That's 45 years ago! What's that got to do with server farms, p 'power' plants, pipelines, hospital care and insurance bureaucracies now?
On Sun, Oct 6, 2013 at 5:54 PM, Perelman, Michael <[email protected]> wrote: > Gar, regarding your question, here is something from my Invisible Handcuffs. > > > > For example, based on a survey of sixty New England factories, Michael Piore > found that employers instructed engineers to pursue the single-minded goal > of developing methods to reduce labor inputs, without regard for the more > rational criterion of overall cost minimization. He went on to say: > ##Virtually without exception, the engineers distrusted hourly labor and > admitted a tendency to substitute capital whenever they had the discretion > to do so. As one engineer explained, "if the cost comparison favored labor > but we were close, I would mechanize anyway." [Piore 1968, p. 610] > > > > > > Michael Perelman > > Economics Department > > California State University > > michael dot perelman at gmail.com > > Chico, CA 95929 > > 530-898-5321 > > fax 530-898-5901 > > www.michaelperelman.wordpress.com > > > > From: [email protected] > [mailto:[email protected]] On Behalf Of Gar Lipow > Sent: Sunday, October 06, 2013 1:01 AM > To: LBO; Progressive Economists List > Subject: [Pen-l] Corporate decision making - some empirical data > > > > There has been some argument back and forth as to whether capitalists act in > their narrow individual self interest, or in the narrow interests of the > businesses they run rather than from class interest. (This by the way is > separate from the question of whether they consciously do so. The 2nd > requires the first, but the first does not automatically imply the 2nd). > > > > One of the things about the work I do on global warming, is that there is a > ton of empirical data that I think sheds light on this question. For example > firms pass up all sorts of profitable opportunities to save energy, often > in favor of LESS profitable opportunities to save labor. Of course no > manager knows for sure what an investment will yield but the point is that > managers demand MUCH higher rates of return on energy savings investments > than they do for savings in labor. If you look at risk-adjusted return, the > discrepancy is even higher, because managers will choose much riskier > opportunities to cut labor costs over safer opportunities to save labor. > Incidentally I refer to energy, because that is what I focus on, and where a > lot of the data is. But as far as I can tell this also applies to water and > raw materials. Basically business people treat labor, differently from > other flow costs. Saving labor is a "core investment". Saving energy or raw > material is not. > > > > So that for energy (and all non-core flow costs) heuristics are used that > are not applied to core investments. Most studies find that one of two > factors overwhelmingly determine whether and energy saving investment is > made: > > > > 1) Simple payback - usually of two years or less. Note that an investment > with a lower simple payback but that keeps paying back costs for longer may > be more profitable even when a high discount rate is used. > > > > 2) Total size of investment. > > > > Incidentally, one outlying study, but based on a really large database show > that projects that are listed first in a set of proposals are 25% more > likely to be approved than those listed further on. It is an outlier, not > because anyone has refuted it, but because no one has made any effort to > replicate the result. My amused guess is that no tries to replicate it > because they fear they might get similar results rather than showing it to > be an artifact or error. > > > > So class analysis of the type Wojo thinks is wrong would say that energy and > raw materials and water do not go on strike, while workers sometime do. > > > > Alternatively, one could argue that this is just a cultural artifact and has > nothing to do with class - that global business culture just has not caught > up with the fact the direct labor is a much smaller percent of flow costs > than it was up to the mid 20th century . (Capital investment and > depreciation is not a flow cost in the same sense that water or energy or > raw materials are.) > > > > I think that would be to overlook how strongly the culture of business is > tied to control. Control over workers as a core value is not coincidental, > but very much tied to class. > > > > Incidentally, though in a lot of cases, I'm sure this is reproduced without > conscious consideration of class, often managers are very much aware of > class issues. For example, energy intensive industries often hire energy > managers. And such energy managers, knowing that a lot of opportunities to > save energy with a factory are very specific to that factory, want to > interview the workers who may know stuff that happens on the shop floor that > operations managers don't. And sometimes that is fine, but often they get a > lot of managerial resistance to doing this. "What you want advice from them > monkeys on how to run the zoo?" > > > > Of course class is the beginning rather than the end of analysis. But even > if it is a first step, it is not one that can be skipped. > > > > A list of sources on this follows. The "Monkey's running the zoo" quote is > from personal conversations with energy managers. > > > > --------------------------------------- > > Jerry Jackson. 2010. “Promoting energy efficiency investments with risk > management decision tools.” Energy Policy 38(8):3865-73. > > Catherine Cooremans. 2012. “Investment in energy efficiency: do the > characteristics of investments matter?” Energy Efficiency 5(4): 497-518. > > Surash Muthulingam, Charles J Corbett, Shlomo Benartzi, Bohdan Oppenheim > 2009. Managerial Biases and Energy Savings: An Empirical Analysis of the > Adoption of Process Improvement Recommendations. Los Angeles: Anderson > School of Management – University of California Los Angeles. > > Anderson, Soren T.; Newell, Richard G. 2004. Information programs for > technology adoption: the case of energy-efficiency audits. Resource and > Energy Economics 26(1):27-50. > > Ramon Luis Maria Abadie, Arigoni Ortiz and Ibon Galarraga. 2010. The > Determinants of Energy Efficiency Investments in the U.S. > Bilbao,Spain:Basque Center for Climate Change. > > -- > > Facebook: Gar Lipow Twitter: GarLipow > Solving the Climate Crisis web page: SolvingTheClimateCrisis.com > Grist Blog: http://grist.org/author/gar-lipow/ > Online technical reference: http://www.nohairshirts.com > > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
