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a side-trip to the human park

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Nietzsche and Jesus

I am not a Christian in any conventional sense of the name. For sure I do not like religion, but that is likely to be misconstrued as faithlessness. But the truly faithless are the forsaken and the suicidal, and I am far from being a suicide or a nihilist. To be a Christian, I would have to feel guilty about being alive, or to look forward to the end of the world.

One should not confuse Christianity as a historical reality with that one root that its name calls to mind: the other roots from which it has grown have been far more powerful. It is an unexampled misuse of words when such manifestations of decay and abortions as “Christian church,” “Christian faith” and “Christian life” label themselves with that holy name. What did Christ deny? Everything that is today called Christian.” [Friedrich Nietzsche, The Will to Power, 158]

Most of what is today called “religion”, let alone “Christian religion,” is god-forsaken, and has become, itself, “the abomination of desolation” as described in Revelations. It has no spiritual content whatsoever, which is what Nietzsche meant by “the death of God” and in describing the churches as “the tomb of God” and the tombstones of God. For Nietzsche, Christianity had become empty of all positive or progressive spiritual content or direction.

Many of “the Faithful of the True Faith” hold that mere observance of the 10 commandments, the Decalogue or Mosaic Law, suffices to be recognised as Christian or “religious” or even “spiritual”. In fact, the so-called “ten commandents” (in Hebrew, they are called “the 10 terms” or “10 matters”) have no positive spiritual content whatsoever. They are the minima moralia of a political and social constitution, called “the covenant”, designed to fuse twelve fractious Hebrew tribes into a functioning national collective called “Israel”, and in more comprehensive terms, are instruments for overcoming man’s more animal spitits.

“I teach you the overman. Man is something that shall be overcome. What have you done to overcome him?”
[Friedrich Nietzsche, Thus Spake Zarathustra, Prologue, §3]

“All beings so far have created something beyond themselves; and do you want to be the ebb of this great flood and even go back to the beasts rather than overcome man? What is the ape to man? A laughingstock or a painful embarrassment. And man shall be just that for the overman: a laughingstock or a painful embarrassment. You have made your way from worm to man, and much in you is still worm. Once you were apes, and even now, too, man is more ape than any ape.” [Friedrich Nietzsche, Thus Spake Zarathustra, Prologue, §3]

The Decalogue is a formula for ape-taming, and little else. That this came to be seen as even the essence of a spiritual or religious life is one of the great perversions of history.

The “new dispensation” brought by Jesus was originally discovered by Plato and adapted by Christianity. The Neoplatonic single principle, “the One”, is the essence of the Gospel according to John. And it is why we divide history between A.D. and B.C. or between New Testament and Old Testament: The Old Testament is concerned with ape-taming. The New Testament with overman-making. This is the meaning of what is called “conversion”, or having one’s face turned in a new direction. The Old Testament was concerned with beating back or disciplining the ape-man or “natural man”, and the Old Testament prophets were continuously calling back the lapsed to remembrance of “God” because of man’s tendency to revert to the ape. The whole mood of the Old Testament is “thou shalt not…!” But the whole thrust of the New Testament is “thou shalt…!”

“Be thou therefore perfect, even as thy Father in Heaven” (Matthew 5:48) is a completely different imperative or commandment than we find in the Old Testament and in the Mosaic Law. It is not a negation, but an affirmation, no longer to fight against the ape in man, but to transcend it. It is for this reason that Jesus said, “I come not to change the law but to fulfil it” or “the Law is made for man, not man for the law”. While the Old Testament was obsessed with origin, the New Testament is obsessed with destiny. And this is what got Jesus condemned, executed, and martyred as a blasphemer and a heretic.

Jesus had a casual attitude towards the Mosaic Law because he recognised it as purely utilitarian and not as complete in itself. His call to mankind to transcend itself was a greater and more creative challenge than constantly merely beating back the ape or obsessing about the reversion to the “natural man”. And this is the vocation or calling that both William Blake and Friedrich Nietzsche responded to, but who were considered lunatic and even evil for doing so.

A Production Possibilities Frontier

The engine of economic progress must ride on the same four wheels (supply side factors), no matter how rich or poor the country:

  • Human resources (including labor supply, education, discipline and motivation)

Labor inputs include, of course the quantity of workers. However, many economists believe that the quality of labor inputs, the skills, knowledge, and discipline of the labor force, is the single most important element in economic growth. capital goods can be effectively used and maintained only by skilled and trained workers.

Improvements in literacy, health, and discipline, and most recently, the ability to use computers, add greatly to the productivity of labor.

  • Natural resources (including land, minerals, fuels and environmental quality)

The important resources here are, arable land, oil and gas, forests, water, and mineral resources.
But the possession of natural resources is hardly necessary for economic success in the modern world. New York City prospers primarily on its high density service industries. While many countries that have virtually no natural resources, such as Japan, have thrived by concentrating on sectors that depend more on labor and capital than on indigenous resources.

  • Capital formation (including machines, factories and roads)

Tangible capital includes structures like roads, and power plants, and equipment, like trucks and computers. In this regard, some of the most dramatic stories in economic history, often involve the rapid accumulation of capital.
Accumulating capital requires a sacrifice of current consumption over many years. Countries that grow rapidly tend to invest heavily in new capital goods. In the most rapidly growing countries, 10 to 20% of output may go into capital formation. In this regard when we think of capital we must not concentrate only on private sector investment. In fact, many investments are undertaken only be governments, and provide the necessary social overhead capital and infrastructure for businesses to prosper. Roads, irrigation and water projects, and public health measures are important.

Government projects involve external benefits that private firms cannot capture so government is necessary to provide them.

  • Technology (from science and engineering to management and entrepreneurship)

Historically, growth has definitely not been a process of simple replication, adding rows of steel mills, or power plants next to each other. Rather, a never-ending stream of inventions and technological advances led to a vast improvement in the production possibilities of Europe, North America, and Japan. Technological change denotes changes in production processes or the introduction of new products or services.

Technological change is a continuous process of small and large improvements.

While the four supply factors of growth relate to the physical ability of the economy to expand, there are two other factors that are equally important:

  • First, there is the demand factor

To realize its growing production potential, a nation must fully employ its expanding supply of resources. This requires a growing level of aggregate demand.

  • Second, there is the efficiency factor

To reach its production potential, a nation must not only achieve full employment, but also two kinds of economic efficiency. Specifically, a country must achieve productive efficiency. That is, it must use its existing and new resources in the least costly way to produce what it does. And it must also achieve allocative efficiency, meaning that the specific mix of goods and services it produces must maximize society’s well-being.

The Future of Work: Driving for Uber

“Professionals who work for Google and Facebook can use the apps on their phones to get their apartments cleaned by Handy or Homejoy; their groceries bought and delivered by Instacart; their clothes washed by Washio and their flowers delivered by BloomThat. Fancy Hands will provide them with personal assistants who can book trips or negotiate with the cable company. Task Rabbit will send somebody out to pick up a last-minute gift and Shyp will gift-wrap and deliver it. SpoonRocket will deliver a restaurant-quality meal to the door within ten minutes. The obvious inspiration for all this is Uber, a car service which was founded in San Francisco in 2009 and which already operates in 53 countries.” (The Economist, 2015)

I learned about Uber through a workmate who used it for getting home after a work gathering. Being always a bit short of cash, I thought it might be an opportunity to work as a driver in order to get some extra pocket money. So I enrolled on their website and was promptly invited to an information evening. Obviously, quite a lot of people came with the same hope of brushing up their valet: Foreign workers, retired persons, outsiders, insurgents – in other words, desperate people like me.

“They have created a plethora of on-demand companies that put time-starved urban professionals in timely contact with job-starved workers, creating a sometimes distasteful caricature of technology-driven social disparity in the process; an article about the on-demand economy by Kevin Roose in New York magazine began with the revelation that the housecleaner he hired through Homejoy lived in a homeless shelter.” (Economist, 2015)

In contrast, the venue of a Zurich web agency, welcomed by a Yuppie-style host who informed us participants what a great thing Uber was. We were presented a short marketing movie about Uber’s history and finally got to employment details. I learnt that I am going to drive for their new service UberPop, their cheapest line of business open to anyone who owns a car not older than eight years and willing to engage in “ride sharing”. UberPop is not about ride sharing, but it sounds less suspect in the dawn of potential government intervention (as happened in the Netherlands, which banned Uber completely). The Economist (2015) refers in this context to “underused capacity” (how polite…):

“Underused capacity applies not just to people’s time, but also to their assets: to drive for Lyft or Uber you do need a car. The on-demand economy is in many ways a continuation of what has been called the “sharing economy” exemplified by Airnb, a company which turns apartments into guesthouses and their owners into hoteliers. For people with few assets, though, on-demand labour markets matter more.”

Our host stressed the fact that Uber is insured up to US$ 5 million – should there be an accident or an issue with one of the customers. The lengthy contract, which I received after the info meeting, says something else: That it is the driver’s responsibility to be properly insured and that the driver is obliged to inform his insurance that he is carrying out (professional) driving services. True, Uber as a company is insured against any claims customers may create after an incident, but it does not apply to the driver. The contract also makes clear that it is a driver’s responsibility to oblige to local laws and pay taxes – in other words, Uber does not care about local frameworks: Taxes, social security contributions, insurances – all left to the driver, returning to pre-industrial revolution principles of piecework with the associated exploitation and insecurity. Therefore, UberPop can be cheaper than any local transportations service, as it undermines competition through unequal conditions. Are these the working conditions of the future? Brave new world… The Economist may be too optimistic in its statement:

“The on-demand economy is not introducing the serpent of casual labour into the garden of full emoployment: it is exploiting an already casualised workforce on ways that will ameliorate some problems even as they aggravate others.”

So far the downside of the coin. Once I started driving, another side emerged. My customers were cheerful, between 16 and an estimated 35, knew how to make good use of their smart phones, many in well paid jobs.

“The on-demand economy is the result of pairing freelance workforce with the smartphone, which now provides far more computing power than the desktop computers which reshaped companies in the 1990s, and to far more people. […] Now that most people carry computers in their pockets which can keep them connected with each other, know where they are, understand their social network and so on, the transaction costs involved in finding people to do things can be pushed a long way down.” (Economist, 2015)

Using a taxi in Zurich can ruin you, but for many of my customers that was not the issue. The point was that taxi drivers were perceived as unfriendly (best case) to rude (worst case), that there were issues with acceptance of credit cards (instead of cash) and safety (for female customers). My backseat drivers had a higher opinion of Uber (painless service, easy payment, friendly drivers).

Besides the social problems that it creates, I strongly believe that Uber is undermining local rules and that is unfair. But Uber also addresses a public nuisance (expensive, unfriendly local taxi service) and an understandable need for painless service.

At the end of the day, the question for me was if Uber has fulfilled my expectations for a bit of pocket money. Somehow it is a yes – I made some cash. But compared to the amount of hours spent, very low. Subtract from that gas, more time spent for cleaning the car, and general car usage. Without Uber’s incentive program (extra payment for being available in the city on Friday and Saturday evening), it would definitely not pay to drive for UberPop. Not surprisingly, I was asked by my customers if I am a temporary “job seeker” (i.e. unemployed).

“The on-demand economy is good for outsiders and insurgents – and for entrepreneurs trying to create new businesses using such people. […] In Europe, the labour market drives a wedge between insiders who have lots of protections and outsiders who don’t; on-demand arrangements may give outsiders a chance of breaking in. […] If this seems attractive, it is also a measure of the way that the on-demand economy will contribute to pressure to reduce labour rights in all sorts of situations; a growing abundance of on-demand employees with no normally accepted rights such as sick-pay and overtime will give employers at firms with more standard structures an incentive to cut back. The more such pressures spread, the more protests against “Plattform Kapitalismus” the world is likely to see.”

[All quotes from: The Economist (2015): The Future of Work: There’s an App for that, EU Edition, January 3]
Further reading: How Payroll Survey is Missing Uber

Technological Advance

One of the most famous studies ever conducted in economics was the study done by Edward Denisen. He found that the most important factor accounting for a full 28% of increased productivity, has been technological advance – just as growth theory suggests. And by the way, Denisen’s eighth category (legal-human environment) is a negative number. It estimates the negative impact that legal and regulatory constraints have had on productivity and growth. Which takes us to Ferguson (2012) who states that among the most deadly enemies of the rule of law is bad law (p.77).

  • While some economists and policy makers stress the need to increase capital investment,
  • others advocate measures to stimulate research and development and technological change.
  • Still a third group emphasizes the role of a better educated work force.

The Neoclassical growth model was pioneered by professor Robert Solow of MIT:

  • Major model components in this neoclassical growth model: Capital and technological change.
  • Primary tool: Aggregate Production Function (APF), which relates technology and inputs, like capital and labor, to total potential GDP.
  • Key concept: Capital deepening – the process of increasing the amount of capital per worker, e.g. more farm machinery and irrigation systems in farming, more railroads and highways in transportation, and more computers and communication systems in banking. In each of these industries societies have invested heavily in capital goods. And as a result, the output per worker has grown enormously.

The first major insight of the model is that in the absence of technological change, capital deepening does not lead to a proportional increase in output.

Reason: The law of diminishing returns – the basic idea is that as you add more and more capital to a fixed supply of labor, eventually the marginal product of capital must fall as the law of diminishing returns kicks in.

The second major insight of the neoclassical growth model is that while capital deepening can dramatically increase the productive output of an economy, it will eventually lead to economic stagnation in the absence of technological change.

At this point, the economy enters a steady state in which, without technological change, both capital incomes and wages end up stagnating.
In the long run, equilibrium of the neoclassical growth model makes it clear that if economic growth consists only of accumulating capital through replicating factories with existing methods of production, then people’s standard of living will eventually stop rising. And that’s why we must come to understand the importance of technological change in averting this fate, as modern economies in this century have so obviously done.

This leads to the third major insight of the neoclassical growth model. It is ultimately only through technological change that we can avoid the trap of economic stagnation.

Technological change represents both advances in production processes, and the introduction of new and improved goods and services. It also includes new managerial techniques, as well as new forms of business organisation.

Technology Influence in Business Strategy

There is a spectrum of attitudes towards technology that is found in different organisations:

1 2 3 4 5
Technology as a tool for efficiency Technology as a tool for achieving business strategy Technology as a function alongside finance, marketing, HR, etc., typically called R&D (product technology) or operations (process technology) Technology strategy influences business strategy in a bottom-up manner Technology strategy leads the business, effectively determining business strategy

Table 1: Degrees of technological influence on business strategy (Source: Fowles, 2005)

Technologies mean different things to different people at different times in the sense of how they are interpreted. Rural customers of the Ford Model T used it for ploughing. Farm tractors evolved as a response. Lacking electricity, the same customers used the car as a source of power to drive farm machinery and even domestic tools such as a washing machine. Nor is it only customers who interpret a technology in various ways. The maker’s technology strategy decides on resource allocation. The decisions of one strategy are closely intertwined with those of the other. By asking to what they allocate resources it is possible to tell them apart.