banks, and even foreign governments.
Lee pioneered the use of internal magazines to maintain employee morale, as well as management newsletters, stockholder reports, and news releases to the media. And he did a great deal of pro bono work, which he knew was important to his own public image; during World War I, he became the publicity director for the American Red Cross.
“Man is a part of nature, and his war against nature is inevitably a war against himself”*…
A sobering new study finds that the world’s biggest industries burn through $7.3 trillion worth of free natural capital a year. And it’s the only reason they turn a profit…
The notion of “externalities” has become familiar in environmental circles. It refers to costs imposed by businesses that are not paid for by those businesses. For instance, industrial processes can put pollutants in the air that increase public health costs, but the public, not the polluting businesses, picks up the tab. In this way, businesses privatize profits and publicize costs.
While the notion is incredibly useful, especially in folding ecological concerns into economics, I’ve always had my reservations about it. Environmentalists these days love speaking in the language of economics — it makes them sound Serious — but I worry that wrapping this notion in a bloodless technical term tends to have a narcotizing effect. It brings to mind incrementalism: boost a few taxes here, tighten a regulation there, and the industrial juggernaut can keep right on chugging. However, if we take the idea seriously, not just as an accounting phenomenon but as a deep description of current human practices, its implications are positively revolutionary.
To see what I mean, check out a recent report [PDF] done by environmental consultancy Trucost on behalf of The Economics of Ecosystems and Biodiversity (TEEB) program sponsored by United Nations Environmental Program. TEEB [Editor’s note: TEEB is now known as the Natural Capital Coalition] asked Trucost to tally up the total “unpriced natural capital” consumed by the world’s top industrial sectors. (“Natural capital” refers to ecological materials and services like, say, clean water or a stable atmosphere; “unpriced” means that businesses don’t pay to consume them.)…
The majority of unpriced natural capital costs are from greenhouse gas emissions (38%), followed by water use (25%), land use (24%), air pollution (7%), land and water pollution (5%), and waste (1%).
So how much is that costing us?… the total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP… Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated. Ponder that for a moment: None of the world’s top industrial sectors would be profitable if they were paying their full freight. Zero…
The distance between today’s industrial systems and truly sustainable industrial systems — systems that do not spend down stored natural capital but instead integrate into current energy and material flows — is not one of degree, but one of kind. What’s needed is not just better accounting but a new global industrial system, a new way of providing for human wellbeing, and fast…
“None of the world’s top industries would be profitable if they paid for the natural capital they use,” from @grist.
See also: “The Biophilia Paradox,” from Clive Thompson (@pomeranian99).
* Rachel Carson
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As we buy it because we broke it, we might recall that it was on this date in 1980 that Coyote finally caught Road Runner– in Chuck Jones’ “Soup or Sonic,” which aired as part of the television special Bugs Bunny’s Bustin’ Out All Over.
“It is at Dusk that the most interesting things occur, for that is when simple differences fade away. I could live in everlasting Dusk.”*…
L. M. Sacasas on time and temporality…
… I’m tempted, as I often am, by the grand generalization, and I will yield. Pre-industrial culture was synchronized by the rhythms of nature, rhythms which were often imbued with sacral significance (a unity suggested by the shared root of cult, culture, and cultivate). Industrial culture was, as Lewis Mumford observed, driven not by the steam-engine but by the clock. Industrial time overthrew pre-industrial time—agricultural time, if you like—but yielded a new set of rhythms and patterns, with the 9-5 workday perhaps at its heart. Mass media, which is to say industrialized media, supplied its own public temporalities to the industrial age, a new quasi-sacral calendar with daily, seasonal, and yearly rituals, some of which were artificial simulations of the old pre-industrial rituals.
What we have now is a new temporal order. It is not a negation of industrial time, but a further development built upon the precision of mechanical time. Industrial time enabled the mass synchronizations industrial culture required. But now digital technology enables a new desynchronized society through even more refined timekeeping coupled with the computational capacity to mobilize and organize society along more fluid, just-in-time, and, yes, from a human perspective, stochastic patterns.
To put this another way, a culture ordered in its patterns, language, ethics, and imagination by the rhythms of the natural world gave way to a culture ordered in its patterns, language, ethics, and imagination by the rhythms of industrialized labor and mass media. While we might disagree as to the timing of the transition, it seems safe to say that we now inhabit yet another cultural configuration. To put it this way may seem like a banal restatement of the well-worn and contested pre-modern/modern/post-modern sequence. But I think it is useful to draw out the temporal dimension of these social dynamics. If we press into each of these four categories—patterns, language, ethics, and imagination—we will find surprising and profound links to the temporal heart beating out the dominant cultural rhythms, whether it be nature or the machine.
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Inhabiting the order of measured, quantified time, as most of us do, already inhibits our capacity to imagine another way of being in time. Our enclosure within the human-built world, in both its analog and digital dimensions, obscures the markers of alternative temporal orders. It is possible, of course, to frame this as a liberation from the limits of time just as it is possible to frame our uprootedness as a liberation from the constraints of place. And, indeed, it sometimes is just that. But it is also possible that our liberation from older cultural forms, forms which were more directly informed by a place and its time, has been used against us. To be disembedded and desynchronized is also to become subject to the stochastic order of the digital economy.
The computer, after all, is, among other things, an agent of social organization and an instrument of control. But what forms of social organization does it enable and what forms of control does it make possible?
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The most tempting thing is to go back to the kind of empirically verifiable harms which I mentioned in passing at the outset. That’s the surest way to make the case for a different set of practices, but, of course, that is itself part of the problem. Yes, there’s a case to be made on the grounds of basic health and well-being, ours and our fellow creatures, for seeking another way of ordering our material environment.
But I find myself reaching beyond such concerns to something more ambivalent and amorphous, toward not just the healthy but the good, toward a deep recalibration of our being in the world according to a different order of time. And perhaps in thinking again about the meaning of our experience of light and dark and, perhaps especially, the transitions between the two, we can discern a different set of rhythms. “We are not only creatures of the light,” Kohák reminds us. “We are creatures of the rhythm of day and night, and the night, too, is our dwelling place.”…
Eminently worth reading in full: “Whose Time? Which Temporality?” from @LMSacasas.
* Olga Tokarczuk, Drive Your Plow Over the Bones of the Dead
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As we contemplate chronology, we might recall that it was on this date in 1918 that the U.S. Congress “standardized” time: the Standard Time Act (AKA, the Calder Act) became effective. Passed earlier in the year, it implemented across the U.S. both Standard Time (the creation of time zones anchored in UTC, the successor to GMT) and Daylight Saving Time.
“My favorite food from my homeland is Guinness. My second choice is Guinness. My third choice – would have to be Guinness.”*…
As Will O’Brien explains, Ireland’s most famous brewery has been ahead of the curve for 250 years…
Taken over its entire history, Guinness may just be the most successful company Ireland has ever produced. In 1930, it was the seventh largest company in Britain or Ireland. It is one of our oldest companies of note. Considering that it predates the Bank of Ireland and the State itself, it could even be said that Guinness is the longest-running successful large institution in Ireland.
The key to Guinness’ robustness has been innovation. Through a series of key innovations, Guinness was able to stay on top despite (among other things) a famine, mass emigration, two World Wars, a civil war, and the changeover from British to sovereign rule. Guinness is responsible for changes in workplace relations, several foundational advances in the physics of brewing, and even the famous Student’s t-test in statistics. Indeed, Guinness has been one of the key drivers of innovation in Ireland.
…
A determined founder began Guinness with a vision and took a bold decision with a 9000-year lease. The company then started a brewery which defied nearly every norm in workplace relations. They used the scientific method to radically rethink how beer is brewed and served, and created a world-class brand & marketing operation.
When Guinness released a subtly different pint glass several years ago, traditionalists decried it as blasphemous. The irony is that the brewery that creates this drink has eschewed tradition for over 250 years…
Lessons are where one finds them: “No Great Stagnation in Guinness,” from @willobri.
* Peter O’Toole
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As we contemplate continuity, we might recall that it was on this date in 1903 that the first U.S. patent for instant coffee (No. 735,777) was issued to Satori Kato of Chicago, Illinois. The application was filed in April of 1901, when his Kato Coffee Company introduced the product at the Pam-American Exposition in Buffalo.
“Another flaw in the human character is that everybody wants to build and nobody wants to do maintenance”*…
Hot, strenuous and unsung. As Steven Gonzalez Monserrate explains, there is nothing soft and fluffy about the caretaking work that enables our digital lives…
The ‘cloud’ is not an intangible monolith. It’s a messy, swelling tangle of data centres, fibre optic cables, cellular towers and networked devices that spans the globe. From the tropical megalopolis of Singapore to the remote Atacama Desert, or the glacial extremes of Antarctica, the material infrastructure of the cloud is becoming ubiquitous and expanding as more users come online and the digital divide closes. Much has been written about the ecological impact of the cloud’s ongoing expansion: its titanic electricity requirements, the staggering water footprint required to cool its equipment, the metric tonnes of electronic waste it proliferates, and the noise pollution emitted by the diesel generators, churning servers and cooling systems required to keep data centres – the heart of the cloud – operational 24 hours a day, seven days a week, 365 days a year.
But less has been written about those who work inside the machinery of the cloud. Though often forgotten, this community of technicians, engineers and executives is integral to the functioning of our increasingly digitised society. They are the caretakers of the digital, the wardens of our data, and the unsung heroes working tirelessly to sustain an ever-expanding array of digital objects, including our emails, cat videos, maps, non-fungible tokens, metaverse avatars, digital twins and more. The idea of digital caretakers might conjure science fiction images of empty, towering warehouses stacked with racks of automated machines. But these workers are very much flesh and blood. The silicon milieu they’re part of is as human as it is mechanical. From their vantage, the cloud is not merely an infrastructure they maintain, but a way of life, an identity, a culture of stewardship – replete with its own norms, rituals and language…
Explore that fascinating culture: “The people of the cloud,” from @cloudAnthro in @aeonmag.
Apposite: “The Maintenance Race,” from Stewart Brand (@stewartbrand)
* Kurt Vonnegut
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As we contemplate continuity, we might spare a thought for Richard Arkwright; he died on this date in 1792. An inventor and entrepreneur, he was a leader in the early stage of the Industrial Revolution. Arkwright was the driving force behind the development of the spinning frame, known as the water frame after it was adapted to use water power; he patented a rotary carding engine to convert raw cotton to ‘cotton lap’ prior to spinning; and he was the first to develop factories housing both mechanized carding and spinning operations, combining power, machinery, semi-skilled labor and the (then-new to England) raw material of cotton to create mass-produced yarn. Indeed, His organizational skills earned him the honorific title “father of the modern industrial factory system.”
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