600 - 614
The major economic motivations are:
Security pertains to every action which prolongs life or safeguards the quality of life of the person concerned, and that person's family. Procreation pertains to every action which conduces to successful reproduction by the person concerned. Emulation pertains to every action which helps a person to equal or exceed the performance and achievements of the person's reference groups.
The essential rationale, of every economic task, is to achieve a greater output of energy, as a result of the task, than the input of energy required to carry out the task. The object of each task is to make a net gain of energy: Such a net gain is called a profit.
An asset is a store of energy and money is a claim upon energy ... that is, a right to command, use and dispose of energy.
By an infinite range of ploys, the creative intelligence manipulates the environment to achieve net gains of energy ... that is, profit.
Examples of gainful ploys of creative intelligence are:
- Buy and sell, trading margins.
- Invention of energy-saving and energy-producing devices and methods.
- Superior marketing and customer service.
- Skilful pruning-out of loss elements.
- Finance and accounting skills.
- Technical and quality superiority.
- Organisational skills.
- Personnel skills.
- Gaining of supply advantages.
- Superior new-product development.
- Superior place utility.
- Superior timing.
- Management skills of prioration, mix and utilisation (of relative economic factors).
- Achievement and exploitation of monopoly and quasi-monopoly situations.
- Achievement and exploitation of superior strategic stance.
- Superior flexibility (e.g. Low commitments and short-term payback investments).
- Risk minimisation.
- Wide, continuing and skilful opportunity search.
- Skilful screening of opportunities and investments.
- Optimum access to, and use of, creative intelligence.
- Defensive and offensive alertness.
- Optimum initiative and drive.
- Superior customer-credit control.
But business and management skills are now in a stage of diminishing returns: The human race is now entering the final self-destruct phase. In general, assets now decrease rather than increase, and economic losses exceed economic gains.
The creative intelligence is the key operant in this scenario of diminishing economic returns. We note four main stages in the historical development of creative intelligence, as follows:
- First Stage (pre-8000 BC): Minor supplementation of instinctive animal behaviour.
- Second Stage (8000 BC to 1870 AD): Active enquiry and invention ... the stage of purposive, intelligent, creative effort.
- Third Stage (1870 AD to 1945 AD): The creative intelligence becomes independent and is no longer subservient to the material and biological needs of mankind.
- Fourth Stage (1945 AD on): In this final stage, the creative intelligence realises that it has the ability to totally destroy and totally create: It proceeds to actualise this realisation.
The creative intelligence is primarily geared to the release of energy from mass. For as long as people are useful to this end (that is, the release of energy), they will be supported ... but not otherwise. The creative intelligence is not geared to supporting people, as people: The creative intelligence is indifferent to people, as such. To the creative intelligence, people are a means to an end.
The creative intelligence achieves release of energy by the burning and clearing of forests; by the dropping of high-explosive bombs; by the testing of nuclear weapons; by the burning of oil wells ... and so on. There is, of course, always a self-convincing rationale for such activities.
The creative intelligence has now achieved a chain-reaction of energy release, via wars, violence, global warming, etc. This chain-reaction is mass-destructive and life-destructive, and irreversible.
The return on investment on most fixed assets (real estate and industrial plants and civil engineering works) is falling to low levels, and even into the area of negative returns.
There are fewer and fewer legitimate opportunities to gain reasonable percentage returns on fixed asset investments.
Most governments around the world are selling off their fixed assets ... and many large corporations are doing the same. Sellers outnumber buyers, and market prices are falling.
The business environment indicates that the following courses of action are advisable:
- I. Maximise your cash or liquidity position.
- II. Sell your fixed assets at the best available prices.
- III. Keep overheads low.
- IV. Pay staff on performance (sales and profits) only.
- V. Sell on cash terms or on undoubted short-term credit.
- VI. Carry inventories only on a 'sale or return' basis.
- VII. Keep commitments to a minimum.
- VIII. Minimise all risks and exposures.
Investments should be restricted to short-term bank deposits and first-class, short-term government loans. Cash-up at the first hint of insolvency of the institutions concerned.