Chapter 9 – Predatory capitalism

I have always wondered how we as a civilization did not manage to overcome the daily fight for basic survival needs. What we did is just shift this struggle to the arena of paying different kinds of bills. We need to pay for our right to be here on planet Earth. Isn’t that astounding? We are no better than the animal kingdom. Especially because our technology, if not being misused as it currently is, could easily provide to ALL OF us for all our survival needs. 

If we go back to history, the first human civilization flourished only after humans were able to cultivate soil and thus partly released themselves from 24/7 direct fight for food. Free time simply gives them time for themselves, they could focus on art, philosophy, and different intellectual activities. We can conclude that they started to train their Mind. 

Currently, most of us work day and night to cover our survival needs. We are always in a kind of fight mode for our in most cases stupid, not creative and useless jobs. Survival or flight instinct is more or less always present. Effectively preventing us from focusing on more advanced thoughts. 

A constant growth mantra of predatory capitalism is toxic, because it alienates us entirely from our true purpose and from being a part of the planet and the Universe. Our goal should be that we master our material domain, and create everything a humanity needs for their existence in a sustainable way. 

That’s actually immensely important knowing the fact our thoughts create our experience. If our focus remains how to pay the bills, and not where we see us in a year, ten years, 100 years, our experience is going to be severely limited. By mastering our material existence we would unlock our minds, give them a freedom to soar. 

Predatory capitalism

I often hear that competition is great because this creates advancements in technology, quality. Now let’s look at some recent facts. The first one is Boeing 737 MAX. Let me briefly summarize what happened to 737 MAX. Boeing is in a competition with Airbus. We have a duopoly situation. Duopoly is just a next step from the oligopoly it is about competition between two market players. Duopoly is a perfect example because we can easily draw a parallel with a hegelian dialectic. 

What happened is a market competition. Airbus was able to make a significant performance improvement of their competitive product, A320 Neo. By installing a new type of engine, Airbus was able to gain a significantly better fuel efficiency and competitive advantage in this class of airliners. Cost per available seat mile. 

Cost per available seat mile (CASM) is a common unit of measurement used to compare the efficiency of various airlines. Generally, the lower the CASM, the more profitable and efficient the airline. Cost per available seat mile, as the name suggests, reflects the costs incurred by an airline to fly a single-seat one mile.

Airbus accomplished this by new engines with bigger fan diameter. They were able to install a bigger fan diameter without any significant impact on the aircraft performance and aerodynamics. Unfortunately for Boeing, they were limited by maximum possible fan diameter, because of very simple fact. Airbus A320 has a higher ground clearance between an engine and ground than Boeing 737. Boeing couldn’t just increase the fan diameter. 

To install new engines with a bigger fan, they were forced to reposition the engine. But by repositioning the engine, they significantly changed the flight characteristics of the aircraft. And here comes the catch. Different flight characteristics normally require re-train all existing 737 pilots who would fly 737 MAX. And that costs a lot, it would have an impact on CASM and the competitive advantage of Airbus. 

Their decision was that a piece of software would automatically handle a possible dangerous situation which might occur because of different flight characteristics, and not pilots. In Boeing mind, this was a workaround on how to avoid training. So they at least hoped. 

As we know today, software failed catastrophically and untrained pilots were clueless about what was going on. As a result, there were a lot of casualties. 

What went wrong with Boeing

Casualties because of a variety of technical issues are unfortunately a part of our technological progress. But in Boeing case this was not the case, technology was not a root cause of the problem, which goes very deep into the rabbit home where civilization is at the moment. 

Here are a handful of quotes which emerged after 737 MAX has been grounded:

“I still haven’t been forgiven by God for the covering up I did last year,” one of the employees said in messages from 2018, apparently in reference to interactions with the Federal Aviation Administration.

The employees appear to discuss instances in which the company concealed such problems from the F.A.A. during the regulator’s certification of the simulators, which were used in the development of the Max, as well as in training for pilots who had not previously flown a 737.

In another set of messages, employees questioned the design of the Max and even denigrated their own colleagues. “This airplane is designed by clowns, who are in turn supervised by monkeys,” an employee wrote in an exchange from 2017.

To what really went wrong I am going to use a Stan’s  Sorscher, a Labor Representative at the Society for Professional Engineering Employees in Aerospace (SPEEA) letter, offered to the Seattle Times as an opinion piece.

He writes, “The cost-cutting culture is the opposite of a culture built on productivity, innovation, safety or quality

Sorscher, a former Boeing engineer, points to a major change in Boeing’s internal culture in the late 1990s.

Before that time, the company was focused on the performance of its products.

This was the era of the bold bet on the 747, and it was also a time when a low little plane called the 737 got its start. That plane became Boeing’s best-seller and remained so over many iterations.

In the 1990s, according to Sorscher, Boeing put workers at the center of its performance-driven universe. That plane of that era was the 777. It was a time of partnership between workers and executives as they learned together how to produce the plane, and many engineers speak of this period as the most fulfilling in their professional lives.

Among the most glorious moments – Boeing executive Alan Mulally hugging a worker who had helped to solve a problem, getting grease all over his thousand-dollar suit and plainly not caring.

“It would have been career-limiting to withhold negative information from managers” at the time, Sorscher observed.

But that has changed. With the 787 program in the late 1990s, Sorscher says, Boeing reset the playing field. Washington state would have to compete with other jurisdictions, offering tax breaks to secure production lines. Suppliers would have to compete with rivals around the world. Workers would discover their positions were precarious.

The atmosphere inside Boeing changed.

In an interview with KUOW, Sorscher said Boeing engineers receive clear cultural messages that identifying problems is thought of by management as making trouble.

“If the message is 'follow the plan' and you watch co-workers who raised an objection and the problem isn't taken seriously or they're considered troublesome, then that's a cultural message you pick up,” he said.

From a shareholder perspective, Boeing’s approach to its business has been wildly successful. The company is enduring its second worldwide grounding in recent memory.

However, worldwide demand for airplanes is riding a high. And Boeing has diverted cash flow into dividends and share buybacks that have helped boost the company’s stock.

From 2000 to the present, Boeing’s stock price has grown from $44 to $356. The stock hit a peak of $440 just before the crash of an Ethiopian Airlines Max jet last March.

Stan Shorscher defines three levels of culture in Boeing 

BusinessCultures

The 777 had the best “learning curve” in the business. On the other hand, if your industry is mature, and your products are commodity-like, business school theory says a cost-cutting model is appropriate.

Wal-Mart perfected its particular version of the cost-cutting business model. Amazon adapted that model to its industry. Boeing has adapted it to high-end manufacturing.

These companies are super-stakeholders with market power over their supply chains. The point of this business model is that the super-stakeholder extracts gains from the subordinate stakeholders for the short-term benefit of investors.

Subordinate stakeholders are made to feel precarious and at-risk.

Each supplier should see other suppliers as rivals. Similarly, each work location should know it competes on cost with rival work locations. Each state or local government should compete for incentives against rival states.

In this model, subordinate stakeholders never say no to the super-stakeholder – not workers, not suppliers, not state legislatures.

This cost-cutting culture is the opposite of a culture built on productivity, innovation, safety, or quality. A high-performance work culture requires trust, coordination, strong problem-solving, open flow of information, and commitment to the overall success of the program.

In a high-performance culture, stakeholders may sacrifice for the good of the program, understanding that their interests are served in the long run.

Analysis

The Boeing case is a perfect example of the decline of our predatory based capitalistic system. Engineering focused or working together engagement models were both customers based. People who actually created aircrafts were respected, and they crafted with the passion for their products. 

Today they work for Wall Street and they get threatened by cheaper workforce coming from anywhere around the globe. This was allegrady one of the reasons why 737 MAX software failed utterly, it was outsourced to the 9 US$ per hour contractor. Contractor is not to be blamed, it is the system behind who should check the code. Code is produced by so called continuous integration model and paradigm where somebody writes the code, another writes a test procedure and then everything should be thoroughly tested. 

It is about the inevitable cycle of our civilization, we fail to reach sustainable growth. We constantly cycle between growth and destruction. After the second world war, when Seth destroyed everything, we were forced to rebuild. And we rebuild with passion. It is a breath process, we inhale growth, and then we exhale destruction unable to find a balance of constant ascent. 

Oswald Spengler was a German historian and philosopher of history whose interests included mathematics, science, and art and their relation to his cyclical theory of history. The Decline of the West (Der Untergang des Abendlandes), published in 1918 and 1922, covering all of world history. Spengler's model of history postulates that any culture is a superorganism with a limited and predictable lifespan.

Spengler predicted that about the year 2000, Western civilization would enter the period of pre‑death emergency whose countering would lead to roughly 200 years of Caesarism (extra constitutional omnipotence of the executive branch of the central government) before Western Civilization's final collapse.

The Decline of the West was written in 1916 and it feels surprisingly contemporary. Spengler asserts that democracy is simply the political weapon of money, and the media are the means through which money operates a democratic political system. 

Democracy and plutocracy are equivalent in Spengler's argument. The "tragic comedy of the world-improvers and freedom-teachers" is that they are simply assisting money to be more effective. The principles of equality, natural rights, universal suffrage, and freedom of the press are all disguises for class war (the bourgeois against the aristocracy). 

Spengler admits that in his era money has already won, in the form of democracy. He notes that the greater the concentration of wealth in individuals, the more the fight for political power revolves around questions of money. One cannot even call this corruption or degeneracy, because this is in fact the necessary end of mature democratic systems.

On the subject of the press, Spengler is equally contemptuous. Instead of conversations between men, the press and the "electrical news-service keep the waking-consciousness of whole people and continents under a deafening drum-fire of theses, catchwords, standpoints, scenes, feelings, day by day and year by year." Through the media, money is turned into force—the more spent, the more intense its influence.

Let me now expand on a Spengler hypothesis that any culture is a superorganism with a limited and predictable lifespan. We can clearly see that the post first war era when Spengler conceived his work was hardly any different from  what is going around today. 

We are experiencing the same storyline as generations experienced before us. We are experiencing the same archetype with the different fractals. We are being forced to experience the same story where we already failed before. And this story as everything in our life comes with the limited time. Like every exam, we have a certain time to complete the exam. Time bomb is ticking. And archetypes are going to repeat and repeat and repeat until we learn eventually. The same is with our individual lives, it is a time bomb, will we finally understand who we are ? 

Will we learn what we are as a collective ? Will we ever learn that we are the same Souls ? Will we ever learn we are our own ancestors and this story line is being replayed for us because we failed ? Or eventually we will learn one day we are also our grandchildren and we influence them in the future too ? 

Obviously Boeing customer centric business model even if it is praised is not sustainable. So what is sustainable ? Perhaps our business model should focus exactly on what is sustainable on this planet. It should perhaps focus on technology which would enrich and not destroy the World. World is not ours to destroy. We are but a virus, a plague playing with destructive power. And we cry when we get back some viruses such as a Coronavirus, not recognizing we are the biggest virus there is. 

Boeing customers are airlines. They don't care for the balance of this Planet too. They care for the same Wall Street mantra. 

As Mr. Sorscher from Boeing said, jet engine is a very old concept, it is from 50ies. Car combustion engine is an even older concept. This is the part of my Concordia project document:

»In the last 100 - 150 years we did not do much. Ancient internal combustion piston engine was invented around 1876 by Niclaus Otto, this was a 4 cycle engine. Atkinson cycle engine, so proudly used in current Lexus Hybrid cars was invented in 1882. 

In 1885 supercharger was invented by Gottlieb Daimler. Turbocharger, used in almost any modern car because of current downsizing trend was invented in 1905 by Alfred Buschi. 

The diesel engine was invented in 1892 by Rudolf Diesel, and the heart of Porsche, boxer engine in 1892 by Rudolf Diesel. 

Anybody knowledgeable enough about what is below the hood of his/her car can immediately see that in marketing campaigns so praised and expensive technology is just polished ancient technology. 

Absolutely no serious advancement, no quantum leap. We are burning fire as we did hundreds of thousands of years ago. Now we do this in the combustion chamber of Otto engine, or Jet turbine.”

It is nothing wrong we invented Jet engine, or Otto engine. But everything else in this reality comes with the time bomb. We are expected to proceed, to find new more sustainable ways. And we constantly fail to do that simply because we are in a kind of a deadlock. Those with power draw their power from ancient technology. And the rest of us, I am not an exception, are focused how to pay their bills. And fail to understand we live in an abundant Universe.  

 

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