That title's so...prurient. I'm sorry. (I almost appended an '(e)' to
"Silicon", but there's cute and then there's cute.)
Also, I'm from a small town. Let's get that ad hominem out there right
now, since it obviously bears heavily on the logic of my argument. I think
Aristotle (or at least Nick May) would agree.
Finally, I'm about to offer some opinons that are not even solicited, much
less substantiated. I've already taken off my shirt. Did you remember to
bring your cat-o'-nine-tails?
As for being on-topic...well, bear with me.
Here it is, the Dirty Little Secret: Profit isn't the point of being in
business.
You're rolling in the aisles. Hey, careful, you in the middle section,
somebody might have to use that seat after you. And you: don't pop a blood
vessel. Got health insurance? Somebody get that woman a respirator! Hey,
it wasn't *that* funny. In fact, I was serious.
I'll say it again: Profit isn't the point of being in business.
So: Me, and which other lunatics?
Peter Drucker, tilting quixotically against the very nature of language,
has proposed *outlawing* the word "profit" and replacing it with the
admittedly-ungainly "the cost of staying in business." He even makes a case
that there's no such thing as a profit motive per se, it's really a
fear-of-losses motive.
(Not that Peter Drucker is God or anything, even if He sometimes thinks so.
I mean, He used to take credit for Japan's lifetime employment system back
when everybody loved it; these days He settles, like a good deity, for just
openly taking the blame. Yes, some gaijin were truly pivotal in those early
post-war years and maybe He was one of them, but...come on. Really,
Drucker-sama. Listen to yourself.
(Not that Peter Drucker is an economist either. Anyway, he's always been
able to plea-bargain his way out of that charge. I guess it's helped that
the jury is always stacked with real economists.
(Nor is Drucker even really a management consultant, if you ask the legions
of professional management consultants. This could be envy, since he's
practically an industry, like Deming. And, like Deming, he appropriated or
unfairly inherited much of what he seems to have originated. He is,
nevertheless, listened to, and laureated, by professional management
consultants. Go figure.
Basically, Peter Drucker is a journalist. And we know journalists don't
get no respect in this forum -- you can smear them all you please. You can
talk about how unrelievedly grim they are, even though you can open their
work anywhere and chance on something quite cheery. Drucker will be quite
the sitting duck for some of you here. After all, a few of his stastistics
are -- get this -- actually *wrong*. Amazing but true. Want
unsubstantiated claims? That's about 50% of each of his dozens of books.
Easily.
Nevertheless, profit *is* basically a cost you have to pay to stay in
business, in any competitive market, one that's somewhere near equilibrium.
I don't know how he got that one right, but he did.
The obscene wealth accumulation and career-shattering losses that we see in
speculative mania are exempt from this general rule. As well they should
be. Absent such chaos, profit is a cost you have to pay out to keep the
shareholders from axing you, and a hedge against the inevitable future
lossses. But you can't say, "the point of being in business is to pay the
cost of being in business." Unless you want to get whacked over the head
with a bamboo cane, repeatedly, in a zen monastery. Hey, be my guest. The
real point of being in business is something else; I needn't go into it
here.
So profit isn't the point. Ready for another Druckerism? No? Too bad.
"The computer industry as whole has never turned a profit."
What? That wasn't as funny?
Hey, deal with it already! Someone billed this as a stand-up comedy act by
mistake? Not my fault.
But is this one so surprising? In my time watching the computer industry
(stretching it a little: 30 years), it just seems to be wave following wave
of speculative mania, the long troughs being filled with stagnant cynicism.
Talk about your bad long-term bets. Would *you* bet long-term on an
industry that spawned "Dilbert", a strip that hasn't gone stale in over 8
years of production despite being focused on a certain kind of workplace to
a degree that that "Blondie" never even approached?
Turning from Drucker to another flaming idiot (but one who know from
numbers), let's hear from Paul Strassman:
"Computerization will never be a sustainable source of profit."
Paul Who? What's he ever done? Why, I bet if I surfed the web for his
resume, I'd find that he's never....um. Heh. OK.
Basically, the use of computers creates new costs you didn't have to deal
with before, and the ROI (if you are lucky enough to get one at all) is also
available to your competitors. After all, ROI is less a matter of
technology per se as it is execution (good management) and opportunities
(AKA luck.) Neither of which you can hope be favored with for more than a
few years at a stretch. Maybe you'll get a few quarters where the new
system helps your bottom line, then everybody else is in on your new act.
IF it was a good system. Pretty big If.
In fact, as a corporate consumer of computer technology, your only hope of
locking competitors out, and profits in, is that bete noir of the technology
enthusiasts: the business model patent. Hence all the interest, even
post-bubble interest.
How does this wireless internet stuff depart from the old scenario? Well,
you tell me. I can't figure it out. Just what is so damned special here?
Isn't it just more computerization, more telecoms? More of everything that
just naturally settles down to the same risk/reward ratios, the same
middling dividends and capital gains for the safer players, the same
ridiculous gains for the undeserving and those equally ridiculous losses for
the foolhardy and hoodwinked?
Isn't this just capitalism? Or rather, isn't this just Silicon Capitalism,
capitalism's bratty kid brother on Ritalin, always exceeding his weekly
allowance and bumming change off his older brother, so he can go buy the
latest issue of X-Men?
They say you can't teach an old dog new tricks, and my oldest trick is a
bad one: biting the hand that feeds me. But I've woken up and smelled New
Alpo, a diet that might make me a comfortable, if toothless, old hound.
Yes, I am studying business model patents. Because I've got to retire on
something. And it won't be on the kindness of the strangers who keep coming
and going, courting the industry that I've had a 30-year love/hate
relationship with. If it's the doghouse for me, I need a master who can at
least fill the bowl regularly, one who will live longer than I will.
In dog years, I'm dead. But silicon dies in *guppy* years. That leaves
owning business models.
So there it is: It's not about profit, unless it's about
government-sanctioned intellectual-property monopolies (de facto, and de
jure), or else beggar-thy-neighbor pump-and-dump stock manipulation. And
that's been as true so far for wireless as it has been for everything else,
from what I can see.
Let the hatred begin. But I won't be here. Gotta go get my rabies shots.
-michael turner
leap@gol.com
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Received on Sat Sep 8 13:42:19 2001