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Andrei.Hicks

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Re: Globalisation
Reply #15 - Mar 1^st, 2012 at 3:57pm

Doctor Jolly wrote on Mar 1^st, 2012 at 12:30pm:

Andrei.Hicks wrote on Mar 1^st, 2012 at 12:24pm:

Karnal wrote on Mar 1^st, 2012 at 11:37am:

Doctor Jolly wrote on Mar 1^st, 2012 at 11:14am:

Globalisation, has allowed free trade to extend into all sorts of disparative economies, causing the whole world to slope toward a average rate of wealth, which is lower than we previously had.

Yes, but all "globalization" has done is outsource the working classes in the developed world to the developing world. It's about the offshoring of labour.

This does not create an average rate of wealth globally. "Globalization" has resulted in a far greater divide between rich and poor. And it's not me saying this, it's the IMF:

http://www.imf.org/external/pubs/ft/survey/so/2007/res1010a.htm

Off-shoring is an excellent idea and I am a big fan of what it brings.
The most successful project I have been a part of involved off-shoring not value add intensive labour processes to India from South Australia which improved any number of company corporate goals.

Think in these terms -

1) Our aim as a company is to maximise shareholder wealth whilst behaving in a socially responsible manner - thats the whole ethos of being for a company.

2) By offshoring to the developing world we are doing two things.
We are increasing capital into that country - we are helping them raise their standard of living and we end up building first world plants for them to have.
We are also paying them a decent wage relative to their living standards in that country.

We are also doing a duty to our shareholders in saving considerable Operating expense.
In our project we replaced workers in Adelaide on $40,000 per annum with Indian workers on $500 per annum. Multiply by that by several thousand across the globe and you a significant savings.

Think this way -

Developing country gets investment, employment and higher living standard.

Developed country keeps the retained profit disbursement and the higher value processes and competitive priced product.

I am a huge fan of globalisation and market force capitalism.

I know you are a troll, and you are full of it with your wage numbers. but I'll just reply this once:

1) A % of the money that otherwise stayed in the Australian economy is now gone. This is not good for Australia.

2) What if the shareholders arent australian. Therefore Australia loses out totally.

Absurd comment about trolling. I have my opinions and voice them, agree, disagree with them - whichever, I care little.

Anyway -

The core fundamentals of a company are to look after the shareholder and behave in a responsible manner.
Now I was obviously referring to Australian listed entities owned principally by Australian shareholders.
That retained profit disbursement will still be distributed in Australia as it always has been.

Also, the argument as well would be that additional funding would come into Australia this way because the outsourcing project (if run correctly) would have decreased OpEx, increased revenue and given a higher retained profit for disbursement to S/H's.

Also given the profit is also reported as higher because of the strategic change, there will be additional corporation tax paid in Australia on the Head Office entity.

I always see the out-sourcing scenario as win-win both for the developed and developing country.

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Doctor Jolly

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Re: Globalisation
Reply #16 - Mar 1^st, 2012 at 4:18pm

Andrei.Hicks wrote on Mar 1^st, 2012 at 3:57pm:

Absurd comment about trolling. I have my opinions and voice them, agree, disagree with them - whichever, I care little.

Anyway -

The core fundamentals of a company are to look after the shareholder and behave in a responsible manner.
Now I was obviously referring to Australian listed entities owned principally by Australian shareholders.
That retained profit disbursement will still be distributed in Australia as it always has been.

Also, the argument as well would be that additional funding would come into Australia this way because the outsourcing project (if run correctly) would have decreased OpEx, increased revenue and given a higher retained profit for disbursement to S/H's.

Also given the profit is also reported as higher because of the strategic change, there will be additional corporation tax paid in Australia on the Head Office entity.

I always see the out-sourcing scenario as win-win both for the developed and developing country.

As usual, you gloss over the issue without looking at the detail

1) I doubt many companies fit your profile of "Australian listed entities owned principally by Australian shareholders.".

2) When all competitors also off-shore, then profit margins slip away to what they were before.

In the end, Australia loses. Loss of money in the economy, and loss of skills in the workforce. Increased cost of welfare for all tax payers.

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Doctor Jolly Gold Member Offline Australian Politics Posts: 3808	Re: Globalisation Reply #17 - Mar 1^st, 2012 at 4:20pm Karnal wrote on Mar 1^st, 2012 at 12:47pm: Not exactly a higher living standard when your country's crops consist entirely of feed stock for cattle in the US - all exported to produce the developed world's hamburgers. its the irish potato famine all over again
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Andrei.Hicks

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Re: Globalisation
Reply #18 - Mar 1^st, 2012 at 5:11pm

Doctor Jolly wrote on Mar 1^st, 2012 at 4:18pm:

Andrei.Hicks wrote on Mar 1^st, 2012 at 3:57pm:

Absurd comment about trolling. I have my opinions and voice them, agree, disagree with them - whichever, I care little.

Anyway -

The core fundamentals of a company are to look after the shareholder and behave in a responsible manner.
Now I was obviously referring to Australian listed entities owned principally by Australian shareholders.
That retained profit disbursement will still be distributed in Australia as it always has been.

Also, the argument as well would be that additional funding would come into Australia this way because the outsourcing project (if run correctly) would have decreased OpEx, increased revenue and given a higher retained profit for disbursement to S/H's.

Also given the profit is also reported as higher because of the strategic change, there will be additional corporation tax paid in Australia on the Head Office entity.

I always see the out-sourcing scenario as win-win both for the developed and developing country.

As usual, you gloss over the issue without looking at the detail

1) I doubt many companies fit your profile of "Australian listed entities owned principally by Australian shareholders.".

2) When all competitors also off-shore, then profit margins slip away to what they were before.

In the end, Australia loses. Loss of money in the economy, and loss of skills in the workforce. Increased cost of welfare for all tax payers.

The positions, in my experience, that go offshore are non-skilled manual labour positions.

Take my example - it was a Pharmaceutical company.
All of the R&D and the high value add portion of the drug making remained in Australia.

The labour intensive portion - the vials, the mass production portions went to India.

With respect to the people who did these roles, you could train a chimp to do it.

The people who unfortunately were retrenched in SA were not highly skilled workers - there was no skills drain to Australia.

Australia is a developed country and needs to move further along the supply chain for skills/demands.

That's just how it is.

As regards the companies I am talking about - you can't say foreign companies because they won't be distributing shareholder funds within Australia in the first place - offshoring or not.

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Karnal

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Re: Globalisation
Reply #19 - Mar 1^st, 2012 at 8:56pm

Great. A pharmaceutical company - what an example. An industry where about 20% is spent on R&D, 50% on marketing, bugger all on manufacturing, and the rest on lobbying agencies and governments.

An industry where lawyers are employed around the clock to keep patents going for another 20 years; where research doctors are gainfully employed to propose imaginary illnesses for those patents, where governments are schmoozed to allow medicine prices to remain high, doctors are schmoozed to prescribe them, and where all the low-skilled Indians who work to make those "vials" are priced out of the market for any life-saving medicines they might need because the medicines they produce are bound for the developing world where the profit margins are.

What's it called? "Maximizing shareholder wealth whilst behaving in a socially responsible manner."

What a relief.

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Karnal

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Re: Globalisation
Reply #20 - Mar 1^st, 2012 at 9:11pm

Andrei.Hicks wrote on Mar 1^st, 2012 at 3:57pm:

Also, the argument as well would be that additional funding would come into Australia this way because the outsourcing project (if run correctly) would have decreased OpEx, increased revenue and given a higher retained profit for disbursement to S/H's.

A working class argument if I ever heard one, mate.

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Karnal

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Re: Globalisation
Reply #21 - Mar 2^nd, 2012 at 9:57am

Doctor Jolly wrote on Mar 1^st, 2012 at 4:20pm:

Karnal wrote on Mar 1^st, 2012 at 12:47pm:

Not exactly a higher living standard when your country's crops consist entirely of feed stock for cattle in the US - all exported to produce the developed world's hamburgers.

its the irish potato famine all over again

You're right, Jolly. Globalization author, Michel Chossudovsky, argues:

"As The IMF-World Bank structural adjustment program (SAP) was imposed on sub-Saharan Africa. The recurrent famines of the 1980s and 1990s are in large part the consequence of IMF-World Bank "economic medicine".

http://www.globalresearch.ca/index.php?context=va&aid=8877

Chossudovsky believes famine in Africa is largely due to global commodity speculation - the futures markets - which artificially inflate the price of grain.

As we know, however, famine in Africa is also the result of civil war. In Somalia, civil war is the result of the politics of oil. Companies like Shell have long employed mercenaries, facilitated ethnic rivalry and contributed handsomely to the war chests of various factions. It's how you do business.

And its how you create an exodus of farmers and rural refugees and create a famine. For Chossudovsky, the dependency on foreign investment (the IMF's SAP policies) is exactly what causes famines.

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Andrei.Hicks

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Re: Globalisation
Reply #22 - Mar 2^nd, 2012 at 11:15am

Karnal - Your synopsis over the Pharma world shows a fair amount of wariness where it is not necessarily required.

I could go into any number of non-profit reasons as to why we as a company rigorously defended our patents - ensuring patient safety from mickey mouse drugs, integrity of completing the required R&D work on the product, refining the product for better patient outcomes without needing to cut corners due to cheaper imitation drugs etc.

I could also go into why the price of varying drugs is higher than others - based upon manufacture, research cost, lead time in the supply chain etc.

But you keep your healthy suspicion of Pharma if it works for you.

Manufacturing - small amount of investment?
I think you're having a laugh son. Our supply chain alone for manufacturing touched on $450m - and we were nowhere near in the league of the likes of Pfizer, GSK, AstraZeneca, Barr, Teva etc.

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Andrei.Hicks

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Re: Globalisation
Reply #23 - Mar 2^nd, 2012 at 11:16am

Karnal wrote on Mar 1^st, 2012 at 9:11pm:

Andrei.Hicks wrote on Mar 1^st, 2012 at 3:57pm:

Also, the argument as well would be that additional funding would come into Australia this way because the outsourcing project (if run correctly) would have decreased OpEx, increased revenue and given a higher retained profit for disbursement to S/H's.

A working class argument if I ever heard one, mate.

It's an economic rationality argument.
Since when were they split into class?

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Doctor Jolly Gold Member Offline Australian Politics Posts: 3808	Re: Globalisation Reply #24 - Mar 2^nd, 2012 at 11:23am Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:15am: Who do you work for ?
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Andrei.Hicks Gold Member Offline Australian Politics Posts: 23818 Carlsbad, CA Gender:	Re: Globalisation Reply #25 - Mar 2^nd, 2012 at 11:24am Doctor Jolly wrote on Mar 2^nd, 2012 at 11:23am: Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:15am: Who do you work for ? I don't work in Pharma anymore. It was an example from my prior workplace. I was based in London.
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Doctor Jolly Gold Member Offline Australian Politics Posts: 3808	Re: Globalisation Reply #26 - Mar 2^nd, 2012 at 11:26am Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:24am: Doctor Jolly wrote on Mar 2^nd, 2012 at 11:23am: Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:15am: Who do you work for ? I don't work in Pharma anymore. It was an example from my prior workplace. I was based in London. So who do you work for now ? Locust Offshoring ?
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Andrei.Hicks

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Re: Globalisation
Reply #27 - Mar 2^nd, 2012 at 11:32am

Doctor Jolly wrote on Mar 2^nd, 2012 at 11:26am:

Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:24am:

Doctor Jolly wrote on Mar 2^nd, 2012 at 11:23am:

Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:15am:

Who do you work for ?

I don't work in Pharma anymore. It was an example from my prior workplace.
I was based in London.

So who do you work for now ? Locust Offshoring ?
Grin

No I am not and never have been in offshoring.
That was a supply chain restructure project I worked on - off-shoring was just a part of it.

I work for an energy company now.

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Doctor Jolly

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Re: Globalisation
Reply #28 - Mar 2^nd, 2012 at 11:35am

Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:32am:

Doctor Jolly wrote on Mar 2^nd, 2012 at 11:26am:

Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:24am:

Doctor Jolly wrote on Mar 2^nd, 2012 at 11:23am:

Andrei.Hicks wrote on Mar 2^nd, 2012 at 11:15am:

Who do you work for ?

I don't work in Pharma anymore. It was an example from my prior workplace.
I was based in London.

So who do you work for now ? Locust Offshoring ?
Grin

No I am not and never have been in offshoring.
That was a supply chain restructure project I worked on - off-shoring was just a part of it.

I work for an energy company now.

You speak like an expert on off-shoring though. Which really means your talking out your arse..... which sounds very similar to the predicament Andrey Hicks finds himself at Locust....

The Securities and Exchange Commission today announced it has charged Andrey C. Hicks of Boston, Mass., and Locust Offshore Management, LLC, his investment advisory firm, with misleading prospective investors about their supposed quantitative hedge fund and diverting investor money to the money manager’s personal bank account. The SEC also announced that Judge Richard Stearns of the U.S. District Court in Massachusetts has issued a temporary restraining order that, among other things, freezes the assets of the money manager, his advisory firm, and the hedge fund.

The SEC alleges that Hicks and his advisory firm made numerous misrepresentations when soliciting individuals to invest in a purported hedge fund Hicks controlled called Locust Offshore Fund, Ltd. According to the SEC’s Complaint, Hicks and his advisory firm falsely represented to potential investors that:

Hicks obtained undergraduate and graduate degrees from Harvard University;
Hicks worked for Barclays Capital, where he “grew his book nearly two-fold and expanded his group’s assets under management to roughly $16 [billion]”;
Ernst & Young served as the fund’s auditor;
Credit Suisse served as the fund’s prime broker and custodian; and
the fund was a business company incorporated under the laws of the British Virgin Islands.

Sounds exactly like you!

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Karnal Gold Member Offline Australian Politics Posts: 96507	Re: Globalisation Reply #29 - Mar 2^nd, 2012 at 11:43am Yes - how many working class economic rationalists who have worked in London and the US called Andrey (sic) Hicks are there? Have you met Andrey (sic) Hicks in your travels, Andrei?
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