Thursday, December 17, 2009

Labor/Capital Mix and Pest Control

One thing I've noticed in my chosen profession is that there is a tension between the interest in doing a thorough, professional job, and an interest in keeping costs down. I'm in the Pest Control industry.

I go to these educational meetings and learn all these things our technicians are supposed to be doing for their customers: taking time to talk with the customer, dusting voids, inspecting for harborages, moisture conditions, and other conducive conditions. We're supposed to use our chemical solutions (hereafter referred to as "products") sparingly, only in those places where it is deemed necessary. Doing this takes time.

But then you've got these bean counters who are less interested in getting the job done right and more interested in how many accounts they get to bill relative to how much labor they're having to pay for. These people either don't know much about how pest control is supposed to be done, or they just don't care. Finally, these bean counters wield considerable power in this, as every every industry. Yes, even the Pest Control Industry could serve as inspiration for Dilbert comics. So the technician who takes his time to get the job done right gets a talking to, and is actively compared to those technicians who are able to do fifteen to twenty jobs a day. That's no more than a half hour per job, including drive time. That's barely enough time to quickly spray the perimeter. So that's all that ever gets done, unless the customer actively demands more.

It got me thinking, as I woke up this morning, about decisions businesspeople make with regard to labor/capital mix. The accountants in the industry, given the choice between more labor less capital (taking the time while reducing product use), and more capital less labor (general broadcast treatments that use more product but take less time), the outcome of the wrangling over time and professionalism is a preference for more capital. This may be because it is more efficient. But I also note that the government taxes labor (income and payroll taxes) at a higher rate than they do capital (capital gains, sales, etc.). This will definitely have some effect on the decisions people make with regard to the use of man hours vs. the use of materials.

So the solution to me seems simple: tax labor and capital at the same rate... preferably zero. This removes the government's stimulus to prefer capital use over labor, making a great number of industries less consumptive (without penalizing the many, many cases where more capital actually means more productivity). And I'm not saying no taxes at all: this is just another strike in favor of the Single Tax, which I have discussed at great length in other entries. Tax labor and people tend to use less labor, resulting in unemployment. Tax capital and people tend to use less capital, resulting in lower labor productivity and reducing opportunities in capital goods producing industries. Tax land, and people tend to use less land... and since land is the one thing people can't just make more of, that's the only way to make more land available for more uses, thus actually improving productivity.

Tuesday, December 15, 2009

Conflict Within, Harmony Between

I've been reading Samuel P. Huntington's The Clash of Civilizations and the Remaking of the World Order. Huntington noted something he considered peculiar about American society in regard to "goodness" or "badness" in international relations: an assumption that friendly international relations are always desirable, and that hostile relations are always undesirable. He contrasted this with the American commitment to competition within American society, that Americans "endorse competition in American society between opinions, groups, parties, branches of government, businesses." (Huntington pg. 221) He wonders why Americans believe conflict within our society is good, but conflict between societies is bad, and speculates that nobody has seriously studied the question.

Off the top of my head it occurs to me that when conflict occurs within established forums or mediums for conflict, the conflict tends to shake out the best ideas and solutions to problems, while resulting in minimal collateral damage. Conflict between competing businesses encourages both businesses to do their best work, while the framework of law prevents destructive forms of conflict. Conflict between ideas occurs as debate and stimulates a vigorous exploration of the ideas under question, while laws and norms prevent the conflict from becoming physically destructive. Conflict between branches of government prevents any one of them from becoming overly powerful, restricting government action to only those things the involved parties can agree are necessary, desirable, or lawful. Even warfare within a cultural group has rules of engagement, ensuring that there is still something left when the victor wins the war.

Between cultural groups, however, laws and norms are not yet developed. As a result, conflict is much more likely to degenerate into total warfare. Tactics which are acceptable to one group are offensive to another group, provoking an equally offensive response. Neither side understands the other's rules of engagement. In debate one man's rebuttal is another man's personal insult. In business one man's clever strategem is another man's unfair practice. And in warfare one man's fair engagement is another man's unforgivable atrocity or abomination.

Conflict that occurs within a cultural paradigm is more likely to be a striving in good works. Conflict that occurs between cultural paradigms is more likely to be nothing but destruction and death. As such, what Huntington describe's as the American preference for conflict within nations, and harmony between nations, makes sense to me.

Thursday, December 03, 2009

Read The Bills Act

The following is just a little something I sent to my representative and senators via Downsize DC's Read The Bills Act Campaign. This is basically Downsize DC's "signature" campaign, the primary issue they'd like to get addressed.

Congress needs to start reading the laws it passes. Please introduce's "Read the Bills Act." I know you have the power to introduce this legislation on your own, without waiting for anyone else. I urge you to do so. This is a much-needed, common sense reform. I can see no justification for not introducing it. I'm telling my friends about it, and I look forward to hearing that you've introduced it. You can find the text of the legislation here:

An analogy: How limiting the flow can actually induce better results.

I have a friend who works in the intelligence community. We are all aware of the controversy over attempts by the previous administration to cast an unconstitutionally wide information gathering net. One might think this is done to make the intelligence community's job easier. But what I hear from the professionals, both those publishing articles on the subject as well as my friend, is that a bloat of untargeted information actually makes their job harder, absorbing resources to analyze all this extra, often irrelevant data that could be used analyzing more important data. Constitutional procedure that limits their ability to collect information, forcing them to prioritize and improving the quality of the information acquired.

In a similar fashion, the "Read The Bills Act" could end up forcing leadership and committees to prioritize in the introduction of legislation. It would definitely encourage brevity of language, making it more difficult to hide abuses of the process by special interest groups. By slowing the process by which bills come to the floor and get voted, it could actually make your job considerably easier. I can think of no reason why the RTBA could be a bad idea.