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Lex maniac

Investigating changes in American English vocabulary over the last 50 years

Tag Archives: distribution of wealth

business model

(1980’s | businese | “business plan,” “grand strategy,” “big idea”)

Putting a business model into practice requires a lot of attention to detail, but the business model itself doesn’t. It can usually be summed up in a few sentences, a statement of general means to achieve broad goals, or a couple of concepts connected loosely with a method of bringing them about. These are not the fiendishly complex models of the hobbyist; they’re like economic models that set up a highly simplified map of how money moves around intended to make reasonably accurate predictions about real life. Business models look to the future, and they are subject to change; executives must recognize when they need a new one, lest the firm fail or fall behind. A start-up might boast of future profit infallibly brought to pass by their business model, while an established concern is more likely to tout a business model that is serving them well in the present and doesn’t need changing, thank you very much.

In everyday use, the expression is pretty casual, but there is a bit more to it. A 1990 definition in Computerworld magazine broke it down thus: “[Business] models, generally developed by a data administration unit, describe current and planned business activities and the related information requirements. A model is typically a four-level hierarchy that identifies business functions, the processes within each function, the activities within each process and the information needed to accomplish each activity.” At some level there must be attention to detail, even in the most devil-may-care industries.

Before 1990, “business model” also meant something else and was more likely to be paired with institutions of higher learning, or perhaps government agencies and even individuals. The idea was “act like a business,” that is, subscribe to the reigning corporate nostrums and show no regard for employees. If you did that, the financial poobahs would congratulate you on following a business model. That use remained in play into the nineties, which is when today’s understanding of the term took over. The tech companies dragged it into prominence; the computer industry seems to be the first that was generally expected to produce “business models.” That’s probably because new firms can’t attract funding without one, and computer start-ups were a dime a dozen in those days. Also because with a few off-the-charts exceptions, most computer companies have never quite figured out how to be profitable, even with an enthusiastic customer base and lots of love from investors. (In that respect the tech industry resembles American society in general, where a tiny minority is staggeringly prosperous while the vast majority does its best many levels below.) But even an unsuccessful venture may pull the wool over the eyes of investors long enough to free them of their money and give the principal shareholders time to grab the capital and run.

For the business model is the blueprint for making money. It helps if it has been proven by others; if it’s untried, you’d better have a good line of patter to back it up. A common way to disparage an enterprise is to say that its business model is the same as that of another company that failed or is in the process of failing. But how much success can be traced back to the business model? If the product’s no good, the business model won’t save it; if your employees don’t do their jobs, your big idea won’t go far. If the theory isn’t put into practice effectively, it doesn’t matter how good it is.

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(1980’s | academese (economics))

Although the Reagan administration gave us many new expressions, it cannot be blamed for this one, which long predates Reagan’s ascent to the presidency. It’s unlikely he ever used it himself, at least in public. But everyone else did, and we continue to associate the phrase with him, especially if we’re my age. The term was accurate in the case of Reaganomics; the much-discussed supply-side theory was a smoke screen to disguise the massive (and ongoing) redistribution of wealth upward, a process well underway before Reagan got in, but which he accelerated, and, more culpably, made to feel normal and inevitable. Now a generation or two of Americans senses that trickle-down economics is just how we do things. Advocates of the theory care far more about the first part — putting more money at the top — than the second — making sure a lot of it actually reaches those who have less. The real point is not that wealth trickles down. The real point is that it gushes up.

No question this expression is older, dating back at least to mid-century. It was not rare before 1980 and therefore ready to hand when Reagan came along. Apparently “trickle-down” did not carry the opprobrium Reagan’s adversaries hoped it would. (John Kenneth Galbraith used the phrase “horse and sparrow economics,” which lacks rhetorical vim but makes the relationship between the tricklers and the tricklees clear.) The word “trickle,” suggesting a sluggish and paltry stream, ought to raise hackles or at least spark discussion, but it doesn’t seem to have bothered very many people back in the eighties, or today, though union spokespersons and political candidates still use the phrase with intent to defame. It may not scare voters very much, but that doesn’t mean politicians advertise their own policies in such terms; it’s one of those expressions you would hear only from an opponent.

“Trickle-down” is not used exclusively to talk about money and distribution of wealth, but that has always been its métier. Today you see it in sportswriting a fair amount, where it comes closer to “ripple effect,” the idea that small changes will be amplified and lead to larger changes. It’s a different axis: “trickle down” insists that the wealthy occupy a higher position, but “ripple effect” is more horizontal and egalitarian. In an economy where more people have a larger share of the money, it washes around; when only a few people have most of the money, it can only trickle down.

The trouble with trickle-down is that it’s deeply un-American. It posits a small aristocratic class that receives large benefits from the king — er, uh, ahem, government — in exchange for a certain amount of fealty and service. The government shovels more and more money onto the aristocrats — a tiny minority of the population — further strengthening their hold on political, and purchasing, power. In theory, anyone can make their way into this minuscule aristocracy, but in practice it’s much easier if you start in the top tax bracket, or in the right family (yes, bloodlines still help). Now there have always been prominent American politicians and philosophers who preferred aristocracy, and they have wielded considerable influence since 1789. But each go-round they seem to get a little more immune to the masses’ resistance. Or maybe that’s just hubris repeating itself. After all, ruthless, amoral greedpigs make mistakes like the rest of us.

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(1980’s | businese | “expansion”)

Here we step once again into the vexed, murky waters of politics and economics. No place for your humble observer of the language, but this flabby gem is indeed a new word, although it follows on the heels of two slightly older expressions, “global village” and “global economy.” (My father referred to the global village in an e-mail, which inspired this week’s post. Thanks, Dad!) “Globaloney,” a favorite of mine, came along later. Ever since the Renaissance, we Europeans have been moving outward, exploring and colonizing. From the beginning, most of that restlessness has been driven by capital — money looking for more commerce or access to more resources. In the U.S., we started late, and we needed about 125 years to pacify our part of North America and get the network firmly in place to ensure that the rich keep getting richer. That flowered as far as it could in the 1920’s. But then hiring picked up again a mere fifteen years later, during the next war, and we were ready to take over the world in 1945, by which time we were the only ones available.

More trade was good for business, so the money that had formerly zipped around the U.S. now started to zip around the world. Not just money, but information and people, too. There are strong arguments to be made in favor of travel and trade, which among other things tend to prevent nations from growing too isolation-minded and turning into Nazi Germany. The price of tea in China became less of an abstraction, but so did the cost of contaminated imported food. Globalization opens up lucrative opportunities for a few in position to take advantage, but it also increases the risk of contagion and epidemic, medical, financial, or otherwise, for all of us.

Globalization has made a lot of people mad, from left-wing laborers to right-wingers leery of world government. It’s easy to depict it as one more instance of the plutocrats taking away our livelihoods; the rise of the word has unquestionably gone along with the widening gap between rich and poor. (But there is always a loud, well-financed chorus to point out that hiring cheaper labor and exploiting new regions is just sound business sense.) “Globalization” started to appear in newspapers in the early eighties, firmly the property of businessmen talking about finding new ways to make money. The emphasis then often fell on high labor costs (“outsource” came along around the same time), and the word was more often used to justify laying off U.S. workers than to justify opening new markets or new mines.

Back then, it was not unusual to talk about globalization of markets, or particular industries, or technology, or the economy itself. But it was already possible to talk about globalization unadorned, a mysterious, superhuman process that just happens, which cannot be diverted or appealed. That’s generally how it’s used now, and such usage benefits those at the top of the heap. If your language conveys the notion that the ability of wealth to accrue and exercise power is natural and unstoppable, most of us will forget that beyond a certain level, inequality is caused by decisions made and policies carried out by living, breathing human beings, who individually put their pants on one leg at a time, but who collectively run the economy in their own interest. There’s nothing automatic or natural about it, and we have to fight hard to be heard at the best of times. When we stop paying attention, whether out of self-satisfaction, fatigue, or wishful thinking, the one percent will bend the rules further to take more for themselves and squeeze the rest of us still harder.

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