How to effectively cold visit prospective employers by Matthew Coppola


There are a number of steps to make in effectively cold visiting a prospective client.

1. Get into the right frame of mind

Never go out and sell a product/service to a business if you really are not feeling up to it. Business people can sense any disinterest, unenthusiasm or tiredness from you and they are likely to imitate you and be disinterested themeselves. So make sure before you go out, you clear your mind, have a cup of coffee, prepare your material, and go out. Make sure you are also comfortable too. If it is a cold day, wear warm clothes, if it is a hot day, then you would do well to well cooler clothes.

2. Prepare yourself

Make sure you have all the marketing material on you, and that you are ready for any objections that you may come up against. I would suggest writing up a document thats titled “Frequently asked questions” which you can hand to the client to remove any suspicions or misunderstandings they may have.

3. Briefly learn about the business you will be visiting before you go out.

Employers appreciate people who have a good knowledge about their company because this shows that theyve gone out of their way to understand the possible needs of the company and it shows enthusiasm.

4. Presentation is key

When you go to reception and ask for the manager or business owner and they ask what you are here for, mention that it is a business matter and you need to speak directly with the manager. I would suggest however that you call before hand to arrange an appointment, but sometimes that can be hard if you are trying to sell something, getting through the gatekeeper can be very difficult in many instances. One option is that you call the business before hand and say:

“Oh hi ________ my name is _________ from __________ and I cant find the business card of the manager/business owner anywhere, are you able to help me? I need to contact them”

When you go into the business I suggest not mentioning your last name and ask to see the manager in a direct and assertive manner.

So you have been successful in getting through the gate keeper and the manager walks out from his office. Use the following script template and change to suit yourself accordingly:

Hi _______ I’m Matthew from ________ I apologise for coming unannounced, but would you be interested in knowing how ____________________”

(This part is when you mention the possible value the business can epect to get, and if they are interested, then proceed with you sales pitch. If they arent, move on. There are plenty of people out there who would be interested)

“The reason why I came to your business is that I felt our product/service would be of interest to you because ________________”

(When you are mentioning why you feel it is of interest to them, mention how your product/service can save their company value and money, tailoring your sales pitch specifically to their business.

“What are your thoughts?”

(Now you have the chance to answer any questions/objections)

And that is pretty much it, if you have got to that stage, you can either sell your product then and there or leave information with them, grab their contact details and ask to follow up in a few days once they have reviewed your product/service.

 

How To Implement A Strategic Plan: Learning from the Game of Monopoly by Matthew Coppola


Implementing a well-thought out strategy can result in a desirable outcome.

Monopoly is a great example. Although it is a game of chance there are elements of strategy which contribute to a successful win.

Firstly forget about cheating in business. It doesn”t guarantee winning.
In Monopoly the player who steals money from his opponent or does not remind the other player that they are due rent if they forget, may experience a short term gain, but the long term result could be negative, such as a loss in credibility and trust, and with a short term gain mentality, there is no future focus, so the strategy will be misguided.

Secondly, ethical behaviour and a sense of fair play, is just as important in Monopoly as it is in business.

In game strategy we refer to the situation when a player makes a course of action over a series of games, as “repeated games”.

A firm that takes on unethical conduct to craft a quick killing might benefit in the short term, but will end up paying for it in the long term.

Take for instance organisations that outsource manufacturing to low cost countries.

Yes it will result in cost savings, but may affect reputation of product quality.
However, a business that maintains an open-handed refund and makes a practice of giving customers the benefit of the doubt, might not be as profitable in the short run as a more rigid policy, but is more likely to lead to repeat business, customer loyalty, and long-term gains.

Thirdly maintain a healthy cash position. In Monopoly having a nice wad of cash around helps protect you from times when you land on high rent spot or you want to buy property or build houses.

Same with strategic planning, opportunities arise in the strategic scope which may not have been accounted for when the plan was initially developed. Cash position is a good indicator also of the health of an organisation and their ability to repay short term debts.

Fourthly in Monopoly, by having your hand in different areas you can be guaranteed of income, for example not just having one side of the board but having parts all over. Same in business.

Business diversification is a strategy to increase the variety of services and products within an organization. Diversification can be a growth strategy, taking advantage of market opportunities, or it may be aimed at reducing risk by spreading interests over different areas.

It can be achieved through acquisition or through internal research and development, and it can involve managing two, a few, or many different areas of interest.

There are two types of diversification strategies:

One type is horizontal diversification, which involves expansion into a similar product area, for example, a domestic furniture manufacturer producing office furniture.

In Monopoly it means acquiring all properties under one colour.
Another is vertical diversification, in which a company moves into a different level of the supply chain, for example, a manufacturing company becoming a retailer.

Vertical diversification in Monopoly entails acquiring utilities and other non-residential spots.

So what are the motives for diversification?

They are growth, risk reduction, and profitability.

To become the top player in Monopoly you need to acquire as many properties as you can and increase your cash flow by buying houses and hotels.

Players can reduce risk of losing or succumbing to landing on a high rental spot by acquiring as many properties and utilities as they can. That way, nearing the end of the game once everyone have bought houses and hotels, if you do land on a property or utility and you own it, well you avoid rent.
Profitability is also a key motive for diversification. In Monopoly, some properties offer very little rent value, but other properties offer very high rental return. And having a constant cash flow from owning numerous properties helps keep you profitable.

However, a key advantage of a specialised company over one that is diversified across a number of vertically linked businesses is the specialised company”s ability to develop distinctive capabilities. In Monopoly, by concentrating on one or a couple of property blocks on one side of the board enables you to have enough money to build houses and hotels on those properties quicker and with less risk.

And lastly In Monopoly try and team up with players who have a nice wad of cash for needed protection.

A strategic alliance is a cooperative relationship between firms involving the sharing of resources in pursuit of common goals. Having a strategic alliance can help you win against the big boys with more money. Acquiring another company can be expensive, but alliances are more targeted and cheaper way of accessing other company”s capabilities.

So all these points just in a game”

Therefore for an organisation, the most important factor is not luck, but the ability to recognise opportunities when they appear and to have the clarity of direction and the flexibility necessary to exploit these opportunities.
Seeing the benefits of a well thought out strategy takes time and patience. You won”t see the fruitages of a strategy over night.

We can learn this lesson on patience in the game of chess.
Many opportunities will come up that may divert your strategy on a tangent, and as attractive it may be, it doesn”t hurt to be patient and do your research by considering all the known options available.

In business grabbing an attractive opportunity can result in “first mover advantage” however, by being flexible and open to possibilities can result in a more optimal outcome.

Understanding the Business Environment: Learning from the Game of Golf by Matthew Coppola


The surroundings of the business has a huge impact on the outcome of any strategy.

Now an organisation may operate in a…..positive environment.

But what if it is operating in a…..negative environment?

Well then it may have detrimental effects to the business.

An organisation would be a smart company if they took good note of their surroundings.

Take for example….professional golf.

Professional golfers are not only good at accurately taking a swing and controlling the speed and height of the ball, but they also take into account how the environment affects their game.

Pro golfers even look at the type of grass used on the golf course they are playing at.

For example, certain types of grass will affect the size of a scuff mark or divot and your ability to create one.

Divots are the amount of grass that shoots out after you hit the ball. It is very annoying to have to fix and also if your ball lands in someone else”s divot.

Some grasses, such as bent grass, have a thinner and more delicate blade structure than most other grasses while their root structures are also more vertical.

Together these traits mean that these grasses more easily produce divots.

On the other hand, the Bermuda and fescue grasses that can be seen on a large number of golf courses in Queensland make it tougher to produce divots. These grasses feature wider and tougher blades.

PEST Analysis (political, economic, social and technical) is a technique we use to analyse the business environment.

But it can be very time consuming to do, and you would be forever finding new factors which may have little or no affect on your organisation”s strategy.

So what we need to do is go back to the fundamentals:

In making a profit, the firm needs to create value for customers. This requires an understanding of the customers:
Who are they? What do they like? Why do they buy?

In creating value, the goods and services are acquired from suppliers. So an understanding of the suppliers is required:
Who do they also supply to? What do they supply? How can we develop a better relationship with them?

Next, your organisations ability to generate profit from value creating activities depends on the competition and how intense it is, this then relies on an understanding of your competition:

Who are they? What are they good at? What aren”t they good at? Who are their customers? Why are they in business?

So your organisations business environment is formed by its relationship with three sets of players in the game: Customers, suppliers, and competitors.
This is its industry environment.

So a key part in understanding the game being played is the ability to read your customers and know how to satisfy their needs depending on changes in the business environment.

Professional golfers for example, read the grass by taking into account the characteristics of the putting grass used. This understanding enables them to be able to determine the “influence” on their ball “” that is, what factors will impact the direction and distance they require from a stroke.

There are two factors which influence their ability to read the grass “” slope and grain

Most greens are designed with some slope so they can drain away water and any green may include a number of slopes to influence your putt.
Grain refers to the tendency of a species of grass to grow in a certain direction.

Because greenkeepers rotate mowing patterns, a uniform pattern of grain generally is not established.

Still, it”s valuable to understand the impact of grain.

Grain has a tendency to run in the direction of the natural form of the land – away from hills and toward places where creeks and ponds naturally occur.
Exposure to sunlight at only certain times is another factor. For example, Bermuda grass has a tendency to grow toward the sun.

A professional will know whether they are putting the ball against the grain or not, and will change their style to suit.

So the solution to the problem of environmental change is to understand your markets characteristics, that is, what are your customer”s underlying needs, rather than what are the specific products your customers need.

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Author: Matthew Coppola, Managing Director of Client Centric.

Client Centric – Executive Employment Solutions are a boutique employment services company specialising in executive and managerial level roles. We are committed to helping you succeed in your career and to do this we have the best staff on board to help you reach your goals. Our team are highly experienced and knowledgeable in a broad range of areas and expertise, so you get the best advice. We service clients all over Australia including Perth, Brisbane, Melbourne, Adelaide, Sydney and Hobart.  We provide Resume Writing ServicesCover Letter WritingLinkedIn ProfilesAddressing Selection Criteria’s and we also offer a Job Application Service where we apply for jobs on your behalf and all you do is wait for the call. Please visit our website at www.clientcentric.com.au to find out more.

Key Marketing Tips by Matthew Coppola



1. Base all your images and information around your target market.

Your target market is the customer base which purchases your products. Take into account their age profile and income group. Older age groups have different preferences as opposed to younger age groups. Income is also a strong dependant on how important price and value will play in determining a successful sale or not.

2. Identify your competitor’s marketing activities

Improve where they fall short.  In engaging in marketing and advertising activities, too many businesses fail by copying their competitors in the hope of gaining a slice of the market share. Competition means choice and availability for customers. Show your customers that you can offer the same services and products of your competitors but better and offer more value. Where your competitors fall short, make it your greatest strength.

3. Engage in networking activities and generate contacts in the industry

It”s not what you know that gets things done, it’s who you know. Networking not only generates business friendships, but it also creates awareness of you and your business. Improve your body language and build rapport with other individuals in the industry. Find people in different industries and let them know what you do and why you are unique. Create awareness and build contacts in the process.

4. Re-design your brochures and other material you present to clients to be unique and attractive

It isn”t good to judge a book by its cover and the same is said for businesses. But unfortunately businesses are judged by their “outward appearance”. Your brochures, website, business cards and other material you use to present to clients should be outstanding in appearance and attractive.

5. Create a website and promote it through social networking sites and internet advertising

The internet is now a major preferred medium by businesses to search for service providers. By listing your organisation on blogs, social networking sites and through web advertising, you can create a strong awareness. Pictures are also great to illustrate what you do. The saying goes that a picture paints a thousand words.

6. Offer packages to suit high income and low income groups

Try and be all things to all businesses. If need be, roll out the red carpet and go the extra to show that you want their business and will work out a package that is both economical for you and provides great value for your prospective client. Sell the benefits of consuming your product, not just the product itself.

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I am an experienced and qualified Employment Consultant. I provide assistance with tailored professional resumes, customised cover letters, key selection criteria responses and keyword optimised LinkedIn profiles.

All of my work is not only professionally written and edited but also has a unique design,  making sure that your job application will stand out from the rest. I work with clients all across Australia including Perth, Melbourne, Sydney, Brisbane, Darwin, Hobart and Adelaide. Having a professionally written resume will ensure your CV stays ahead of the rest. Contact me today to find out how I can help you land your dream job.

Please feel free to email me at info@matthewcoppola.com or call me on 0415 559 233.

Do’s and Dont’s of Email Etiquette by Matthew Coppola


1.What is the biggest mistake people make when sending business emails?

The biggest mistake would have to be sending emails with too many subjects.
If you are sending an email, make sure that it is on one subject alone, not many. Because when people receive emails with too many subjects, the email respondents end up forgetting to reply to most of the different matters.
So I suggest when sending emails, make sure they are on one subject, and if you have a number of matters that need dealt with, keep them as separate emails.

2.What is a common mistake people make without realising they are making a mistake?

Bad grammar
– forgetting to spell check is a common mistake people make that they don’t realize.
– When sending emails throughout the day, we may become busy and so will rush through an email, and sending it without double checking our grammar and punctuation.
– Make sure spell check is always turned on. However, spell check misses mistakes like this:
“I this due by Tuesday”
Spell check would say that is correct. When really it isn”t and should be:
“I need this due by Tuesday”

So it is always good to double check our emails before sending.
Ways you can quickly check for typo mistakes:
Read through the email but only concentrate on the words and their structure, not what the email is reading. This way you will be able to find mistakes easier without getting caught up in the email.

3.How should an email be properly constructed?

-Specific subject
Eg.
BAD: Next Tuesday”s appointment
GOOD: Appointment for Tuesday the 20th of August 2010 with John Smith
-Introduction
An email should start off with a good introduction which captures your readers attention and helps them to follow on through the email:
Eg.
Hello John,
Hope you had a good weekend OR
Thank you for your time today to discuss the matter with you.

-Body
This is the base of the email.
Key information for the reader is in this part of the email. Whatever you need to ask or say put it in here.

-Conclusion
Always end an email off in a positive note or to recap your email.
Eg. Please feel free to contact me if you would like more information
Kind regards,
OR
I look forward to seeing you next week and discussing the proposition with you.
Kind regards,

4.How important is good email etiquette?

Very important.
A good email shows professionalism so sending a well written email will impress your client or customer.

5.What are the possible ramifications of bad email etiquette?

-Perception by the email respondent as unprofessionalism and lack of care in the way your conducting business
-The email respondent may disregard the email and forget about it
-The email may be passed on as junk mail if the subject line is too general or small.
-The use of emoticons and acronyms like BTW (by the way) are way too informal. Not everybody knows what they mean. Readers could even get the wrong impression of your email writing skills.

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Author: Matthew Coppola, Managing Director of Client Centric.

Client Centric – Executive Employment Solutions are a boutique employment services company specialising in executive and managerial level roles. We are committed to helping you succeed in your career and to do this we have the best staff on board to help you reach your goals. Our team are highly experienced and knowledgeable in a broad range of areas and expertise, so you get the best advice. We service clients all over Australia including Perth, Brisbane, Melbourne, Adelaide, Sydney and Hobart.  We provide Resume Writing ServicesCover Letter WritingLinkedIn ProfilesAddressing Selection Criteria’s and we also offer a Job Application Service where we apply for jobs on your behalf and all you do is wait for the call. Please visit our website at www.clientcentric.com.au to find out more.

A Comparison and Contrasting of John Mill and Thomas Malthus on the long term dynamics of Capitalism by Matthew Coppola


The following article studies the opposing and unifying theories of two economists, John Stuart Mill and Thomas Robert Malthus, on the long term dynamics of capitalism, which entail aspects of growth, development and accumulation of a capitalist economy. The key topics studied by Malthus and Mill include labour, consumption, population growth, agriculture and property rights. These will be discussed from both a theoretical and empirical perspective in the following article.

A major topic discussed by Mill and Malthus is on unproductive and productive labour in contributing to wealth creation in a capitalist economy. According to Malthus, a worker did not have to just produce wealth to be productive, but rather it is the value of what the worker produces that makes them productive. To Malthus, productive labour:
“should be susceptible to some sort of definitive valuation” [And] must add to the wealth of the country an amount at least equal to the value paid for such labour” (Malthus, 1836 p.46).

Thus according to Malthus, the worker is not productive unless the worker adds to society more than was paid their services, namely, labour.
In comparison to Malthus, the notion of value to the productive process was also adopted by Mill, as he saw value in objects produced by workers. Mill saw workers engaged in the manufacturing sector as being truly productive:
“We should regard all labour as productive which is employed in creating permanent utilities, whether embodied in human beings, or in any animate or inanimate objects”[And] labour expended in the acquisition of manufacturing skills, I class as productive” (Mill, 1886 v.1, p.61).

In reverence to human capital, Malthus also put forth the idea that one must produce an object to be productive:

“no small portion of it is employed in acquiring the skill necessary to the production and distribution of material objects, as in the case of most apprenticeships” (Malthus, 1836 p.37).

However unlike Malthus, Mill was ignorant of the idea that unproductive labour has a positive impact on economic growth in capitalist economies. Those individuals in society who are identified as unproductive labour include those who attend to activities in the private service, such as capitalists, landowners, government ministers, executives, musicians, teachers, priests and so on. It also includes those who perform activities in the home, such as menial servants and child rearing. According to Malthus, “unproductive” workers are valuable to the welfare and development of Society:
“that kind of labour which highly useful and important…may conduce indirectly to the production and security of material wealth” (Malthus, 1836 p.35).

Therefore, to Malthus, those who perform activities in the home, such as the upbringing of children and the maintenance of the home are valuable to society and have an indirect impact on production and development.
Having been a cleric from the Church of England, Malthus appreciated the value religious activities have to the development of society. For instance, the Catholic religion exemplify strong “pro-natalist ideologies” with teachings forbidding artificial forms of contraception and abortion. In particular, studies have shown that religious participation by youths has been linked to “a lower probability of substance abuse and juvenile delinquency [and] a lower incidence of depression among some groups” (Lehrer 2004, p.16).
However, Mill was sceptical of the impact religion has on the development of society. Mill is quoted for saying:

“It is…evident that the greater number of missionaries or clergymen a nation maintains, the less it has to expend on other things; while the more it expends judiciously in keeping agriculturalists and manufacturers at work, the more it will have for other purposes” (Mill, 1886 v.1, p.61).

To Mill, spending on the unproductive labour of clergymen will receive no return or benefit to society, whereas maintaining a class of agriculturalists and manufacturers will generate a higher return, which can be allocated to other productive activities, which will again generate a positive return to society.

In terms of the role of government in a capitalist economy, both scholars viewed government as being productive indirectly. In comparison to Malthus, Mill was a right wing economist and believed that the government has an important role to play in society:

“The labour of officers of government…is indispensable to the prosperity of industry, [and] must be classed as productive, even of material wealth, because without it, material wealth, in anything like its present abundance, could not exist. Such labour may be said to be productive indirectly” (Mill, 1886 v.1, p.61).

Thus both acknowledged that some form of Government was critical to the long term dynamics of capitalism. Without government, society would not have been able to generate such high material welfare and gain. Empirical evidence has indicated that non-military government capital is a significant input in the production function and has a high output elasticity of .39 (Karras & Evans 1994).

With respect to labour, both Mill and Malthus distinguished between productive and unproductive (U/P) consumption, including their effects on growth and development in capitalism. Mill made a distinction of productive and unproductive consumption to the labourer being:

“What they consume in keeping up or improving their health, strength, and capacities of work, or in rearing other productive labourers to succeed them, is productive consumption. But consumption on pleasures or luxuries, whether by the idle or by the industrious, since production is neither its object nor is in any way advanced by it, must be reckoned unproductive” (Mill 1848, book 1, chapter 3).

Mill saw unproductive consumption as having an undesirable influence to the wealth creation and growth of society, regarding U/P consumption as being undesirable and will only impoverish society:

“Whether they like it or not, the unproductive expenditure of individuals will pro tanto, tend to impoverish the community, and only their productive expenditure will enrich it” (Mill, 1886 Vol. 1, p.5).

Malthus on the other hand regarded U/P consumption as necessary to capitalism, particularly when productivity and innovation are at their utmost levels, which would ensure value and profit to expand:

“It would at once confound the effects even of production and consumption, as there is certainly no indirect cause of production so powerful as consumption” (Malthus 1836, p.45).

Another major topic studied by both economists was decreasing returns to agriculture and its effect on growth and development in a capitalist nation. This idea that agriculture would be subject to increasing returns, due to rising population unless supported by an increase in productivity, was adopted by Malthus.

Malthus contended that when the less fertile soil is used, the marginal product declines, while the rent increases due to inequality in the lands. Thus, the marginal expansion declines and output increases arithmetically, but at a diminishing rate. Therefore due to decreasing returns to agriculture, and population rising in a geometrical progression without any checks to it, society would not be able to survive in a population-food supply struggle.

In regards to population and food supply, Malthus said:
“The power of the population being…so much superior, the increase of the human species can only be kept down to the level of the means of subsistence by the constant operation of the strong law of necessity, acting as a check upon the greater power” (Malthus 1970, p.21).

This “subsistence” level is the minimum level to reach survival. Malthus” population dilemma posed a theoretical question on the checks to population and a practical question concerning solutions to the problem. There were positive and preventative checks. The positive checks to population growth included war, famine and pestilence. These tended to have an adverse impact. According to Malthus, the ultimate positive check to population is limited food supply. In Malthus” own words:

“It has been inferred, that and increase of population in any state, not cultivated to the utmost, will tend rather to augment than diminish the relative plenty of the whole society”a country cannot easily become too populous for agriculture; because agriculture has the signal property of producing food in proportion to the number of consumers” (Malthus 1809 Vol. 2 p. 275).

The preventative checks included moral restraint, contraception and abortion. These tended to have a positive impact on procreation. Mill also believed that contraception needed to be encouraged to keep a hold on population. However, Mill was against abortion or immorality, even having been jailed for distributing birth control pamphlets.

Malthus believed that the tendency to procreate would in fact rule over the cumulative effect of the checks to population growth. Therefore, unless the positive checks were greater than the preventative checks, the human population would thus be brought to a “subsistence level” or just to a means of survival.

In Scandinavia for example, poverty has been eliminated locally, and even death from infectious disease is rare. This would not have occurred without low birth rates that have characterized the region. Not only in Scandinavia, but in other regions, low birth rates and death rates, strong education, a stable population, control of infectious disease and elimination of poverty and war are linked together in a “mutually re-enforcing circle of cause and effect” (Avery 2005, p.25). By contrast in many third world cities, contaminated water, polluted air, high birth rates, increasing population, poverty and resurgence of infectious disease are linked in a “self perpetuating causal loop” (Avery 2005, 25) with the result being a vicious circle.

Malthus failed to look at other checks that may have forestalled his gloomy conclusion. He had failed to separate sex and procreation. In the second half of the 20th century and well into the 21st century, advances have been made in modern birth control. Couples can have less constraint in regards to sexual activities. Therefore these additional checks can reduce the disparity between multiplication of the species and growth of the food supply.
Mill also adopted Malthus” population principle, adding further that the population must:

“work harder, or eat less, or obtain their usual food by sacrificing a portion of their customary comforts” (Mill Vol 4, p.109).
Mill here was saying the reality is, if society wants to maintain their usual way of living or maintain their “customary comforts” they must sacrifice either their time, consumption of goods, or activities that they have become accustomed to.

Malthus, like other classical economists of his time, was a pessimist. He envisioned that the capitalist system in the long run would face “pressure of population…decreasing response to human effort to increase supply of food and basic materials, limits to technical progress, subsistence wages, and falling profits” (Zweig, 1979 p.511) believing that in the end, technological improvement would not be sufficient to counteract the law of diminishing returns and depletion of natural resources.

Mill however was less sceptical about the capitalist system coming to a means of subsistence. Despite the classical economists such as Malthus and Smith realising that the growth of wealth could not continue indefinitely, only John Stuart Mill believed that a collapse of the system could be avoided and a stationary state achieved.

Economist Adam Smith described the stationary state as a situation of zero growth, in which the stock of goods is always the same, that is the quantity consumed is equal to the quantity supplied in the same time period, and rewards to the factors of production are at a minimum. The idea that the capitalist system would come to an end at the stationary state was feared by many classical economists including Malthus and Smith

According to Mill, once the stationary state was reached:

“every increase in the demand for food, occasioned by increased population”unless there is a simultaneous improvement in production, diminish the share which on a fair division would fall to each individual” (Mill Vol 4, p.109).
Here Mill was saying that the demand for food must be balanced with supply. Mill described his ideal stationary state in book 4 of his Principles of Political Economy:
“The density of population necessary to enable mankind to obtain all advantages of co-operation and social intercourse has in all the most populous countries been attained. It is no good for a man to be kept perforce at all times in the presence of his species. A world from which solitude is extirpated is a very poor ideal . . . With every rood of land brought into cultivation . . . every hedgerow or superfluous tree rooted out, every flowery waste or dell ploughed up . . . there is no satisfaction in contemplating the world with nothing left to the spontaneous activity of nature. If the earth must lose that great portion of pleasantness which it owes to things that the unlimited increase of wealth would extirpate from it, for the mere purpose of enabling it to support a larger, but not better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compels them to it.” (Mill, 1848, book 4, ch.6).

However to reach the stationary state required extensive social changes and reforms, which Malthus and the other classical economists did not realise. Mill is quoted as saying:

“improvement here must be understood in a wide sense, including not only new industrial inventions”but improvements in institutions, education, opinions, and human affairs generally” (Mill, 1886 Vol. 1, p.105).
Mill argued that we need to educate society about contraception; that we need social reform and change. He further added:

“It is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement. . . Only thus can the conquests made from the powers of nature by the intellect and energy of scientific discoverers, become the property of the species and the means of improving and elevating the universal lot” (Mill, 1848, book 4, ch.6).
Assuming that the capitalist system keeps a restraint on population, Mill held a relatively optimistic view of the stationary state, in that it would be characterised by technical progress and past capital accumulation, which Mill extends into in his book, further saying:

“I am inclined to believe that the stationary state would be, on the whole, a very considerable improvement on our present condition. I know why it should be a matter of congratulation that persons who are already richer than any one needs to be, should have doubled their means of consuming things which give little or no pleasure except as representative of wealth”It is only in the backward countries of the world that increased wealth is still an important object: In most advanced countries, what is economically needed is a better distribution to relieve poverty, of which one indispensable means is a strict restraint on population” (Mill, 1848, book 4, ch.6).

In his autobiography, Mill admits that this will all require a transformation of society and a character change in all classes of the population (Zweig, 1979 p.519). For instance, Mill was a strong advocate of contraception and safe sex attitudes of society. The only way to change people”s attitudes according to Mill was social change.

An idea that many classical economists held was that supply creates its own demand, known as Say”s Law. Attributed to the French economist, Jean-Baptiste Say, this law states that a market-capitalist economy will tend towards full employment of resources if there are flexible prices, interest rates and wages. Thus, according to Say”s law, it is inherently impossible that there will be long term crises of a market capitalist system.

Malthus rejected the idea of supply creating its own demand, arguing that supply reduces profit:

“It is impossible that the increased quantity of commodities, obtained by the increased number of productive labourers, should find purchasers, without such a fall of price as would probably sink their value below that of the outlay, or, at least, so reduce profits as very greatly to diminish both the power and the will to save” (Malthus, 1836 p.315).

Mill, like most economists, attached great importance to the role of capital and capital accumulation. Mill argued that given Say”s law, increased levels of output and employment depend on the accumulation and investment of capital. The portion of investment in capital, that is, result of saving, is required to tide labour over a “discontinuous production period” (Ekelund & Hebert, 1990 p.170). This was known as the wages-fund doctrine:

“It is often forgotten that the people of a country are maintained and have their wants supplied, not by the produce of present labour, but of past. They consume what has been produced, not what is about to be produced. Now, of what has been produced, a part is only allocated to the support of productive labour; and there will not and cannot be more of that labour than the portion so allotted (which is the capital of the country) can feed, and provide with the materials and instruments of production” (Mill 1848, p. 64).

Stated simply, it was not a temporary state of affairs, but rather the unemployment of resources, was not considered probable because of Says Law (Ekelund and Hebert, 1990, p.170). Saving would automatically be turned into investment, another form of spending and a general glut would not occur. Thus the saving of those who do not consume all their income will be otherwise utilised by capitalists in purchasing factories, machines and the like to an expansion of value. Saving then becomes net investment:

S = In

So Mill agrees with Say”s Law, that what is saved will be invested. Mill only assumed a system whereby the supply curve was vertical, where we are always at full capacity.

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Author: Matthew Coppola, Managing Director of Client Centric.

Client Centric – Executive Employment Solutions are a boutique employment services company specialising in executive and managerial level roles. We are committed to helping you succeed in your career and to do this we have the best staff on board to help you reach your goals. Our team are highly experienced and knowledgeable in a broad range of areas and expertise, so you get the best advice. We service clients all over Australia including Perth, Brisbane, Melbourne, Adelaide, Sydney and Hobart.  We provide Resume Writing ServicesCover Letter WritingLinkedIn ProfilesAddressing Selection Criteria’s and we also offer a Job Application Service where we apply for jobs on your behalf and all you do is wait for the call. Please visit our website at www.clientcentric.com.au to find out more.