I don’t know anyone in this video, or anyone in Hancock, Maine, either, as far as I know; but there are only 1.3 million people in Maine, so they’re all my neighbors, I guess.
I of course especially like to see people making stuff that other people can make other stuff out of. I could make all sorts of things out of the pine boards you see exiting the mill, and have, and likely will again. House-y sort of stuff. I’m fairly certain I could build a whole house and all the furniture in it out of nothing but 1×12 common pine boards, and it would still be better than whatever you’re living in, no matter how elaborate. It’s an infinitely useful material, and since a pine tree is a weed here, it’s infinitely infinitely useful stuff — the best kind.
The new owners are taking a chance, I’ll bet, by re-opening this mill. They’re betting on demand that is not currently in evidence. Maybe they think they’ll prevail in a game of economic musical chairs instead of expanding capacity in preparation for an uptick in business. I hope not. People need jobs here, badly.
They took a $200,000 government giveaway to restart the shuttered lumber mill. The aroma of Gerry Ford and the redolent smell of Jimmy Carter is on the money; I’m old enough to remember when the Community Development Block Grant was introduced. Like everything to do with the government, everything but the government might go away, but I’ll bet the CDBG never will.
The last owners “went away.” The Crobb Box Company went out of business just last year. They’d been in business at that location since the 1940s. Think of all the economic tumult they’d endured since then, and what sort of economic Armageddon it would take to finally kill them off. Fans of ascribing everything bad that happens to a business solely to mismanagement or simple creative destruction should pause for a moment and consider that in 2008, the Small Business Administration gave Crobb Box the “Jeffrey H. Butland Family-Owned Small Business of the Year award.” If Crobb Box was a disaster, why’d they get a government award ten minutes before they drove to the economic tollbooth with Sonny Corleone? It’s the same government that gave Pleasant River money to re-open the place on top of the barely-room-temperature corpse of Crobb. Were they wrong then, or are they wrong now?
I’m pretty sure that’s a rhetorical question. The answer is probably “yes.” They have no idea what’s going on, except to wreck it, blame someone for its demise, or take credit for it, depending on what week it is.
If Pleasant River makes a go of it (I hope they do), then they didn’t need the money. If they’re going to go the way of Crobb, then the grant money wouldn’t save them. What would be useful is a return to some sort of transparency in the basic workings of the market. There’s no transparency in much of anything anymore. It’s surrounded by impenetrable walls; sometimes the walls are made of block grants.
5/19/2012: I read Woodweb from time to time. I learn very little of a factual nature there, and offer no advice there, either. Like many places on the Intertunnel, I read it like I’m looking into a petri dish or I’m visiting a zoo. I don’t stick my fingers through the bars or into the dish. I don’t mean that in a disparaging way. It’s useful to me because you can get an imperfect feel for a portion of the zeitgeist there. Putting your finger in the dish affects it.
They’ve front-paged a man blegging for advice about his one-man shop. Most such questions are simply a plea for sympathy or praise, sometimes both. People look for accomplices, not advice, generally. Almost all the advice he got was worse than bad. A man can learn about perfectly elastic demand only once.
I’m fascinated that so many persons that have absolutely no interest in running a business start businesses. Hell, I may be one of those people. But people on the stage deserve a kind of respect that people in the audience do not, no matter how bad the show is. I’ll give that respect, instead of advice. But I’m reminded of Twain: If you hold a cat by the tail you learn things you cannot learn any other way.
[Editor’s Note: First offered four years ago. Timely, years in advance. There’s a word for that, isn’t there?]
[Author’s Note: Yeah: Broke-ass loser. And there is no editor.]
You don’t understand economics very well.
No offense. I don’t know who you are, but I’m willing to defame you like that. Why do you suppose that is? It’s because nobody understands economics very well, in my experience. When I see the poll question: “Which candidate for President do you trust more to run the economy?” it’s the question itself which bugs me, not the percentages assigned to the candidates. If you’d ask or answer that question, you have a pre-civilized view of economics in my opinion.
I’m not educated in economics, so I know a little about it. If I was educated, I’d know about an economics education. Not the same thing. I learned what I know about economics by getting the treatment a baby gives a diaper every day out in the economic landscape. You’re not allowed to indulge in fantasy very long out here. You can do it for a lifetime in a college. And beyond, if you can get published.
I want to talk about price elasticity, because it interests me. It refers to the relationship between the supply and demand for things as you tinker with price, or supply, or a host of other factors.
In general, people who work with their hands seek price inelasticity. That means that demand falls more slowly than an increase in price. Since the amount of work a person can do is finite you want to raise your price to perform the work without decreasing demand too much by doing so. You work less, for more money.
If demand is elastic, this means if you raise your price, the demand falls, and doesn’t make up for the increased price. You raise your prices but you make less money.
If it’s unit elastic, there’s a direct correlation between price and demand. Raise the price, demand goes down exactly the amount necessary so that revenue stays the same. An accountant is the only person to have ever seen this creature.
Now let’s go out on the economic map where navigators used to see “Here Be Monsters.”
Perfectly elastic pricing is where if you raise the price one iota, the demand drops to zero.
And finally, if we talk of demand being perfectly inelastic, no matter what you charge, the demand stays the same. You’ve got a crack stand in Marion Barry’s living room.
Now I want you to come out to the edge of the map where I live, and have lived for the vast majority of my life. Forget inelastic price, elastic price, and the unicorn of economists, unit elastic demand. Those are just things that determine whether you’ll buy a flatscreen TV or an end table or not. I want to get existential on you.
If you have a sinecure, you will never understand what it is to be in a walk of life where demand for your production risks perfect elasticity. You simply talk about the churn in the economy. No sympathy for those buggy-whip manufacturers. They should have been smart and got a job collecting tolls on the highway and then they wouldn’t have found themselves in that pickle. People with whales on their pants who refer to their significant other as “Lovie” like this line of reasoning a lot, too.
People often tell me that my cottage furniture is very inexpensive for what you get. Raise your prices, they counsel. Maybe. But more likely, they don’t understand that the market often doesn’t make such fine distinctions about your pricing structure. Sometimes it’s pass/fail. I have to be careful never to hit the fail point because there’s no readjustment period. You’re just dead. People with straightforward jobs can picture this best by imagining that if you went into you boss’s office and demanded a raise, the only two answers are: “Sure!” and “You’re fired!”. You’d be less extravagant in your demands then, wouldn’t you?
What about the political angle I mentioned earlier? Oh, that’s where perfect inelasticity comes in. See, you don’t understand it, because if you answered the poll question above, you think the government is the producer in this scenario. You think they produce prosperity, and through some jiggery-pokery with inelastic set-asides, or elastic statutes, or unit elastic Smoot-Hawley tarriffs or raging carpet-bombing wars, they’re going to arrange for the shelves in the US Store to be stocked with goodies for you. But you’ve got it exactly backwards.
The example often used for perfect inelasticity is the human heart transplant. If heart transplants were ten dollars, you wouldn’t want one just because it was cheap, and if it cost eleventy-billion dollars, but you needed one, you wouldn’t care what it costs. You’d beg, borrow, or steal the dough to get it.
So in the real world with the government in the picture, I am the good or service. But the United States Government is not a supermarket. It is a pawn shop. And I am born pawned, and I wake up every morning pawned. And if I want to get myself out of there, to work all day and try to make a few bucks so I can worry about something other than my very existence, I’m going to do whatever I’m told, and pay whatever is demanded of me. My interest in continuing to be me is 100%, and my demand to continue being me will not diminish no matter how abusive the situation you plunge me into.
My demand for me is perfectly inelastic, and the government knows it. Pay up, sucka.
The Mafia always understood perfect inelasticity, too. They’d come in, tell you how much protection money was required, and mentioned that your kneecaps were perfectly inelastic if you bent them backwards.
Frank Gilbreth was born in Fairfield, Maine, in 1868. He never went to college except to teach at Purdue eventually. He’s famous, in a way, and anonymous in another. He’s the father portrayed in the original Cheaper By The Dozen, using a stopwatch to figure out how to make his family more efficient. That was his thing –efficiency.
He was a bricklayer. Built houses. He got to wondering if the repetition of laying one oblong slug of fired clay atop two others in a bed of mortar could be improved by observing the motions of skilled persons, breaking these exertions down into their component movements, and eliminating the wasted motions in the routines. It can, and he did. I’ve been a hod carrier and mason tender, and I can tell you that working off the ground or a platform the same height as your feet would be backbreaking and slow way to assemble masonry. We always used the footing form boards and leftover planks to assemble ad hoc shelves just lower than waist height behind the mason so that they could turn and pick up a brick and some mortar and go back to the next slot in the wall. I had no idea Clifton Webb, er, Frank Gilbreth came up with the idea less than a century before. It would be literally impossible to calculate how much time, money, effort, and how many worker’s backs Frank Gilbreth (and his wife, who was his partner and carried on after his early death) saved anonymously. His method is now universal and uncontroversial. How many people are incalculably useful to their fellow men?
Gilbreth’s ghost is in so many well-known aspects of everyday life that you can’t hope to find them all. He’s in here, in a scene that’s repeated one way or another in so many movies you can’t count them, never mind the tens of millions of real-life examples:
It’s Gilbreth’s method that’s used to train soldiers to be able to disassemble and reassemble the components of their small arms, even if they are in total darkness. It’s not a pointless trick; if your weapon doesn’t work and you can’t fix it under any conditions, including at night, you might pay for it with your life.
Want more? How about this:
Guess whose idea it was for a nurse to organize and hand instruments as called for to a surgeon. Think of how ubiquitous that method is. It’s universal and uncontroversial. How many people could tell you it was Gilbreth’s idea?
There was a contemporaneous and competing version of efficiency expert abroad in the land with Frank and his wife: Taylorism.
Frederick Taylor is the progenitor of so many things that are in the common language today that he deserves to be discussed with the most influential people of his time. That’s not necessarily a good thing. Almost all the fruit of Taylor’s tree is rotten.
Taylor is the guy standing behind dehumanized workers with a stopwatch, keeping track of bathroom breaks, and generally treating all work as a series of unrelated steps that any unskilled human could do, and constantly finding new ways of measuring it and subdividing it to harangue a little more out of the continually less and less skilled worker. “Scientific Management,” they called it. The Soviet Union loved it. They thought all people were just cogs in a big machine anyway. Most of the terms for malingering in dead-end jobs come from Taylorism. Goldbricking. Dogging it. Taylor observed that when normal people are in a group and everyone has the same duties, it is human nature for everyone in the group to devolve and perform at the level of the least capable and energetic member. His solution was a big expansion of management. He is the busted idol of micromanagement, and by extension, big government.
Taylorism is often touted as the reason you need unions. I don’t see it. The death embrace of unionized workers finding dignity in organized heel-dragging while management tries to find ways to lay everyone off is the most soul-destroying work setting I’ve encountered. Workers are just slaves with two masters instead of one, afraid to work too hard to suit the union, afraid to work too little for the boss. Unionized Taylorism simply puts off the benefits of creative destruction until in the end it leads to just plain destruction. See Detroit. Eventually Taylorism leads to management giving up and finding people for the mind-numbing work overseas, where the boss is the union and the government and the Pinkertons and the mafia rolled into one.
Gilbreth believed in craftsmanship, and in the dignity of productive work. His efficiencies were certainly scientific, in the true sense of the word, but he didn’t look at people as robots, or worse, as farm animals. Look at Taylor’s most famous nostrum for the men he observed unloading pig iron ingots at a factory:
…the labor should include rest breaks so that the worker has time to
recover from fatigue. Now one of the very first requirements for a man
who is fit to handle pig iron as a regular occupation is that he shall be so stupid and so phlegmatic
that he more nearly resembles in his mental make-up the ox than any
other type. The man who is mentally alert and intelligent is for this
very reason entirely unsuited to what would, for him, be the grinding
monotony of work of this character. Therefore the workman who is best
suited to handling pig iron is unable to understand the real science of
doing this class of work.
That is a profoundly malignant view of your fellow human beings. That view of the world is on display on every Internet comment section I’ve ever seen, now disguised as referring to people capable of only asking if you want fries with that. Unionizing the situation, or keeping the management in one country and the oxen in another (yeah, Apple, I’m looking at you) doesn’t alter the disdain the people in charge have for the people that work for them.
I like Gilbreth’s world of meaningful work that’s freed from plain drudgery, and I try to live in it, but it’s getting near impossible for the average person to cobble it together now. You don’t have to coerce people to follow sound advice. The government at all levels is all coercion, all the time, about everything, and in their hearts most government functionaries of both parties have a profound contempt for their constituents, and they get elected solely on assembling a coalition of voters with a profound contempt for just under half of their fellow citizens. Businesses solve all their problems by Taylor-ing their jobs overseas, and locally just annoy their white collar workers with Six Sigma slogans and cover pages for their TPS reports until they can find a javascript widget to do their job, too. Everyone’s angry and envious of everyone else, and no one knows how to do much except some weird little sliver of a byzantine process to earn their keep. Everyone thinks they have the right to micromanage everyone else’s life, right down to the lightbulbs and happy meals.
The abolition of drudgery through efficiency should allow people to be craftsmen, and scholars and healers, and counselors, and other meaningful things, and so have rich full lives — not make them obsolete and useless to themselves and everyone else.
Gilbreth or Taylor. Choose. I’m afraid we already have, and chose very, very wrong.
I’m not in the advice business. I’m willing to talk about what I’m doing. That’s different.
I have no formal business training. I’m not sure it matters much. It would be nice if they could train you to be able to run something effectively right out of the gate, but it seems unlikely. All the advice I got from business educated persons while running businesses wasn’t just worthless, it was actively bad.
It may be because I’ve always been in the construction industry, more or less. It’s different in many respects from other industries. When I went to college, there was no such thing as Construction Management. It was a blue collar profession right to the top.
I read Adam Smith and F. A. Hayek to get the big picture. I have no use for Keynesians or Marxists. Keynes says bang on the side of the TV to get a good picture. Marx says steal the TV, and then break it so no one can watch it. Then we’ll all be happy. The world doesn’t work that way. As far as getting the small picture, I just paid attention. I’ve learned some harsh lessons along the way, but never as bad as educated persons did alongside me. I’ve seen some colossal errors made due to hubris. I just plug away, generally. I’ve always made the most money doing things most everyone thought were crazy when I began. I could fit it on one page in pencil and all the numbers added up. That kind of crazy.
I have absolutely no use for show-biz management. Lee Iacocca and Donald Trump and all those guys with the laser pointers and the Rah Rah speech couldn’t find their ass with a map and flashlight in the real world. They either build houses of cards and sell them before the wind blows, or allow you to point a camera at them while they run things into the ground for amusement. That’s why they’re telling you how to do it at $450.00 a ticket in a seminar. It beats working.
When I was working at a large commercial construction company, every once in a while, I’d be sitting in a meeting room with a fat sheath of figures of doubtful accuracy and utility, pressed into my hand by some inkstained wretch who had the BIG ANSWER. Move things from column A to column H, and all would be well. Institute Protocol F to counter Bad Behavior M and we’ll lay in the clover. Make Target X and Bank C will give us a toaster.
“You do realize that something happens outside of this building, don’t you?” I’d ask.
These gentlemen thought that the building of large and complicated things out in the landscape from Canada to Florida and Martha’s Vineyard to Sausalito existed simply to give them figures to Rubik around on their desktop. They did not realize that they existed to support the actual operation. They thought they were the actual operation. Everyone in the government makes this same mistake, 25 hours a day, 11 days a week, by the way. A quarter of a billion dollars was going through that business a year. Very few of my colleagues had ever seen one bit of it generated.
They ran that place into the ground.
I was a middle manager. I helped make them a lot of money while everyone else lost it by the bushel. They hired consultants to restructure, and the consultants were instructed to ask me how I did it. I sat in front of them and got the same feeling an ugly puppy must get when the vivisectionist visits the dog pound. Some things are not amenable to being pulled apart for inspection. The components only work when they are working together.
I told them I didn’t do anything. I let other people do it. I told them that when the customers called, we always answered the phone, and asked them what they wanted. I told the estimators to accurately determine what it would cost us to perform the required work. I submitted the bids on time and told the customer I wanted the job. If they said someone else was cheaper I instructed them to hire them, and to please keep us in mind for the future. I kept accurate track of how we were doing, and made sure we charged for all the work we performed. And I directed that we deliver the jobs on-time no matter what. When I ran out of one kind of work, I looked for work that was similar to the kind we already knew how to do. I hired good people and I trusted them, while expecting a lot from them.
That was it. They seemed disappointed. They were looking for a slogan of some sort, I think. They promoted me, and I left.
I’m trying every day to make the thing I made yesterday, only better. Or faster. Better and faster is even better. If I can’t make money at it, I am disinterested in giving a congressman $1000 to get a set-aside for me, or a law passed against my competition. I’ll do something else. The market is wise because the market is everybody’s wisdom together. The market will tell me what to do. The customers tell me what to do. I listen imperfectly, because I am imperfect, but I get it eventually. I’m going too slow, and doing a poor job, but it’s always getting better.
I show up every day, and work as hard and as smart as I can. I’ve been told that this pays off in the long run.
Who told me that? Why, everyone that has nothing to do with the government, a university, or a newspaper or television, that’s who.
Tag: business
sippicancottage
A Man Who Has Nothing In Particular To Recommend Him Discusses All Sorts of Subjects at Random as Though He Knew Everything.
Recent Comments