|The Nightstar Zoo
|Why do fast food companies exist?
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|Author:||Schol-R-LEA [ Sun Mar 12, 2006 2:37 pm ]|
|Post subject:||Why do fast food companies exist?|
I was just reading an online book, Manna by 'Marshall Brain', and while I haven't finished it yet, there's already something about it that doesn't quite fit. The first part of the book is a dystopian story based on what is essentially cyber-Taylorism: what starts as a fast food restaraunt management system eventually 'efficiencies' out all actual management, and all but a small part of human labor. The result is that everyone except a very small number of working poor and an even smaller number of idle rich get forced into barracks-like Welfare housing where their existence is micro-managed by the same software that put them out of work. Because anyone who raises a hand, or their voice, against the system is immediately declared a terrorist and arrested, revolution is impossble, and eventually (so it seems from the point in the book I'm up to) even the wealthy would get sorted into the system.
The first problem is the assumption that everyone would accpet this without question. This doesn't fit the reality of recent history, however. Oh, to be sure, most people would submit - if this weren't true, the great tyrranies of the past would never have been possible. But some wouldn't. More than most people would expect, in fact. Most importantly, those in the middle range, the specialists such as police or fire or lawyers or doctors, would rebell, not because it was dehumanizing, but because it took away their social power. This was a large part of the failure of the original Taylor system: the workers went along with it fine, but the foremen and the white collar workers refused to implement it. People are jealous of their social status; something that threatens an entire caste would quickly face a mutiny. This is, among other things, part of why most labor unions have become so clogged with 'required' positions which don't actually accomplish anything - no one is willing to step off of a position of power, even a trivial one. Part, but only part, of why companies accept this is because, despite the oft-repeated claim that organized labor is 'socialist', collective bargaining is a perfectly legitimate form of capitalist business: like with any asset, a cartel formed to manage labor can demand higher prices than those who compete independently, providing enough of the asset in question is in the cartel's hands.
The next problem with this is the software. Today, at least, there's no software sufficiently flexible to handle all the edge cases in just a single burger stand, even with it using human bodies and brains as it waldoes. It would take a true AI for that, and once you have true AI, the issue would become moot - as I will explain.
You see, if this sort of thing were going to happen, it would have already, even without computers. Indeed, such a system did exist: it was called the Soviet Union.
But the USSR failed; micromanagement was less efficient over time, because it lacked the flexibility to react to crises. And while the Soviet government could do a lot more than just lock you up as a 'terrorist' (without even any justification needed), it wasn't able to prevent uprisings in the 1930s in the Ukraine, in it's satellite states in the 1960s and 1970s, and finally, the (largely non-violent!) movement that toppled it in 1980s. Nominally it failed because it couldn't afford to continue the Cold War, but looking at the facts at hand, that explanation doesn't hold water. The truth is, the Cold War probably extended the life of the SU by nearly forty years; had it ben left to it's own devices, it would not have outlived Stalin by more than a few years at most. By giving the Soviets an active opponent which they percieved as implacable, and a reason to fear destabilization (lest the West attack, or one of their own general's start a war that would drag everyone else down), the Cold War stabilized the Soviet system.
(The Politburo probably would not have initiated an attack on the West unless they were absolutely certain of victory, for three reasons. First, the Russian psychology, while expansionist, is primarily paranoid; it expands to protect it's own borders from attack. Russia has been invaded many times over, and their is a general assumption in the Russian culture that everyone who isn't Russian is out to rob or kill them - thus, they figure, they are justifies in doing the same to everyone else first. Second, Marxist doctrine held that they wouldn't need to go to war: it carries the basic assumption that global revolution is inevitable, and that all they needed to do was help it along. I will get to the third reason shortly.)
Taylorism was an equally dismal failure elsewhere; even in places where it still exists, such as in modern-day fast-food restaurants, it is only taken so far. The main thing to date has been that companies have generally drawn the line at micromanaging middle management, despite the fact that most such jobs were even easier to eliminate than the labor jobs they managed.
Indeed, it has been possible to eliminate the human element of a fast food restaurant for longer than fast food restaurants have existed. In the 1920s, there was a brief fad for 'automats', a type of cafeteria in which one wall was made up as a sort of oversized vending machine: you would find the meal you wanted, put money in the slot, the small glass door would unlock, and you took out your meal. The food still needed to be prepared by a human cook, and you needed someone to clean and service the equipment, but as far as the customers were concerned, there was no interaction with the staff.
Automats were very efficient, from a certain point of view. But after the initial fad broke, they quickly faded away. Most people hated automats; they were too clean, too orderly, too inhuman. The public preferred even the nastiest greasy spoon to the cold sterility of the automat.
But even that wasn't the reason why the 'Manna' system wouldn't work. The real reasons are tied up into one of the central illusions of our society.
Most people, if you asked them what a corporation's purpose was, would tell you that it was to make a profit for the shareholders, regardless of how. So long as the company remains profitable, they would say, and there are no obvious criminal activities or catastrophic social or political gaffes, the business would be a success.
Conversely, the citizens of a Socialist or Marxist state, if asked what the state was for, would tell you that it was to provide for the citizens' needs. They, too, would argue that so long as the interests of the people were upheld (no snickering, please; I'm just stating what one would expect them to believe, not what was actually going on!), that the state was justified in its actions.
These two sets of claims don't match the reality, however. The actual behavior of most corporations is staggeringly inefficient; most major firms could easily cut away large parts of their structure without loss of productivity, and in lean times the often do. However, much of the inefficiency always remains, so long as the business is solvent. In most organizations, the bureaucracy needed to support operations increases exponentially to the size of the actual operation itself. But even taking this into account, the increase in non-production and non-delivery positions generally increases faster than the system actually needs. Why would this be, if the main goal was profitability (or effectiveness in general)? Is it merely a result of incompetence and 'friction', or are their other matters at hand?
Let's return to the comparision with Communism. Here, the stated goal (as mentioned above) is to provide the the needs of the citizens; "to each according to his needs", as the old socialist slogan goes (this phrase predates Marx, BTW, and dates back to shortly before the French Revolution). However, the Soviet system was notoriously bad at actually fulfilling this goal, even to the point where basic necessities were often unavailable. This is often pointed to as a sign of the inefficiency of systems where there is no personal incentive for advancement, but this doesn't hold water. First off, the Soviet system did have advancement, and indeed had far more structure for it in their system; and second, the Soviets actually were remarkably productive in the early part of Stalin's rule (an example of the principle of faith in leadership: any economic or political system, regardless of it's principles, failures, or excesses, will continue to work iff the majority of the population have faith in it's effectiveness) and again during WWII (though in the latter case there certainly was more than enough personal motive to work for everyone). Indeed, many of the factories and farms actually fulfilled their Five Year Plans well ahead of schedule.
And in fact, that was the problem: once industrialized, the system had too much production capacity, and not enough 'justifiable' (e.g., according to plan) goods to produce. This led to a paradoxical situation where there were large numbers of people going without goods even while the very good they needed were sitting around unused, or worse, the factories which were set to produce them were left idle. This left the party bosses with a dilemma: they couldn't continue producing goods indefinitely, so raising quotas was out of the question; Western style 'planned obsolesence' went against doctrine, and in any case would have exhausted their basic resources; and slowing down production would have ruined morale, and caused a real drop in productivity. The solution, as George Orwell predicted in 1984, was to re-tool for production of the one thing guaranteed to be consumed in unlimited numbers: arms.
To get back to the point: the same problem with industrial overproduction affected the US corporate world as well. Unlike the Soviets, they could cut back production, lower prices to encourage purchasing, and could use planned obsolesence (and heavy marketing) to increase demand. However, they had a different problem: the labor pool producing the goods were (broadly speaking) the best source of customers for the goods as well. If they cut prices too low, they'd have to reduce salaries, putting the prices outside of the factory workers' reach; conversely, cutting their rolls and keeping salaries high would also reduce the number of customers. While planned obsolesence and fast-turnaroud marketing played a role in the solution, the main answer was to pad the roster, hiring many more workers than they actually needed and relying on the post-war prosperity (and government contracts) to keep themselves afloat.
Even now, despite the series of economic downturns the US has had, the general business model still works this way, especially in large, established companies such as GM and IBM. These 'paternalistic' companies tried for many years to provide for their employees what the State did in socialist nations, and while these benefits would later drop drastically, the companies still frequently kept on more employees than they strictly needed.
The point of this? That neither capitalism nor communism work quite they way we've bee told; production isn't the key, employment is, and many companies even today are less concerned with profit than they are with propping up the economy (though out of their own interests, of course). As a result, despite their lip service towards efficiency, they have actually backed away from the Taylor model and embraced ones which actually demand more work than needed, rather than less. Some entire sectors of the economy - fast food, in particular - exist less to make money than to create low-paying jobs, just to keep the circular flow of money going. Most of the real interest in the 'dot com' companies came from the perception that 'e-business' needed no actual final product, and could serve as a sort of economic perpetual-motion machine. For all the talk of 'the success of capitalism' after the end of the Cold War, the truth is that no major business is truly profit or capital driven, nor could they be in an industrialized economy. Both the socialists and the capitalists live in denial of the real nature of their economies, primarily because both groups - each for their own reasons - fetishize 'labor' above and beyond it's actual utility.
I just don't see something like 'Manna' being acceptable to the US business world: it is too self-destructively efficient.
|Author:||AnnoDomini [ Mon Mar 13, 2006 9:36 am ]|
Well, that was certainly educational. Cool article, Schol-R-LEA!
I was thinking of something pretty close to what you wrote when I read Orwell's 1984, that such a system would just not work. Because the people were just too stupid (I guess that could mean 'inefficient,' as well) to actually build something that complex and keep it running.
|Author:||zippthorne [ Wed Jun 04, 2008 2:59 pm ]|
|Post subject:||Re: Why do fast food companies exist?|
It's also wrong.
There are a couple of misconceptions here.
One is the confusion of money with wealth. Money is not wealth. It is grease to enable the flow of wealth. It is useful, though, because the more liquid wealth is, the easier it is for it to flow to the most efficient configuration for producing more wealth. Especially important as some wealth has a limited shelf life. Food, like Time, gets disappears whether it's used to produce more wealth or not.
Production is the key. Employment is less relevant, except as a means to determine where production goes. Orwell's book is a warning against those who would make that mistake. Or who would assume that people are easier to control if they're constantly a little bit starving. But even in the book that didn't happen. The only people under control were the party members.
But sheer production numbers for one company are but a very small part of the picture. If they can produce more by improving efficiency: i.e. more goods are produced per person, then they can distribute their product to more people. They can also accept smaller payment per-person, so the consumers retain more of their own wealth for other uses. If they can only produce more by adding workers, it's possible to "over produce" by incorporating workers who would be working in other areas of the economy.
Capitalism solves this problem by those companies going insolvent, and their assets sold off. Sometimes their function is absorbed by others, sometimes their function is not that useful or is overtaken by changes to other areas. The workers of course will have to retool, but the alternative is to suffer with inefficiency and not producing as much wealth (and therefore quality of life) as possible for society.
Central planning pretends it can solve the problem by directing the workforce and equipment changes from on-high. Indeed, this might be possible, with enough processing power. The problem there is that in the absence of transistor calculators, you have to use human calculators. And you need a lot of them. And they come out of your workforce that could be producing real wealth. You can get away with fewer, but you have to micromanage quite a bit, and if you don't have enough managers, you're not going to have a very effective central planning office, because you simply won't be aware of the "changes on the ground." If you have access to "The Matrix" level AI and processing capability, you could make it work with few enough workers to not be a drain.
Until that kind of silicon computing machinery is available, you could take a cue from the scientific community. Just like NASA's inexpensive psuedo-supercomputer, COTS "Beowulf cluster" you cou do a kind of "distributed computing" version of "central planning" Leverage everyone in every industry's capability to make lots of small decisions that add up in aggregate to solving the optimization problem. I call this, "Distributed Central Planning" or, "Capitalism."
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