Manfred Davidmann

Manfred Davidmann is an internationally well-known and respected scientist and consultant, and author of a number of books and reports which have had and are having considerable impact. His work usually breaks new ground and opens up new understanding and is written in meaningful and easily understood language. Outstanding is that his work is generally accepted as factual, objective and unbiased.

More than 6,5 million copies of his reports have been downloaded from the Solhaam website so far and have changed the way in which people live, think and behave.

The Fifteen Most Popular Downloads

• Style of Management and Leadership

• Family, Sex and the Individual; Women's Liberation, Feminism and Community

• How the Human Brain Developed and the Human Mind Works

• ORIGIN OF CHRISTIANITY and JUDAISM

• MOTIVATION: Summary

• Meaning and Significance of the Names of God in Genesis

• Co-operatives and Co-operation: Causes of Failure, Guidelines for Success

• The Will to Work: What People Struggle to Achieve

• Directing and Managing Change

• Using Words to Communicate Effectively

• Inflation, Balance of Payments and Currency Exchange Rates
  Including: How Base (General) Interest Rates determine Share Prices and Pensions

• Organising

• Multinational Operations: Transfer Pricing and Taxation

• The Meaning of Genesis: Creation, Evolution and the Origin of Evil

• COMMUNITY ECONOMICS: Ownership and Limited Liability

Books by Manfred Davidmann

• ISLAM: Basis - Past - Present - Future
  
  
• God and People: The Social Laws and Social System
  Underlying Judaism, Christianity, Islam and Democracy
  
  
• THE HUMAN MIND AND HOW IT WORKS:
  Group Minds in Action: How the Human Group Mind
  Shapes the Quality of Our Life and Living
  
  
• COOPERATIVES AND COOPERATION:
  Causes of Failure, Guidelines for Success
  
  
• Management and Leadership:
  Local, National, Multinational (Global),
  Principles and Practice
  
  
• The Real World in Which We Live:
  The Social Rules and Social System under Which We Suffer, Struggle, Survive and Prosper
  
  
• Messianic Struggle: The Worldwide Struggle for a Good and Secure Life for All, Here and Now
  
  
• Judaism: Basis - Past - Present - Future, Part 1
  
  
• Judaism: Basis - Past - Present - Future, Part 2
  
  

You can support and help us to provide and keep this exceptional website free of charge by buying Manfred Davidmann's books.

Theme of the Week (Current Events, Current Problems)

• Themes     (listed by content)
  
  
• 
  Previous themes:
  
  
• 'Transfer Pricing by Multinational (Global) Enterprises'
  
  
• 'Family's Role in the Real World:
  Teamwork in an Age of Specialisation and Accelerating Change and
  Gaining Strength in the Struggle for a Better Life'
  
  
• 'Using Words Effectively'
  
  
• 'Applied Science: Group Minds in Action'
  
  

Theme:

Creating Unemployment for the Sake of Private Profit;
Multinational (Global) Operations and the Exporting of Employment

Take an enterprise owned by British owners, employing British capital, employing British employees in Britain. Wage rates are much lower in the Far East because of the low standard of living of those living there. So the British enterprise (owners, directors) transfers some or all of its production (or other) operations to a Far Eastern country. And this applies to calculators, computers, television sets, electrical and electronic equipment, toys, and much else.

Their British employees are made redundant, are dismissed, become unemployed. But employment increases in the Far Eastern country. And all this for the sake of greater profits to owners and directors of the British enterprise.

Employment increases abroad and decreases in Britain, so that employment has been exported. Unemployment decreases abroad but increases in Britain, so that unemployment has been imported. Employment has been exported, unemployment has been imported, and all this for the sake of private profit.

The large additional profits which result from transferring operations abroad then do not result from doing a better job, or from providing better, or more needed, or more effectively produced, goods or services. These additional profits result from importing unemployment into the UK, are the result of dismissing their British employees.

The social costs of unemployment, however, are in the end paid by the unemployed (who are part of the community) and to some extent by the community as a whole. So the enterprise has passed on to the community this part of its operating costs, is making a profit at the expense of the community.

It is an accepted principle of economics, that the social costs of an enterprise's operations have to be paid by the enterprise, expressed by the maxim 'The polluter pays'. In other words, the social costs of unemployment have to be paid by the enterprise which caused the unemployment.

See   Community Economics: Principles

To the extent to which an enterprise fails to allow for the social costs of its operations, to that extent are its profits derived from passing its operating costs to the community, is it making profits at the expense of the community, is it exploiting the community and its members.

It would seem that importing cheaper goods from low-wage countries results in cheaper goods being made available, in lower prices. But we need to consider that middlemen take excessive profits, that unemployment increases, that wages and living standards decrease. And these are the social costs arising from such importing operations.

The consumer experiences a small lowering of prices from such imports, an apparent gain to the community. The picture changes when the larger costs to the community are included which the community (including consumers) has to pay.

Goods and services are bought cheaply in low-wage countries and sold in high-wage countries, at what seem to be large and excessive profit mark-ups.

Prices used to be based on 'cost plus reasonable mark-up', and unhindered competition was meant to ensure that the mark-up was reasonable. Prices are now based on what people can be persuaded to pay for what they can be persuaded to buy. The mark-up between producing in a low-wage country, and then selling in a high-wage country, can be enormous.

So imports are priced at what the market will bear, or just under. Sales of home-produced product reduce or its prices are lowered so as to compete with the imported product. The importer can easily afford to reduce his prices a little further, and so on until, in the end, the home-country's production facilities are knocked out. In the home-country we see prices reduced a little as long as low-wage countries compete with each other, increasing unemployment and reducing wages in the home-country.

This process looks like the free-market system in operation. However, what is actually happening is very different.

Underlying the free-market system is that unhindered balancing of supply and demand, that is unhindered competition, ensures that goods and services are made available at reasonable prices, at reasonable profit margins. As supply and demand change so the profit margin changes and it is this profit change which produces balance.

See   Community Economics: Principles

The system functions in this way as long as wage rates and living standard are held at constant level, remain roughly at the same level.

In practice we see an enormous difference in wages between low-wage and high-wage countries which results in large profits. These profits are almost unaffected by supply and demand changes. Hence there is no effective competition for this product, the requirement for unhindered competition has not been satisfied and the system fails to meet the community's needs.

Profit tends to be the sole consideration, regardless of the consequences to the community, regardless of the cost to people. Instead of producing more effectively and competitively at home, owners and directors find it easier and more profitable to import from low-wage countries. Unemployment increases and increasing unemployment and social need is used to force down wages and living standards.

Owners and directors in this way profit from the unemployment and the lower standard of living their operations cause in the home-country. They will continue to profit from increasing unemployment and its consequences as long as they do not have to pay the social costs of their operations. In other words, as long as they are allowed to pass this part of their operating costs to the community.

Sources

See report

Exporting and Importing of Employment and Unemployment

from which this theme's information was reproduced here.

Also see

See   Community Economics: Principles

Descriptions of Sources

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