Economicwatch

[Waves]

Originally Posted by dr dowell

Inflation rate for Nov stand at 12.3%

I think SLS is lossing the fight on inflation, if I should suggest he should ease MPR let companies access fund for expansion of manufacturing activities,create jobs, increase manufacturing activities will lead to increase production and reduction in cost of production and cost of product which will invariable lead push down inflation. SLS should change gear.

UPDATE 1-Nigeria inflation rises to four month high on food costs | Reuters

Very unlikely with these type of inflation figures.

[bamidele97]

Originally Posted by Waves

Sanusi, government and job creation — The Punch - Nigeria's Most Widely Read Newspaper

"...Another thing often said is that the main role of the private sector is to create jobs. No entrepreneur starts a business with the sole aim of generating employment. Every business is set up to provide goods and services, and making profits thereof for the owners and investors. They just need workers to help achieve that. If they could make profit without workers they would go ahead. They would not mind using machines to do human jobs. If a manager or chief executive could make the same level of profit with fewer workers but instead chose to hire more workers, he would probably be shown the way out.."

Very true. Even more impressive is that it is coming from a Doctor. This is one of the most often forgotten aspect of capitalism. Our economy can continue growing without creating jobs but creating profits for the owners. We need a 'Jobs Strategy' apart from a "Growth strategy'

The part in bold is only as true as saying "Nobody buys a Pay-Loader with the sole aim of employing an operator,patronizing the man selling the OEM (Original Equipment Manufacturer), patronizing the man selling hydraulic oil, paying tax to the authority e.t.c." There is absolutely no way an entrepreneur can grow his business without directly and indirectly employing labour from the population apart from shipping jobs out of the country, in which case, labour would still be employed overseas, albeit cheaper. I doubt if cheaper labour is found anywhere in the world than Nigeria when you factor in shipping and taxes.

[Waves]

Originally Posted by bamidele97

The part in bold is only as true as saying "Nobody buys a Pay-Loader with the sole aim of employing an operator,patronizing the man selling the OEM (Original Equipment Manufacturer), patronizing the man selling hydraulic oil, paying tax to the authority e.t.c." There is absolutely no way an entrepreneur can grow his business without directly and indirectly employing labour from the population apart from shipping jobs out of the country, in which case, labour would still be employed overseas, albeit cheaper. I doubt if cheaper labour is found anywhere in the world than Nigeria when you factor in shipping and taxes.

This is false. Telecom companies in Nigeria have been growing thier business and reducing both their direct and indrect jobs. In Telecoms, companies try to subsitute call centre agents with IVR and recharge card sellers with e-recaharge. Ever wondered why there are fewer recharge card sellers by traffic lights? Well the reason is simple. More than 40% of all recharge card sales are now done through e-channells. This figure use to be less than 5%. I think i have mentioned it here before that MTN alone in 2011 controls 1.2% of Nigeria's GDP with only 2,100 staff. The company has fewer staff now (direct and indirect) than they had when the had half the subscribers they have now. Telcoms is one of those industries that Economist say "....rewards capital more than labor..'

By the way, has it ever occured to you that whenever you use an ATM, you are depriving a potential Bank Teller of a job. Think about that.

[nosa2]

Originally Posted by Waves

This is false. Telecom companies in Nigeria have been growing thier business and reducing both their direct and indrect jobs. In Telecoms, companies try to subsitute call centre agents with IVR and recharge card sellers with e-recaharge. Ever wondered why there are fewer recharge card sellers by traffic lights? Well the reason is simple. More than 40% of all recharge card sales are now done through e-channells. This figure use to be less than 5%. I think i have mentioned it here before that MTN alone in 2011 controls 1.2% of Nigeria's GDP with only 2,100 staff. The company has fewer staff now (direct and indirect) than they had when the had half the subscribers they have now. Telcoms is one of those industries that Economist say "....rewards capital more than labor..'

By the way, has it ever occured to you that whenever you use an ATM, you are depriving a potential Bank Teller of a job. Think about that.

I guess pixies have learnt how to build, install and maintain ATM machines. As per e-commerce systems who builds and maintains them? Last I heard Santa was still in the North pole

[Dicobody]

Vision 2020: How close to the vision? (2) — The Punch - Nigeria's Most Widely Read Newspaper

[Dicobody]

Tiger Brand’s incursion into Nigeria’s food industry could create monopoly

[bamidele97]

Originally Posted by Waves

This is false. Telecom companies in Nigeria have been growing thier business and reducing both their direct and indrect jobs. In Telecoms, companies try to subsitute call centre agents with IVR and recharge card sellers with e-recaharge. Ever wondered why there are fewer recharge card sellers by traffic lights? Well the reason is simple. More than 40% of all recharge card sales are now done through e-channells. This figure use to be less than 5%. I think i have mentioned it here before that MTN alone in 2011 controls 1.2% of Nigeria's GDP with only 2,100 staff. The company has fewer staff now (direct and indirect) than they had when the had half the subscribers they have now. Telcoms is one of those industries that Economist say "....rewards capital more than labor..'

By the way, has it ever occured to you that whenever you use an ATM, you are depriving a potential Bank Teller of a job. Think about that.

To quote you sir:
"Ever wondered why there are fewer recharge card sellers by traffic lights? Well the reason is simple. More than 40% of all recharge card sales are now done through e-channells. This figure use to be less than 5%."
The simple reason is called Automation(Automation is the use of machines,
control systems and information
technologies to optimize productivity in
the production of goods and delivery of
services). Can we blame MTN for that? I don't think so.

[Waves]

Originally Posted by bamidele97

To quote you sir:
"Ever wondered why there are fewer recharge card sellers by traffic lights? Well the reason is simple. More than 40% of all recharge card sales are now done through e-channells. This figure use to be less than 5%."
The simple reason is called Automation(Automation is the use of machines,
control systems and information
technologies to optimize productivity in
the production of goods and delivery of
services). Can we blame MTN for that? I don't think so.

No. We wont blame MTN. But if you are the President of a country, you should be worried.

Let me use the analogy of a farm to make this a little easier. A village commercial farmer used to employ 50 laborers on his farm to till the soil, plant, weed and harvest. Someone now informs the farmer about some machines that can do this job better. The following year, the farmer decides to buy a tractor, planter, and combine harvester. The machines eventually do a far better job than the 50 labourers and without any 'human wahala' like strikes and call for increased wages. The Farmer makes a far better harvest than before and makes more profit after depreciating for the machines. The farmer uses his profit to buy a new car for his family, travel for holidays and expand his farm by buying more tractors and combined harvesters. If this village, was an economy, the following would have happened, GDP has increased, profits has increased, more richer investors, higher unemployment and more poverty. By 'mechanising', the farmer has created few jobs in the country where these tractors are produced, where his new car is made but his neighbors in the village are now unemployed and poorer. So even though the farmer's increased production may make food cheaper (call rates have been dropping since 2001 inspite of inflation), people are too poor to buy more food because the don't have jobs and income. This is how improved technology works in Telecoms.

Summarily, industries that witness increased productivity due to technological advancement do not provide the jobs and income needed to buy thier products as supply side economics suggests.

[Salida]

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[Salida]

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[Taipan]

Originally Posted by Waves

No. We wont blame MTN. But if you are the President of a country, you should be worried.

Let me use the analogy of a farm to make this a little easier. A village commercial farmer used to employ 50 laborers on his farm to till the soil, plant, weed and harvest. Someone now informs the farmer about some machines that can do this job better. The following year, the farmer decides to buy a tractor, planter, and combine harvester. The machines eventually do a far better job than the 50 labourers and without any 'human wahala' like strikes and call for increased wages. The Farmer makes a far better harvest than before and makes more profit after depreciating for the machines. The farmer uses his profit to buy a new car for his family, travel for holidays and expand his farm by buying more tractors and combined harvesters. If this village, was an economy, the following would have happened, GDP has increased, profits has increased, more richer investors, higher unemployment and more poverty. By 'mechanising', the farmer has created few jobs in the country where these tractors are produced, where his new car is made but his neighbors in the village are now unemployed and poorer. So even though the farmer's increased production may make food cheaper (call rates have been dropping since 2001 inspite of inflation), people are too poor to buy more food because the don't have jobs and income. This is how improved technology works in Telecoms.

Summarily, industries that witness increased productivity due to technological advancement do not provide the jobs and income needed to buy thier products as supply side economics suggests.

Your model of economics is being proven wrong everyday. Economics simply does not work that way. How can I prove that? Consider that it is the most technologically advanced countries that also have the lowest unemployment rates. If your theory were right, then backward countries that still utilise human power for most of their production & services would have the lowest unemployment rates and not vice versa.
So how does the model work in practice? Take a look back at the scenario you drew. Now the farmer has a tractor, a car, more money and probably more time at his disposal. This implies that he'll now need mechanicsssss for his vehicles, spare parts dealers, engine oil sellers etc. He'll also start lobbying for better roads that have to be built by people. Also, because he has more time, he'll now visit the cinema and clubs more often - more jobs still - and employ a housemaid, gardener and maybe a driver. His tractors would now need drivers who will then need houses to stay, and their wives would have money to start petty businesses. He'll now have more graisn which wil need silos, and perhaps one day, he'll start food processing. Then consider that the grains and stuff he sells are now cheaper. This means that others around him will also have more disposable incomes for Mama Put and Silverbird Cinema to survive. The tailors will also have more customers as people now want better clothes. I could go on and on, but I'm sure you get the picture already. The farmer's increased mechanisation has directly reduced the amount of inefficient labour, but in so doing has created many more sophisticated jobs in new sectors. Another way of looking at it is this: Has the advancement and proliferation of computers increased or reduced the sum total of jobs?
Wealth is created for ALL when resources are directed towards their most efficient uses. This is a basic tenet of capitalism, which many traditional economists have been unable to understand because they consider capital & jobs as something fixed, instead of a living thing that grows and multiplies.
I recommend you read Adam Smith's 'The Wealth of Nations' as it really opened my eyes to the concept. I've also attached an article I wrote during my service year - incidentally while I was reading Wealth of Nations - which you might be interested in reading.

[bivins1]

Originally Posted by Taipan

Your model of economics is being proven wrong everyday. Economics simply does not work that way. How can I prove that? Consider that it is the most technologically advanced countries that also have the lowest unemployment rates. If your theory were right, then backward countries that still utilise human power for most of their production & services would have the lowest unemployment rates and not vice versa.
So how does the model work in practice? Take a look back at the scenario you drew. Now the farmer has a tractor, a car, more money and probably more time at his disposal. This implies that he'll now need mechanicsssss for his vehicles, spare parts dealers, engine oil sellers etc. He'll also start lobbying for better roads that have to be built by people. Also, because he has more time, he'll now visit the cinema and clubs more often - more jobs still - and employ a housemaid, gardener and maybe a driver. Then consider that the grains and stuff he sells are now cheaper. This means that others around him will also have more disposable incomes for Mama Put and Silverbird Cinema to survive. The tailors will also have more customers as people now want better clothes. I could go on and on, but I'm sure you get the picture already. The farmer's increased mechanisation has directly reduced the amount of inefficient labour, but in so doing has created many more sophisticated jobs in new sectors. Another way of looking at it is this: Has the advancement and proliferation of computers increased or reduced the sum total of jobs?
Wealth is created for ALL when resources are directed towards their most efficient uses. This is a basic tenet of capitalism, which many traditional economists have been unable to understand because they consider capital & jobs as something fixed, instead of a living thing that grows and multiplies.
I recommend you read Adam Smith's 'The Wealth of Nations' as it really opened my eyes to the concept. I've also attached an article I wrote during my service year - incidentally while I was reading Wealth of Nations - which you might be interested in reading.

Bros Taiwan and Japan equals Taipan, This your once in a blue moon posting no be am ooo. Please try and contribute from time to time. Please abeg. Good piece

[Waves]

Originally Posted by Taipan

Your model of economics is being proven wrong everyday. Economics simply does not work that way. How can I prove that? Consider that it is the most technologically advanced countries that also have the lowest unemployment rates. If your theory were right, then backward countries that still utilise human power for most of their production & services would have the lowest unemployment rates and not vice versa.
So how does the model work in practice? Take a look back at the scenario you drew. Now the farmer has a tractor, a car, more money and probably more time at his disposal. This implies that he'll now need mechanicsssss for his vehicles, spare parts dealers, engine oil sellers etc. He'll also start lobbying for better roads that have to be built by people. Also, because he has more time, he'll now visit the cinema and clubs more often - more jobs still - and employ a housemaid, gardener and maybe a driver. His tractors would now need drivers who will then need houses to stay, and their wives would have money to start petty businesses. He'll now have more graisn which wil need silos, and perhaps one day, he'll start food processing. Then consider that the grains and stuff he sells are now cheaper. This means that others around him will also have more disposable incomes for Mama Put and Silverbird Cinema to survive. The tailors will also have more customers as people now want better clothes. I could go on and on, but I'm sure you get the picture already. The farmer's increased mechanisation has directly reduced the amount of inefficient labour, but in so doing has created many more sophisticated jobs in new sectors. Another way of looking at it is this: Has the advancement and proliferation of computers increased or reduced the sum total of jobs?
Wealth is created for ALL when resources are directed towards their most efficient uses. This is a basic tenet of capitalism, which many traditional economists have been unable to understand because they consider capital & jobs as something fixed, instead of a living thing that grows and multiplies.
I recommend you read Adam Smith's 'The Wealth of Nations' as it really opened my eyes to the concept. I've also attached an article I wrote during my service year - incidentally while I was reading Wealth of Nations - which you might be interested in reading.

Fair enough. Since you have read Wealth of Nations, you should note that most of the 'new jobs' you mentioned above fall into what Adam Smith in the same book complained about the unproductive labors of ‘’… some of the most frivolous professions; churchmen, lawyers, physicians, men of letters of all kind; players, buffoons, musicians, opera singers, opera dancers etc....". Just in case you missed the point, Adam Smith thinks jobs that produce a 'service' as opposed to a 'good' are frivolous. Check your post and you will realize that ALL the jobs you mentioned from Mechanic to Cinema fall into this category. This is the stage where most western Economies are. They all want to raise taxes because the economy is producing more profits than wages. T

Your Economic analysis and view on Privatisation are fine. I also use to think and write like that a decade ago. I once even forwarded the name of El Rufai as my role model. Having passed through the phase you are at the moment, I perfectly appreciate your view. Good luck.

[Taipan]

Originally Posted by Waves

Fair enough. Since you have read Wealth of Nations, you should note that most of the 'new jobs' you mentioned above fall into what Adam Smith in the same book complained about the unproductive labors of ‘’… some of the most frivolous professions; churchmen, lawyers, physicians, men of letters of all kind; players, buffoons, musicians, opera singers, opera dancers etc....". Just in case you missed the point, Adam Smith thinks jobs that produce a 'service' as opposed to a 'good' are frivolous. Check your post and you will realize that ALL the jobs you mentioned from Mechanic to Cinema fall into this category. This is the stage where most western Economies are. They all want to raise taxes because the economy is producing more profits than wages. T

Your Economic analysis and view on Privatisation are fine. I also use to think and write like that a decade ago. I once even forwarded the name of El Rufai as my role model. Having passed through the phase you are at the moment, I perfectly appreciate your view. Good luck.

Hmmm, I flew from Lagos to PH today, a 1hr trip instead of perhaps 1 week walking on the road. It's interesting to note this service is considered 'frivolous' by some... And the service offered by the mechanic in repairing the tractor is also 'frivolous'. Well, we learn everyday.
But perhaps, you didn't notice that I included building of roads, houses & silos, and clothesmaking, and food processing in my list of jobs. Are these also 'frivolous'!?

Is there anything wrong with the stage where the Western economies are?

[Taipan]

Originally Posted by bivins1

Bros Taiwan and Japan equals Taipan, This your once in a blue moon posting no be am ooo. Please try and contribute from time to time. Please abeg. Good piece

Thanks, I'll try to do so more often.

[hispy99]

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[hispy99]

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[hispy99]

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[pegheneji]

Originally Posted by Waves

Fair enough. Since you have read Wealth of Nations, you should note that most of the 'new jobs' you mentioned above fall into what Adam Smith in the same book complained about the unproductive labors of ‘’… some of the most frivolous professions; churchmen, lawyers, physicians, men of letters of all kind; players, buffoons, musicians, opera singers, opera dancers etc....". Just in case you missed the point, Adam Smith thinks jobs that produce a 'service' as opposed to a 'good' are frivolous. Check your post and you will realize that ALL the jobs you mentioned from Mechanic to Cinema fall into this category. This is the stage where most western Economies are. They all want to raise taxes because the economy is producing more profits than wages. T

Your Economic analysis and view on Privatisation are fine. I also use to think and write like that a decade ago. I once even forwarded the name of El Rufai as my role model. Having passed through the phase you are at the moment, I perfectly appreciate your view. Good luck.

The services Taipan mentioned does not eliminate the production of goods which originally the farmer does but adds to it. Adam Smith talk about when services replace production of goods. Providing of labour should also be linked to quality labour and using ur famer as exammple, compare the multiplier effect of both approach and the probabilty of the mechanised farmer setting up a factory [production] rather than the 'our daily bread' farmer givng out 'handout' to his employees

[Waves]

Originally Posted by Taipan

Hmmm, I flew from Lagos to PH today, a 1hr trip instead of perhaps 1 week walking on the road. It's interesting to note this service is considered 'frivolous' by some... And the service offered by the mechanic in repairing the tractor is also 'frivolous'. Well, we learn everyday.
But perhaps, you didn't notice that I included building of roads, houses & silos, and clothesmaking, and food processing in my list of jobs. Are these also 'frivolous'!?

Is there anything wrong with the stage where the Western economies are?

Originally Posted by pegheneji

The services Taipan mentioned does not eliminate the production of goods which originally the farmer does but adds to it. Adam Smith talk about when services replace production of goods. Providing of labour should also be linked to quality labour and using ur famer as exammple, compare the multiplier effect of both approach and the probabilty of the mechanised farmer setting up a factory [production] rather than the 'our daily bread' farmer givng out 'handout' to his employees

I seem to have trouble communicating my thoughts. The central point is that Adam Smiths ideas should be studied in the light of current realities as some of his views are not in tune with the current global economy.

My advice is that whenever you come across an Economic Idea (whether western or not), try and ask some basic questions before adopting same. Can the model work in my environment? For instance, the central idea behind Privatisation (as Taipan wrote in his article), is sound. It even seems to have worked in Chile ( from where copied our current Pension Scheme). But look back at the experience of Nigeria. Has it worked? Obviously not. From Eleme, Alscon, Nitel to NICON, the story is bad. Is the problem really that of govt ownership or mismanagement. Certainly, with what we have seen in the Banks, mismanagement is not peculiar to govt. China and Singapore have shown that SOEs can work. If our problem is the 'Nigerian Factor', then make sure you carry the 'Nigerian Factor' in your plan because it is real. Whatever you do, open your mind and think. Don't just copy and paste.