Transform – Page 45 – Go Lean…Caribbean

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Economic Principle: Wage-Seeking – Market Forces -vs- Collective Bargaining

Posted on June 18, 2015 in Economics, Ethos, Industries, Social

Go Lean Commentary

The field of Economics is unique! We all practice it every day, no matter the level of skill or competence. There is even the subject area in basic education branded Home Economics, teaching the students the fundamentals of maintaining, supporting and optimizing a home environment. Most assuredly, economics is an art and a science, albeit a social science.

In a previous blog/commentary, Scotman’s Adam Smith was identified as the father of modern macro-economics. Though he lived from 1723 to 1790, his writings defined advanced economic concepts even in this 21^st Century. His landmark book An Inquiry into the Nature and Causes of the Wealth of Nations qualified the divisions of income into these following categories: profit, wage, and rent.^[4] We have previously explored profit-seeking (a positive ethos that needs to be fostered in the Caribbean region) and rent-seeking (a negative effort that proliferates in the Caribbean but needs to be mitigated), so now the focus of this commentary is on the activity of wage-seeking, and the concepts of governance and public choice theory to allow for maximum employment.

This is hard! Change has come to the world of wage-seekers – the middle classes are under attack; the labor-pool of most industrialized nations have endured decline, not in the numbers, but rather in prosperity. While wage-earners have not kept pace with inflation, top-earners (bonuses, commissions and business profits) have soared; (see Photo).

As a direct result, every Caribbean member-state struggles with employment issues in their homeland. In fact, this was an initial motivation for the book Go Lean…Caribbean, stemming from the fall-out of the 2008 Great Recession, this publication was presented as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU) to elevate the economic, security and governing engines of the Caribbean region to create 2.2 million new jobs, despite global challenges.

Needless to say, the global challenge is far more complex than Home Economics. The Go Lean book describes the effort as heavy-lifting; then proceeds to detail the turn-by-turn directions of a roadmap to remediate and mitigate wage-seeking.

The roadmap channels the Economic Principles and best-practices of technocrats like Adam Smith and 11 other named economists, many of them Nobel Laureates. A review of the work of these great men and woman constitute “Lessons in Economic Principles”. Why would these lessons matter in the oversight of Caribbean administration? Cause-and-effect!

The root of the current challenge for wage-seekers is income equality; and this is bigger than just the Caribbean. It is tied to the global adoption of globalization and technology/ automation – a product of global Market Forces as opposed to previous Collective Bargaining factors. This relates back to the fundamental Economic Principle of “supply-and-demand”; but now the “supply” is global. This photo/”process flow” here depicts the ingredients of Market Forces. When there is the need for labor, the principle of comparative analysis is employed, and most times the conclusion is to “off-shore” the labor efforts, and then import the finished products. This is reversed of the colonialism that was advocated by Adam Smith; instead of the developed country providing factory labor for Third World consumption, the developed nation (i.e. United States) is now in the consumer-only role, with less and less production activities, for products fabricated in the Third World. This reality is not sustainable for providing prosperity to the middle classes, to the wage-seekers.

As a community, we may not like the laws of Economics, but we cannot ignore them. The Go Lean book explains the roles and significance of Economic Principles … with this excerpt (Page 21):

While money is not the most important factor in society, the lack of money and the struggle to acquire money creates challenges that cannot be ignored. The primary reason why the Caribbean has suffered so much human flight in the recent decades is the performance of the Caribbean economy. Though this book is not a study in economics, it recommends, applies and embraces these 6 core Economic Principles as sound and relevant to this roadmap:

People Choose: We always want more than we can get and productive resources (human, natural, capital) are always limited. Therefore, because of this major economic problem of scarcity, we usually choose the alternative that provides the most benefits with the least cost.

All Choices Involve Costs: The opportunity cost is the next best alternative you give up when you make a choice. When we choose one thing, we refuse something else at the same time.

People Respond to Incentives in Predictable Ways: Incentives are actions, awards, or rewards that determine the choices people make. Incentives can be positive or negative. When incentives change, people change their behaviors in predictable ways.

Economic Systems Influence Individual Choices and Incentives: People cooperate and govern their actions through both written and unwritten rules that determine methods of allocating scarce resources. These rules determine what is produced, how it is produced, and for whom it is produced. As the rules change, so do individual choices, incentives, and behavior.

Voluntary Trade Creates Wealth: People specialize in the production of certain goods and services because they expect to gain from it. People trade what they produce with other people when they think they can gain something from the exchange. Some benefits of voluntary trade include higher standards of living and broader choices of goods and services.

The Consequences of Choices Lie in the Future: Economists believe that the cost and benefits of decision making appear in the future, since it is only the future that we can influence. Sometimes our choices can lead to unintended consequences.

Source: Handy Dandy Guide (HDC) by the National Council on Economic Education (2000)

The Go Lean book describes the end result of the application of best-practices in this field of economics over the course of a 5-year roadmap: the CU … as a hallmark of technocracy. But the purpose is not the edification of the region’s economists, rather to make the Caribbean homeland “better places to live, work and play” for its citizens. This branding therefore puts emphasis on the verb “work”; the nouns “jobs” and “wages” must thusly be a constant focus of the roadmap.

This Go Lean book declares that the Caribbean eco-system for job-creation is in crisis … due to the same global dilemma. The roadmap describes the crisis as losing a war, the battle of globalization and technology. The consequence of the defeat is 2 undesirable conditions: income inequality and societal abandonment, citizens driven away to a life in the Diaspora. This assessment currently applies in all 30 Caribbean member-states, as every community has lost human capital to emigration. Some communities, like Puerto Rico and the US Virgin Islands have suffered with an abandonment rate of more than 50% and others have watched more than 70% of college-educated citizens flee their community for foreign shores. Even education is presented as failed investments as those educated in the region and leave to find work do not even return remittances in proportion to their costs of development. (See Table 4.1 in the Photo)

The Go Lean book therefore posits that there is a need to re-focus, re-boot, and optimize the labor/wage-seeking engines so as to create more jobs with livable wages. Alas, this is not just a Caribbean issue, but a global (i.e. American) one as well. See the following encyclopedic references for wage-seeking and Collective Bargaining to fully understand the complexities of these global issues:

Encyclopedia Reference #1: Wage-Seeking
(Source: https://en.wikipedia.org/wiki/Wage)

A wage is monetary compensation paid by an employer to an employee in exchange for work done. Payment may be calculated as a fixed amount for each task completed (a task wage or piece rate), or at an hourly or daily rate, or based on an easily measured quantity of work done.

Wages are an example of expenses that are involved in running a business.

Payment by wage contrasts with salaried work, in which the employer pays an arranged amount at steady intervals (such as a week or month) regardless of hours worked, with commission which conditions pay on individual performance, and with compensation based on the performance of the company as a whole. Waged employees may also receive tips or gratuity paid directly by clients and employee benefits which are non-monetary forms of compensation. Since wage labour is the predominant form of work, the term “wage” sometimes refers to all forms (or all monetary forms) of employee compensation.

Determinants of wage rates
Depending on the structure and traditions of different economies around the world, wage rates will be influenced by market forces (supply and demand), legislation, and tradition. Market forces are perhaps more dominant in the United States, while tradition, social structure and seniority, perhaps play a greater role in Japan.^[6]

Wage Differences
Even in countries where market forces primarily set wage rates, studies show that there are still differences in remuneration for work based on sex and race. For example, according to the U.S. Bureau of Labor Statistics, in 2007 women of all races made approximately 80% of the median wage of their male counterparts. This is likely due to the supply and demand for women in the market because of family obligations. ^[7] Similarly, white men made about 84% the wage of Asian men, and black men 64%.^[8] These are overall averages and are not adjusted for the type, amount, and quality of work done.

Real Wage
The term real wages refers to wages that have been adjusted for inflation, or, equivalently, wages in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wages or unadjusted wages. Because it has been adjusted to account for changes in the prices of goods and services, real wages provide a clearer representation of an individual’s wages in terms of what they can afford to buy with those wages – specifically, in terms of the amount of goods and services that can be bought.

See Table of European Model in the Appendix below. (The European Union is the model for the Caribbean Union).

———-

Encyclopedia Reference #2: Collective Bargaining
(Source: https://en.wikipedia.org/wiki/Collective_bargaining)

Collective Bargaining is a process of negotiation between employers and a group of employees aimed at reaching agreements to regulate working conditions. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. The collective agreements reached by these negotiations usually set out wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.^[1]

The union may negotiate with a single employer (who is typically representing a company’s shareholders) or may negotiate with a group of businesses, depending on the country, to reach an industry wide agreement. A collective agreement functions as a labor contract between an employer and one or more unions.

The industrial revolution brought a swell of labor-organizing in [to many industrialized countries, like] the US. The American Federation of Labor (AFL) was formed in 1886, providing unprecedented bargaining powers for a variety of workers.^[11] The Railway Labor Act (1926) required employers to bargain collectively with unions. While globally, International Labour Organization Conventions (ILO) were ratified in parallel to the United Nations efforts (i.e. Declaration of Human Rights, etc.). There were a total of eight ILO fundamental conventions ^[3] all ascending between 1930 and 1973, i.e. the Freedom of Association and Protection of the Right to Organise Convention (1949).

The Go Lean book presents a roadmap on how to benefit from the above Economic Principles – and how to empower communities anew – in the midst of tumultuous global challenges. This roadmap addresses more than economics, as there are other areas of societal concern. This is expressed in the CU charter; as defined by these 3 prime directives:

Optimization of economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
Establishment of a security apparatus to protect the resultant economic.
Improvement of Caribbean governance to support these engines.

Early in the Go Lean book, the responsibility to create jobs was identified as an important function for the CU with these pronouncements in the Declaration of Interdependence (Pages 14):

xix. Whereas our legacy in recent times is one of societal abandonment, it is imperative that incentives and encouragement be put in place to first dissuade the human flight, and then entice and welcome the return of our Diaspora back to our shores.…

xxi. Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of ship-building, automobile manufacturing, prefabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex. In addition, the Federation must invigorate the enterprises related to existing industries tourism, fisheries and lotteries – impacting the region with more jobs.

According to an article from the Economic Policy Institute, entitled The Decline of Collective Bargaining and the Erosion of Middle-class Incomes in Michigan by Lawrence Mishel (September 25, 2012), the challenges to middle class income are indisputable, and the previous solution – Collective Bargaining – is no longer as effective as in the past. (The industrial landscape of Michigan had previously been identified as a model for the Caribbean to consider). See a summary of the article here (italics added) and VIDEO in the Appendix:

In Michigan between 1979 and 2007, the last year before the Great Recession, the state’s economy experienced substantial growth and incomes rose for high-income households. But middle-class incomes did not grow. The Michigan experience is slightly worse than but parallels that of the United States as a whole, where middle-class income gains were modest but still far less than the income gains at the top. What the experience of Michiganders and other Americans makes clear is that income inequality is rising, and it has prevented middle-class incomes from growing adequately in either Michigan or the nation.

The key dynamic driving this income disparity has been the divergence between the growth of productivity—the improvement in the output of goods and services produced per hour worked—and the growth of wages and benefits (compensation) for the typical worker. It has been amply documented that productivity and hourly compensation grew in tandem between the late 1940s and the late 1970s, but split apart radically after 1979. Nationwide, productivity grew by 69.1 percent between 1979 and 2011, but the hourly compensation of the median worker (who makes more than half the workforce but less than the other half) grew by just 9.6 percent (Mishel and Gee 2012; Mishel et al. 2012). In other words, since 1979 the typical worker has hardly benefited from improvements in the economy’s ability to raise living standards and, consequently, middle-class families’ living standards have barely budged since then. This phenomenon has occurred across the nation, including in Michigan.

This divergence between pay and productivity and the corresponding failure of middle-class incomes to grow is strongly related to the erosion of collective bargaining. And collective bargaining has eroded more in Michigan than in the rest of the nation, helping to explain Michigan’s more disappointing outcomes.

Research three decades ago by economist Richard Freeman (1980) showed that collective bargaining reduces wage inequality, and all the research since then (see Freeman 2005) has confirmed his finding. Collective bargaining reduces wage inequality for three reasons. The first is that wage setting in collective bargaining focuses on establishing “standard rates” for comparable work across business establishments and for particular occupations within establishments. The outcome is less differentiation of wages among workers and, correspondingly, less discrimination against women and minorities. A second reason is that wage gaps between occupations tend to be lower where there is collective bargaining, and so the wages in occupations that are typically low-paid tend to be higher under collective bargaining. A third reason is that collective bargaining has been most prevalent among middle-class workers, so it reduces the wage gaps between middle-class workers and high earners (who have tended not to benefit from collective bargaining).

Collective bargaining also reduces wage inequality in a less-direct way. Wage and benefit standards set by collective bargaining are often followed in workplaces not covered by collective bargaining, at least where there is extensive coverage by collective bargaining in particular occupations and industries. This spillover effect means that the impact of collective bargaining on the wages and benefits of middle-class workers extends far beyond those workers directly covered by an agreement.
…
Source: http://www.epi.org/publication/bp347-collective-bargaining/

The siren call went out 20 years ago, of the emergence of an “Apartheid” economy, a distinct separation between the classes: labor and management. Former US Secretary of Labor Robert Reich (1993 – 1997 during the Clinton Administration’s First Term) identified vividly, in this 1996 Harvard Business Review paper, that something was wrong with the U.S. economy then; (it is worst now):

That something is not the country’s productivity, technological leadership, or rate of economic growth, though there is room for improvement in all those areas. That something is an issue normally on the back burner in U.S. public discourse: the distribution of the fruits of economic progress. For many, the rise in AT&T’s stock after it announced plans [on January 3, 1996] to lay off 40,000 employees crystallized the picture of an economy gone haywire, with shareholders gaining and employees losing as a result of innovation and advances in productivity.

Has the distribution of the benefits of economic growth in the United States in fact gone awry? Is the nation heading toward an apartheid economy—one in which the wealthy and powerful prosper while the less well-off struggle? What are the facts? What do they mean? Are there real problems—and can they be solved?
…

Deploying solutions for the problem of income equality in the Caribbean is the quest of the Go Lean/CU roadmap. The book identified Agents of Change (Page 57) that is confronting the region, (America as well); they include: Globalization and Technology. A lot of the jobs that paid a “living wage” are now being shipped overseas to countries with lower wage levels, or neutralized by the advancement of technology. Yes, computers are reshaping the global job market, so even Collective Bargaining may fail to counter any eventual obsolescence of wage-earners, their valuation and appreciation; (see Encyclopedic Article # 2). The Go Lean book, and previous blog/commentaries, therefore detailed the campaign to not just consume technology, but to also innovate, produce and distribute the computer-enabled end-products. Therefore industries relating to STEM (Science, Technology, Engineering and Mathematics/Medicine) are critical in the roadmap. Not only do these careers yield good-paying direct jobs, but also factor in the indirect job market, and the job-multiplier rate (3.0 to 4.1) for down-the-line employment (Page 260) opportunities.

The Go Lean… Caribbean book details the creation of 2.2 million new jobs for the Caribbean region, many embracing ICT/STEM skill-sets. This is easier said than done, so how does Go Lean purpose to deliver on this quest? By the adoption of certain community ethos, plus the executions of key strategies, tactics, implementations and advocacies. The following is a sample from the book:

Assessment – Puerto Rico – Extreme Unemployment – The Greece of the Caribbean	Page 18
Community Ethos – Deferred Gratification	Page 21
Community Ethos – Job Multiplier	Page 22
Community Ethos – Anti-Bullying and Mitigation	Page 23
Community Ethos – Lean Operations	Page 24
Community Ethos – Return on Investments	Page 24
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Foster Genius	Page 27
Community Ethos – Ways to Help Entrepreneurship	Page 28
Community Ethos – Ways to Promote Intellectual Property – Key to ICT Careers	Page 29
Community Ethos – Ways to Impact Research and Development – Germaine for STEM jobs	Page 30
Community Ethos – Ways to Close the Digital Divide – Vital for fostering ICT careers	Page 31
Strategy – Mission – Education Without Further Brain Drain	Page 46
Strategy – Agents of Change – Technology	Page 57
Strategy – Agents of Change – Globalization	Page 57
Tactical – Fostering a Technocracy	Page 64
Tactical – Tactics to Forge an $800 Billion Economy – East Asian Tigers Model	Page 69
Tactical – Tactics to Forge an $800 Billion Economy – High Multiplier Industries	Page 70
Tactical – Tactics to Forge an $800 Billion Economy – Trade and Globalization	Page 70
Tactical – Separation of Powers – Commerce Department – Patents & Copyrights	Page 78
Implementation – Steps to Implement Self-Governing Entities – As Job-creating Engines	Page 105
Implementation – Ways to Benefit from Globalization – Technology: The Great Equalizer	Page 119
Planning – Ways to Improve Trade	Page 128
Planning – Ways to Model the EU	Page 130
Planning – Lessons Learned from 2008 – Income Equality Now More Pronounced	Page 136
Advocacy – Ways to Grow the Economy	Page 151
Advocacy – Ways to Create Jobs	Page 152
Advocacy – Ways to Improve Education – e-Learning Options	Page 159
Advocacy – Ways to Impact Labor Markets and Unions – Collective Bargaining Best-Practices	Page 164
Advocacy – Ways to Foster Empowering Immigration – STEM Resources	Page 174
Advocacy – Ways to Foster Technology – Credits, Incentives and Investments	Page 197
Advocacy – Ways to Foster e-Commerce – Optimize Remittance Methods	Page 198
Advocacy – Ways to Help the Middle Class – Exploit Globalization	Page 223
Appendix – Growing 2.2 Million Jobs in 5 Years	Page 257
Appendix – Job Multipliers – Direct & Indirect Job Correlations	Page 259
Appendix – Emigration Bad Example – Puerto Rican Population in the US Mainland	Page 304

The CU will foster job-creating developments, incentivizing many high-tech start-ups and incubating viable companies. The primary ingredient for CU success will be Caribbean people, so we must foster and incite participation of many young people into fields currently sharing higher job demands, like ICT and STEM, so as to better impact their communities. A second ingredient will be the support of the community – the Go Lean movement recognizes the limitation that not everyone in the community can embrace the opportunity to lead in these endeavors. An apathetic disposition is fine-and-well; we simply must not allow that to be a hindrance to those wanting to progress – there are both direct jobs and indirect jobs connected with the embrace of ICT/STEM disciplines. The community ethos or national spirit, must encourage and spur “achievers” into roles where “they can be all they can be”. Go Lean asserts that one person can make a difference … to a community (Page 122).

Other subjects related to job empowerments for wage-seekers in the region have been blogged in other Go Lean…Caribbean commentaries, as sampled here:

https://goleancaribbean.com/blog/?p=4240	Immigration Policy Exacerbates Worker Productivity Crisis
https://goleancaribbean.com/blog/?p=3694	Jamaica-Canada employment programme pumps millions into local economy
https://goleancaribbean.com/blog/?p=3473	Haiti to Receive $70 Million Grant to Expand Caracol Industrial Park to Create Jobs and Benefit from Globalization
https://goleancaribbean.com/blog/?p=3446	Forecast for higher unemployment in Caribbean in 2015
https://goleancaribbean.com/blog/?p=3164	Michigan Unemployment Model – Then and Now
https://goleancaribbean.com/blog/?p=2857	Where the Jobs Are – Entrepreneurism in Junk
https://goleancaribbean.com/blog/?p=2800	The Geography of Joblessness
https://goleancaribbean.com/blog/?p=2750	Disney World’s example of Self Governing Entities and Economic Impacts of 70,000 jobs; 847,000+ Puerto Ricans now live in the vicinity.
https://goleancaribbean.com/blog/?p=2126	Where the Jobs Are – Computers Reshaping Global Job Market
https://goleancaribbean.com/blog/?p=2025	Where the Jobs Are – Attitudes & Images of the Caribbean Diaspora in US
https://goleancaribbean.com/blog/?p=2003	Where the Jobs Are – Ship-breaking under the SGE Structure
https://goleancaribbean.com/blog/?p=1698	Where the Jobs Are – STEM Jobs Are Filling Slowly
https://goleancaribbean.com/blog/?p=1683	Where the Jobs Were – British public sector now strike over ‘poverty pay’
https://goleancaribbean.com/blog/?p=1214	Where the Jobs Are – Fairgrounds as SGE & Landlords for Sports Leagues
https://goleancaribbean.com/blog/?p=273	10 Things We *Don’t* Want from the US – Job Discrimination of Immigrations

The Caribbean is arguably the best address on the planet, but “man cannot live on beauty alone”, there is the need for a livelihood as well. This is the challenge, considering the reality of unemployment in the region; the jobless rate among the youth is even higher.

The crisis of income inequality for the US is a direct result of free trade agreements, like NAFTA, and China’s Preferential Trading Status. Despite this status, we can benefit from the realities of globalization; jobs are being moved to conducive locations with lower labor costs. We should invite these investors to look for cheaper labor options, here in the Caribbean region (Haiti, Dominican Republic, Jamaica, etc.). This is the same reality as in Europe with different wage levels for the different countries (see Appendix below); the Caribbean also has these wage differences.

The Go Lean roadmap seeks to foster higher-paying job options: Call Centers, Offshore Software Development Centers, R&D Medical campuses, light-manufacturing and assembly plants for “basic needs” products (food, clothing shelter, energy, and transportation) for Caribbean consumption. This is the successful model of Japan, China and the “East Asia Tigers” economies; these are manifestations of effective Economic Principles.

The Go Lean book therefore digs deeper, providing turn-by-turn directions to get to the desired Caribbean results: a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

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Appendix – List of European countries by average wage (USA & Japan added for comparison)

(Source: https://en.wikipedia.org/wiki/List_of_European_countries_by_average_wage)

2014 Annual values (in national currency) for a family with two children with one average salary, including tax credits and allowances.^[1] Net amount is computed after Taxes, Social Security and Family Allowances; the result is provided in both the National Currency and the Euro, if different. The table, sorted from highest Net amount to the lowest, is presented as follows:

State	Gross	Net (Natl. Curr)	*Net (Euro)*
Switzerland	90,521.98	86,731.20	71,407.21
Luxembourg	54,560.39	52,041.36	52,041.36
Norway	542,385.96	415,557.87	49.,741.20
Denmark	397,483.78	289,292.48	38,806.20
Iceland	6,856,099.69	5,872.114.66	37,865.07
*UNITED STATES*	56,067	45,582	37,671
Sweden	407,974.45	335,501.45	36,874.37
Netherlands	48,855.70	36,648.71	36,648.71
United Kingdom	35,632.64	28,960.38	35,925.65
Belgium	46,464.41	35,810.55	35,810.55
Italy	41,462.67	24,539.93	35,539.93
Germany	45,952.05	36,269.23	35,269.23
France	38,427.35	30,776.75	34,776.75
Ireland	34,465.85	34,382.63	34,382.63
Austria	42,573.25	33,666.04	33,666.04
Finland	42,909.72	32,386.59	32,386.59
*JAPAN*	4,881,994.24	4,132.432.02	29,452.16
Spain	26,161.81	22,129.78	22,129.78
Greece	24,201.50	17,250.24	17,250.24
Slovenia	17,851.28	15,882.53	15,882.53
Portugal	17,435.71	15,140.25	15,140.25
Estonia	12,435.95	11,176.87	11,176.87
Czech Republic	312,083.83	306,153.76	11,118.31
Slovakia	10,342.10	9,778.16	9,778.16
Poland	42,360.01	34,638.77	8,278.27
Hungary	3,009,283.93	2,530.280.97	8,196.30
Turkey	28,370.00	21,072.12	7,250.00

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Appendix Video – Collective Bargaining and Shared Prosperity: Michigan, 1979 – 2009 http://youtu.be/PcT4jK89JmE

Published on September 27, 2012 – This VIDEO depicts the positive effects of Collective Bargaining on the quest for income equality in the US State of Michigan; and the sad consequence of the widening income inequality when Collective Bargaining is less pervasive.
This reflect the “Observe and Report” functionality of the Go Lean…Caribbean promoters in the Greater Detroit-Michigan area.

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Economic Principle: Profit-Seeking – When ‘Greed is Good’

Posted on June 17, 2015 in Economics, Ethos, Industries

Go Lean Commentary

1776 was a very good year…

… not just because the 13 original British colonies declared their independence as the United States of America, but also the publication of the landmark book on Economic Principles, An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, the 18th century Scottish political economics pioneer. The publication is cited as a reference source in the book Go Lean…Caribbean – a roadmap for the introduction and implementation of Caribbean Union Trade Federation (CU) to elevate the economic, security and governing engines of the Caribbean region. A relevant quote from the Go Lean book follows (Page 67):

… usually abbreviated as “The Wealth of Nations“, this book is considered the first modern work of economics, and [Smith] is thusly cited as the “father of modern economics”, even today, and among the most influential thinkers in the field of economics. Through reflection over the economics at the beginning of the Industrial Revolution the book touches upon broad topics as the division of labor, productivity and free markets.

Smith attacked most forms of government interference in the economic process, including tariffs, arguing that these create inefficiency and high prices in the long run. It is believed that this theory, laissez-faire economic philosophy, influenced government legislation in later years.

Smith advocated a government that was active in sectors other than the economy. He advocated public education for poor adults, a judiciary, and a standing army—institutional systems not directly profitable for private industries.

The “Invisible Hand” is a frequently referenced theme from Smith’s book. He refers to “the support of domestic industry” and contrasts that support with the importation of goods. Neoclassical economic theory has expanded the metaphor beyond the domestic/foreign manufacture argument to encompass nearly all aspects of economics. The “invisible hand” of the market is a metaphor now to describe the self-regulating behavior of the marketplace. …

Adam Smith’s writings qualified many rules of economics, in particular the divisions of income into profit, wage, and rent.^[4] In a previous commentary the concept of rent-seeking was fully explored.; also the global challenges of wage-seeking have been fully detailed in another commentary. Now, this commentary is about profit, and the concepts of governance and public choice theory, allowing for the pursuit of profit. Where there is the pursuit of profit, there is invariably a focus on greed. For the purpose of elevating the Caribbean economy, greed is good! (In this case “greed” is not being defined as excess, but rather the natural desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one’s self. The dreaded excess of “greed”, on the other hand, is a “vice” that must be cautiously monitored and curtailed, i.e. Crony-Capitalism). See VIDEO in the Appendix below.

Actor Michael Douglas as Wall Street Corporate Raider Gordon Gekko in the 1987 film

The Caribbean features mixed economies, wherein greed or profit plays a pivotal motivator. A mixed economy is an economic system that is variously defined as containing a mixture of markets (profit-seeking) and economic planning, in which both the private sector and the State direct the economy; or as a mixture of free markets with economic interventionism.^[1] Most mixed economies can be described as market economies with strong regulatory oversight and governmental provision of public goods. That “public good” is what Adam Smith focused on for the role of government – non-profit-seeking activities – that they should concentrate on the public availability and distribution of the non-excludable and non-rivalrous materials that satisfies human wants (infrastructure, education, judiciary, security, etc.) and are not directly profitable for private industries.

Economies ranging from the United States^[3][4] to Cuba^[5] – in effect all of the Caribbean – have been catalogued as mixed economies. Around the world, the most prosperous countries with the highest average standard of living tend to have mixed economic systems with democratically elected governments. Thusly, this consideration on the Economic Principles of Profit, as follows, is important for the roadmap to elevate Caribbean economies:

Encyclopedia Reference: Profit (Economic)
Source: https://en.wikipedia.org/wiki/Profit_(economics)
In classical economics, profit is the return to an owner of capital goods or natural resources in any productive pursuit involving labor, or a return on bonds and money invested in capital markets.^[3]

Related concepts include profitability and the profit motive, which is the motivation of firms to operate so as to maximize their profits. Mainstream microeconomic theory posits that the ultimate goal of a business is to make money. Stated differently, the reason for a business’s existence is to turn a profit. The profit motive is a key tenet of rational choice theory, or the theory that economic agents (actors or decision makers in some aspect of the economy) tend to pursue what is in their own best interests. Accordingly, businesses seek to benefit themselves and/or their shareholders by maximizing profits. In general the basic premise of rational choice theory is that aggregate social behavior results from the behavior of individual actors, each of whom is making their individual decisions.

Government intervention
Often, governments will try to intervene in uncompetitive markets to make them more competitive. Antitrust or competition laws were created to prevent powerful firms from using their economic power to artificially create the barriers to entry they need to protect their economic profits.^[7][8][9] This includes the use of predatory pricing toward smaller competitors.^[6][9][10] With lower barriers, new firms can enter the market, making the long run equilibrium much more like that of a competitive industry, with no economic profit for firms.

(This consideration aligns with alternate Economic Principles regarding sources of income; other commentaries detailed the concepts of rent-seeking and wage-seeking).

This historic information regarding Economist Adam Smith is important in understanding the “Lessons in Economic Principles”. These lessons matter in assessing today’s Caribbean status and fate, as there is the need for the optimal balance of “free market” versus “interventionism”. The Go Lean book explains the significance of Economic Principles with this excerpt (Page 21):

While money is not the most important factor in society, the lack of money and the struggle to acquire money creates challenges that cannot be ignored. The primary reason why the Caribbean has suffered so much human flight in the recent decades is the performance of the Caribbean economy. Though this book is not a study in economics, it recommends, applies and embraces these 6 core economic principles as sound and relevant to this roadmap:

People Choose: We always want more than we can get and productive resources (human, natural, capital, etc.) are always limited. Therefore, because of this major economic problem of scarcity, we usually choose the alternative that provides the most benefits with the least cost.
All Choices Involve Costs: The opportunity cost is the next best alternative you give up when you make a choice. When we choose one thing, we refuse something else at the same time.
People Respond to Incentives in Predictable Ways: Incentives are actions, awards, or rewards that determine the choices people make. Incentives can be positive or negative. When incentives change, people change their behaviors in predictable ways.
Economic Systems Influence Individual Choices and Incentives: People cooperate and govern their actions through both written and unwritten rules that determine methods of allocating scarce resources. These rules determine what is produced, how it is produced, and for whom it is produced. As the rules change, so do individual choices, incentives, and behavior.
Voluntary Trade Creates Wealth: People specialize in the production of certain goods and services because they expect to gain from it. People trade what they produce with other people when they think they can gain something from the exchange. Some benefits of voluntary trade include higher standards of living and broader choices of goods and services.
The Consequences of Choices Lie in the Future: Economists believe that the cost and benefits of decision making appear in the future, since it is only the future that we can influence. Sometimes our choices can lead to unintended consequences.
Source: Handy Dandy Guide (HDC) by the National Council on Economic Education (2000)

The Go Lean book presents a roadmap on how to better benefit from these economic principles – and how to increase profit-seeking opportunities in the Caribbean member-states and for the region as a whole. While “rent-seeking” – seeking to increase one’s share of existing wealth without creating new wealth – is a negative ethos, “profit-seeking” – the end product of investing in new opportunities – can be positive. The absence of profit-seeking is an absence of prosperity. Every Caribbean community suffers from an acute problem of societal abandonment. Those most capable of creating opportunities of prosperity, the educated classes, have mostly fled these lands, despite being labeled “the best address on the planet”. Why?

When people love their homelands yet begrudgingly leave, the defects – deficient economic opportunities – must be addressed. Caribbean member-states have tried, strenuously, over the decades, to diversify their economies; yet the preponderance of evidence point to adoption of “rent-seeking” in the region rather than the required profit-seeking. The requisite investment of the resources (time, talent, treasuries) for the goal of economic optimization may be too big for any one Caribbean member-state to conduct alone. Rather there is the need for a regional technocratic solution.

The Caribbean needs the evolutionary spirit (for one generation to do better than the previous one) of “profit-seeking” or “greed”. As portrayed in the VIDEO:

“Greed, for the lack of a better word, is good!” [Thus says the fictitious character in below VIDEO]. “Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed in all of its forms – greed for life, greed for money, greed for love, knowledge has marked the upward surge of mankind; and greed will not only save [this company] but the other malfunctioning corporation called the USA”.

Posted commentary by Screen Name “fh downtheline”on the below VIDEO:

There is a better word than “greed” for this application. It may be “hunger”. Hunger is more present [in the Caribbean] and thusly more important than greed. Hunger keeps people hunting for progress. While greed ends up destroying the value of that progress. “Hunger” would refer to more than just food or economic dimension, but rather there is a hunger for knowledge, hunger for scientific thought. While “greed” says “I want” this, “Hunger” says “I need” this!

“Profit-seeking” is also a better word than “greed”; it too conveys the same concept as the definition above.

The consideration of the Go Lean book, as related to this subject is one of governance, the need for technocratic stewardship of the regional Caribbean society. This point was also pronounced in the opening Declaration of Interdependence (Pages 12 – 14) with these acknowledgements and statements:

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xii. Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of ship-building, automobile manufacturing, prefabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex. In addition, the Federation must invigorate the enterprises related to existing industries like tourism, fisheries and lotteries – impacting the region with more jobs.

This Go Lean book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) to provide better stewardship for the 30 member-states of the Caribbean region. The CU is motivated by positive community ethos, designed to elevate Caribbean society and the economic opportunities there in. In general, the Go Lean roadmap stresses key community ethos, strategies, tactics, implementations and advocacies necessary to transform and turn-around the eco-systems of Caribbean society. These points are detailed in the book as follows:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Return on Investments	Page 24
Community Ethos – Ways to Impact the Future – Count on the Greedy to be greedy	Page 26
Community Ethos – Ways to Help Entrepreneurship – Fostering Incubators	Page 28
Community Ethos – Ways to Impact the Greater Good	Page 37
Strategy – Vision – Confederate all 30 member-states / 4 languages into a Single Market	Page 45
Tactical – $800 Billion Economy – How and When – Adam Smith Case Study	Page 67
Tactical – Fostering High Job Multiplier Industries	Page 70
Tactical – Separation-of-Powers – CU Federal Government versus Member-State Governance	Page 71
Implementation – Ways to Pay for Change – Award exploratory rights in exclusive territories	Page 101
Planning – 10 Big Ideas – #3: Proactive Anti-crime Measures	Page 127
Planning – Ways to Improve Trade	Page 128
Planning – Ways to Improve Interstate Commerce	Page 129
Planning – Ways to Make the Caribbean Better	Page 131
Advocacy – Ways to Grow the Economy	Page 151
Advocacy – Ways to Create Jobs	Page 152
Advocacy – Ways to Improve Education – Online Job Training	Page 159
Advocacy – Ways to Improve Governance	Page 168
Advocacy – Ways to Better Manage the Social Contract	Page 170
Advocacy – Ways to Better Manage Natural Resources	Page 183
Advocacy – Reforms for Banking Regulations – Tools to Stimulate/Control the Economy	Page 199
Advocacy – Ways to Impact Wall Street	Page 200
Advocacy – Ways to Impact Main Street	Page 201
Advocacy – Ways to Battle Poverty – Entrepreneurial Values	Page 222
Appendix – Job Multipliers	Page 259

In considering this economic history, the CU/Go Lean roadmap is motivated to create value for Caribbean communities, to foster good economic habits and principles. In general, the CU/Go Lean roadmap employs better strategies, tactics and implementations to impact its prime directives; identified with the following 3 statements:

Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
Establishment of a security apparatus to protect the resultant economic engines and mitigate internal and external threats.
Improvement of Caribbean governance – federal, national, municipal and corporate – to support these engines.

As defined in previous blog/commentaries, the CU/Go Lean roadmap asserts best-practices for proper stewardship for regional, national, municipal, and corporate governance. One strategy advocated is to better grow/control the money supply. The end-product should be the creation of new jobs, wealth, trade networks, plus develop new products and services, and an educated society.

New jobs need not only originate from the big corporate entities; that is the multi-national corporations that are traded on Wall Street or the 9 stock exchanges in the Caribbean region. No, rather small-to-medium enterprises (SME) – and even the self-employment “hustle” – will play a role in the economic optimization process. These points were detailed in these previous commentaries:

https://goleancaribbean.com/blog/?p=3490	How One Entrepreneur Can Rally a Whole Community
https://goleancaribbean.com/blog/?p=2857	Where the Jobs Are – Entrepreneurism in Junk – the “Hustle” Ethos
https://goleancaribbean.com/blog/?p=1325	Puerto Rico Governor Signs Bill on SME’s
https://goleancaribbean.com/blog/?p=398	Self-employment on the rise in the Caribbean – the “Hustle” Ethos
https://goleancaribbean.com/blog/?p=214	LCD versus an Entrepreneurial/”Hustle” Ethos

Adherence to economic principles/best-practices, such as profit-seeking, would help us make our Caribbean community better to live, work and play. We need to optimize the “invisible hand” of the market to incentivize, retain and repatriate Caribbean “free market” enterprises. Everyone in the region – the people, entrepreneurs, business owners and governmental institutions – are all urged to lean-in to this roadmap to elevate the Caribbean economic engines. 🙂

Download the book Go Lean … Caribbean – now!

———–

Appendix VIDEO: Gordon Gekko “Greed is Good” – https://youtu.be/PF_iorX_MAw
Uploaded on Dec 9, 2011 – Gordon Gekko, principal character in 1987 movie “Wall Street”, *unknowningly* describes the problems facing today’s private sector, while blasting the bureaucracy responsible for said problems in the first place. A classic speech, both in film and, also, within economic thought.

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Economic Principle: Bad Ethos of Rent-Seeking

Posted on June 11, 2015 in Economics, Ethos

Go Lean Commentary

Imagine a person making a resolution to improve their health…
… but they smoke cigarettes.

The expectation first would be:

Quit smoking!

One does not have to be a medical doctor, a PhD or a genius to glean this logic. It is now just common sense. Alas, common sense is not so common!

This commentary is not about smoking. It is about economics and public choice theory; see VIDEO’s below. In particular this commentary is about the bad Economic Principle referred to as “rent-seeking”. (This aligns with alternate Economic Principles regarding sources of income; other commentaries detailed the concepts of profit-seeking and wage-seeking). This is a big deal! Imagine a government public health department gifting cigarettes to people as a public health policy. Yes, it is that bad! This is the formal definition of “rent-seeking”:

Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of that which is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The classic example of rent-seeking, according to Nobel Laureate Economist Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.^[5]

“Finding a way to make money from something that used to be free”! How evasive is this practice? How can we identify it and how can we stop it?

The Caribbean is in crisis! Surveying the economic landscape of the region, we see a preponderance of rent-seeking as public policy in one member-state after another; see international Examples below. Alas, the book Go Lean…Caribbean, quoting famed economist Paul Romer (Page 8), declares that a crisis is a terrible thing to waste. Currently the region features unsustainable societal abandonment rates, exhaustive unemployment rates and near-Failed-State statuses.

The premise in this commentary is not an easy one. Just like it is common sense for a smoker to quit in order to preserve health/wellness, it is hereby acknowledged that this is “easier said than done”. Common sense is not so common! This heady discussion of advanced concepts in economics is an example of the heavy-lifting required to elevate Caribbean society.

The Go Lean book seeks to reboot and reform the economic engines of the Caribbean by being technocratic in applying best practices from the field of Economics. This intent is declared at the outset of the book with this Declaration of Interdependence (Page 10) for the region to work in unison to remediate the broken systems of commerce:

Preamble: As the colonial history of our region was initiated to create economic expansion opportunities for our previous imperial masters, the structures of government instituted in their wake have not fostered the best systems for prosperity of the indigenous people. Despite this past, we thrust our energies only to the future, in adapting the best practices and successes of the societies of these previous imperial masters and recognizing the positive spirit of their intent and vow to learn from their past accomplishments and mistakes so as to optimize the opportunities for our own citizenry to create a more perfect bond of union.

One of the basis of understanding this complex economic subject of “rent-seeking” is the review of the book The Rise and Decline of Nations by Economist Mancur Olson; in this publication, the writer traced the historic consequences of rent-seeking. He argued that the extremes of laissez-faire (the traditional economic philosophy in North American economies) and a command socialist economy (popular in Europe) would avoid rent-seeking, while a mixed economy would be subject to it. Dr. Olson claimed two distinct groups (actors) with separate agendas: an encompassing organization with the broader social collective interest, versus the narrower distributional coalition – the special interest – who would naturally be a rent-seeking group that would slow down economic growth. See this detailed encyclopedic definition of the width-and-breadth of rent-seeking, here:

Encyclopedia Reference: Rent-Seeking
Source: http://en.wikipedia.org/wiki/Rent-seeking

In the field of Economics and public choice theory – the application of economic thinking to political issues – “rent-seeking” is seeking to increase one’s share of existing wealth without creating new wealth. The effects of these efforts are reduced economic efficiency [in the community] through poor allocation of resources, reduced actual wealth creation, lost government revenue, and increased income inequality,^[1] and, potentially, national decline.

Attempts at capture of regulatory agencies to gain a coercive monopoly can result in advantages for the rent-seeker in the market while imposing disadvantages on competitors. (The term regulatory capture directly refers to a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating). The term “rent-seeking” itself is attributed to Economist Gordon Tullock in its modern sense with political connotation but with antecedents and common sense back to Ricardo.^[2]

The idea of rent-seeking was developed by Gordon Tullock in 1967.^[2] The expression rent-seeking was coined in 1974 by former World Bank Chief Economist Anne Krueger.^[3] The word “rent” does not refer here to payment on a lease but stems instead from Adam Smith‘s division of incomes into profit, wage, and rent.^[4] The origin of the term refers to gaining control of land or other natural resources.

Georgist economic theory – economic value derived from natural resources should belong equally to all residents of a community – describes rent-seeking in terms of land rent, where the value of land largely comes from government infrastructure and services (e.g. roads, public schools, maintenance of peace and order, etc.) and the community in general, rather than from the actions of any given landowner, in their role as mere titleholder. This role must be separated from the role of a property developer, which need not be the same person, and often is not.

In many market-driven economies, much of the competition for rents is legal, regardless of the harm it may do to an economy. However, some rent-seeking competition is illegal – such as bribery, corruption, smuggling, and even black market deals.

Rent-seeking is distinguished in economic theory from profit-seeking, in which entities seek to extract value by engaging in mutually beneficial transactions.^[6] Profit-seeking in this sense is the creation of wealth, while rent-seeking is the use of social institutions such as the power of government to redistribute wealth among different groups without creating new wealth.^[7] In a practical context, income obtained through rent-seeking may contribute to profits in the standard, accounting sense of the word.

Examples
An example of rent-seeking in a modern economy is spending money on political lobbying for government benefits or subsidies in order to be given a share of wealth that has already been created, or to impose regulations on competitors, in order to increase market share.

A famous example of rent-seeking is the limiting of access to lucrative occupations, as by medieval guilds or modern state certifications and licensures. Taxi licensing is a commonly-referenced example of rent-seeking. To the extent that the issuing of licenses constrains overall supply of taxi services (rather than ensuring competence or quality), forbidding competition by livery vehicles, unregulated taxis and/or illegal taxis renders the (otherwise consensual) transaction of taxi service a forced transfer of part of the fee, from customers to taxi business proprietors. [Labor unions also fit the definition of rent-seeking].

The concept of rent-seeking would also apply to corruption of bureaucrats who solicit and extract ‘bribe’ or ‘rent’ for applying their legal but discretionary authority for awarding legitimate or illegitimate benefits to clients.^[8] For example, tax officials may take bribes for lessening the tax burden of the tax payers; [and politicians take campaign contributions].

Regulatory capture is a related concept which refers to collusion between firms and the government agencies assigned to regulate them, which is seen as enabling extensive rent-seeking behavior, especially when the government agency must rely on the firms for knowledge about the market. Studies of rent-seeking focus on efforts to capture special monopoly privileges such as manipulating government regulation of free enterprise competition.^[9] The term monopoly privilege rent-seeking is an often-used label for this particular type of rent-seeking. Often-cited examples include a lobby that seeks economic regulations such as tariff protection, quotas, subsidies,^[10] or extension of copyright law.^[11] Anne Krueger concludes that, “empirical evidence suggests that the value of rents associated with import licenses can be relatively large, and it has been shown that the welfare cost of quantitative restrictions equals that of their tariff equivalents plus the value of the rents” ^[12]

Economists have argued that innovation in the financial industry is often a form of rent-seeking.^[13][14] [A common everyday examples in American life would be: Wall Street on the ‘right’ and labor unions on the ‘left’].

[A local example stems from the Bahamas 2^nd city of Freeport. That city provides a monopoly to the local petroleum retailing company, Freeport Oil Company, Limited (FOCOL). On one occasion that retailer limited gasoline purchases to the more expensive premium option only, as opposed to the standard choices; see story here: http://www.tribune242.com/news/2013/aug/02/focol-comes-under-fire-grand-bahama-residents/]

Possible consequences
From a theoretical standpoint, the moral hazard of rent-seeking can be considerable. If “buying” a favorable regulatory environment seems cheaper than building more efficient production, a firm may choose the former option, reaping incomes entirely unrelated to any contribution to total wealth or well-being. This results in a sub-optimal allocation of resources – money spent on lobbyists and counter-lobbyists rather than on research and development, on improved business practices, on employee training, or on additional capital goods – which retards economic growth. Claims that a firm is rent-seeking therefore often accompany allegations of government corruption, or the undue influence of special interests.^[18]

Rent-seeking can prove costly to economic growth; high rent-seeking activity makes more rent-seeking attractive because of the natural and growing returns that one sees as a result of rent-seeking. Thus organizations value rent-seeking over productivity. In this case there are very high levels of rent-seeking with very low levels of output. Rent-seeking may grow at the cost of economic growth because rent-seeking by the state can easily hurt innovation. Ultimately, public rent-seeking hurts the economy the most because innovation drives economic growth.^[19]

Government agents may initiate rent-seeking – such agents soliciting bribes or other favors from the individuals or firms that stand to gain from having special economic privileges, which opens up the possibility of exploitation of the consumer.^[20] It has been shown that rent-seeking by bureaucracy can push up the cost of production of public goods.^[21] It has also been shown that rent-seeking by tax officials may cause loss in revenue to the public exchequer.^[8]

Mancur Olson traced the historic consequences of rent seeking in The Rise and Decline of Nations. As a country becomes increasingly dominated by organized interest groups, it loses economic vitality and falls into decline. Olson argued that countries that have a collapse of the political regime and the interest groups that have coalesced around it can radically improve productivity and increase national income because they start with a clean slate in the aftermath of the collapse. An example of this is Japan after World War Two. But new coalitions form over time, once again shackling society in order to redistribute wealth and income to themselves. However, social and technological changes have allowed new enterprises and groups to emerge in the past.^[22]

A study by economists David Laband and John Sophocleus in 1988^[23] estimated that rent-seeking had decreased total income in the US by 45 percent. Both economists William Dougan and Tullock affirmed (1991) the difficulty of finding the cost of rent-seeking. Rent-seekers of government-provided benefits will in turn spend up to that amount of benefit in order to gain those benefits, in the absence of, for example, the collective-action constraints highlighted by Olson.

Nobel Prize-winning Economist Joseph Stiglitz has argued that rent-seeking contributes significantly to income inequality in the United States through lobbying for government policies that let the wealthy and powerful get income, not as a reward for creating wealth, but by grabbing a larger share of the wealth that would otherwise have been produced without their effort.^[26][27] (See related VIDEO here). Economists Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva (2011) had analyzed international economies and their changes in tax rates to conclude that much of income inequality is a result of rent-seeking among wealthy tax payers.^[28]

This historic information is being considered in conjunction with the book Go Lean…Caribbean; a publication designed to elevate the region’s economy (create 2.2 million new jobs), security and governing engines. The book features a roster call for some All-stars of the field of Economics; (1700s, 1800s, 1900s & today). Consider this list of those quoted directly:

Paul Romer	1955 –	Page 8
Adam Smith	1723 – 1790	Page 67
Arthur Okun	1928 – 1980	Page 153
James M. Buchanan	1919 – 2013	Page 169
Elinor Ostrom	1933 – 2012	Page 183
Norman Girvan	1941 – 2014	Page 255
Alfred Marshall	1842 – 1924	Page 258
Jacob Mincer	1922 – 2006	Page 258
Gary Becker	1930 – 2014	Page 258
John Geanakoplos	1955 –	Page 276
David Hume	1711 – 1776	Page 318
John Maynard Keynes	1883 – 1946	Page 318

A review of the work of these great men and woman constitute “Lessons in Economic Principles”. Why would these lessons matter in assessing today’s Caribbean status and fate?

The Go Lean book explains the significance of Economic Principles with this excerpt (Page 21):

While money is not the most important factor in society, the lack of money and the struggle to acquire money creates challenges that cannot be ignored. The primary reason why the Caribbean has suffered so much human flight in the recent decades is the performance of the Caribbean economy. Though this book is not a study in economics, it recommends, applies and embraces these 6 core economic principles as sound and relevant to this roadmap:

People Choose: We always want more than we can get and productive resources (human, natural, capital) are always limited. Therefore, because of this major economic problem of scarcity, we usually choose the alternative that provides the most benefits with the least cost.

All Choices Involve Costs: The opportunity cost is the next best alternative you give up when you make a choice. When we choose one thing, we refuse something else at the same time.

People Respond to Incentives in Predictable Ways: Incentives are actions, awards, or rewards that determine the choices people make. Incentives can be positive or negative. When incentives change, people change their behaviors in predictable ways.

Economic Systems Influence Individual Choices and Incentives: People cooperate and govern their actions through both written and unwritten rules that determine methods of allocating scarce resources. These rules determine what is produced, how it is produced, and for whom it is produced. As the rules change, so do individual choices, incentives, and behavior.

Voluntary Trade Creates Wealth: People specialize in the production of certain goods and services because they expect to gain from it. People trade what they produce with other people when they think they can gain something from the exchange. Some benefits of voluntary trade include higher standards of living and broader choices of goods and services.

The Consequences of Choices Lie in the Future: Economists believe that the cost and benefits of decision making appear in the future, since it is only the future that we can influence. Sometimes our choices can lead to unintended consequences.
Source: Handy Dandy Guide (HDC) by the National Council on Economic Education (2000)

In psycho-therapy the approach to forge change for an individual is defined as “starting in the head (thoughts, visions), penetrating the heart (feelings, motivations) and then finally manifesting in the hands (actions). The people of the Caribbean must change their feelings about elements of their society – elements that are in place and elements missing. This is referred to as “Community Ethos”, defined as: “the fundamental character or spirit of a culture; the underlying sentiment that informs the beliefs, customs, or practices of a group or society; dominant assumptions of a people or period; practices of a group or society; dominant assumptions of a people or period.

Rent-seeking is not one of the community ethos that is being urged for the Caribbean; just the opposite, it is a bad ethos to avoid!

VIDEO – The Rent Seeking of Both Left and Right – https://youtu.be/OqrDkegqyDo

Published on Jun 22, 2012 – For an alternative to our anti-democratic system check out Jim Rogers latest project to create a system that will hold politicians feet to the fire, and to put shackles on lobbyists so that they can no longer control the system. One day we might have a system that’s controlled by the people and is for the people.
This is an idea put forth for Americans but it can easily work in any other part of the world.

This bad ethos stems from an attitude of entitlement; to get something … for almost nothing. The Caribbean was colonized originally under this community ethos; a previous blog/commentary related how Papal Bulls and Royal Charters enabled entities to exploit Caribbean markets and trade with very little investment of their own. A direct quote from that commentary relates:

Most of the property and indigenous wealth of the Caribbean region is concentrated amongst the rich, powerful and yet small elite; an oligarchy. Many times these families received their property, corporate rights and/or monopolies by Royal Charter from the European monarchs of ancient times. These charters thus lingered in legacy from one generation to another … until …

The Go Lean book presents a roadmap on how to benefit from the above economic principles – and how to empower communities anew – without continuing rent-seeking practices. (For this reason this commentary opposes reparations for slavery and colonialism).

The consideration of the Go Lean book, as related to this subject is one of governance, (national, municipal and corporate governance), the need for technocratic stewardship of the regional Caribbean society. This point was also pronounced in the opening Declaration of Interdependence (Page 12) with these acknowledgements and statements:

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xii. Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.

xxxiii. Whereas lessons can be learned and applied from the study of the recent history of other societies, the Federation must formalize statutes and organizational dimensions to avoid the pitfalls of communities like East Germany, Detroit …. On the other hand, the Federation must also implement the good examples learned from developments/communities like … Germany, [and] Japan ….

In general the Go Lean roadmap stresses key community ethos, strategies, tactics, implementations and advocacies necessary to transform and turn-around the eco-systems of Caribbean society. These points are detailed in the book as follows:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Return on Investments	Page 24
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Impact the Greater Good	Page 37
Strategy – Vision – Confederate all 30 member-states/ 4 languages into a Single Market	Page 45
Tactical – Fostering a Technocracy – Economists are Technocrats	Page 64
Tactical – Growing to $800 Billion GDP – Adam Smith Case Study: Father of Modern Economics	Page 67
Tactical – Separation-of-Powers – CU Federal Government versus Member-State Governance	Page 71
Implementation – Ways to Pay for Change – Award exploratory rights in exclusive territories	Page 101
Implementation – Start-up Benefits from the Exclusive Economic Zone (EEZ)	Page 104
Planning – 10 Big Ideas – #3: Proactive Anti-crime / Corporate Governance Measures	Page 127
Planning – Ways to Improve Trade	Page 128
Planning – Ways to Make the Caribbean Better	Page 131
Planning – Lessons Learned from 2008 – Glass-Steagall Case Study	Page 136
Advocacy – Ways to Grow the Economy – Government’s Role: Protect Property Rights	Page 151
Advocacy – Ways to Create Jobs – 2.2 Million New Jobs	Page 152
Advocacy – Ways to Improve Governance	Page 168
Advocacy – Ways to Better Manage the Social Contract	Page 170
Advocacy – Ways to Better Manage Natural Resources	Page 183

In considering this economic history, the CU/Go Lean roadmap is motivated to create value for Caribbean communities, not skim off the top with rent-seeking practices. The mandate is simple:

Foster good economic habits; abandon bad habits.

(At one point, smoking was encouraged, but now it is universally assailed; this demonstrates that communities can mature).

This is not common ground; this is a higher ground!

With the proper stewardship, we can create jobs, value, wealth, trade networks, an educated society, plus develop new products and services that the world demands. Adherence to these best-practices – and aversion to bad community ethos like rent-seeking – would help us make our Caribbean community better to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!

————–

Appendix VIDEO: Public Choice – Rent Seeking – https://youtu.be/4H2TicrHC8I

Uploaded on Mar 1, 2007 – based on the textbook “Microeconomics for MBAs”

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Crony-Capitalism, Freeport, History, Model, Power, Transform

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For-Profit Education: Plenty of Profit; Little Education

Posted on June 8, 2015 in Economics, Industries

Go Lean Commentary

Follow the money…

This is a familiar plot-line in Hollywood Police dramas. Its “life imitating art” because this is the same eventuality for the American For-Profit education industry. There is a lot of money available in the US for post-secondary education of American students. Federal Student Loans are available to any American citizen regardless of credit or income. This constitutes a fertile ground for abuse.

According to the following news article, this one education company Corinthian College – see Appendix A below – is a bad example of For-Profit schools making a lot of profit but providing very little education to its customers: students.

“Scratch a liar, catch a thief”.

The article is presented here:

1. Title: My college degree is worthless

Sub-title: Students across the country are shelling out tens of thousands of dollars for degrees that end up being completely worthless.

Rosalyn Harris, an unemployed single mother who had never gone to college, thought getting a degree would be the ticket to a new life. So at age 23, she enrolled in a two-year criminal justice program at for-profit Everest College in Chesapeake, Va.

But the wealth of job opportunities the school had touted never transpired, and all she ended up with was more than $22,000 in student loan debt. She said classes were terrible, she didn’t receive any of the training she needed, and as a result, she spent months after graduation searching for criminal justice jobs without ever getting a call back.

Desperate to start paying some of her bills, Harris eventually applied for any entry-level job she could find. A full year after she graduated, she finally found a minimum wage job stocking shelves at Victoria’s Secret.

“My sole purpose of going to school was bettering my life for me and my son,” she said. “But now I wish I had never gone.”

Everest is a member of for-profit behemoth Corinthian Colleges, which has been accused by federal agencies of operating a predatory lending scheme, preying on low-income students and falsely inflating job placement numbers. Corinthian is currently closing and selling its schools, leaving thousands of graduates on the hook for loans they took out.

A Corinthian spokesman confirmed that Harris graduated in good standing, but it was unable to place her in a job. He said the school did provide her with career assistance and claims the criminal justice program has a 75% job placement rate, which he said is “a strong outcome for any educational program.”

He also disputed the allegations against the school, noting that Corinthian’s student loan default rate (of up to 27% for its EverestCollege campuses) is lower than other community colleges and its graduation and job placement rates are higher.

And while Corinthian has a particularly bad reputation, the for-profit college industry as a whole is often criticized for luring low-income students with false promises and failing to provide educations that qualify students for jobs.

Not only that but for-profit schools are generally double or triple the cost of public institutions like community colleges, and the default rate (19% last year) was the highest of all sectors.

Vantrell Echols, a 36-year-old from Georgia, wishes he never received a phone call from for-profit Lincoln College of Technology back in 2008. He said the school spent six months convincing him to enroll — promising to provide all the training and help he needed to find a high-paying computer science job. He had been unemployed for more than a year and he was desperate, so he gave it a shot.

But upon enrolling in the computer science program, he said the quality of education “was a complete joke” and job assistance was nonexistent.

“They sold many of us dreams about helping us, getting us qualified to work, to help us with jobs, [but] I had to ask fellow students to help me because the teachers wouldn’t. Many of us graduated with honors but didn’t learn anything in our fields,” he said.

Lincoln Educational Services president Scott Shaw defended the school’s reputation to CNNMoney, touting its 75% job placement rate and pointing to examples of successful graduates like the CEO of VMWare (who graduated in 1979).

But Echols said that after accumulating more than $20,000 in debt to attend the one-year program, he wasn’t able to find a single job in computer science. He’s still unemployed, is now homeless — and he is convinced he’d be better off without the degree even listed on his resume.

He says multiple employers have told him that they don’t view his degree as credible because of the for-profit industry’s reputation and because other people they’ve hired from the school haven’t had the necessary skills for the job.

“They’ve ruined my life and the lives of many of my classmates,” he said.

Shaw said extensive career assistance was provided to Echols and that he isn’t sure why Echols couldn’t find a job. “There’s only so much we can do — at some point the student has to partake,” he said.

But these kinds of stories are popping up so often that even the Obama Administration took action this week. Going forward, for-profit colleges will risk losing federal student aid if average loan payments of graduates exceed 20% of discretionary income or 8% of total earnings.

“Too many hard-working students find themselves buried in debt with little to show for it,” Secretary of Education Arne Duncan said in a statement.

Senators Jeff Merkley of Oregon and Tom Harkin of Iowa are pushing for legislation that goes a step further. They argue that a loophole in federal laws allow some institutions to offer programs that aren’t licensed or accredited at the state or federal level. That means graduates end up with degrees that may sound legitimate but are meaningless to many employers.

The two senators introduced legislation last month aimed at cracking down on these “worthless degrees.” The legislation would require courses to be licensed before allowing schools to accept federal money like student loan dollars or financial aid.

“Passing this bill will ensure that a college can no longer charge thousands of dollars for a degree that does not prepare them to work in the field they were promised‎,” according to a statement about the bill.

Related: U.S. sues Corinthian Colleges
2. Title: Embattled for-profit education behemoth Corinthian Colleges is facing yet another legal fight: This time, from the Consumer Financial Protection Bureau.

The consumer agency announced Tuesday it is suing Corinthian for “illegal predatory lending” and is demanding that the school forgive more than $500 million in private loans it has given to students since July of 2011.

According to the CFPB’s complaint, Corinthian convinced students to enroll in the school by inflating its job placement rates. It even paid employers to hire graduates for at least one day in order to boost its numbers.

Meanwhile, Corinthian’s tuition and fees — which can climb to as high as $75,000 for a bachelor’s degree — are higher than what federal loans generally cover, forcing many students to take out private loans from the school. These loans, called “Genesis loans,” came with origination fees of 6% and interest rates of around 15% as of 2011 — much higher than the 3% and 7% charged on federal loans.
…
CNNMoney (New York); posted September 16, 2014 from: http://money.cnn.com/2014/09/16/pf/college/cfpb-corinthian-lawsuit/index.html?iid=EL

The references to “low-income students” in the foregoing article are most commonly the “Black and Brown” of the American population. This is a frequent demographic for victimization in American life.

This issue in the article is just another example of Crony-Capitalism and institutional racism. The book Go Lean…Caribbean and subsequent blogs posit that the Caribbean must not be vulnerable to these negative American forces.

The dread of Crony-Capitalism and institutional racism have been highlighted and detailed in many previous blog commentaries; see the many Crony-Capitalism models in Appendix B below. Now we have to add the reality of Big Education to the discussion. The issue underpinning this dilemma is the easy availability of guaranteed student loans from the US federal government. Unfortunately this is not just an issue for For-Profit institutions, many not-for-profit colleges and university also exploit the federal student loan funds to garner revenues at the expense of innocent students. The Crony in this case is a direct consequence of a rich pool of federal monies.

Rich pool? This brings to mind the visual of an isolated pool/pond on the African Plain, a watering hole on the Serengeti where many animals seek hydration and refuge, but the terrain is endangered with predators: lions, crocodiles, hyenas, cheetahs, etc.. Yes, in the American commercial eco-system, “follow the money”, and you will find many “bad actors” looking to exploit the situation for unfair gain and quick profits.

VIDEO – Is the cost of college crippling? – http://money.cnn.com/video/news/2013/09/03/n-cost-of-college-rising-education-middle-class-jobs.cnnmoney/

The Caribbean must do better! We must also dissuade our citizens from emigrating to this American eco-system.

The consideration of Crony-Capitalism in the For-Profit Education industry aligns with the book Go Lean…Caribbean, a roadmap to elevate the economic, security and governing engines of the Caribbean. The Caribbean wants to model many of the good examples of the United States, and learn from the many bad models. Education is one such model. While optimization of education can systemically raise a country’s economy, the Caribbean experience has been more negative than positive. Too many of our students have left … to study abroad; then refused to return home, taking with them the return on community investments and repayment of their student loans. The Go Lean book has reported in detail on how traditional college career paths have been disastrous policies for the Caribbean in whole, and each specific country in particular.

This Go Lean book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The CU has a complete education agenda, applying lessons learned from the consideration of the American models. This roadmap represents a big change for the region. The CU/Go Lean roadmap has 3 prime directives:

Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs..
Establishment of a security apparatus to police “bad actors” and protect the resultant economic engines.
Improvement of Caribbean governance, including a separation-of-powers, to support these engines.

The Go Lean roadmap provides turn-by-turn directions on how to reform the Caribbean tertiary education systems, economy, governance and Caribbean society as a whole. There is a plan for a regional student loan pool, where we mitigate the dangers that are so evident in the American eco-system. Our primary threat now is the constant abandonment rate among the college-educated populations. So as a planning tool, the roadmap commences with a Declaration of Interdependence, pronouncing the dread of societal threats and the Caribbean brain drain (Page 12):

xvi.  Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes … can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.

xix.  Whereas our legacy in recent times is one of societal abandonment, it is imperative that incentives and encouragement be put in place to first dissuade the human flight, and then entice and welcome the return of our Diaspora back to our shores …

xxi.  Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group… This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

The Go Lean book posits that education is a vital consideration for Caribbean economic empowerment. The vision of the CU is a confederation of the 30 member-states of the Caribbean to do the heavy-lifting of championing better educational policies. The book details those policies; and other ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to impact tertiary education in the region:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Economic Systems Influence Individual Choices and Incentives	Page 21
Community Ethos – Job Multiplier	Page 22
Community Ethos – Lean Operations	Page 24
Community Ethos – Return on Investments (ROI)	Page 24
Community Ethos – Ways to Impact the Future – Apply Lessons of American Lax Oversight	Page 26
Community Ethos – Ways to Foster Genius	Page 27
Community Ethos – Ways to Help Entrepreneurship – Training & Mentoring	Page 28
Tactical – Separation of Powers – Education Department	Page 85
Tactical – Separation of Powers – Labor Department – On-the-Job-Training Regulator	Page 89
Implementation – Ways to Better Manage Debt – Lessons of American Student Loan Crisis	Page 114
Advocacy – Ways to Grow the Economy – Essential Role of Tertiary Education	Page 151
Advocacy – Ways to Create Jobs – Vital Need for Better STEM* Education Empowerments*	Page 152
Advocacy – Ways to Improve Education – Mitigating the Brain Drain	Page 159
Advocacy – Ways to Impact Student Loans – Regional Pools for Cross-Border Enforcements	Page 160
Advocacy – Ways to Improve Governance	Page 169
Appendix – Education and Economic Growth	Page 258
Appendix – Measuring Education Progress and Success Criteria	Page 266
Appendix – New American Student Loan Debt Crisis – Now Over $1 Trillion in Debt	Page 286

The American Tertiary Education Student Loan eco-system is badly broken; (tuition has increased 500% since 1985). The large pools of money has attracted “bad actors” or predators. The party in the foregoing news article – Corinthian Colleges – has been charged and adjudicated with predatory lending violations. Their victims: poor students who would have to repay these non-dischargeable federally-insured student loans. How sad? All of that time, talent and treasury and nothing to show for it. No wonder the economic effects of this affected population are now showing in other aspects of the economy, such as retarded home-buying output among the younger generations.

The Caribbean is urged to do better.

The people, educational and governing institutions in the region are urged to lean-in for the empowerments described in the book Go Lean … Caribbean. Education reform can suceed in elevating Caribbean society; we can make our Caribbean homeland a better place to live, work, learn and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

———-

Appendix A – Corinthian Colleges, Inc.
(Source: http://en.wikipedia.org/wiki/Corinthian_Colleges)

Corinthian Colleges, Inc. (CCi) was a large for-profit post-secondary education company in North America. Its subsidiaries offered career-oriented diploma and degree programs in health care, business, criminal justice, transportation technology and maintenance, construction trades, and information technology.^[1]

At its largest, CCi had over 100 Everest, Heald and WyoTech campuses throughout the United States and Canada.^[2]

Corinthian’s campuses in Canada closed on February 19, 2015 after the Ontario government suspended their operation license. After a series of legal challenges by state and federal agencies, on April 26, 2015 Corinthian Colleges announced that they would cease operations at all remaining US locations effective April 27, 2015. The closure affected more than 16,000 students and employees.

Corinthian Colleges was founded in February 1995.^[3] The five founders — David Moore, Paul St. Pierre, Frank McCord, Dennis Devereux, and Lloyd Holland — were executives at National Education Centers, Inc. (NECI), a for-profit operator of vocational schools based in Irvine, California. The founders planned to acquire schools that were fundamentally sound, but which for one reason or another were performing below their potential.^[4]

Historically, CCi grew rapidly through acquisitions and through organic growth, including opening new branch campuses, remodeling, expanding or relocating existing campuses, and adopting curricula into existing colleges.^[3]

Acquired Schools
The following institutes and colleges were acquired [through the years]:^[5]

American Motorcycle Institute
AshmeadCollege
Blair College
Bryman College
Bryman Institute
Duff’s Business Institute
Florida Metropolitan University
Georgia Medical Institute
Kee Business College
Las Vegas College
National Institute of Technology
National School of Technology
Olympia Career Training Institute
Olympia College
Parks College
Rochester Business Institute
Tampa College
Western Business College

Corinthian Colleges faced numerous investigations and lawsuits, including a federal criminal investigation.^[6]

Financial Aid Financing
The Higher Education Act provides that a private, for-profit institution, such as CCi’s institutions, may derive no more than 90% of its revenue from the Title IV federal student aid programs.^[39] In 2010, CCi reported that it received 81.9% of revenue from Title IV federal student aid programs. ^[40] Corinthian Colleges (CCI) acquired QuickStart Intelligence in summer 2012, an Irvine, California-based, privately held technology training company. As a B2B revenue stream; CCI acquired QuickStart Intelligence to leverage the 10%, non-government funding essential to back the additional student loans for CCi’s core adult learning programs.

Student Loan Default Rate
A significant requirement imposed by Congress is a limitation on participation in Title IV programs by institutions whose former students default on the repayment of federal student loans in excess of specified rates (“Cohort Default Rates”).^[41] On March 25, 2013, CCi received a draft three-year Cohort Default Rates from the U.S. Department of Education for students who entered repayment during the federal fiscal year ending September 30, 2010 (the “2010 Cohort”), measured over three federal fiscal years of borrower repayment. The weighted average of CCi’s institutions was 19.0%, a 9.0 percentage point decrease from the 28.0% weighted average for the three-year cohort default rate for students who entered repayment during the prior fiscal year.^[42] For the 2010 Cohort, none of CCi’s institutions exceeded the default threshold set by the U.S. Department of Education.^[42]

———-

Appendix B – Models of American Crony-Capitalism

Big Defense	Many theorists indicate that the “follow the money” approach reveals the Military Industrial Complex work to undermine peace, so as to increase defense spending for military equipment, systems and weapons.
Big Media	Cable companies conspire to keep rates high; kill net neutrality; textbook publishers practice price gouging; Hollywood insists on big tax breaks/ subsidies for on-location shooting.
Big Oil	While lobbying for continuous tax subsidies, the industry have colluded to artificially keep prices high and garner rocket profits ($38+ Billion every quarter).
Big Box	Retail chains impoverish small merchants on Main Street with Antitrust-like tactics, thusly impacting community jobs. e-Commerce, an area of many future prospects, is the best hope of countering these bad business tactics.
Big Pharma	Chemo-therapy cost $20,000+/month; and the War against Cancer is imperiled due to industry profit insistence.
Big Tobacco	Cigarettes are not natural tobacco but rather latent with chemicals to spruce addiction.
Big Agra	Agribusiness concerns bully family farmers and crowd out the market; plus fight common sense food labeling efforts.
Big Data	Brokers for internet and demographic data clearly have no regards to privacy concerns.
Big Banks	Wall Street’s damage to housing and student loans are incontrovertible.
Big Weather	Overblown hype of “Weather Forecasts” to dictate commercial transactions.
Big Real Estate	Preserving MLS for Real Estate brokers only, forcing 6% commission rates, when the buyers and sellers can meet without them.
Big Salt	Despite the corrosiveness of salt on roads and the environment, it is the only tactic used to de-ice roads. Immediately after the weather warms, the roads must be re-constructed, thus ensuring a continuous economic cycle.
Big Energy	The For-Profit utility companies always lobby against regulations to “clean-up” fossil-fuel (coal) power plants or block small “Green” start-ups from sending excess power to the National Grid. Their motive is to preserve their century-long monopoly and their profits.
Big Legal	Even though it is evident that the promotion of Intellectual Property can help grow economies, the emergence of Patent Trolling parties (mostly lawyers) is squashing innovation. These ones are not focused on future innovations, rather just litigation. They go out and buy patents, then look for anyone that may consume any concepts close to those patents, then sue for settlements, quick gains.
Big Cruise	Cruise ships are the last bastion of segregation with descriptors like “modern-day-slavery” and “sweat-ships”. Working conditions are poor and wages are far below anyone’s standards of minimum. Many ship-domestic staff are “tip earners”, paid only about US$50 a month and expected to survive on the generosity of the passengers’ gratuity. The industry staff with personnel from Third World countries, exploiting those with desperate demands. Nowhere else in the modern world is this kind of job discrimination encouraged, accepted or tolerated.
Big Jails	The private prison industry seem motivated more by profit than by public safety. They attempt to sue state governments when their occupancy levels go too low; a reduction in crime is bad for business.
Big Housing	The American legacy is one of the institutional segregation in American cities. The practice was administered by real estate agents and housing officials executing policies to elevate property values and generational wealth for White families at the expense of a life of squalor for Non-Whites.
Big Charities	Big Not-For-Profit organizations that fleece the public under the guise of charities but retain vast majorities of the funding as administrative costs, thusly benefiting mostly the charities’ executives and staff rather than the intended benefactors.

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Extracurricular Music Programs Boost Students

Posted on May 28, 2015 in Economics, Ethos, Social

Go Lean Commentary

“Reading, ‘Riting and ‘Rithmetic” – The 3 R’s of Education.

If only everybody learned these basic skills at the same level of competence.

The truth is, not everyone is as gifted as others. While some may display genius abilities with these literary and/or computational skills, others show genius qualifiers for art, dance, athleticism … and music!

The book Go Lean…Caribbean declares: “That’s OK”!

The book identifies that there are 8 different genius qualifiers and plots to include the contribution of all these participants in the quest to elevate Caribbean society. The 8 genius qualifiers are stated in the book (Page 27) as follows:

1. Linguistic
2. Logical-Mathematics
3. Musical, Sound, Rhythm
4. Bodily-Kinesthetic-Body Movement Control
5. Spatial – Shapes/Figures Aptitude
6. Interpersonal – Other People’s Feelings – Leadership
7. Intrapersonal and Naturalistic – Self-Awareness
8. Existential – Moral Intelligence

Some genius skills are innate, natural abilities; but some genius qualifiers have to be taught, learned and fostered. The same as everyone benefits from literary and computational skills – genius or not – the same can be said of music, sound and rhythm. Those who can make music can contribute greatly to society. But on the other hand, even those not enabled with great musical abilities can become appreciative music consumers. So the benefits of music education are extended far-and-wide. In fact, this below news article posits that Extracurricular Music programs have benefits for all students, boosting their grades and graduation rates.

Wow, the research and findings – as follows – should not be ignored:

Title: Extracurricular Music Program Boosts Students’ Grades and Graduation Rates
By: Corey Whelan

(This article is presented in partnership with the California Lottery. The California Lottery proceeds provides supplemental funding to State Education & Music programs)

Music is one of the most powerful motivators human beings have. Music can calm an anxious toddler, energize a sleepy teenager and elicit every human emotion known. According to MUSICSTAR, a California public school music program, it can also generate better math scores and higher rates of graduation among public school students. As reported in a recent Gallop Poll, most parents, including those raising children in California, agree that children can benefit from music programs and want them to be available at their child’s school.

The Sound of Learning
In general, music education and learning how to play a musical instrument, have been consistently resulted in developing a myriad of skills and abilities among children. In addition to acquiring mastery of an instrument many come to love, according to MUSICSTAR, the following benefits also occur:

Creativity development

Team-building skills, particularly if they play in an orchestra or band

Increased levels of academic and personal achievement

Higher sense of self-esteem

Increased levels of self-discipline

Higher rates of school spirit

Decreased rates of behavioral issues

Decreased levels of depression and anxiety

Music programs in school can also support better relationships between teachers and students, and between the school and parent community.

The Power of MUSICSTAR Learning
MUSICSTAR is an educational program which is offered in a variety of California’s public schools, both during the school day and as an after-school program. “We’re providing a solution for many of California’s schools, from elementary through to high school, by providing all of the music education components needed, from the equipment to the instruments, plus the curriculum, trained teaching staff and program support,” says Eckart Seeber, the director of the MUSICSTAR program. “There’s no limit as to what instruments the children can use. They can access and explore band instruments, guitar, drums, marching band or rock band or the violin.”

As an award-winning composer, Seeber knows firsthand what the power of musical learning can do. “MUSICSTAR ran our own internal research and also accessed third-party research which compared students in the same socioeconomic locations. Consistently it was shown that music education learners excelled in many areas over students who were not studying music, in ways which surprised some parents and educators. Music students consistently displayed higher test scores in mathematics than their non-music studying counterparts,” he explains.

The Benefit to Students and Their Community
Students are welcome to explore a wide range of musical instruments and techniques, including multicultural music, music technology, mariachi, choir, glee and hand-drumming. Program options can be suited to all levels of musical ability and the student’s age. Several themes run through all of the programs and provide high levels of musicianship and aesthetics, music literacy and an in-depth comprehension of music as it has been applied throughout various historical periods as an art form.

The programs are geared towards acquiring performance and public speaking skills, both confidence builders. Students involved in the programs long term have the opportunity to take their music into the community. With the support of school-based professionals, many students go on to play with groups at community centers and senior citizen facilities, providing a well-deserved respite for others and an incredible self-growth opportunity for themselves.
——-
Corey Whelan is a freelance writer in New York. Her work can be found at Examiner.com.

Source: CBS Los Angeles – News Site of Local Affiliate (Posted March 18, 2015; retrieved 5/28/2015) –
http://losangeles.cbslocal.com/top-lists/extracurricular-music-program-boosts-students-grades-and-graduation-rates/

The focus of this commentary is on education. (This has proven to be a pivotal subject for the Go Lean movement: the book and accompanying blogs). The focus on this commentary is also on music, and the intersection of these two dynamics: music education.

The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), an initiative to bring change and empowerment to the Caribbean region; to make the region a better place to live, work and play. From the outset, the book recognized the significance of music in the Caribbean change/empowering plan with these statements in the opening Declaration of Interdependence (Page 12 & 14):

xxi. Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxxii. Whereas the cultural arts and music of the region are germane to the quality of Caribbean life, and the international appreciation of Caribbean life, the Federation must implement the support systems to teach, encourage, incentivize, monetize and promote the related industries for arts and music in domestic and foreign markets. These endeavors will make the Caribbean a better place to live, work and play.

The purpose of the Go Lean roadmap is to foster change, to elevate Caribbean society. Music can play a major role in that endeavor; (there is the acknowledgement that music can help forge change). Education is also pivotal. Therefore music education must be a priority.

This Go Lean roadmap calls for the heavy-lifting in shepherding change in Caribbean life. In fact, the empowerment roadmap has these 3 prime directives:

Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
Establishment of a security apparatus to protect the resultant economic engines.
Improvement of Caribbean governance to support these engines.

While the Go Lean book describes the CU as a hallmark of a technocracy, with a commitment to efficiency and effectiveness, there is still a commitment to concepts of fun, such as music, arts, sports, film/media, heritage and overall happiness. There is the 3^rd rail of this Caribbean optimization roadmap: 1. Live, 2. Work and 3. Play.

The Go Lean book declares that before any real change takes root in the Caribbean that we must reach the heart of people, to ready them to adopt new community ethos – the national spirit that drives the character and identity of its people. This is easier said than done! But, Music helps.

This Go Lean movement has previously detailed how society can be transformed through music; consider prior Go Lean blog/commentaries:

https://goleancaribbean.com/blog/?p=5251	Bahamas Attempts to Transform Society with Inaugural Carnival
https://goleancaribbean.com/blog/?p=3641	Building a City on ‘Rock and Roll’
https://goleancaribbean.com/blog/?p=3568	Forging Change: Music Moves People
https://goleancaribbean.com/blog/?p=2415	How ‘The Lion King’ Music/Play roared into history
https://goleancaribbean.com/blog/?p=2291	Forging Change: The Fun Theory
https://goleancaribbean.com/blog/?p=1909	Music Role Model Berry Gordy: Transformed America
https://goleancaribbean.com/blog/?p=866	Music Role Model Bob Marley: Legend Transformed the World
https://goleancaribbean.com/blog/?p=273	10 Things We Do Not Want From the US – #9: Cultural Neutralizations

Our world is in constant flux. The region has not always kept pace with change; as a result, we have often fallen behind and lost many battles in the war of globalization. We have stood on the sidelines and watched the taste and interest of our young people, and many times our youth themselves, shift to life in foreign shores. Change need not be scary! We can win many of the battles of globalization; we do not have to lose this war.

To win, or if only to survive, we must first outfit ourselves in a complete suit of armor. This is a Biblical reference (Ephesians 6:10-18). It stresses that a foremost piece of armor is a “helmet”, referring to the need to protect/prepare mental processes.

This means education!

Yes, the need to better teach our youth is a God-given mandate. Music can be an offensive and defensive tool (weapon). Since most educational administrations in the Caribbean are overwhelmed with just the delivery of the basic “3 R’s” – defined above – music is mostly deemed an extracurricular activity. The Go Lean roadmap was constructed with the approach that change and new empowerments are needed for the Caribbean “community ethos”; plus the execution of new strategies, tactics, implementations and advocacies to impact our society. The following list from the book provides a sample of the community ethos, strategies, tactics, implementations and advocacies for the region to Go Lean:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Economic Principles – People Respond to Incentives in Predictable Ways	Page 21
Community Ethos – Economic Principles – The Consequences of Choices Lie in the Future	Page 21
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Foster Genius	Page 27
Community Ethos – Ways to Promote Intellectual Property	Page 29
Community Ethos – Ways to Impact Research & Development	Page 30
Community Ethos – Ways to Bridge the Digital Divide	Page 31
Community Ethos – Ways to Impact Turn-Around	Page 33
Community Ethos – Ways to Promote Happiness – Promotion of Domestic Culture	Page 36
Community Ethos – Ways to Impact the Greater Good	Page 37
Strategy – Vision – Confederate 30 Member-States	Page 45
Strategy – Mission – Celebrate the Music, Sports, Art, People and Culture of the Caribbean	Page 46
Tactical – Fostering a Technocracy	Page 64
Tactical – Growing Economy to $800 Billion – Education Empowerments	Page 70
Tactical – Separation-of-Powers – Educational Empowerment from Federation to Member-States	Page 85
Implementation – Ways to Pay for Change	Page 101
Implementation – Ways to Deliver	Page 109
Planning – 10 Big Ideas for the Caribbean Region – Four Languages in Unison	Page 127
Planning – Ways to Make the Caribbean Better – Music/Media/Arts for better PLAY	Page 131
Advocacy – Ways to Grow the Economy	Page 151
Advocacy – Ways to Create Jobs	Page 152
Advocacy – Ways to Improve Communications	Page 186
Advocacy – Ways to Impact Hollywood	Page 202
Advocacy – Ways to Impact Beauty Pageants	Page 203
Advocacy – Ways to Preserve Caribbean Heritage	Page 218
Advocacy – Ways to Improve the Arts	Page 230
Advocacy – Ways to Promote Music	Page 231
Appendix – Job Creations – Music and Art Related Jobs: 12,600	Page 257
Appendix – Caribbean Musical Genres for all 30 Member States	Page 347

The quest to change the Caribbean is conceivable, believable and achievable. But it is more than just playing or listening to music. It is heavy-lifting. Yes, it does include a lot of skill-sets of those that master the Reading, ‘Riting and ‘Rithmetic subject matters; but it also has a role for those with genius qualifiers in music and the other arts. Plus, according to the foregoing news article, education in music makes students of Science, Technology, Engineering and Mathematics (STEM) better at their perspective STEM professions.

This is a win-win all-around. Even for those who fail to excel, master or display any genius abilities, their ventures into music will never be wasted, for at least they would have had fun consuming it. This will make them lifelong music patrons.

Life imitating art; art imitating life. This thought was dramatically illustrated in the 2003 Movie School of Rock; see Appendix and VIDEO below.

The Go Lean roadmap was composed with the theme that one man or woman can make a difference in transforming society. The cited movie below is renowned for the quotation:

“One great rock concert can change the world”.

Yes, according to one Bahamian Music Artist and Music Educator extraordinaire Sonovia “Novie” Pierre: Make Love; Make Peace; Make Music.

This aligns with the clarion call for the Go Lean…Caribbean book: A better place to live. A better place to work. A better place to Play. Music is tied to all of these activities.

This is the mandate of the Go Lean roadmap. Everyone is hereby encouraged to lean-in to this roadmap.

🙂

————

Appendix – Movie: School of Rock (2003)

Summary: When struggling musician Dewey Finn finds himself out of work, he takes over his roommate’s job as an elementary school substitute teacher and turns [his] class into a rock band.

Storyline: Down and out rock star Dewey Finn gets fired from his band, and he faces a mountain of debts and depression. He takes a job as a 4th grade substitute teacher at an uptight private school where his attitude and hijinks have a powerful effect on his students. He also meets Zack, a 10-year-old guitar prodigy, who could help Dewey win a “battle of the bands” competition, which would solve his financial problems and put him back in the spotlight. – Written by Anonymous

Director: Richard Linklater
Writer: Mike White
Stars: Jack Black, Mike White, Joan Cusack

VIDEO – School Of Rock – Epic Scene – https://youtu.be/x_-4d8YBojo

The Journey: The Teacher discovering the genius talents in his midst.
Category: Music. License: Standard YouTube License

VIDEO – School Of Rock -Zach’s Song [HD] “OFFICIAL VIDEO” – https://youtu.be/oP7kExN8LFA

The Big Show: The culmination of all the effort, teamwork and genius.

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‘Significant’ oil deposit found offshore Guyana

Posted on May 25, 2015 in Economics, Government, Implementation

Go Lean Commentary

Oil is up and down.

Just recently the price per barrel was so low that it was traded on the commodities market for the rock-bottom price of $48. But in 2008, (a familiar year for this commentary), the price was as high as $144 per barrel. That’s wholesale for crude. At the retail level, the price at the low was below $2 per gallon in some US cities; (as reported in this previous blog, a Oklahoma gas station posted a price at $1.99). At the 2008 high, the retail price was over $5.00 in some American cities, like in California.

It could be a dizzying ride, up and down, complete with exhilaration and anxiety, especially for communities with mono-industrial economic engines. Trinidad is one such community. Now Guyana wants to be added to the fray.

This news article speaks of the success of the oil exploration activities undergoing in the waters off the coast of Guyana. This is not just off-shore, but rather within the 200-mile region called the Exclusive Economic Zone. The news article relates as follows:

Title: ‘Significant’ oil deposit found offshore Guyana

GEORGETOWN, Guyana (GINA) — Guyana looks to be set to join the group of oil producing nations, as news was made public by ExxonMobil that it has found a deposit of a ‘significant’ amount of oil in the Stabroek Block, some 120 nautical miles offshore Guyana.

It was discovered in one of the two wells it drilled in the Liza-1 site, which realised more than 295 feet of high-quality oil-bearing sandstone. The well was started or “spudded” on March 5, 2015, and the data will be analysed in the coming months to determine the full resource potential.

It was drilled to 17,825 feet (5,433 metres) in 5,719 feet (1,743 metres) of water in the Stabroek Block, which is 6.6 million acres (26,800 square kilometers), the statement noted.

In the released statement, president of ExxonMobil Exploration Company, Stephen Greenlee, said, “I am encouraged by the results of the first well on the Stabroek Block… over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block.”

Guyana has been identified by several surveying companies as one of the world’s greatest untapped potential sources for hydrocarbons.
Source: Caribbean News Now – Regional Online News Site – Posted May 22, 2015; retrieved from: http://www.caribbeannewsnow.com/topstory-%27Significant%27-oil-deposit-found-offshore-Guyana-26217.html

Congratulations to Guyana!

There are other countries in the region hoping for similar success. This is just a sample list:

What feature about these aspiring countries, and the existing oil-producing countries, makes oil exploration possible?

The answer is the Exclusive Economic Zone (EEZ), which constitutes additional territory to explore and exploit. Every Caribbean nation, with no immediate neighbor within 200 miles, has this EEZ territory for their benefit; see Appendix A.

How does this process work?

It is simple and it is complicated. This duplicity is part of the heavy-lifting for elevating the region.

This is the guidance from the book Go Lean … Caribbean. It serves as a roadmap – turn by turn directions – for the introduction and implementation of the Caribbean Union Trade Federation (CU). This federation is designed to employ best practices for economics, security and governance. The CU/Go Lean roadmap posits that “Extractions” (Oil and Rare Earths) must be a significant strategy for the Caribbean region to elevate its society. In fact, the roadmap has these 3 prime directives:

Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
Establishment of a security apparatus, including emergency management, to protect the resultant economic engines.
Improvement of Caribbean governance to support these engines, including a separation-of-powers between member-state governments and the CU.

The implementation of the CU allows for the designation of more Exclusive Economic Zones, the consolidation of existing EEZ’s and the technocratic-cooperative administration of “Extractions” within these geographic spaces.

The process of benefiting from the EEZ starts with exploration. This is what Guyana has just concluded. They embarked on a scanning / diagnostic process to map out a geological survey of the subterranean formations under the seabed within their EEZ. First they found ideal indicators, then they drilled wells and “lo and behold” the announcement in the foregoing news article.

Guianan officials are not trained oil explorers. They hired and out-sourced to technocrats or Subject Matter Experts (SME), for both the drilling and the earlier step of geologic scanning. The foregoing article reveals that the drilling was performed by the drilling SME ExxonMobil. But the scanning was done by a different SME, a company branded Petroleum Geo-Services (PGS); see Appendix B & VIDEO.

PGS also works with Trinidad & Tobago, helping to map out the geological surveys for that country’s Ministry of Energy and Energy Industries for further exploration in their EEZ. Trinidad is already an oil-exporting country.

Within the exploration process, there is a step for public bidding. This allows a drilling SME to make financial commitments (and immediate down payments) to the host country for a split of any resultant revenues derived from successful drilling expeditions. Once bids have been accepted by the host country and permits issued, then the exploring entity proceeds to drill test wells, after more detailed analysis and diagnostic mapping. The results are “hit and miss”.

The foregoing news article reports that the exploratory effort in the Guianan EEZ has been made a “hit”.

The Go Lean/CU roadmap designates an enlarged Exclusive Economic Zone for the integrated Caribbean region, for the geographic area of the Caribbean Sea.

An EEZ can have non-standard dimensions (beyond the 200 miles of the coastline) only with approval of the United Nations Convention on the Law of the Seas. (Consider the examples of Denmark, Philippines and Portugal in Appendix A). The confederation of the 30 member-states, the CU, will be the administrator of this EEZ. Step One / Day One of the roadmap calls for awarding contracts for oil exploration and other extractions in the EEZ – this is what the Go Lean book describes as one of the methods for financing the CU start-up; this is how to Pay For Change (Page 101).

The Go Lean roadmap details a series of community ethos, strategies, tactics, implementations and advocacies to foster development, administration and protections in the Caribbean EEZ. The following list applies:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Economic Principles – All Choices Involve Costs	Page 21
Community Ethos – Economic Principles – Economic Systems Influence Individual Choices	Page 21
Community Ethos – Economic Principles – Voluntary Trade Creates Wealth	Page 21
Community Ethos – Economic Principles – Consequences of Choices Lie in the Future	Page 21
Community Ethos – Economic Principles – Job Multiplier	Page 22
Community Ethos – Security Principles – Whistleblower Protection	Page 23
Community Ethos – Security Principles – Intelligence Gathering	Page 23
Community Ethos – Security Principles – “Crap” Happens	Page 23
Community Ethos – Governing Principles – Lean Operations	Page 24
Community Ethos – Governing Principles – Return on Investments	Page 24
Community Ethos – Governing Principles – Cooperatives	Page 25
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Impact Research & Development	Page 30
Anecdote – Pipeline Transport – Strategies, Tactics & Implementations	Page 43
Strategy – Alternative Energy: Harness the power of the sun, winds and tides in the EEZ	Page 46
Strategy – Agents of Change – Technology	Page 57
Tactical – Fostering a Technocracy	Page 82
Tactical – Separation of Powers – Extractions (Mining, Materials & Drilling) Administration	Page 83
Anecdote – “Lean” in Government – Environment Regulations & Permits	Page 93
Anecdote – Caribbean Energy Grid Implementation	Page 100
Implementation – Ways to Pay for Change	Page 101
Implementation – Start-up Benefits from the EEZ	Page 104
Implementation – Ways to Develop Pipeline Industry	Page 107
Implementation – Ways to Improve Energy Usage – Deploy Wind Turbines in EEZ	Page 113
Advocacy – Ways to Foster Cooperatives	Page 176
Advocacy – Ways to Impact Extractions – Oil Mitigation Plan	Page 195
Advocacy – Ways to Improve Emergency Management	Page 196
Advocacy – Ways to Foster Technology	Page 197
Advocacy – Ways to Improve Fisheries – Model of Alaska EEZ	Page 210
Advocacy – Ways Impact Trinidad & Tobago – Oil Boom to Expire without new Exploration	Page 240
Advocacy – Ways Impact The Guianas – Guyana’s Societal Challenges	Page 241
Appendix – North Dakota Oil Boom Economic-Societal Effects	Page 334
Appendix – Cape Cod Wind Farm – Model for Caribbean EEZ	Page 335

Oil is good; oil is bad! The Go Lean roadmap asserts that the world’s energy needs are undeniable – constant demand – and that the oil-producing economies do have prospects of prosperity (Trinidad & Tobago is no longer considered developing / Third World). The Caribbean sorely needs the empowerments in this roadmap to explore and exploit “oil” in the modern economy. The region also needs mitigations and security measures in the roadmap to guarantee environmental protection.

Oil prices are cyclical – constantly up and down. It is difficult to manage certainties in governance without certainties in revenues. Thusly, the Go Lean roadmap calls for economic diversifications; this is apropos for tourism-service economies as well. There is much at stake when communities “miss the mark” on the diversity quest: fight and flight. The “fight” has been consistent in oil-producing Trinidad with security incidents big and small; big as in Martial Law declaration and terrorist threats; small as in constant crime and employment insecurities. The flight consequence has been consistent in Trinidad; they have experienced one of the highest societal abandonment rates in the region where 70% of the college-educated population have fled.

Guyana is encouraged to take heed from Trinidad.

The CU/Go Lean roadmap is designed to bring the long-awaited economic diversity and efficiency to the Caribbean. The goal is to optimize Caribbean society, allowing us to better compete globally and present more favorable options for our youth to prosper here in their homeland.

Oil exploration and production requires heavy-lifting to derive full benefits for the community; and mitigate accompanying risks. Welcome to the CU technocracy.

Now is the time for all of the Caribbean, the people, business, institutions and governments, to lean-in for the efficiencies and diversities described in the book Go Lean … Caribbean. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

————-

Appendix A – Exclusive Economic Zone

An Exclusive Economic Zone (EEZ) is a sea zone prescribed by the United Nations Convention on the Law of the Sea over which a state has special rights regarding the exploration and use of marine resources, including energy production from water and wind.^[1] It stretches from the baseline out to 200 nautical miles (nmi) from its coast. In colloquial usage, the term may include the continental shelf. The term does not include either the territorial sea or the continental shelf beyond the 200 nmi limit. The difference between the territorial sea and the exclusive economic zone is that the first confers full sovereignty over the waters, whereas the second is merely a “sovereign right” which refers to the coastal state’s rights below the surface of the sea. The surface waters, as can be seen in the map, are international waters.^[2]

Generally, a state’s EEZ extends to a distance of 200 nautical miles (370 km) out from its coastal baseline. The exception to this rule occurs when EEZs would overlap; that is, state coastal baselines are less than 400 nautical miles (740 km) apart. When an overlap occurs, it is up to the states to delineate the actual maritime boundary.^[3] Generally, any point within an overlapping area defaults to the nearest state.^[4]

A state’s Exclusive Economic Zone starts at the landward edge of its territorial sea and extends outward to a distance of 200 nautical miles (370.4 km) from the baseline. The Exclusive Economic Zone stretches much further into sea than the territorial waters, which end at 12 nmi (22 km) from the coastal baseline (if following the rules set out in the UN Convention on the Law of the Sea).^[5] Thus, the EEZ includes the contiguous zone. States also have rights to the seabed of what is called the continental shelf up to 350 nautical miles (648 km) from the coastal baseline, beyond the EEZ, but such areas are not part of their EEZ. The legal definition of the continental shelf does not directly correspond to the geological meaning of the term, as it also includes the continental rise and slope, and the entire seabed within the EEZ.

The following is a list of the largest Exclusive Economic Zones; by country with a few noticeable deviations:

Country	EEZ Kilometers²	Additional Details
United States	11,351,000	The American EEZ – the world’s largest – includes the Caribbean overseas territories of Puerto Rico and the US Virgin Islands.
France	11,035,000	The French EEZ includes the Caribbean overseas territories of Guadeloupe, Martinique, Saint Martin, Saint Barthélemy and French Guiana.
Australia	8,505,348	Australia has the third largest exclusive economic zone, behind the United States and France, with the total area actually exceeding that of its land territory. Per the UN convention, Australia’s EEZ generally extends 200 nautical miles (370 km) from the coastline of Australia and its external territories, except where a maritime delimitation agreement exists with another state.^[15]The United Nations Commission on the Limits of the Continental Shelf confirmed, in April 2008, Australia’s rights over an additional 2.5 million square kilometres of seabed beyond the limits of Australia’s EEZ.^[16][17] Australia also claimed, in its submission to the UN Commission on the Limits of the Continental Shelf, additional Continental Shelf past its EEZ from the Australian Antarctic Territory,^[18] but these claims were deferred on Australia’s request. However, Australia’s EEZ from its Antarctic Territory is approximately 2 million square kilometres.^[17]
Russia	7,566,673
United Kingdom	6,805,586	The UK includes the Caribbean territories of Anguilla, Bermuda, Cayman Islands, Montserrat, Turks & Caicos and the British Virgin Islands.
Indonesia	6,159,032
Canada	5,599,077	Canada is unusual in that its EEZ, covering 2,755,564 km², is slightly smaller than its territorial waters.^[20] The latter generally extend only 12 nautical miles from the shore, but also include inland marine waters such as Hudson Bay (about 300 nautical miles (560 km; 350 mi) across), the Gulf of Saint Lawrence and the internal waters of the Arctic archipelago.
Japan	4,479,388	In addition to Japan’s recognized EEZ, it also has a joint regime with Republic of (South) Korea and has disputes over other territories it claims but are in dispute with all its Asian neighbors (Russia, Republic of Korea and China).
New Zealand	4,083,744
Chile	3,681,989
Brazil	3,660,955	In 2004, the country submitted its claims to the United Nations Commission on the Limits of the Continental Shelf (CLCS) to extend its maritime continental margin.^[19]
Mexico	3,269,386	Mexico’s EEZ comprises half of the Gulf of Mexico, with the other half claimed by the US.^[32]
Micronesia	2,996,419	The Federated States of Micronesia comprise around 607 islands (a combined land area of approximately 702 km² or 271 sq mi) that cover a longitudinal distance of almost 2,700 km (1,678 mi) just north of the equator. They lie northeast of New Guinea, south of Guam and the Marianas, west of Nauru and the Marshall Islands, east of Palau and the Philippines, about 2,900 km (1,802 mi) north of eastern Australia and some 4,000 km (2,485 mi) southwest of the main islands of Hawaii. While the FSM’s total land area is quite small, its EEZ occupies more than 2,900,000 km2 (1,000,000 sq mi) of the Pacific Ocean.
Denmark	2,551,238	The Kingdom of Denmark includes the autonomous province of Greenland and the self-governing province of the Faroe Islands. The EEZs of the latter two do not form part of the EEZ of the European Union.
Papua New Guinea	2,402,288
China	2,287,969
Marshall Islands	1,990,530	The Republic of the Marshall Islands is an island country located near the equator in the Pacific Ocean, slightly west of the International Date Line. Geographically, the country is part of the larger island group of Micronesia. The country’s population of 68,480 people is spread out over 24 coral atolls, comprising 1,156 individual islands and islets. The land mass amounts to 181 km² (70 sq mi) but the EEZ is 1,990,000 km², one of the world’s largest.
Portugal	1,727,408	Portugal has the 10th largest EEZ in the world. Presently, it is divided in three non-contiguous sub-zones: Continental Portugal 327,667 km² Azores 953,633 km² Madeira 446,108 km² Portugal submitted a claim to extend its jurisdiction over additional 2.15 million square kilometers of the neighboring continental shelf in May 2009,^[44] resulting in an area with a total of more than 3,877,408 km². The submission, as well as a detailed map, can be found in the Task Group for the extension of the Continental Shelf website. Spain disputes the EEZ’s southern border, maintaining that it should be drawn halfway between Madeira and the Canary Islands. But Portugal exercises sovereignty over the Savage Islands, a small archipelago north of the Canaries, claiming an EEZ border further south. Spain objects, arguing that the SavageIslands do not have a separate continental shelf,^[45] citing article 121 of the United Nations Convention on the Law of the Sea.^[46]
Philippines	1,590,780	The Philippines’ EEZ covers 2,265,684 (135,783) km^2[41].
Solomon Islands	1,589,477
South Africa	1,535,538
Fiji	1,282,978	Fiji is an archipelago of more than 332 islands, of which 110 are permanently inhabited, and more than 500 islets, amounting to a total land area of about 18,300 square kilometres (7,100 sq mi).
Argentina	1,159,063
Spain	1,039,233
Bahamas	654,715
Cuba	350,751
Jamaica	258,137
Dominican Republic	255,898
Barbados	186,898
Netherlands	154,011	The Kingdom of the Netherlands include the Antilles islands of Aruba, Bonaire, Curacao, Saba, Sint Maarten and Sint Eustatius
Guyana	137,765
Suriname	127,772
Haiti	126,760
Antigua and Barbuda	110,089
Trinidad and Tobago	74,199
St Vincent and the Grenadines	36,302
Belize	35,351
Dominica	28,985
Grenada	27,426
Saint Lucia	15,617
Saint Kitts and Nevis	9,974

(Source: http://en.wikipedia.org/wiki/Exclusive_economic_zone)

————-

Appendix B – Guyana Stabroek MC2D Description

Petroleum Geo-Services (PGS), in conjunction with the Guyana Geology and Mines Commission (GGMC), is pleased to announce the availability of the MultiClient 2D survey acquired over the Stabroek concession. The survey consists of approximately 7,603 km of seismic that has been acquired and processed over the block and tie lines to existing well information with the objective of providing for the first time detailed imaging and geological understanding of this as yet undrilled concession. PGS acquired the data using its GeoStreamer® technology which is a solid streamer with the combination of two different sensors which provide data that exhibits a wider bandwidth and better penetration than conventional data. This MC2D survey provides the GGMC with a state of the art data set that assists industry in their evaluation of this frontier area.

SURVEY AREA
7,603 km

ACQUISITION DETAILS:
2008 – M/V Aquila Explorer
2D Acquisition Mode
GeoStreamer®

ACQUISITION PARAMETERS:
2 ms sample rate
Record Length 14000 ms
Shot Interval 37.5 m
Streamer Length 12000 m
Nominal fold 160

PROCESSING PARAMETERS:
Wavefield summation
SRME
Radon Demultiple
Pre-Stack Time Migration

AVAILABLE DATASETS:
TAPSTM Gathers
Raw PSTM Stack SEGY
Final PSTM Stack SEGY
Near, Mid and Far Angle Stack SEGY
Navigation UKOOA
Velocity Data in ASCII format
Gravity data

About PGS
Petroleum Geo-Services (PGS) offers a broad range of products including seismic and electromagnetic services, data acquisition, processing, reservoir analysis/interpretation and multi-client library data. We help oil companies to find oil and gas reserves offshore worldwide.

PGS was founded in Norway in 1991, with two seismic ships and some highly innovative ideas on how to reshape the industry. Today we share the same drive to innovate as inspired our founders, though the team is bigger:

12 offshore seismic vessels
30 offices worldwide, employing over 70 nationalities

PGS has a presence in 21 countries with regional centers in London, Houston and Singapore. Our headquarters is in Oslo, Norway and the PGS share is listed on the Oslo stock exchange (OSE:PGS).

VIDEO – PGS Seismic Principles – https://youtu.be/q4PqkV0SBe0

Published on Mar 21, 2014 – A short video explaining the seismic principles.

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Drones to be used for Insurance Damage Claims

Posted on May 22, 2015 in Government, Implementation, Industries

Go Lean Commentary

What have you done for “me” lately?

So now that we’ve been awed and entertained with drones, frankly we need something more. We need to put them to work. What can drones do for us … in our quest to elevate Caribbean societal engines?

The answer is “Plenty”!

For starters, an insurance company had sought and is now approved to use drones for disaster claims processing.

This is BIG!

In a few days, the annual hurricane season will begin … in earnest; (this year was an aberration with the first Tropical Depression – Ana – making landfall early on May 10 in South Carolina, USA).

“Ana” is the first of what is forecasted to be a busy season. The names for the 2015 season are already pre-determined as:

Ana, Bill, Claudette, Danny, Erika, Fred, Grace, Henri, Ida, Joaquin, Kate, Larry, Mindy, Nicholas, Odette, Peter, Rose, Sam, Teresa, Victor and Wanda.

The source news article follows:

Title: FAA Gives USAA The A-OKAY To Test Damage Claims Drones
By: Kelsey D. Atherton

Source: Popular Science Magazine posted April 7, 2015; retrieved 05-21-2015 from:
http://www.popsci.com/faa-gives-usaa-okay-drone

After the disaster come the accountants. Major tornadoes, earthquakes, tsunamis, and the like do dollar amounts of damage, sometimes in the billions. That number comes from the nitty-gritty of insurance valuations and payouts, a wholly human assessment of the ruins from natural forces. Now, thanks to FAA approval, robots may start to get in on the action.

Yesterday, insurance giant USAA announced, as follows, that the FAA approved their request to test drones as a way to more quickly process insurance claims after disasters:

FAA Approves USAA Request for Drone Research

April 6, 2015 –The Federal Aviation Administration has approved USAA’s request to test how unmanned aircraft systems, also known as drones, could help speed review of insurance claims from its members following natural disasters. USAA is one of the first insurers to be granted the approval for such testing.

“Our members have grown accustomed to seeing us pave the way for innovative solutions that streamline the claims process,” said Alan Krapf, president, USAA Property and Casualty Insurance Group.

In October 2014, USAA filed for an exemption under Section 333 of the FAA Modernization and Reform Act of 2012 to enable more efficient testing of small drones. Exempt from select FAA regulations, USAA can now fly drones, made by U.S.-based PrecisionHawk, during the day within line-of-sight of a trained pilot and air crew. Prior to the approval, USAA test flights could only take place at FAA-approved sites. No aircraft will exceed an altitude of 400 feet, and all flights will continue to be reported to the FAA prior to takeoff.

With FAA approval, USAA will work with PrecisionHawk [(see VIDEO here)] to efficiently research and develop best practices, safety and privacy protocols and procedures as it further develops plans for operational use.

USAA also filed for an additional FAA exemption in November that will enhance USAA’s ability to use drones in catastrophes. That exemption petition is pending approval, and a decision is expected soon.

“We’re proud to be among the first insurers approved to test this technology,” Krapf said. “It’s our responsibility to explore every option to improve our members’ experience.”

About USAA
The USAA family of companies provides insurance, banking, investments, retirement products and advice to 10.7 million current and former members of the U.S. military and their families. Known for its legendary commitment to its members, USAA is consistently recognized for outstanding service, employee well-being and financial strength. USAA membership is open to all who are serving our nation in the U.S. military or have received a discharge type of Honorable – and their eligible family members. Founded in 1922, USAA is headquartered in San Antonio. For more information about USAA, follow us on Facebook or Twitter (@USAA), or visit usaa.com.
(Source: https://communities.usaa.com/t5/Press-Releases/FAA-Approves-USAA-Request-for-Drone-Research/ba-p/62019)

USAA applied for the exemption in October. In their application, they noted that USAA employees were invited to Oso, Washington, after a mudslide to assist local officials with aerial surveys.

Drones are a great tool for examining natural disasters, because they can safely fly over areas where the ground may still be hazardous for humans. Visual assessment and mapping tools give rescue workers a way to understand the newly-changed terrain, and they can also let insurance agents see which claims are justified.

In the best case scenario, using drones to evaluate claims means that victims of disasters will get the resources they need to get back on their feet faster. All told, that’s pretty great. There are certainly far worse things that could happen when a robot shows up after a disaster.

The subject of unmanned aircrafts are just another area of autonomous vehicles that the Go Lean … Caribbean movement (book and aligning blogs) has highlighted as being a focused subject for the region. This subject will impact jobs and security measures. Consider these previous blog/commentaries:

https://goleancaribbean.com/blog/?p=1487	Here come the Drones … and the Concerns
https://goleancaribbean.com/blog/?p=1277	The need for highway safety innovations – here comes Google
https://goleancaribbean.com/blog/?p=673	Ghost ships – Autonomous cargo vessels without a crew

A lot of activity with autonomous aircrafts have been the product of Radio Controlled craft hobbyists; see Appendix C VIDEO. But now, practical applications are being promoted, especially for commercial photographers. This is science, not science fiction; see VIDEO in Appendix B. There is the need for high-end photography solutions to process claims after natural disasters. According to the foregoing news article, the US regulators are now allowing the testing of drones for post-hurricane (and other natural disasters) claims processing. This aligns with the Go Lean book, to optimize natural disaster response AND to provide oversight for the regional aviation space. This book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The CU/Go Lean roadmap describes CU agencies in the role of the Federal Aviation Administration (FAA) performs for the US in the foregoing article. So the parallel is strong, as there is the need to plan for natural disasters in the Caribbean – more and more – in partnership with the CU‘s Emergency Management agencies.

The Go Lean book purports that this type of industrial revolutions emerging with drones are more and more critical for Caribbean society. The risks and threats from storms will only intensify. In the previous blog about the rise of drones, this commentary asserted that “our region must participate in these developments, not just spectate on them”. These points are also pronounced early in the book in the opening Declaration of Interdependence (Page 14), with these statements:

i. Whereas the earth’s climate has undeniably changed resulting in more severe tropical weather storms, it is necessary to prepare to insure the safety and security of life, property and systems of commerce in our geographical region. As nature recognizes no borders in the target of its destruction, we also must set aside border considerations in the preparation and response to these weather challenges.

xxvi. Whereas theCaribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries… In addition, the Federation must invigorate the enterprises related to existing industries like tourism…– impacting the region with more jobs.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

This Go Lean book and accompanying blogs champion the cause of deploying technology to make the Caribbean a better homeland to live, work and play. The assertion is that innovative developments like camera-mounted unmanned aerial vehicles (drones) should be readily deployed after emergencies and disasters – from hurricanes to industrial accidents – to quickly assess the damage: life and property; see Appendix A VIDEO. There is the need to gather intelligence for where to direct First Responders (as in 911 emergencies); and even before people in the affected areas may call out for help.

While the focus of the Go Lean movement is primarily towards economics, it is the premise of this roadmap that security efforts must be coupled with the region’s economic empowerments. The premise is simple! The economic engines must be protected and preserved; this subject of “Insurance Company Disaster-Claim Assessing Drones” is therefore within scope for the Trade Federation. In fact, the CU/Go Lean roadmap has defined these 3 prime directives:

Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million jobs.
Establishment of a security apparatus to protect the resultant economic engines.
Improvement of Caribbean governance to support these engines.

While there may be proponents and opponents (privacy advocates) of unmanned aviation, no one would object to aggressive efforts to locate people in danger or quickly restore communities to normal operations after a storm. There is an overriding need, as many times tourist-based industries need to project the confidence to the watching world that Caribbean winter destinations will be ready, willing and able to extend hospitality to visitors … in short order.

The message and image must be consistent for the region’s primary economic driver, even after a natural disaster: Be our guest!

The Go Lean strategy is to confederate the 30 member-states of the Caribbean region to form the technocratic CU Trade Federation. Tactically, the roadmap calls for a separation-of-powers, allowing the Caribbean member-states to deputize authority of the Caribbean airspace to the one unified CU agency. Operationally, there is the need for these drones in critical times and also for everyday scenarios. (Many times, watercrafts become imperiled in the region’s waters; the scanning & diagnostic capabilities on drones would far-exceed human-eye capability for search-and-rescue).

The book details community ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to foster innovative solutions in Caribbean communities, so as to positively impact the societal economic, security and governing engines:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – All Choices Involve Costs	Page 21
Community Ethos – Job Multiplier	Page 22
Community Ethos – Public Protection Over Privacy Concerns	Page 23
Community Ethos – “Crap” Happens	Page 23
Community Ethos – Lean Operations	Page 24
Community Ethos – Return on Investments (ROI)	Page 24
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Help Entrepreneurship	Page 28
Community Ethos – Ways to Impact Research & Development	Page 30
Community Ethos – Impact the Greater Good	Page 37
Strategy – Vision – Confederating 30 Member-states in a Union	Page 45
Strategy – Agents of Change – Technology	Page 57
Strategy – Agents of Change – Aging Diaspora	Page 57
Strategy – Agents of Change – Globalization	Page 57
Strategy – Agents of Change – Climate Change	Page 57
Tactical – Fostering a Technocracy	Page 64
Tactical – Growing Economy – New High Multiplier Industries	Page 68
Separation of Powers – Self Governing Entities	Page 80
Separation of Powers – Aviation Administration and Promotion	Page 84
Implementation – Ways to Pay for Change – Hurricane Reinsurance Funds	Page 101
Implementation – Benefits from the Exclusive Economic Zone	Page 104
Implementation – Steps to Implement Self-Governing Entities	Page 105
Implementation – Ways to Deliver	Page 109
Planning – 10 Big Ideas – Homeland Security Innovations	Page 127
Advocacy – Ways to Grow the Economy	Page 151
Advocacy – Ways to Create Jobs	Page 152
Advocacy – Ways to Improve Housing – Hurricane Risk Reinsurance Funds	Page 161
Advocacy – Revenues Sources for Caribbean Administration – Reinsurance Funds	Page 172
Advocacy – Ways to Improve Homeland Security	Page 180
Advocacy – Ways to Improve Intelligence Gathering & Analysis	Page 182
Advocacy – Ways to Improve for Natural Disasters	Page 184
Advocacy – Ways to Improve Emergency Management	Page 196
Advocacy – Ways to Foster Technology	Page 197
Advocacy – Ways to Impact Wall Street – Adopt Advanced Products: “Reinsurance”	Page 197
Advocacy – Ways to Improve Transportation – Aviation Oversight	Page 205
Advocacy – Ways to Improve Fisheries – Search & Rescue	Page 210
Advocacy – Ways to Impact Urban Living	Page 238
Advocacy – Ways to Impact Rural Living	Page 239

The foregoing news story relates to threats and consequences of hurricanes. While hurricanes present a Clear and Present Danger to “life and limb”, the focus of this commentary is on property. While the sense of urgency may appear to be lower, there is still the need to impact the region’s Greater Good. The advocacy in this case is to be an early adopter of technology to optimize the administration of Caribbean economic engines.

This is heavy-lifting. The buy-in from community stakeholders will not be easy; there will be the need for collaboration, compromise and consensus-building for the full adoption of unmanned aviation.

The insights from the foregoing articles and embedded videos help us to appreciate that the future for unmanned aviation is now! We must therefore lean-in for these empowerments now.

In fact the region is urged to lean-in for the entire roadmap of Go Lean … Caribbean. The benefits are too alluring. Protection of people, properties and processes. This is the Greater Good. This roadmap allows for that quest: to make the Caribbean a better homeland to live, work and play. 🙂

Download the book Go Lean…Caribbean now!

————

Appendix A VIDEO – Drone Footage from Inside Corvette Museum Sinkhole – https://youtu.be/vkEDwOidW_Q

Published on Feb 12, 2014 – University of Western Kentucky’s Engineering Department sent a drone helicopter into the sinkhole at the National Corvette Museum that swallowed eight vintage Corvettes.

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Appendix B VIDEO – Sprite Unmanned Aerial Vehicle – https://youtu.be/-w9YTJjGaEg

Published on May 13, 2015 – Meet Sprite, the most portable, most durable small unmanned aerial vehicle in the world. Powerful, yet simple to fly. Visit us at www.ascentaerosystems.com for more information! Pre-order at https://www.kickstarter.com/projects/…

————

Appendix C VIDEO – Top 10 Drones 2015 – https://youtu.be/sq2n4TMC1XU

Published on Nov 14, 2014 – More Info & Pics: https://ezvid.com/top-ten-drones

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Aviation, Disaster, ICT, Model, Security, Transform

[Top]

Cruise Ship Commerce – Getting Ready for Change

Posted on May 6, 2015 in Economics, Government

Go Lean Commentary

According to the following news article, Royal Caribbean Cruise Line (RCL) is presenting their new corporate executive for Human Resources (HR), Senior Vice-President Paul Parker.

Congratulations Mr. Parker; welcome to Caribbean Commerce. We are glad to have you participating in our regional marketplace and hope that you are ready for change; to make change and adapt to change.

Title: Royal Caribbean Names New SVP
By: Caribbean Journal Staff

Royal Caribbean Cruises, Ltd has named Paul Parker its new senior vice president and chief human resources officer, the company announced.

Parker comes to the company after more than two decades of working in the human resources field, from Deloitte & Touche to Colgate Palmolive, among other stints.

Parker will report directly to the company’s president and COO, Adam Goldstein.

“What made Paul stand out for us during the interview process was his comprehensive knowledge of state-of-the-art best practices in human resources management,” Goldstein said. “His background and skills are ideally suited for the role of leading and managing our HR organization as we strive to identify, hire, develop, motivate and retain the best employees, both shipboard and shoreside, responsible for providing our guests with extraordinary vacations.”
Caribbean Journal – Regional News Magazine Site (Posted May 2, 2015; retrieved May 6, 2015) –
http://caribjournal.com/2015/05/02/royal-caribbean-names-new-svp/

VIDEO – Royal Caribbean’s “Oasis of the Seas”: The Biggest Cruise Ship in the World – https://youtu.be/uhLbFGYNDlI

Uploaded on Aug 22, 2011 – With twenty-one swimming pools, its own version of New York’s Central Park, and room for 5,400 passengers, the Oasis of the Seas is the most massive cruise ship ever built.

Mr. Parker will be based in the company’s headquarters^* in Miami, FL^#. So why is it that we say Caribbean commerce?

This is due to the fact that this cruise line “plies its trade” in the Caribbean region (waters and ports-of-call); even their name confesses this fact: Royal Caribbean. While the Port of Miami accommodated 4.8 million passengers in 2014, the truth is that these ones did not buy their cruise vacation to consume Miami, but rather to consume the Caribbean. We are the attraction!

In addition, many of the jobs on the ships are maintained by Caribbean workers.

This is good …

This is bad …

This is the focus of this commentary and advocacy. There are strict divisions of labor on cruise ships – wait staff and cabin stewards are reserved for citizens from Third World countries like the Caribbean and Asia – with terrible pay scales – while the officers/leadership roles are reserved for Europeans-only – Scandinavians proliferate. We appreciate the fact they set aside jobs for people of the Caribbean, but it is unacceptable that job advancements are unattainable. The resultant discrimination is real. Cruise ships, and other maritime vessels in general, are the last bastion of segregation. Descriptors like “modern-day-slavery”, “sweatships” and “extreme poverty” are far too common. Case in point, many ship-domestic staff are “tip earners”, paid only about US$50 a month and expected to survive on the generosity of the passengers’ gratuity. Another report have detailed this, here:

“The operation of the cruise ship is segregated by gender,” says Researcher Minghua Zhao, of the ITF-funded Seafarers’ International Research Centre at Cardiff University, “All the captains are men and no woman is found in deck and engine departments. Women concentrate in hotel, catering and other ‘non-technical’ sectors of the vessel.”

Nationality is another main factor in the allocation of jobs. Women from western and developed countries are far more likely to be found in a small number of management or administrative positions. They are also likely to be employed as entertainers, beauticians, nurses, aerobics leaders and receptionists.

On the other hand women from Asian and less developed countries are almost entirely employed in the “hotel” functions of the ship in catering, waiting and cabin staff positions.
Source: http://www.itfseafarers.org/dark-side.cfm

This is a human resource matter and thusly will be within the sphere of influence for the new HR executive at RCL. While many ships are only governed by maritime laws, injustice is injustice. Good shepherding of Caribbean economic eco-system requires some focus to these bad practices.

The book Go Lean…Caribbean opens with the thesis (Page 3) that the problems of the Caribbean are too big for any one member-state to tackle alone. Some of the most popular cruise destinations include the Bahamas, Jamaica, Cayman Islands and Saint Martin. Alone, these port cities/member states cannot effect change on this cruise line industry. But together, as one unified front, the chances for success improves exponentially. The unified front is the Caribbean Union Trade Federation (CU). The term Union is more than a coincidence; it was branded as such by design. The Go Lean book serves as a roadmap for the introduction and implementation of the CU.

The vision of this integration movement is for the region to function as a Single Market. The quotation from the Go Lean book continues in advocating that the Caribbean member-states (independent & dependent) lean-in to this plan for confederacy, convention and collaboration. This is Collective Bargaining 101. From the outset, the book recognized the significance of our exercising authority over the Caribbean Seas. This point was pronounced in the opening Declaration of Interdependence (Page 11):

v. Whereas the natural formation of our landmass and coastlines entail a large portion of waterscapes, the reality of management of our interior calls for extended oversight of the waterways between the islands. The internationally accepted 12-mile limits for national borders must be extended by International Tribunals to encompass the areas in between islands. The individual states must maintain their 12-mile borders while the sovereignty of this expanded area, the Exclusive Economic Zone, must be vested in the accedence of this Federation.

The confederacy goal entails accepting that there is interdependence among the Caribbean member-states. Implementation-wise, this shifts the responsibility for cruise line negotiations to a region-wide, professionally-managed, deputized technocracy that can result in greater production and greater accountability.

An advocacy, in this case collective bargaining, on behalf of the oppressed workers in Caribbean waters is a just and honorable cause. The quest of this Go Lean movement is to make the Caribbean region better to live, work and play. Labor practices on cruise ships are therefore within scope of the CU.

This is the change … that now confronts the new RCL HR executive. But the CU quest to elevate Caribbean society should not run afoul of this or any cruise line’s modus operandii. The CU sets out to be their trading partner, not adversarial opponent. This should be win-win.

Nowhere else in the modern world is job discrimination encouraged, accepted or tolerated. The Caribbean demanding fair employment opportunities are therefore aligned with the Greater Good community ethos. Besides, these ships are conducting commerce in our neighborhood, so our community standards should apply. This is the change; consolidating the region so as to be able to leverage as one, a Single Market.

The end result? The goal of the CU is cataloged in the stated prime directives, identified with the following 3 statements:

Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
Establishment of a security apparatus to protect the resultant economic engines.
Improvement of Caribbean governance to support these engines.

The issue – cruise ship division of labor – being presented in this commentary is not the only focus of the Go Lean movement (book and blogs) relating to cruise commerce. There are so many societal defects associated with this eco-system; the corporate abuses of Big Cruises have been duly documented. Clearly this another example of crony-capitalism. Already, these previous blog/commentaries stressed different issues within the cruise industry space:

https://goleancaribbean.com/blog/?p=4639	Tobago: A Model for Cruise Tourism
https://goleancaribbean.com/blog/?p=3889	Electronic Payments– Ready for Change in Cruise Commerce
https://goleancaribbean.com/blog/?p=3225	Regional aviation dysfunction leading to more cruise traffic
https://goleancaribbean.com/blog/?p=2207	Hotels charging resort fees leading to more cruise traffic
https://goleancaribbean.com/blog/?p=1003	Epidemiology (Virus) protections for Caribbean & Cruise Tourism

The elevation of cruise commerce in the region is a mission within the Go Lean roadmap. The book details the applicable community ethos, strategies, tactics, implementation and advocacies to derive more benefits of regional cruise ship commerce and promote collective bargaining within the region:

Community Ethos – Economic Principles – People Respond to Incentives in Predictable Ways	Page 21
Community Ethos – Economic Principles – Economic Systems Influence Individual Choices	Page 21
Community Ethos – Economic Principles – Consequences of Choices Lie in the Future	Page 21
Community Ethos – Security Principles – Anti-Bullying and Mitigation	Page 23
Community Ethos – Security Principles – Light Up the Dark Places	Page 23
Community Ethos – Governing Principles – Lean Operations	Page 24
Community Ethos – Governing Principles – Return on Investments (ROI)	Page 24
Community Ethos – Governing Principles – Cooperatives	Page 25
Community Ethos – Ways to Improve Negotiations – Cruise Line Collective Bargaining	Page 32
Community Ethos – Ways to Improve Sharing	Page 35
Community Ethos – Ways to Impact the Greater Good	Page 37
Strategy – Vision – Confederate 30 Caribbean Member-States	Page 45
Strategy – Mission – Facilitate Transportation Efficiencies for Passengers & Ships	Page 46
Strategy – Customers / Stakeholders – Business Community and Employees	Page 48
Strategy – Customers / Stakeholders – Cruise Passengers	Page 48
Strategy – Competitors – Visitors – Summer Caribbean Cruise -vs- Northern Vacation	Page 55
Strategy – Core Competence – Cruise Tourism	Page 58
Anecdote – Carnival Cruise Lines Strategies	Page 61
Tactical – Foster a Technocracy	Page 64
Tactical – Separation of Powers – Homeland Security – Coast Guard and Naval Authority	Page 75
Tactical – Separation of Powers – Homeland Security – Emergency Management	Page 76
Tactical – Separation of Powers – Commerce Department – Regional Tourism Coordination	Page 78
Tactical – Separation of Powers – Labor Department – Labor Relations Board	Page 89
Implementation – Start-up Benefits from the Exclusive Economic Zone of Caribbean Sea	Page 104
Implementation – Ways to Deliver – Embracing a Technocratic Ethos	Page 109
Planning – 10 Big Ideas – Confederation Without Sovereignty	Page 127
Advocacy – Ways to Grow the Economy	Page 151
Advocacy – Ways to Create Jobs	Page 152
Advocacy – Ways to Impact Labor Unions – Partnerships with Labor & Management	Page 164
Advocacy – Ways to Improve Governance	Page 168
Advocacy – Ways to Manage Federal Civil Service – Meritocracy Labor standards	Page 173
Advocacy – Ways to Foster Cooperatives	Page 176
Advocacy – Improve Homeland Security – Emergency Management Readiness	Page 180
Advocacy – Ways to Impact Cruise Tourism	Page 193
Advocacy – Ways to Improve Emergency Management	Page 196
Advocacy – Ways to Foster Ship-Building – Cruise Ship Dry-Dock Opportunities	Page 209

The roadmap posits that the Caribbean must change … to adapt to a changing world; also asserting that the cruise line industry must change. This commentary specifically declares that Royal Caribbean Cruises Lines must change. This means you “Paul Parker”.

In the end, these changes will be for the better; for the Greater Good and to promote a better partnership for all cruise industry stakeholders, including the lowly wait and cabin staff who usually have no voice. Is there a danger that these CU/Go Lean demands (fair labor practices) may drive up costs of the product? Yes, absolutely!

But this has always been the argument for those resisting labor reforms: slavery, labor unions, child labor, occupational safety and minimum wage. This current industry defense seems like a “throwback” to the days of 1850 – ironic, considering that Mr. Parker was applauded for his “knowledge of state-of-the-art best practices in human resources management”. “Win-win” is still possible with Cruise Commerce; the industry suffers from staff retention due to this bad labor practices; in the end cruise ship can optimize their cost of labor acquisition and retention by following best practices. This should be self-evident!

Why has this labor status quo persisted for so long in the cruise industry? Supply and demand. The demand for Caribbean exotic cruise ports are high, while the supply of staffers from Third World countries is also high. The economic principles therefore forces downward pressure on labor prices. This is Bullying 101. Remediation of this type of conduct, like any other form of bullying, requires a superior power. In this case, it will be the Caribbean confederation and the accompanying authority for the Exclusive Economic Zone of the Caribbean Sea.

While we will weld some power, the region should consider it more of an honor to host 10 million visitors – as reported in the Go Lean book (Page 55) – who want to enjoy our hospitality … in conjunction with cruise ships from many North American points of embarkation. Our plea to these tourists is echoed in unison: Be Our Guest.

But our warning to cruise operators bent on abuse and oppression on our waters: Get Ready for Change.

Let us show the world why the Caribbean is the best destination – via cruise or otherwise – to live, work and play. 🙂

Download the free e-book of Go Lean … Caribbean – now!

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Appendix ^* – Full Disclosure: At one point, this writer worked for Royal Caribbean Cruise Lines in Miami.

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Appendix ^# – About the Port of Miami

The Port of Miami is among America’s busiest ports and recognized across the globe with the dual distinction of being the Cruise Capital of the World and the Cargo Gateway of the Americas. Port of Miami contributes more than $27 billion annually to the South Florida economy and helps generate 207,000 direct, indirect, and induced jobs. For more information please visit www.portmiami.biz.

For Fiscal Year 2015, the Port is servicing 34 ships and 15 different cruise brands, including: Aida Cruises, Azamara Club Cruises, Carnival Cruise Lines, Celebrity Cruises, Costa Cruises, Crystal Cruises, Disney Cruise Line, Hapag-Lloyd Cruises, MSC Cruises, Norwegian Cruise Line, Oceania Cruises, P&O Cruises, Regent Seven Seas Cruises, Resorts World Bimini, and Royal Caribbean International.

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Crony-Capitalism, Cruise, Play, Power, Ships, Tourism, Transform

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Tesla unveils super-battery to power homes

Posted on May 5, 2015 in Economics, Industries, Social

Go Lean Commentary

Necessity is the ‘mother’ of invention – Old Wives Tale

Caribbean energy costs are among the highest in the world. The book Go Lean…Caribbean relates (Page 100) that the Caribbean has among the most expensive energy costs in the world, despite having abundant alternative energy natural resources (solar, wind, tidal, and geo-thermal). The Caribbean eco-system focuses on imported petroleum to provide energy options and as a result retail electricity rates in the Caribbean average US$0.35/kWh, when instead it could be down to US$0.088/kWh.

There is definitely the need for invention. Now, along comes Tesla^*…
… with this “inventive” solution.
… with this Powerwall product, launched last week by Tesla Chief Executive Officer Elon Musk; it is designed to allow homeowners to store electricity generated by green energy options – solar panels and wind turbines – during the peak of the day, then use it at other times when electricity consumption is higher.

VIDEO 1 – Tesla unveils super-battery to power homes – http://www.cbsnews.com/videos/tesla-unveils-super-battery-to-power-homes/

May 2, 2015 – The electronic car maker has come up with large, high-tech batteries to power your home even after the sun goes down. Telsa’s founder, Elon Musk, says they will let homeowners store solar power during the day and keep using it at night. CNET.com’s senior editor Bridget Carey joins “CBS This Morning: Saturday” to discuss how this could open a whole new way to use clean energy and to save money. (VIDEO plays best in Internet Explorer).

According to Elon Musk, this is “a fundamental transformation of how the world works”.

VIDEO 2 – Elon Musk unveils Powerwall, a battery pack for buildings (TomoNews) – https://youtu.be/NvCIhn7_FXI

Published on May 5, 2015 – Tesla Motors on Thursday, April 30 unveiled Tesla Energy, storage systems or batteries designed for homes and businesses.

Elon Musk, the company CEO, introduced the products to a crowd of business experts and journalists at a Tesla facility close to Los Angeles.

Category: News & Politics

Tesla did not invent the original battery, nor solar power panels. These technologies had pre-existed before this new development. But the problem has always been availability of the green energy option during uninviting conditions: solar – night time or cloud covered days; wind – still days.

This was the problem: Energy needs are undeniable 24-7-365; all the time. Energy delivery must cover all of those times.

The delivery or fulfilling those needs is a great target for lean, agile operations. It will save a lot of money for the people and institutions of the Caribbean.

This is the economic dynamic; there is also the matter of burning fossil fuels (oil, coal, wood pulp) and contributing to global warming and climate change. The Go Lean book posits that the embrace of alternative energy generation sources to be more impactful on the quest to minimize the threats on the environment. Early in the book, the pressing need to be aware of climate change is pronounced in the Declaration of Interdependence (Page 11), with these words, (the first of many “causes of complaints”):

i. Whereas the earth’s climate has undeniably changed resulting in more severe tropical weather storms, it is necessary to prepare to insure the safety and security of life, property and systems of commerce in our geographical region. As nature recognizes no borders in the target of its destruction, we also must set aside border considerations in the preparation and response to these weather challenges.

Now, with this innovative offering from Tesla, the quest to adapt to more clean/green energy options can be practical and more cost effective. Power generation from the sun or wind (free & renewable sources) is far cheaper that generation based on fossil fuels.

Money! Environment! These two constitute reasons enough to pursue strategies, tactics and implementations of renewable energy with battery back-ups. But there is a third motivation behind the Go Lean…Caribbean movement; that is love of the homeland. Many people find the current lack of energy options unbearable for a normal life in their Caribbean ancestral homeland – imagine not being able to turn on air conditioning during the summer due to excessive costs – so they flee the region for foreign shores … in North America and Europe.

This new innovative product by Tesla…changes everything!

The book Go Lean… Caribbean serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). This roadmap has 3 prime directives:

Optimization of the economic engines in order to grow the regional economy to $800 Billion GDP and create 2.2 million new jobs.
Establishment of a security apparatus to protect the resultant economic engines.
Improvement of Caribbean governance to support these engines.

This Go Lean/CU roadmap recognizes that modern life has expanded the definition of basic needs to now include food, clothing, shelter and energy. And thusly the book proposes many solutions for the region to optimize energy delivery:

generation
distribution
consumption

Home-based solar panels or home-based wind turbines with battery back-ups would optimize all these three areas of focus. We applaud Tesla and the success of their transformational product.

To the Caribbean we declare: More help is on the way! The Go Lean book posits that with the adoptions of the strategies, tactics and implementations in the roadmap that average costs of energy can be decreased from an average of US$0.35/kWh to US$0.088/kWh in the course of the 5-year term of this roadmap. (Page 100). That is a 75% savings.

The Go Lean roadmap details a series of community ethos, strategies, tactics, implementations and advocacies to be early adopters of these cutting-edge energy systems. The following list applies:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Lean Operations	Page 24
Community Ethos – Return on Investments	Page 24
Community Ethos – Cooperatives	Page 25
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Impact the Greater Good	Page 37
Strategy – Harness the power of the sun/winds	Page 46
Tactical – Fostering a Technocracy	Page 82
Tactical – Separation of Powers – Energy Commission	Page 82
Anecdote – “Lean” in Government – Energy Permits	Page 93
Anecdote – Caribbean Energy Grid Implementation	Page 100
Implementation – Ways to Develop Pipeline Industry	Page 107
Implementation – Ways to Improve Energy Usage	Page 113
Advocacy – Ways to Impact Public Works	Page 175
Advocacy – Ways to Foster Cooperatives	Page 176
Advocacy – Ways to Impact Monopolies	Page 202

This Tesla battery system – Powerwall – offers independence from utility grids. It is not from an energy company, but rather from a technology company; (see Appendix). Stay tuned, opposition will emerge; it always does…especially in the US. The For-Profit utility companies always lobby against regulations to “clean-up” fossil-fuel (coal) power plants or block small “Green” start-ups from sending excess power to the National Grid. Their motive is to preserve their century-long monopoly. See related article here:

Title: Is America’s electrical grid fading to black?
By: Bruce Kennedy – MoneyWatch – April 8, 2015

Are you prepared to live “off the grid,” independent of major electric utilities? Many people who live in Washington, D.C., may be ready for a change — after widespread power outages in the region on Tuesday, due to a problem in a utility company transmission line.

While the term may sound like something out of a novel, a growing number of U.S. consumers and businesses are actually expected to be living “off the grid” over the next several decades – to the point where some of the big utilities may find themselves in a new financial reality.

According to a new report by Rocky Mountain Institute (RMI) and HOMER Energy, a firm that designs remote microgrids, the development of practical and efficient solar-plus battery systems is an economic and cultural game-changer.

The report looked at median commercial and residential electrical customers in five very different metro areas – Louisville, Kentucky, Westchester County, New York, San Antonio, Texas, Los Angeles, California, and Honolulu, Hawaii – and evaluated their local economics through to 2050.

And their findings were startling. “Over time, as retail electricity prices from the grid increase and solar and battery costs decrease,” said the report’s executive summary, “customers logically reduce their grid purchases until the grid takes a backup-only role.”

For example, according to RMI’s analysis, the New York suburb of Westchester Country could see utility grid’s supply to overall electric power for commercial customers in the region shrink from 100 percent today to around 25 percent by 2030 – and to less than five percent by 2050.

“These findings should be compelling for customers and technology providers,” RMI principal and report author James Mandel said in a press statement. “No matter how expensive retail electricity gets in the future, customers that invest in these grid-connected systems can contain their electricity costs at or below a ‘peak price,’ yielding significant savings on their monthly utility bill.”

More choices for consumers of electricity also means major changes for the big utilities, even if only a fraction of their current customers end up adopting the new-tech systems. The report says that in the northeastern United States, commercial load “defections” away from the traditional utility grid could total 140 million megawatt hours by 2030, or around $35 billion in annual electrical costs.

But RMI manager and report coauthor Leia Guccione says the changes aren’t necessarily adversarial, pitting the old-school utilities against the new technology.

“Because these solar-plus-battery systems are grid-connected,” she notes, “they can offer value and services back to the grid. We need not see them only as a threat.”

© 2015 CBS Interactive Inc.. All Rights Reserved.
Retrieved from CBS News Online Site (Posted May 2, 2015) from: http://www.cbsnews.com/news/is-americas-electrical-grid-fading-to-black/

This will be a choice for America to make: immediate profits or the Greater Good. Choose well, America!

The Go Lean movement (book and blogs) asserts that we should not look to American Big Energy for answers to our own Caribbean dilemmas. American leadership has often times been motivated by crony-capitalistic intentions. This point had been further elaborated upon in these previous blog/commentaries:

https://goleancaribbean.com/blog/?p=4897	US Backs Natural Gas (LNG) Distribution Base in Jamaica
https://goleancaribbean.com/blog/?p=4294	Ambassadors to Caribbean discuss PetroCaribe-Energy, Security
https://goleancaribbean.com/blog/?p=2465	Book Review: ‘This Changes Everything: Capitalism vs. the Climate’
https://goleancaribbean.com/blog/?p=2338	Lessons: How Best to Welcome the Dreaded American ‘Plutocracy’
https://goleancaribbean.com/blog/?p=926	Conservative heavyweights have solar industry in their ‘kill’ sights
https://goleancaribbean.com/blog/?p=273	10 Things We Don’t Want from the US – #1: American Self-Interest

Fulfilling energy needs is a great target for lean, agile operations, perfect for the CU technocracy.

We need innovative products, systems, companies and people to help us in our quest to make the Caribbean a better place to live, work and play.

Let’s get started. Now is the time for all of the Caribbean, the people, businesses, institutions and governments, to lean-in for the optimizations and opportunities described in the book Go Lean … Caribbean. 🙂

Download the book Go Lean … Caribbean – now!

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Appendix – ^* Tesla

Tesla Motors, Inc. is an American company that designs, manufactures, and sells electric cars and electric vehicle powertrain components.^[4] Tesla Motors is a public company that trades on the NASDAQ stock exchange under the symbol TSLA.^[5] In the first quarter of 2013, Tesla posted profits for the first time in its history.^[6]

Tesla first gained widespread attention following their production of the Tesla Roadster, the first fully electric sports car.^[7] The company’s second vehicle is the Model S, a fully electric luxury sedan, and its next two vehicles are the Models X and 3.^[8] As of March 2015, Tesla Motors has delivered about 70,000 electric cars since 2008.^[9]

Tesla also markets electric powertrain components, including lithium-ion battery packs to automakers including Daimler and Toyota.^[10] Its CEO, Elon Musk, has said that he envisions Tesla Motors as an independent automaker,^[11] aimed at eventually offering electric cars at prices affordable to the average consumer.^[12][13] Pricing for the Tesla Model 3 is expected to start at US$35,000 before any government incentives and deliveries are expected to begin by 2017.^[14][15] On April 30, 2015, Tesla announced the Powerwall, a battery product for home use. (Source: http://en.wikipedia.org/wiki/Tesla_Motors)

The company is named after famous inventor and innovator, Nikola Tesla (1856 –1943). He was a Serbian American^[2][3][4], electrical engineer, mechanical engineer, physicist, and futurist. He is best known for his contributions to the design of the modern alternating current (AC) electricity supply system.^[5]

Nicola Tesla gained experience in telephony and electrical engineering before immigrating to the United States in 1884 to work for Thomas Edison in New York City. He soon struck out on his own with financial backers, setting up laboratories and companies to develop a range of electrical devices. His patented AC induction motor and transformer were licensed by George Westinghouse, who also hired Tesla for a short time as a consultant. His work in the formative years of electric power development was involved in a corporate alternating current/direct current “War of Currents” as well as various patent battles. Tesla went on to pursue his ideas of wireless lighting and electricity distribution in his high-voltage, high-frequency power experiments in New York and Colorado Springs and made early (1893) pronouncements on the possibility of wireless communication with his devices. He tried to put these ideas to practical use in his ill-fated attempt at intercontinental wireless transmission. He was ahead of his time, as we only now have some semblance of these systems in place today. (Source: http://en.wikipedia.org/wiki/Nikola_Tesla).

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A Lesson in History – Royal Charter: Zimbabwe -vs- South Africa

Posted on April 30, 2015 in Ethos, Government, Strategy

Go Lean Commentary

If presented the choice, which would you rather be granted: riches or power?

Many would conclude riches, because of societal expressions like the “Golden Rule: He who has the Gold… rules”. Yet the truth is riches can be created and destroyed quickly. This was the experience just recently during the 2008 Great Recession, where people in the US – the richest country on the planet – lost $11 Trillion in net worth in short order.

On the other hand, there is power. History shows that with power, the rights to riches can be granted, exploited and passed on, from century to century, generation to generation. Consider for example the African continent (in particular the southern region) and the Royal Charters that granted abundant wealth to a privileged few:

The English had been the first to adopt the approach of bundling their resources into a monopoly enterprise, with the English East India Company in 1600. This threatened their Dutch competitors with ruin,^[15] so in 1602 the Dutch monarchy followed suit and sponsored the creation of a single Dutch East Indies Company and granted it monopoly over the Asian trade. (Source: http://en.wikipedia.org/wiki/Dutch_East_India_Company#Formation_.281602.29)

The British monarchy has issued over 980 Royal Charters.^[1] (A formal document issued by a monarch as letters patent, granting a right or power to an individual or a body corporate). A specific charter was issued for the South African region.

The British South Africa Company (BSAC) was established following the amalgamation of Cecil Rhodes‘ Central Search Association and the London-based Exploring Company Ltd which had originally competed to exploit the expected mineral wealth of Mashonaland but united because of common economic interests and to secure British government backing. The company received a Royal Charter in 1889 modeled on that of the English East India Company. Its first directors included the Duke of Abercorn, Rhodes himself and the South African financier Alfred Beit. Rhodes hoped BSAC would promote colonisation and economic exploitation across much of south-central Africa, as part of the “Scramble for Africa“. However, his main focus was south of the Zambezi, in Mashonaland and the coastal areas to its east, from which he believed the Portuguese could be removed by payment or force, and in the Transvaal, which he hoped would return to British control.^[1] (Source: http://en.wikipedia.org/wiki/British_South_Africa_Company)

This historic information is being considered in conjunction with the book Go Lean…Caribbean; a publication designed to elevate the region’s economic (create 2.2 million new jobs), security and governing engines. Why would this “Lesson in History” matter in assessing today’s Caribbean status and fate?

It is of utmost importance. This discussion reveals how to reconcile the injustices of the past, and still build a better future. We have good models to consider, in this case the countries of Zimbabwe and South Africa.

In a previous blog/commentary, the issue of the origin of colonial entitlements was detailed at full length. A direct quote relates:

The most iconic of all the Papal Bulls [-“letters patent” or charters issued by a Pope, the Head of the Roman Catholic Church -] was the Inter caetera, a Papal Bull by Pope Alexander VI on 4 May 1493, which set a demarcation between the New Lands to Portugal and Spain; this granted to Spain all lands to the “west and south” … of the islands of the Azores … and all new lands to the East of this pole remained assigned to Portugal.

Just before this world-changing decree, there was an earlier Papal Bull that sealed the fate and would prejudice the African Diaspora for 500 years. The African Slave Trade and institution of “Slavery” was legally predicated on a Papal Bull from Pope Innocent VIII (Giovanni Battista Cybo) in 1491; just months before Christopher Columbus’s historic first voyage…

From the origins of slavery, [colonialism] traversed the historic curves of social revolution and evolution. In the 1500, the Protestant movement took hold. As other European powers deviated from Catholicism, Papal Bulls carried no significance to them and compliance was ignored. England and Holland established their own Protestant Churches with their own monarch as head of Church and State; Papal decrees were replaced with Royal Decrees and Charters. The intent and end-result was still the same: territories and lands awarded (colonized) with the stroke of a pen by one European power after another. The Royal Decrees and Charters were then reinforced with a strong military presence and many battles…

[The resultant] “oligarchy” … power effectively rested with a small number of people. These people could be distinguished by royalty, wealth, family ties, education, corporate, religious or military affiliation.

In this discussion of oligarchy, focus is given to powerful families. There are encyclopedic references that relate that oligarchy structures are often controlled by a few prominent families, who typically pass their influence/wealth from one generation to the next, even though inheritance alone is not a necessary condition for oligarchies to prevail…

This is the challenge that belies Caribbean society. Most of the property and indigenous wealth of the Caribbean region is concentrated amongst the rich, powerful and yet small elite; an oligarchy. Many times these families received their property, corporate rights and/or monopolies by Royal Charter from the European monarchs of ancient times. These charters thus lingered in legacy from one generation to another … until …

The form of rulership that dominated these times in history is that of Oligarchy; empowered by Royal Charters/Decrees. Today, oligarchy – rule by the rich^[4] – is synonymous with another term commonly used, plutocracy.

The subject of oligarchs is very familiar on the African continent. This has been a real issue there. In many countries after colonialism, like Zimbabwe (1980), the cure for the oligarch disease was nationalization – forfeiting and seizing commercial farms and mines. This turned out disastrously for this country; the cure was worse than the disease. But, next door in South Africa (14 years later), the strategy, tactics and implementation was different. This country did not ascend to majority-rule until 1994; the first majority-ruled President there, Nelson Mandela saw the futility of the nationalization strategy amongst the precedent independent African nations, so he pursued an alternate approach to assuage White Flight and keep the capital and skilled labor in the country. But the continuation of the oligarchs ill-gained, and public-perceived-stolen assets forged problems in the reality of economic/wealth inequality. Majority-rule therefore brought no revolutionary change for the average man.

All in all, change is not easy. It is heavy-lifting. This is abundantly clear in the examination of the independent majority-ruled Zimbabwe and majority-ruled South Africa. See Chart in the Appendix of the comparisons.

The details of the Republic of Zimbabwe (1980) evolution are as follows:

The British South Africa Company was a Royal Charter, to administer “North-Western Rhodesia” and “North-Eastern Rhodesia” for White settlement; it was not under those names, but the names of the geographic parts—”Mashonaland”, “Matabeleland”, “Barotseland”, and so on. The collective territories were initially referred to as “Zambesia” – the name origins of both Zambia and Zimbabwe – but became Rhodesia as an international brand. While the White minority community resisted the transition to black majority-rule, the change inevitably came, empowering revolutionary leader Robert Mugabe. The new regime – due to spite, revenge and broken promises – began confiscating White-owned farmlands. This is widely blamed for leading to the deterioration of the Zimbabwean economy (societal abandonment of human and financial capital); this has plagued the country even until this day.^[113]

The details of the Republic of South Africa (1994) evolution are as follows:

The Cape Colony was a British colony in present-day South Africa and Namibia, named for the Cape of Good Hope. The British colony was preceded by an earlier Dutch colony of the same name, established in 1652 by the Dutch East India Company – granted by Royal Charter from the Dutch Monarchy. The Dutch lost the colony to Britain following the 1795 Battle of Muizenberg, but had it returned following the 1802 Peace Treaty of Amiens. It was re-occupied by the British following the Battle of Blaauwberg in 1806, and British possession affirmed with the Anglo-Dutch Treaty of 1814. The Cape Colony then remained in the British Empire, becoming self-governing in 1872, and uniting with three other colonies to form the Union of South Africa in 1910. Despite practicing racial segregation for most of its history, eventually integration and black majority-rule evolved in the Republic of South Africa. Despite their resistance to these changes, accommodations and reconciliations on the part of Nelson Mandela allowed for the continuation of the established societal engines; the minority White communities and business interests remained.

Considering these case studies, the Failed-State status of Zimbabwe versus the economic successes of South Africa, we see a lesson in this history, an obvious appreciation for best-practices … for us to apply in the Caribbean. We can optimize these best-practices by applying regional strategies, tactics and implementations to benefit everyone – the Greater Good – and try not to disenfranchise any one group.

The masses of people in the democratic Caribbean now have the right to rule, not just some special group set aside by Royal Decree or granted power by a Royal Charter. Since there is the scientific fact that no one can go back in time and change history; we can only move forward, hopefully with wisdom from the lessons learned in history. The Go Lean book presents a roadmap on how to benefit from these lessons – good, bad and ugly – and how to empower communities anew; to use political power to impact the Greater Good. We therefore see a role for the Rich (One Percent – Page 224), the Poor (Page 222) and the Middle Classes (Page 223).

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xii. Whereas the legacy in recent times in individual states may be that of ineffectual governance with no redress to higher authority, the accedence of this Federation will ensure accountability and escalation of the human and civil rights of the people for good governance, justice assurances, due process and the rule of law. As such, any threats of a “failed state” status for any member state must enact emergency measures on behalf of the Federation to protect the human, civil and property rights of the citizens, residents, allies, trading partners, and visitors of the affected member state and the Federation as a whole.

xiii. Whereas the legacy of dissensions in many member-states (for example: Haiti and Cuba) will require a concerted effort to integrate the exile community’s repatriation, the Federation must arrange for Reconciliation Commissions to satiate a demand for justice.

This Go Lean book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) to provide better stewardship for the 30 member-states of the Caribbean region, despite their European heritage. The book (and subsequent blog/commentaries) posits that we must not fashion ourselves as parasites of our previous European colonizers, but rather pursue a status as protégés.

Our past history feature much oppression and repression; European colonialism had been a villainous “dragon”. But we can train our dragons! We can make the most of previous bad history. This point was presented as a strategy for Direct Foreign Investments, asserting that we want to invite and attract investments. We can use their resources to elevate our own communities, while still providing a return/profit for the investors.

This is Pragmatism 101!

We, in the Caribbean, were not the only ones abused. Other indigenous people (Africans, Asians, Amerindians, etc.) also suffered, sometimes even more so. The goal should be to thrive despite the disabling legacy; (and if not for everyone, then make the most of the situation for the most number of people).

This is the community ethos of the Greater Good!

Globalization is now an ‘Agent of Change’ that we must contend with. We must “play nice in the sandbox” with people of other countries, especially those with capital resources. So if a minority group represents a faction that previously exploited our land and forefathers, we cannot expect to extract vengeance against them – Zimbabwe proved the futility of such a quest for justice and inequity. As related in the Go Lean book (Page 151), the best-practice for any governing entity to grow the economy is to protect all property rights; (real, personal or intellectual). This is the “new” New World; and the new formula for success.

Another formula, an economic principle, is that “voluntary trade creates wealth” (Page 21). This fact has often been overlooked in policy decisions for Africa. The following VIDEO portrays this dilemma, decrying the current migrant/refugee crisis in Europe, when the best-practice the continent can provide the African people is a more liberal trade policy, allowing markets for African agricultural produce. (Without this type of proactive strategies, the continent is being oppressed … all over again … by today’s Europe; this is a lesson learned from the Native American Reservations in the US).

VIDEO: UKIP Leader Nigel Farage Addressing European Parliament on African Culpability & Hyprocrisy – https://youtu.be/NTwOap7ohc4

Posted by Wednesday, April 29, 2015 – UKIP Leader Nigel Farage: speaks to the European Parliament on the EU suggestion that the continent should have a common asylum and migration policy. He felt it was important to represent the view that this is not just another attack on British sovereignty but also inherently dangerous.

In general, the Go Lean roadmap stresses key community ethos, strategies, tactics, implementations and advocacies necessary to transform and turn-around the eco-systems of Caribbean society. These points are detailed in the book as follows:

Community Ethos – Deferred Gratification	Page 21
Community Ethos – Economic Principles – Economic Systems Influence Individual Choices	Page 21
Community Ethos – Economic Principles – Consequences of Choices Lie in the Future	Page 21
Community Ethos – Ways to Impact the Future	Page 26
Community Ethos – Ways to Manage Reconciliations – South African Model	Page 34
Community Ethos – Ways to Impact the Greater Good	Page 37
Strategy – Vision – Confederate all 30 member-states/ 4 languages into a Single Market	Page 45
Tactical – Separation-of-Powers – CU Federal Government versus Member-State Governance	Page 71
Implementation – Ways to Pay for Change	Page 101
Implementation – Ways to Foster International Aid	Page 115
Planning – 10 Big Ideas – #4: Confederation Without Sovereignty	Page 127
Planning – Ways to Improve Trade	Page 128
Planning – Ways to Model the new European Union – Unified Economy	Page 130
Planning – Ways to Make the Caribbean Better	Page 131
Planning – Lessons Learned from 2008	Page 136
Planning – Lessons Learned from Indian Reservations – Audacity versus Absence of Hope	Page 141
Advocacy – Ways to Grow the Economy – Protect Property Rights	Page 151
Advocacy – Ways to Create Jobs	Page 152
Advocacy – Ways to Improve Governance	Page 168
Advocacy – Ways to Better Manage the Social Contract	Page 170
Advocacy – Ways to Better Manage Natural Resources	Page 183
Advocacy – Ways to Preserve Caribbean Heritage	Page 218

In considering this history and re-addressing the opening question: given the choice between riches and power, we choose power!

With the proper stewardship, we can “create real money from thin air”; establish trade networks to grow the economy, educate our people to be global leaders, foster development of products and services that the world demands. The “world would beat a path to our doors”.

Adherence to these best-practices – gleaned from this lesson in history – would help us make our Caribbean community a better homeland to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

———

Appendix – Comparative Analysis of Zimbabwe versus South Africa

	Zimbabwe	South Africa
Economy – overview	Zimbabwe’s economy is growing despite continuing political uncertainty. Following a decade of contraction from 1998 to 2008, Zimbabwe’s economy recorded real growth of roughly 10% per year in 2010-11, before slowing in 2012-13 due poor harvests and low diamond revenues. The government of Zimbabwe faces a number of difficult economic problems, including infrastructure and regulatory deficiencies, ongoing indigenization pressure, policy uncertainty, a large external debt burden, and insufficient formal employment. Until early 2009, the Reserve Bank of Zimbabwe routinely printed money to fund the budget deficit, causing hyperinflation. Dollarization in early 2009 – which allowed currencies such as the Botswana pula, the South Africa rand, and the US dollar to be used locally – ended hyperinflation and reduced inflation below 10% per year, but exposed structural weaknesses that continue to inhibit broad-based growth.	South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors and a stock exchange that is the 16th largest in the world. Even though the country’s modern infrastructure supports a relatively efficient distribution of goods to major urban centers throughout the region, unstable electricity supplies retard growth. The global financial crisis reduced commodity prices and world demand. GDP fell nearly 2% in 2009 but has recovered since then, albeit slowly with 2014 growth projected at about 2%. Unemployment, poverty, and inequality – among the highest in the world – remain a challenge. Official unemployment is at nearly 25% of the work force, and runs significantly higher among black youth. Eskom, the state-run power company, has built two new power stations and installed new power demand management programs to improve power grid reliability. Construction delays at two additional plants, however, mean South Africa is operating on a razor thin margin; economists judge that growth cannot exceed 3% until those plants come on line. South Africa’s economic policy has focused on controlling inflation, however, the country has had significant budget deficits that restrict its ability to deal with pressing economic problems. The current government faces growing pressure from special interest groups to use state-owned enterprises to deliver basic services to low-income areas and to increase job growth.
Population	12,973,808	54,002,000
GDP (purchasing power parity)	$7.496 billion (2013 est.)	$595.7 billion (2013 est.)
	$7.265 billion (2012 est.)	$584 billion (2012 est.)
	$6.957 billion (2011 est.)	$569.5 billion (2011 est.)
	note: data are in 2013 US dollars	note: data are in 2013 US dollars
GDP – real growth rate	3.2% (2013 est.)	2% (2013 est.)
	4.4% (2012 est.)	2.5% (2012 est.)
	10.6% (2011 est.)	3.5% (2011 est.)
GDP – per capita (PPP)	$600 (2013 est.)	$11,500 (2013 est.)
	$600 (2012 est.)	$11,400 (2012 est.)
	$500 (2011 est.)	$11,300 (2011 est.)
	note: data are in 2013 US dollars	note: data are in 2013 US dollars
GDP – composition by sector	agriculture: 20.1%	agriculture: 2.6%
	industry: 25.4%	industry: 29%
	services: 54.5% (2013 est.)	services: 68.4% (2013 est.)
Population below poverty line	68% (2004)	31.3% (2009 est.)
Household income or consumption by percentage share	lowest 10%: 2%	lowest 10%: 1.2%
Household income or consumption by percentage share	highest 10%: 40.4% (1995)	highest 10%: 51.7% (2009 est.)
Inflation rate (consumer prices)	8.5% (2013 est.)	5.8% (2013 est.)
Inflation rate (consumer prices)	8.2% (2012 est.)	5.7% (2012 est.)
Labor force	3.939 million (2013 est.)	18.54 million (2013 est.)
Labor force – by occupation	agriculture: 66%	agriculture: 9%
	industry: 10%	industry: 26%
	services: 24% (1996)	services: 65% (2007 est.)
Unemployment rate	95% (2009 est.)	24.9% (2013 est.)
	80% (2005 est.)	25.1% (2012 est.)
	note: figures include unemployment and underemployment; true unemployment is unknown and, under current economic conditions, unknowable
Distribution of family income – Gini index	50.1 (2006)	63.1 (2005)
Distribution of family income – Gini index	50.1 (1995)	59.3 (1994)
Budget	revenues: $NA	revenues: $88.53 billion
Budget	expenditures: $NA (2013 est.)	expenditures: $105.5 billion (2013 est.)
Industries	mining (coal, gold, platinum, copper, nickel, tin, diamonds, clay, numerous metallic and nonmetallic ores), steel; wood products, cement, chemicals, fertilizer, clothing and footwear, foodstuffs, beverages	mining (world’s largest producer of platinum, gold, chromium), automobile assembly, metalworking, machinery, textiles, iron and steel, chemicals, fertilizer, foodstuffs, commercial ship repair
Industrial production growth rate	3.7% (2013 est.)	0.9% (2013 est.)
Agriculture – products	corn, cotton, tobacco, wheat, coffee, sugarcane, peanuts; sheep, goats, pigs	corn, wheat, sugarcane, fruits, vegetables; beef, poultry, mutton, wool, dairy products
Exports	$3.144 billion (2013 est.)	$91.05 billion (2013 est.)
Exports	$3.314 billion (2012 est.)	$93.48 billion (2012 est.)
Exports – commodities	platinum, cotton, tobacco, gold, ferroalloys, textiles/clothing	gold, diamonds, platinum, other metals and minerals, machinery and equipment
Exports – partners	China 21.1%, South Africa 15.1%, Democratic Republic of the Congo 12.1%, Botswana 10.8%, Italy 4.6% (2012)	China 11.8%, US 8.3%, Japan 6%, Germany 5.7%, India 4.2% (2012)
Imports	$4.571 billion (2013 est.)	$99.55 billion (2013 est.)
Imports	$4.569 billion (2012 est.)	$102.6 billion (2012 est.)
Imports – commodities	machinery and transport equipment, other manufactures, chemicals, fuels, food products	machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs
Imports – partners	South Africa 51.9%, China 10% (2012)	China 14.4%, Germany 10.1%, Saudi Arabia 7.7%, US 7.4%, Japan 4.6%, India 4.5% (2012)
Debt – external	$8.445 billion (31 December 2013 est.)	$139 billion (31 December 2013 est.)
Debt – external	$8.765 billion (31 December 2012 est.)	$130.4 billion (31 December 2012 est.)
Exchange rates	Zimbabwean dollars (ZWD) per US dollar –	rand (ZAR) per US dollar –
	234.25 (2010)	9.576 (2013 est.)
	234.25 (2009)	8.2031 (2012 est.)
	9,686.8 (2007)	7.3212 (2010 est.)
	note: the dollar was adopted as a legal currency in 2009; since then the Zimbabwean dollar has experienced hyperinflation and is essentially worthless	8.42 (2009)
		7.9576 (2008)
Fiscal year	calendar year	1 April – 31 March
Public debt	202.4% of GDP (2013 est.)	45.4% of GDP (2013 est.)
Public debt	244.2% of GDP (2012 est.)	42.3% of GDP (2012 est.)
Reserves of foreign exchange and gold	$437 million (31 December 2013 est.)	$48.46 billion (31 December 2013 est.)
Reserves of foreign exchange and gold	$575.6 million (31 December 2012 est.)	$50.7 billion (31 December 2012 est.)
Current Account Balance	-$576 million (2013 est.)	-$23.78 billion (2013 est.)
Current Account Balance	-$416.5 million (2012 est.)	-$24.07 billion (2012 est.)
GDP (official exchange rate)	$10.48 billion (2013 est.)	$353.9 billion (2013 est.)
Stock of direct foreign investment – at home	$NA	$143.3 billion (31 December 2013 est.)

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