we need more unemployed people

February 19th, 2015 § Comments Off on we need more unemployed people § permalink

Custard-filled doughnut served by Il Fornaio, ...

Custard-filled doughnut served by Il Fornaio, St Kilda, Victoria, Australia (Photo credit: Wikipedia)

there was the carnival this week on tuesday. there are two things slovenians do for the carnival: we walk around in costumes, and we eat doughnuts.

not everyone wears costumes of course, but everyone does eat doughnuts. even people who never eat them normally have one for the carnival.

now imagine walking into a bakery in the centre of the capital at 750 in the morning which advertises it sells doughnuts on the street already:

  • you: “can i have 3 doughnuts please?”
  • them: “no”
  • you: “???”
  • them: “someone bought all 60 of them”

let me restate some facts before continuing:

  • it’s the carnival, everyone will eat a doughnut
  • it’s the city centre, probably 20.000 people live and work in the immediate vicinity of this bakery
  • it’s the oldest and largest bakery company in the country, it’s a public company employing 1000 people
  • it’s not the first time they were out of stock on that location
  • they are selling doughnuts for 50 cents these days

so what’s wrong in this picture:

  • they are obviously poor at capacity planning. 60 doughnuts in the most crowded part of the country for the whole morning? even if they received some more later in the day it doesn’t really make business sense to miss the window of people going to work
  • the seller when she ran out of doughnuts did not care about the customer expectations at all. she didn’t write ‘sold out’ on the banners outside the store, she didn’t feel sorry at all, she didn’t appear to be yelling at someone ‘in the central’ to send more.

she just said no.

a goddam computer wouldn’t say no in that situation.

not doing those actions is essentially the same as stealing from the company she works for. biting the hand that feeds her. she just doesn’t care if her employer is doing a good or bad job, if it’s making or loosing money, if it’s growing or reducing staff. she probably believes these things have nothing to do with how she works and are all “up to the management”, that same management that proverbially steals from the company as well.

and there’s thousands, tens of thousands of people like that in the services sector. you meet them everywhere.

and in the meantime, there is 125.000 people unemployed in Slovenia.

But she should get fired, her manager should get fired and his boss as well. Each of them for a different type of negligence.

Bah. All i wanted was a doughnut.

should we finance all good ideas?

February 16th, 2015 § Comments Off on should we finance all good ideas? § permalink

It seems that Slovenian society doesn’t have an agreement as to what projects should be publicly funded, so there is always pressure for more and more public financing of ‘useful’ projects, while the deficit is growing.

let’s look at the utopian approach first, let’s count how much money should the government disseminate to satisfy everything that the society produces. let’s break it down:

  • we have 2M population.
  • let’s assume that even retired and some underaged people can still participate in projects,
  • let’s assume that importing foreigners is also an option which will compensate for the ones that couldnt participate.
  • let’s also assume, that 10% of the population is capable of coming up with ideas and leading them, and that
  • average size of an ideal project is 10 members.

This means that we will have 200k active projects, which will need capital to pay for 10 member’s living expenses, and the projects’ material and program expenses. let’s say this cost structure is something like:

  • decent salary – $50k per person annually (average across the population)
  • decent baseline annual project budget is $1M (keep in mind, that this now has to include everything that public sector is already covering – from schools and hospitals to EU projects contributions and everything in between)

this means, that if the country wanted to pay for everything, the budget would have to be:

  • 2M people * $50k = $100 billion
  • 200k projects * $1M = $200 billion
  • so total budget would be $300 billion, and average project’s budget would be $1.5M

Slovenian budget is $10 billion, and the total GDP of the country is $50 billion. So this obviously won’t work.

Every time some new project expects public funding, it implicitly expects that if everyone did the same, the society would require $300 billion to function. Every time a new project is publicly demanding public funding, they are broadcasting this expectation into the general public. Every time a new project succeeds with this pressure, it sends the message that the society can afford $300 billion worth of public funding.

I believe it is crucial we form a broad agreement about what to do with this gap between ‘implied expectations’ and reality. We’ll look into that next time.

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