Is it time to retire Ronald, fast food’s Joe Camel?

April 19, 2010

All campaigns end.

These articles suggest the Ronald McDonald, like Joe Camel, has worn out his welcome:

  1. Group: Time for Ronald McDonald to retire
  2. Can Ronald McDonald be forced into early retirement?
  3. Corporate Accountability International poll shows Ronald McDonald contributes to obesity epidemic

John Ralston Saul defines the clown in line with the emerging understanding of junk food as an addiction (see The Doubter’s Companion: A Dictionary of Aggressive Common Sense.)

RONALD McDONALD

Post-modern philosopher. In somewhat the same way that Voltaire was the public intellectual face of the Enlightenment, Ronald McDonald is the face of and voice of consumer culture.

The moral underpinning of this movement is addiction. The philosophical dilemma proposed by the phrase “fast food” is: how fast can the seller make the buyer buy more?

..It (desire for more) is based not on hunger but on the illusion of hunger. Science, however, has contributed a better understanding of three key elements capable of accentuating that illusion: salt, grease and sugar.

It’s chemistry, stupid.

Salt, somewhat like monosodium glutamate, attacks the taste receptors on the tongue and excites them. If grease is combined with the salt, a chemical reaction is provoked which accentuates this excitement, which in turn translates into a meaningful simulation of hunger. The further addition of sugar will then provoke an abrupt rise in blood-sugar levels. As on a roller-coaster this can only be followed by an abrupt fall, which takes the form of a yet more extreme sensation of weakness and hunger. At this point fast food, through the ingenious use of basic science, comes close to reconstituting the old religious marriage (in fact a philosophical tension) between desire and fear.

Indeed, with a new outlet opening somewhere in the world every eighteen minutes, Ronald McDonald may be the most successful scientist/philosopher since Albert Einstein. A suitable heir-apparent to Mickey Mouse.

A philosopher-king.

The king may be dead.

Long live the king?

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Unsustainable Levels of Debt by John Ralston Saul

April 13, 2010

Got crushing personal or national debt?

Is enslavement and stagnation the only answer?

Not necessarily.

John Ralston Saul suggests in his 1994 book that both private and public debt can be dealt with in creative ways.

I quote at length on his one section but encourage everyone to read this and Saul’s other work.

UNSUSTAINABLE LEVELS OF DEBT

National debts are treated today as if they were unforgiving gods with the power to control, alter and if necessary destroy a country. This financial trap is usually presented as if it were peculiar to our time, as well as being a profound comment on the profligate habits of the population. The reality may be less disturbing.

1. The building up of unsustainable debt loads is a commonplace in history. There are several standard means of resolving the problem: execute the lenders, exile them, default outright or simply renegotiate to achieve partial default and low interest rates.

2. There is no example of a nation become rich by paying its debts.

3. There are dozens of examples of nations becoming rich by defaulting or renegotiating. This begins formally in the sixth century BC with Solon taking power in debt-crippled Athens. His organization of general default – “the shaking off of the burdens” – set the city-state on its road to democracy and prosperity. The Athens which is still remembered as the central inspiration of WESTERN CIVILIZATION was the direct product of a national default. One way or another most Western countries, including the United States, have done the same thing at some point. Most national defaults lead to sustained periods of prosperity.

4. The non-payment of debts carried no moral weight. The only moral standards recognized in Western society as being relevant to lending are those which identify profit made from loans as a sin. Loans themselves are mere contracts and therefore cannot carry moral value.

5. As all businessmen know, contracts are to be respected whenever possible. When not possible, regulations exist to aid default or renegotiation. Businessmen regularly do both and happily walk away.

The collapse of the Reichmann financial empire – larger than most countries – is a recent example. The family was able to turn around, walk away and almost immediately begin a new life, promoting the biggest property development in the history of Mexico.

6. There are no general regulations dealing with the financial problems of nations simply because they are themselves the regulatory authority. There is however well-established historical precedent. Mexico effectively defaulted in 1982-83, thus regenerating its economy. The reaction of Western lenders has been to treat these crises as special cases. The sort of thing that only happens to Third World countries. That’s nonsense.

7. The one major difference between private and public debt is that the public sore cannot be based upon real collateral. This makes default a more natural solution to unviable situations.

The question of national collateral was fully addressed in the eighteenth century when it became clear that an indebted people could not owe their national rights (their land and property) to a lender. The citizen’s natural and concrete rights took precedence over the lender’s abstract rights.

One of the most peculiar and insidious aspects of twentieth-century CORPORATISM has been an attempt to reverse this precedence. The managerial imperative suggests that national debts can be indirectly collateralized in several ways. Governments can be forced to sell national property to pay debts (PRIVATIZATION). They can also be pressed to transfer ownership of national property to lenders, as has been done in the Third World.

There is also the threat that defaulting nations will be treated as international pariahs. This is a strange argument since it doesn’t apply in the private sector (see 5). It is also an idle threat, as Mexico has demonstrated (see 6).

8. Debts – both public and private – become unsustainable when the borrower’s cash flow no longer handily carries the interest payments. Once a national economy has lost that rate of cash flow, it is unlikely to get it back. The weight of the debt on the economy makes it impossible.

9. A nation cannot make debts sustainable by cutting costs. Cuts may produce marginal savings, but savings are not cash flow. This is another example of the alchemist’s temptation.

Mrs. Thatcher spent a decade trying to slash the British national debt. She had the advantage of being able to use North Sea oil income for this purpose. The result was a damaged industrial sector, economic stagnation and endemic unemployment.

The payment of debts is a negative process which can only be a drain on investment and growth. The more successful major repayment programs are, the more the economy will be damaged.

10   Strong nations weaken their own economies by forcing weaker ones to maintain unsustainable debt-levels. For example, in spite of enormous efforts on all sides, the Third World debt has continued to grow. In 1993 it was $1.6 trillion. This costs them far more in interest payments sent to the West than the West sends in aid. The practical effect is to make economic growth impossible. The Third World thus constitutes a dead weight in our ongoing DEPRESSION; a barrier to renewed cash flow

11. Civilizations which become obsessed by sustaining unsustainable debt-loads have forgotten the basic nature of money. Money is not real. It is a conscious agreement on measuring abstract value. Unhealthy societies often become mesmerized by money and treat it as if it were something concrete. The effect is to destroy the currency’s practical value.

12. An obsession with such false realities and with deb t repayment indicates a liner, narrow managerial approach to economics. The management of an economy is the profession of finance-department technocrats, economists and bankers. Their approach is quite naturally one of continuity. This is a means of denying failure.

To treat money or debt as a contractual matter – therefore open to non-payment or to renegotiation – would mean treating the managerial profession as of secondary importance and unrelated to fundamental truths. What sensible people might see as originality or practicality, fiancnial expers see as a threat to their professional self-pride.

13. Does all of this mean that governments should default on their national debt? Not exactly.

What it does mean is that we are imprisoned in a linear and managerial approach which denies reality, to say nothing of experience. Money is first a matter of imagination and second of fixed agreements on the willing suspension of disbelief.

In other words, it is possible to approach the debt problem in quite different ways.

14. There have been changes which limit our actions in comparison to those of Solon or Henry IV, who negotiated his way out of an impossible debt situation in the early seventeenth century and re-established prosperity. First we have to recognize and protect the investment made by citizens directly (government bonds) and indirectly (bank deposits) in the financing of national debts. Second, there is the new and unregulated complexity of the international MONEY MARKETS, which now constitutes an important corporatist element.

15. Our central problem is one of approach. For two decades governments have been instructing economists and finance officials to come up with ways in which the debt can be paid down and interest payments maintained.

No one has instructed them to propose methods for not paying the debt and not maintaining interest payments. No one has asked them to use their creativity in place of a priori logic.

16. Were the members of the Group of Seven (G7) each to pool their economists and give them a month to come up with modern versions of default, we might be surprised by the ease with which practical proposals would appear.

17. There are two simple guiding points:
A. The appearance of continuity is easily achieved in default scenarios through paper mechanisms which can be categorized as “debt retirement.”
B. What is difficult for a single country in contemporary circumstances is easy for a group, particularly if that group speak for the developed world. See: ETHICS.

The Doubter’s Companion: A Dictionary of Aggressive Common Sense, John Ralston Saul.


Corporatism v. Democracy: What concept really won WWII?

April 8, 2010

Franchising degrades humans.

I use World War II images for a reason.

I think democratic societies won the battles but lost the war against totalitarianism. The tyrants wear business casual.

John Ralston Saul has made an important contribution to my thinking by writing The Doubter’s Companion: A Dictionary of Aggressive Common Sense.

One of his key definitions:

CORPORATISM

Among the most important yet most rarely used words. Better than any other it describes the organization of modern society.

Corporatism is the persistent rival school of representative government. In place of the democratic idea of individual citizens who vote, confer legitimacy and participate to the best of their ability, individuals in the corporatist state are reduced to the role of secondary participants. They belong to their professional or expert groups – their corporations – and the state is run by ongoing negotiations between those various interests. This is the natural way of organizing things in a civilization based on expertise and devoted to the exercise of power through bureaucratic structures…

The surface argument of corporatism has always been that democracy is inefficient, ineffective, corrupting, subject to whims and emotions. Corporatism, on the other hand, presents itself as professional and responsible. It promises to deliver prosperity by helping those who know how to do their jobs properly and in concert…

Note:

The Second World War was about many things, but at its heart is was a battle between two concepts of civilization – the one based on individualism and democracy, and the other one corporatist authoritarianism. Theoretically the democratic individualists won.

Yet since 1945 corporatism has advanced with even greater strength and now has a real hold on day-to-day power.

Somehow we seem to have lost World War II after all…

What makes modern franchising most offensive (to me) is its corruption of mom-and-pops’ individual labour and basic human rights (speech, association). It produces serious and long-lasting physical, mental, spiritual and ethical disease (dis-ease).

Franchising is not alone and may not even the most severe but this but this is an area I know about, so this is why I write.


Writers: Making language work for the reader

January 15, 2009

voltaire2VOLTAIRE

“That nasty man who did so much good.”

Paul Valéry

Is it because Voltaire wasn’t afraid to be nasty that he did so much good? Almost certainly. There is no convincing evidence that writers can do their job by being nice.

And why should they be nice? To be asked to dinner? To be part of a corporation of writers, which like all corporate groups rewards discretion? To be rewarded with money, prizes and titles?

Nice writers are usually working for someone or senile or in the wrong business. Those who have done the most good, as Voltaire pointed out, have “mostly been persecuted.” The nasty sort continue to be persecuted in most countries. In the West they have to deal with more sophisticated assaults such as bankrupting lawsuits and job loss. Worst of all – in this society of expensive communication systems – they are threatened with irrelevance.

What about their messy lives, their greed, their jealousies, their hypocrisy? Who cares? Voltaire himself had a more than average number of flaws and contradictions. He still created the language which ended a regime…

Their only job is to make language work for the reader. That is the basis for free speech. Whatever the vested interests of the day may be, they invariably favour an obscure language of insider’s dialects and received wisdom. So the writer turns nasty. It’s a public service.

— excerpt from The Doubtger’s Companion: A Dictionary of Aggressive Common Sense, John Ralston Saul

The franchise industry has made me a writer. For better or worse, I am that: I can do nothing other than type. And no one is more surprised than me.

I consider what I do to be a public service. I have created an index method for a U.S. $1 trillion per year industry, created an institutional memory of any published article and broken the back of those that enable this modern tyranny.

By any measure I have paid the price and more. I am indebted to no one. I am a free man and choose to associate with others who value freedom.

The time of reckoning coming quickly.

😉


Franchise Bankers are on the Autobahn to Perdition

January 10, 2009

roadtoperdition2

As I promised, more thought-provoking ideas from Saul‘s, The Doubter’s Companion.

BANKERS Pillars of society who are going to hell if there is a God and He has been accurately quoted.

All three Western religions have always forbidden the collection of interest on loans. When Samuel Johnson defined the banker in the eighteenth century his status was clear: “One that trafficks in money.” Their venal sin of usury [excessive interest] continues to sit high on lists of scriptural wrongdoing, which raise the question of why bankers – the money-market sort excluded – tend to be frequent church goers. The respect in which they have increasingly been held over the last two centuries has paralleled the growth of economics based on long-term debt, which spread into every corner of society, from governments and corporations to the poor. The more money owed, the more the lender is respected, so long as the borrower intends to pay it back.

But what effect does this have on the moral position of bank employees? Few modern bankers are owners. Except through their salaries they do not profit from interest payments. Are they or are they not among the damned? Perhaps they should themselves be seen as victims of usury, having little choice but to lend their lives to the usurious process in order to feed their families. Yet for the borrower, these employees are the human face of usury.

The clearest situation for bankers would be if God didn’t exist. They would then be morally home-free and could go to church in a more relaxed frame of mind. See: DEBT.

Margaret Atwood observes lately that Christianity is based primarily on debt: Jesus came and redeemed man, opened the gates of heaven and paid off all past and future debt. The Aramaic words for debt and sin are the same. In the Lord’s Prayer, believers are directed to forgive trespasses (debts, offences) and it appears She does only as much as you forgive others their debts.

  • One of my lawn sprinkler customers retired after 35 years with the Royal Bank of Canada in 2009. She looks 10 years younger in 4 months and attributes it not having to lie to her neighbours anymore about what the bank did to them.

A recurring theme is that debt is a form of death, is life-taking. You make your own hell by losing your soul now, let alone the everlasting damnation bit (perdition). autobahn

The Road to Perdition, 2002 movie with Tom Hanks, Paul Newman and Jude Law.


On Unsustainable levels of Debt: another perspective

January 7, 2009

johnralstonsaul6There are many, many types of debt.

  • Financial debt is really only a bit player in the rich theatre of human history. A necessary evil; a loutish relative sent to help us develop our patience and forbearance.

The recent obsession with financial debt overshadows and distorts culturally much more significant types of debt such as: ethical, debt to yourself, moral, educational, spiritual.

  • Financial debt is a simple matter that is simply a child of contract law.
  • This type carries NO moral or ethical weight, whatsoever.

Many franchise contracts carry into them a severe imbalance of economic and information power.

Some contracts are entered into with fraudulent intent.

Fusing imagination with a historical perspective may mean a different understanding of debt obligations. Some or all franchisee debt may prove to be:

  1. repaid $1.00 for $1.00,
  2. re-negotiated (certain % of claim),
  3. unenforceable (a Court will not oblige repayment),
  4. void (a conditions were not present for a valid contract to be formed), or
  5. commercially forgivable (0 to 100%, it makes economic and career sense for the creditor not to pursue the debt).

Dr. John Ralston Saul [Wikipedia, quotes] pursues a number of topics in an extremely lively and interesting way in his book, A Doubter’s Companion: A Dictionary of Aggressive Common Sense, One Review: B+.

  • Dr. Saul is a very accomplished and expansive Canadian author and philosopher. I had the great pleasure of meeting him in December 2008.
  • I told him his writings (along with Galbraith and McLuhan) had ruined my perfectly good Ivey MBA. He seemed pleased.

Unsustainable Levels of Debt is one of Saul’s more delightful entries. By substituting the words “groups of franchisees” for the word “nation, countries or civilization”, you may find it an apt franchising analogy.

I will be returning to The Doubter’s Companion and taking the liberty of free riding on Dr. Saul’s approach and insights.

Selected Excerpt

National debts are treated today as if they were unforgiving gods with the power to control, alter and if necessary destroy a country. This financial trap is usually presented as if it were peculiar to our time, as well as being a profound comment on the profligate [adj 1 shamelessly immoral 2 recklessly extravagant] habits of the population. The reality may be less disturbing.

1. The building up of unsustainable debt loads is a commonplace in history. There are several standard means of resolving he problem: execute the lenders, exile them, default outright or simply renegotiate to achieve partial default and low interest rates.

2. There is no example of  nation become rich by paying its debts.

3. There are dozens of examples of nations becoming rich by defaulting or renegotiating.

This begins formally in the sixth century BC with Solon taking power in debt-crippled Athens. His organization of general default – “the shaking off of the burdens” – set the city-state on its road to democracy and prosperity. The Athens which is still remembered as the central inspiration of WESTERN CIVILIZATION was the direct product of a national default. One way or another most Western countries, including the United States, have done the same thing at some point. Most national defaults lead to sustained periods of prosperity.

4. The non-payment of debts carried no moral weight. The only moral standards recognized in Western society as being relevant to lending are those which identify profit made from loans as a sin. Loans themselves are mere contracts and therefore cannot carry moral value.

5. As all businessman know, contracts are to be respected whenever possible. When not possible, regulations exist to aid default or renegotiation. Businessmen regularly do both and happily walk away…

8. Debts – both public and private – become unsustainable when the borrower’s cash flow no longer handily carries the interest payments. Once a national economy has lost that rate of cash flow, it is unlikely to get it back. The weight of the debt on the economy makes it impossible.

11. Civilizations which become obsessed by sustaining unsustainable debt-loads have forgotten the basic nature of money. Money is not real. It is a conscious agreement on measuring abstract value. Unhealthy societies often become mesmerized by money and treat it as if it were something concrete. The effect is to destroy the currency’s practical value.

13. Does all of this mean that governments should default on their national debt? Not exactly.

What it does mean is that we are imprisoned in a linear and managerial approach which denies reality, to say nothing of experience. Money is first a matter of imagination and second of fixed agreements on the willing suspension of disbelief.

In other words, it is possible to approach the debt problem in quite different ways.

14. There have been changes which limit our actions in comparison to those of Solon or Henry IV, who negotiated his way out of an impossible debt situation in the early seventeenth century and re-established prosperity..[discussion not relevant to franchising but he takes a shot at money market managers]

— [my definitions and emphasis]

A franchisee frequently owes the following entities:

  1. themselves,
  2. relatives (near and far),
  3. employees,
  4. government (federal, state, municipal),
  5. franchisor,
  6. financial institution,
  7. suppliers, and
  8. professionals and others (lawyers, accountants, consultants).

Both the lender and the creditor took a risk in advancing funds, or goods and services on credit. Most of the creditors have much more experience in business than the franchisee.

If, as Saul mentions, that loans are mere contracts and carry no moral weight, why should most franchisees pay themselves last?


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