Monday, August 08, 2022

Are Older Workers Propping Up the U.S. Economy?

Are 55 and older workers propping up the U.S. economy? The data is rather persuasive that the answer is yes.

The chart of U.S. employment ages 25 to 54 years of age and 55 and older reveals a startling change.

There are now 20 million more 55+ employed than there were in 2000, an equivalent of the entire workforce of Spain. This unprecedented demographic / employment transition is worth a closer look.

As the second chart shows, some of this increase is due to the rising population of Americans over 55 years of age--an increase of 42 million. In 2000, 30% of those 55 and older were employed. Today, over 37% are employed--a significant increase in the percentage of 55+ people who are working.

An increase of 20 million employees age 55 and older is so large that it's difficult to grasp. An increase equivalent to an entire nation's workforce is one way to make sense of it. Another is to look at the increase of America's total population from 2000 to 2022, which is about 48 million people (282 million in 2000, 330 million today).

The total U.S. population increased by 17%. The 55+ population increased by 42 million (from 57 million in 2000 to 99 million today), a 74% increase. Total employment in the 55+ cohort increased by 113%.

In 2000, only 17.6% of the 55 and older populace had a job. Now the percentage is 37.5% A 20% increase in the percentage of 55+ who are employed in a 20-year span is unprecedented.

If the percentage of employed 55+ had stayed the same, there would only be 17 million 55+ workers today. Instead, there are over 37 million. This raises a question: why are so many older workers continuing to work longer than they did in 1990 and 2000?

I doubt there is one cause or answer. We can attribute this dramatic shift to a number of causes: older households that never recovered from the financial damage wrought by the 2008-09 Global Financial Meltdown; older workers (like me) who only have Social Security for retirement income who can't get by on just their SSA check; those who enjoy their work and see no reason to stop; people who retired and became bored out of their minds so they returned to the workforce; parents who keep working to help their offspring and/or elderly parents; people who keep working to maintain healthcare coverage until they qualify for Medicare; older entrepreneurs who can dial back their workload but who still love their work, and so on.

All of these reflect structural changes in the U.S. economy: a steady decline in the purchasing power of wages and financial security, systemic exposure to the risks of financial bubbles bursting, etc. The bottom line is that nest-eggs that were deemed adequate are no longer adequate, and the only way to fill the gap is to keep earning money.

These changes are reflected in the decline in the percentage of employed 55+ people from 28% in 1970 to 18% in 1990 and 2000, and the subsequent rise to 37%. In an economy with an expanding workforce of young employees and rising productivity, more older workers could retire early. This is no longer the case.

In many cases, there is no nest-egg due to bankruptcy via huge medical bills, the heavy burdens of student loans, or the costs of helping children and grandchildren or very elderly parents. (Many of us aged 65-70 are taking care of parents 90+ years of age and helping out with active 3-year olds. Retirement? You're joking.)

As a result, expenses have risen rather than dropped for the 55+ cohort, requiring an income to stabilize household finances. (Have you looked at childcare (grandchildren) and elderly care (parents) costs recently?)

Another important structural change is the demand for workers of any age who are reliable and able to do the work. People who are accustomed to the structures of work by virtue of 40 or 50 years of employment are generally reliable workers and thus valued by employers beset by a scarcity of reliable, productive employees. (My first formal paycheck was issued by Dole Pineapple in 1970. That's 52 years of getting accustomed to the demands of employment. I'm pretty well broken in now.)

There are also demographic and cultural dynamics in play: the continuing satisfactions of work and the loss of purpose many feel in retirement, the decline in age discrimination, longer lifespans, etc.

Whatever the causes, 37 million workers 55 and older are earning money that's flowing into the economy and providing stable productivity--20 million more 55+ workers than 20 years ago. These 20 million jobs generate income that isn't just funding cruises and RVs. In many cases, it's supporting several generations on either side of the 55+ cohort.

Are 55 and older workers propping up the U.S. economy? The data is rather persuasive that the answer is yes.

Charts courtesy of CH @Econimica)






Recent podcasts/videos:

Save Money On Food, Get Free Gold & Silver, Beat Price Inflation (1:08 hrs)

It's Time To End The Fed & Return To A Decentralized Currency (X22 Report, 38 min)

Charles Hugh Smith On Inequalities And The Distortions Caused By Central Bank Policies (FRA Roundtable, 30 min)

Tectonic Shift of Mercantilism Revalued (Gordon Long, Macro-Analytics, 42 min)


My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.



My recent books:

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 Kindle, $10 print, ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

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Friday, August 05, 2022

Rather Than Focus on What You Don't Control ("The News"), Focus on What You Do Control: What You Grow, Eat and Own

Now that globalization and financialization are finally unraveling, people are slowly awakening to the national security foundations of localizing production.

What exactly is "the news" other than an inducement to passivity, despair and derangement? Since we exert zero control over what happens in distant lands and global economies, why waste time passively consuming "if it bleeds it leads" offal designed to addict us to a steady stream of despair and derangement?

Why not ditch "the news" in favor of focusing on what we do control: what we grow, eat and own? It's almost a binary choice: either focus on screens of addictive offal for hours every day or act on our own behalf in the real world.

Food inflation is highlighting the financial value of home gardens. Paul of the Silver Doctors and I discuss turning gardening savings into more ownership of something we control (for example, precious metals) in Save Money On Food, Get Free Gold & Silver, Beat Price Inflation (1:08 hrs).

I've been posting about the value of gardening for over a decade, describing the financial and health benefits. I Dig Dirt: The Remedy for Derealization (July 23, 2011)         The Hidden Value of Gardens (September 13, 2014)

Food inflation simply increases the gains: One Solution to Soaring Food Prices: Start Your 2022 Garden Now (November 6, 2021).

Municipalities can either encourage or hinder local food production. Cities once grew between a third and a half of their own food within city limits: Could Urban Gardens Supply 1/3 of a City's Food? Yes. (March 13, 2010).

If we're not allowed to grow food, that's a problem that can be solved by local lobbying or moving to a place where there are fewer restrictions on growing our own food. Local authorities can either lead (by encouraging community gardens for apartment dwellers, for example) or get out of the way.

Which makes more sense--air freighting tomatoes thousands of miles or growing your own? Globalization and financialization have so distorted our economy that if it's cheaper to fly in tomatoes then that's the "most profitable choice."

But is maximizing profit really the only "value" we should be calculating? Thanks to an obsessive focus on maximizing profits, our economy has been stripmined of essential production because it's always cheaper to produce stuff somewhere else where labor and bribes are cheap and environmental controls non-existent.

Now that globalization and financialization are finally unraveling, people are slowly awakening to the national security foundations of localizing production. Home gardens were called Victory Gardens in World War II for a reason. Reducing dependency and increasing local production is national security in a nutshell.

Gardening is the antidote to the toxic tsunami of despair and derangement sweeping the land and one expression of self-reliance and ownership of what we can control.

There are health benefits, too: the nutritional value of the food we consume has plummeted by a third as the soils are depleted of micro-nutrients. By boosting the health of the soil in your own garden, you are supplying your household with higher quality food than you can buy at the store.

If we consider the tragic decline in the health of the American public since the 1980s, the decline in the nutritional value of food and the consumption of real food (as opposed to processed "food", much of which is inedible) are factors that we can control in our own lives: grow healthy food, eat what you grow.

The money saved by a home garden can be invested in assets we control: new skills, new tools, and assets that we control such as gold and silver.

The food we grow tastes better, too. Local chefs prefer locally raised food for many reasons, and taste is one. We recently turned a batch of our heirloom tomatoes into an amazing tomato soup (served with fresh basil leaves, croutons and grated Romano cheese) that was nothing like the over-salted canned variety. Our inspiration was Marcella Hazan's Oven-Browned Tomatoes (page 527 from her cookbook Essentials of Classic Italian Cooking) and this recipe: The Best Homemade Tomato Soup.

This isn't a difficult recipe. Even a beginner can chop up veggies, roast them and pulp them in a blender or food processor. Cuisine that's just as good as that produced in a fancy restaurant is within reach of home gardeners. Truly refined cuisine is simple. It doesn't take celebrity chefs with a half-dozen assistants to make. Preparing your own healthy home-cooked meals saves a bundle, too.

As I've been saying for years: "A healthy homecooked family meal and a home garden are revolutionary acts." If these don't seem revolutionary yet, just wait a few years: their revolutionary nature will become self-evident.

Gardening is a process of experiments and failures. Like any enterprise, it's not a commercial, it's real life.

Please join Paul and I for an enthusiastic look at taking control of what we can control and the joys of growing food and saving money: Save Money On Food, Get Free Gold & Silver, Beat Price Inflation (1:08 hrs).








Recent podcasts/videos:

Save Money On Food, Get Free Gold & Silver, Beat Price Inflation (1:08 hrs)

It's Time To End The Fed & Return To A Decentralized Currency (X22 Report, 38 min)

Charles Hugh Smith On Inequalities And The Distortions Caused By Central Bank Policies (FRA Roundtable, 30 min)

Tectonic Shift of Mercantilism Revalued (Gordon Long, Macro-Analytics, 42 min)


My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.



My recent books:

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 Kindle, $10 print, ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Frank E. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Guy T. ($50), for your monumentally generous contribution to this site -- I am greatly honored by your steadfast support and readership.

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Wednesday, August 03, 2022

China at the Crossroads

Watch where capital is flowing. That's pretty much all you need to know to predict the future.

The word "China" evokes strong emotions, so let's set it aside in favor of a simple syllogism:

1. Certain things matter in all economies.

2. China is an economy.

3. Therefore these certain things matter in China.

Four things matter to all economies:

1. The flow of capital and talent in or out of an economy.

2. The productivity of that capital and talent.

3. The availability and cost of energy.

4. The stability of the primary foundation of the majority's wealth.

Capital and talent flowing into an economy and being productively invested generates prosperity. Capital and talent squandered on unproductive speculation generates bubbles of phantom wealth that eventually pop, destroying the illusion of wealth.

Capital and talent fleeing an economy generates stagnation and collapse. Capital and talent are democratic in the most basic form: both vote with their feet. Dictators can strut around ordering everyone to wear their underwear on the outside of their clothing, but if people can vote with their feet, he soon finds he's talking to himself and a handful of clueless cronies.

The cliche is that capital goes where it's well-treated. What does that actually mean? It turns out capital and talent both want what the average citizen / participant in the economy wants: stability and predictability. Every participant wants the rules to be visible and predictable, so they can make decisions about where to invest their capital and talent with some confidence that the rules won't change tomorrow.

If everything you've worked for can be taken from you or you're no longer able to sell and deploy your capital and talent elsewhere, then why gamble your capital and talent in such an unstable, unpredictable economy at all?

The more restrictions that are applied to keep capital and talent from fleeing, the greater the incentives for capital and talent to flee. Those that can't flee just give up and lay down, doing the minimum to survive.

Capital and talent invested in unproductive bridges to nowhere and speculative bubbles generate a brief explosion of illusory wealth. The workers and enterprises building the bridges to nowhere spend their earnings, boosting consumption, and the incoming tide of capital chasing speculative gains boosts the value of the assets being chased.

But bridges to nowhere and speculative frenzies don't actually boost the productivity of capital or labor; they are mal-investments that bleed the economy dry behind a flimsy facade of phantom wealth, a facade generated by the enormous tide of capital gushing into the economy.

Once the tide recedes as capital votes with its feet, the facade of phantom wealth collapses.

When energy is cheap and abundant, all sorts of things become possible. When energy becomes scarce and costly, all sorts of things are no longer financially viable.

Economies that only function if energy is cheap and abundant unravel when energy becomes scarce and costly.

People want to become wealthier, and they will follow whatever trails are open to them to do so. If the economy is structured to funnel most of the majority's wealth into one asset class, that economy becomes highly dependent on the stability of that asset class for its financial, social and political stability.

If, for example, the people's wealth is channeled into real estate to the degree that owning empty flats is considered a form of secure savings as well as a stake in an investment bubble that will never pop, then that economy is extremely vulnerable to the resulting speculative excess collapsing under its own weight.

When an asset class owned solely by the super-wealthy collapses under its own weight--for example, fine art--the damage to the economy is limited. But when an asset class that is the primary foundation of the majority's wealth collapses, that is extremely consequential because too much of the economy's capital has been sunk in an unproductive speculative bubble.

As strategist Edward Luttwak observed, the funny thing about force is how limited it is in actual efficacy. Forcing capital and talent to stay put doesn't make people productive. It simply forces a choice: find a way to flee or just give up and stop working hard. After all, what's the point?

Every economy in which capital and talent can no longer count on predictability is an economy at the crossroads. As Luttwak explained, force is not the same as power, though many confuse the two. Power attracts capital and talent because they're being offered stability and predictability. Force tries to shove instability and unpredictability down everyone's throat and compels then to declare their undying loyalty for instability and unpredictability.

But capital and talent vote with their feet. If they can't vote with their feet, they just give up. Any economy in which capital and talent either flee or give up has only one possible end-point: stagnation and collapse.

In other words, watch where capital is flowing. That's pretty much all you need to know to predict the future.

China Is Pariah for Global Investors as Xi's Policies Backfire (Bloomberg)




Recent podcasts/videos:

It's Time To End The Fed & Return To A Decentralized Currency (X22 Report, 38 min)

Charles Hugh Smith On Inequalities And The Distortions Caused By Central Bank Policies (FRA Roundtable, 30 min)

Tectonic Shift of Mercantilism Revalued (Gordon Long, Macro-Analytics, 42 min)


My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.



My recent books:

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 Kindle, $10 print, ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Adam G. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.

 

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Monday, August 01, 2022

Can We "Export Inflation?" Yes We Can, Yes We Are

A strong currency exports inflation to those nations which do not issue the currency.

Though it's difficult to be confident of anything in the current flux, I am pretty confident of three things:

1) price is set on the margins

2) currencies are the foundation of every economy

3) the financial forecasts issued to calm the public do not reflect operative geopolitical goals.

Every national government has "global interests." Governments naturally do whatever they can to boost dynamics favorable to the state and nation, and obstruct or hinder dynamics injurious to the state or nation.

As a general rule, nations have relatively few levers they can pull to influence global finance, trade, growth, currencies or the geopolitical balance of power. One such lever is the interest the state pays on its sovereign bonds.

If a central bank/state increases the interest it pays on its bonds, that attracts capital seeking higher return (presuming the bond is perceived as safe from default). This inflow of capital strengthens demand for its currency, because the bonds are denominated in the state's currency.

As the currency strengthens vis a vis other currencies, it buys more goods and services. Imports become cheaper and the nation's exports become more costly to those using other currencies.

Another lever is to reduce the exports of commodities, especially essential commodities like energy and grains. If this reduction reduces the global supply, the price leaps.

If allies get the exports and enemies don't, this punishes enemies and rewards allies.

A third lever is to limit imports. A consumer nation can limit imports from specific exporters, or make do with domestic supplies, or only buy from allies.

A fourth lever is to meet with allies and reach an agreement about finance and commodities to stave off imbalances that threaten the stability of the alliance.

An example of this is the 1985 Plaza Accord that weakened the U.S. dollar at the expense of the Japanese yen and European currencies. The strong dollar was crushing U.S. exports and generating destabilizing trade deficits in the U.S.

Each of these levers has geopolitical consequences.

Financial actions such as raising interest rates are presented as purely financial, but their geopolitical consequences are not lost on the nation's political / military leadership.

Boosting or trimming exports of commodities can be presented as financial as well, even when the real purpose is geopolitical.

In other words, events which are presented as solely financial can also serve geopolitical aims beneath the domestic-centric rah-rah..

Consider how the price of oil contributed to the collapse of the Soviet Union.

In the mid-to-late 1980s, the price of oil fell and stayed relatively low for years.

In 1986, oil fell under $10/barrel. Adjusted for inflation, this was lower than prices paid in the late 1950s.

Although this ample oil supply was fundamentally a result of super-major oil fields discovered in the 1960s and 1970s coming online, it had a geopolitical consequence few fully appreciate: it pushed the Soviet Union over the fiscal cliff into collapse.

Oil and natural gas exports were the primary source of the Soviets' hard cash it needed to buy goods and commodities from other nations.

Once the oil revenues dried up, the Soviet Union was no longer financially viable.

Was this lengthy "glut" of oil just good luck for the U.S., or was a policy agreement with Saudi Arabia and other oil exporters that "nudged" the price lower also a factor?

What do you reckon--pure luck or luck "nudged" to achieve a geopolitical goal? Given the high stakes and the vulnerability of the USSR to low oil prices, is it plausible that it was entirely happy happenstance?

In the 35 years since the Plaza Accord, the U.S. has endeavored to keep the dollar relatively weak for a number of reasons: to limit trade deficits, and avoid putting undue pressure on emerging countries with debts denominated in USD and nations that imported commodities priced in USD, which is virtually all commodities.

This weak-dollar policy has changed, with profound implications. The soaring USD is adding a currency "surcharge" on top of rising prices for commodities such as oil and grain.

Take Japan as an example: the yen has weakened 20% against the USD. This means every commodity priced in USD is 20% higher in price for those using yen.

Add the increase in cost due to global scarcities and that's a double-whammy hit of inflation.

These sharp increases in inflation / price of essentials are recessionary, as demand craters. People simply don't have enough earnings to pay higher costs for essentials and maintain their discretionary spending on goods and services.

Recall that price is set on the margins. If supply of oil falls 5 million barrels per day (BPD), price rises. But if demand falls 10 million BPD, the price of oil plummets.

As the price of oil falls, oil exporters receive much less money, and so they compensate by pumping more oil. This serves to further depress prices.

Who would benefit from a rising US dollar and a global recession, and who would be hurt? The US would benefit from a higher USD because that lowers the cost of all imports. Everyone else using weaker currencies would pay more for imported commodities.

As demand for oil falls, price plummets. That helps consumer nations and hurts oil exporters.

As the USD rises, it drags every currency pegged to the USD higher with it, making their exports more expensive. That would pressure China's exports, forcing China to adjust its currency peg, reducing the purchasing power of everyone using yuan/RMB.

Is the looming global recession merely "bad luck" or could an unavoidable global recession be "nudged" to serve geopolitical aims? The forces that have been unleashed (higher interest rates, scarcities, strong dollar) will take time to work through the global economy. The USD may drop and oil may rise over the next few months, but where will global demand and oil be in a year?

Many people expect the dollar to weaken and the Federal Reserve to lower interest rates back to zero once the recession becomes undeniable.

I am not so sure. A case can be made that interest rates have completed a 40-year cycle of decline and are now in a secular cycle higher.

A case can also be made that the weak-dollar policy has ended and the dollar will move higher, accelerating the financial and geopolitical consequences described above.

A strong currency exports inflation to those nations which do not issue the currency. Luck, coincidence, or "nudge"? Maybe it doesn't matter. maybe what matters is that it's happening.

A version of this essay was first published as a weekly Musings Report sent exclusively to subscribers and patrons at the $5/month ($54/year) and higher level. Thank you, patrons and subscribers, for supporting my work and free website.








Recent podcasts/videos:

It's Time To End The Fed & Return To A Decentralized Currency (X22 Report, 38 min)

Charles Hugh Smith On Inequalities And The Distortions Caused By Central Bank Policies (FRA Roundtable, 30 min)

Tectonic Shift of Mercantilism Revalued (Gordon Long, Macro-Analytics, 42 min)

My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.



My recent books:

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 Kindle, $10 print, ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Sue W. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.

 

Thank you, Hector G. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

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Saturday, July 30, 2022

What Can The Beatles Teach Us about Management?

Own your work. Don't give it away or let others profit at your expense. Leverage it when opportunities arise.

What can The Beatles teach us about management? Young readers may wonder why The Beatles still matter 52 years after the band broke up. It's a fair question.

There are many answers, but perhaps the obvious one (beyond the music, of course) is the band was a cultural phenomenon that has no modern equivalent.

A less obvious answer is the unusual dynamics of the four lads: founder John Lennon, Paul McCartney, Paul's younger mate George Harrison and drummer Ringo Starr (Richard Starkey) who was invited to join the band shortly before they rocketed to global fame.

Each had a distinct personality and a unique fan base. Though the songwriting team of Lennon-McCartney naturally received the most attention, the band operated by consensus: all four members had to agree on a song for it to be released on a record, and other decisions were also made by consensus: one no vote nixed the deal.

There were other bands with songwriting duos and lively personalities, but none shared quite the same remarkable distribution: there were no "in the background" members in The Beatles.

Due to the intensity of the mania surrounding the band, the members formed bonds which many described in essentially mystical terms: only the four understood their shared experience. Everyone else was an outsider.

As the burdens of fame increased, the band stopped playing live performances and retreated to the studio in 1966. The death of their 32-year old manager Brian Epstein in 1967 left them without a steady hand on the management of the band's business arrangements, a blow that Lennon realized was devastating. With Epstein gone, the band was in effect managing itself, a task it was poorly prepared to accomplish.

Indeed, the foursome's own attempt at running their empire, Apple Corps, was soon in such disarray that the band nearly went broke despite their prodigious record sales.

Both Lennon and Harrison had tired of being Beatles by 1966-67, and the group's sojourn to India in February 1968 marked a transition. The group's next album (The White Album) was more a collection of solo compositions than collaborations.

By 1969, Lennon's continued involvement in the band was contingent on the inclusion of Yoko Ono (whom Lennon tellingly called "mother") in all recording sessions, a move that eroded the unique bond of the foursome.

The coup de grace for the band was the breakdown of decision by consensus: sleazy manager Allen Klein persuaded Lennon, Harrison and Starr into signing him on as manager but McCartney smelled a rat and refused. That was the beginning of the end of the band as an enterprise.

(The three Beatles ended up suing Klein and eventually winning a large settlement.)

Equally interesting from a management perspective are the tug of wars that erupted as the band members matured and the pressures of fame increased. (In 1963 when the band first topped the popular music charts in the U.K., Harrison was 19, McCartney was 20 and Lennon and Starr were 22.)

Unflappable, likeable Ringo had quit the band in 1968 due to feeling unappreciated and left out of the White Album sessions. The other members persuaded him to return.

Harrison famously walked out of a recording session in 1969, Lennon quit in 1969 after the final album recording and McCartney beat the rest to the punch in making the breakup public with the release of his solo album in 1970.

Hard feelings took root and much bitterness was expressed by Lennon and Harrison following the breakup of the band.

Harrison felt that he was unfairly cast as "junior member" in terms of how many of his songs were allowed on each album, and was miffed that Lennon did little to help on Harrison's songs and McCartney was over-controlling in the studio.

As for Lennon (a mercurial personality, to put it mildly), it seems he resented McCartney's assumption of leadership, though it was universally acknowledged that Lennon had essentially relinquished any leadership by 1967. He'd worked hard to guide the band to fame (reportedly Harrison had the greatest confidence in their pre-fame days that the band was destined for great things) but lost interest as he wearied of fame and the burdens of being a Beatle.

In contrast, McCartney remained completely committed to The Beatles and responded to the declining interest of Lennon and Harrison by becoming pushier and more demanding, further alienating the other members.

But as Ringo has stated, if McCartney hadn't pushed, the band's final records would not have been completed.

While the band's breakup was a relief to Harrison and Lennon, it was a crushing blow to McCartney, who spiraled into a deep depression fueled by alcohol.

Let's put on our Manager caps and see who we can recognize:

1. The Founder who's coasting on past glory but resentful of anyone who takes the reins they've dropped.

2. The Over-Achiever who fills the vacuum left by others to keep the operation going.

3. The "quiet one" who isn't actually that quiet, who resents not being respected for their contributions and being overlooked when it comes to recognition.

4. The easy-going one who gets along with everyone but feels undervalued for being steady, reliable and talented at their job.

5. The con artist who sells snake-oil to the management but fails to con a key manager, and the ensuing conflict breaks what had been a functioning enterprise.

6. Enormous early success that is celebrated at first even as it distorts and burdens everyone involved, eventually driving key members to destructive coping mechanisms (alcohol, drugs, etc.).

7. The manager who rose to prominence in the early days of rapid success but who was left behind as the enterprise no longer needed their particular skillset.

8. The team manages to overcome all their differences and set aside their squabbles for one last brilliant production.

9. Young extremely talented people who mistakenly assume they can manage an enterprise they know little about.

10. The benefits of being a natural at public relations.

11. The benefits of group cohesion.

12. Timing is everything: when the moment is ripe and you've put in the work, remarkable things can happen.

There are undoubtedly many others, but the point is The Beatles offer us a microcosm of human interactions and management under great stress and novel challenges. We don't know what we don't know, of course, and The Beatles' experience reflects two truisms:

A. The vast majority of people pitching their services to the very successful are seeking to benefit themselves at the expense of the successful, and should be treated with the utmost skepticism and caution.

B. Recruiting an older, more experienced hand to guide the enterprise who actually has the best interests of the group at heart is often the difference between failure / financial insolvency and stability / financial security. Such people are rare but they do exist.

For all that he did right, Brian Epstein lacked the experience to leverage The Beatles' enormous early success. The rights to their original compositions were botched, as were merchandizing rights and record sales royalties.

These beginner's mistakes cost the band millions in income that should have been theirs. These errors were eventually set right but they cost the band dearly.

Good judgment is hard-earned. Manipulative people find young successful creators easy marks, hence the great number of sports and entertainment figures who end up broke despite making millions.

One of the best business decisions the surviving members made occurred 25 years after the band broke up: the release of the Anthology recordings that began in 1995. Their best-selling record, a collection of their 30 #1 songs, was released in 2000.

For me, the lessons are clear: own your work. Don't give it away or let others profit at your expense. Leverage it when opportunities arise.




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