Category: Sin categorizar

It is very important to ask yourself this question. Is your money working for you? For your bank? For your tax adviser? For your solicitor? For your estate agent?

For our part, we humbly wanted many of these virtues to be taken into account by our clients when designing their future. Interestingly enough, just as Steve Jobs , one of the many reflections that we always like to do with our new clients before we prepare a new project. Global Wealth Plan is: What changes would you have to make in your life if you were diagnosed with a serious illness and your time was suddenly running out? The answers we come across are very diverse, but they always involve extremely fruitful reflections. We should not wait until the end of our life to put it in order. And hiring a family office is the right time to make these and many other changes that are not always directly related to optimising our investments.

As you will see in Steve Jobs' video, this reflection on the end of life has also helped him to analyse and relativise what is truly important in this world. Although it may come as a surprise, when we talk about managing and structuring more or less important assets, the consequences of contemplating or ignoring these reflections are very noticeable. For better and for worse. And we can assure you that when a Client's personal size allows him to value these concepts and reflections that we propose to him when designing his PGR, the results in terms of wealth progression and Happiness are spectacular. The pursuit of Happiness in parallel but also beyond the increase of our fortune, is something very enriching at all levels. As we have said before:

Paradoxically, when the focus is on the enjoyment of the journey, you tend to get on the podium, and the happiness achieved is far greater than the mere medal.

Losing sight of these vital concepts and reflections when dealing with money and wealth is one of the greatest dangers we can incur. Optimising the returns on our assets will produce money, but also a myriad of problems that will lead to unhappiness if we ignore what is really important in Life. On the other hand, if we have properly assessed these concepts, wealth progression in a wise living environment will be much more likely and easier to optimise. This is the basis of Cluster effect positive.

Here is the version of Mr. Jobs' speech that I found more than a year ago at Gurusblog thanks to Investorsconundrum, It is in its entirety and subtitled in Spanish. However, Steve Jobs' speech opened the 2005 academic year at the university:

If you are interested in this kind of reflections, which in my opinion are what distinguish the interesting people who pass through this world from the rest of the crowd, I also recommend you to read another pearl, this time from here: The Seven Powers, of Àlex Rovira. Finally, I leave you with the selection of the Top 20 must-reads for «the journey of life», according to this same author, a true Guru of Happiness. An interesting library if ever there was one:

1. Man's search for meaning. Victor Frankl.
2. The man who planted trees. Jean Giono.
3. Philosophical dictionary. André Comte-Sponville
4. Siddhartha. Hermann Hesse.
5. Leaves of Grass. Walt Whitman.
6. The wheel of life. Elisabeth Kübler-Ross.
7. Grace and courage. Ken Wilber.
8. The freedom to be. Annie Marquier
9. The art of loving. Erich Fromm.
10. The scripts we live by. Claude M. Steiner.
11. I am that. Sri Nisargadatta Maharah.
12. Who I am - the sacred quest. Jean Klein.
13. The Dance of Reality. Alejandro Jodorowsky.
14. The Little Prince. Antoine de Saint-Exupéry
15. The Act of Will. Roberto Assagioli.
16. The prayer of the frog. Anthony de Mello.
17. The wisdom of insecurity. Alan Watts.
18. Integral psychology. Ken Wilber.
19. Bhagavad Gita.
20. I Ching.

The supreme wisdom is to have dreams big enough not to lose sight of them while pursuing them.
William Faulkner.

Just like the pessimism about the property market It hinders the healthy growth of our wealth; the nomadic practice of parking money in bank deposits, scraping together tenths of a percentage point above the Euribor – here today, there tomorrow – does nothing to promote the sound, planned growth of our cash. However, compared to strategies that focus solely on rising share prices and the short term – which have made thousands upon thousands of investors rich in recent years – those entrenched in savings accounts will form the elite of those who knew how to exit the market in time and will be envied for weathering the winter without losses until the stock market spring returns (although the Japanese have been waiting for it for 18 years). But there is an opportunity cost, and in times of crisis it tends to be high.

In short, both the Pessimism in the property market such as the Financial Absenteeism represent a dangerous shift in the healthy growth of our wealth, which we must safeguard throughout our lives and in any economic climate. Some of you might say that avoiding losses that would severely erode our wealth is an achievement in these times. Of course, it is a lesser evil and, for many, a pipe dream, but we should only be content with avoiding a decline in our wealth if we are unable to maintain steady progress with reasonable guarantees of success, whether on our own or with help. Furthermore, success in achieving such steady progress will depend entirely on the PGR designed and based on the unique characteristics of the individual or family.

Here we must make it clear that financial success should not be defined solely in terms of maximising financial returns. Wealth and happiness are concepts that we must address together, as the former often poses a serious threat to the latter, as we can see from the following chart:

«A concert is not merely a performance of an album, but a theatrical event»

Freddie Mercury

Similarly, we can say that managing our wealth is not merely a matter of applying economic principles to our investments, but rather the perfect harmony between Happiness and Wealth throughout our lives and those of our descendants.

But returning to the steady growth of our assets and the show that must go on, we must not simply resign ourselves to a change of scenery. What we must do is adapt to it. Like the mouse in search of new cheese. Financial inaction can cost us irreplaceable opportunities, in terms of both quality and quantity, when it comes to our wealth. And, at best, we only have one lifetime in which to grow it.

We do not intend to encourage anyone to venture into investments whose risk is beyond their means or for which they are not suitably qualified. Far from it. We simply wish to share with you all the criteria and guidelines we work by as a Family Office. This is the path we believe to be the right one, and one that our clients follow with our guidance. And this is what we wish to explain and share on this blog for small and medium-sized investors. How each individual applies this will depend on whether or not they share our criteria and protocols, on their individual capabilities and training, and on whether or not they wish to receive our support.

We can hardly hope to reach a safe harbour if we do not know the right course. Only by understanding our objectives and limitations can we focus our efforts on trying to overcome winds y tides, such as the current credit and energy crises. Some will succeed. But without clarifying the route, the destination and our level of self-sufficiency, the chances are nil.

«My property is worth far more than what I would be offered for it at the moment. In other words, I won’t be able to sell it at that price until the crisis is over, and so I have no choice but to wait for the property market to recover to normal levels.».

No doubt many readers will recognise themselves in this pithy phrase. And we say ‘pithy’ because it could perfectly adorn the tomb of their wealth growth. Our longest-standing clients enjoy a very balanced mix of property and cash, tailored to their needs and PGR. However (or before this is implemented), we are going to try to correct certain conceptual and strategic errors via this blog, just as we do personally with new clients who come to our family office with this property burden:

1. Firstly, our properties are not worth more than what the market is willing to pay us today by them. This is the market price, and no other price we might have moored in our memory (just like the anchor effect (as defined by Fernan2 in the stock market). We may also be misled by the mental anchor we may hold onto regarding the expected capital gain at the time of purchase. This universal law of market price, determined by supply and demand, is particularly difficult to accept when it comes to our own property, especially when it accounts for virtually our entire wealth. But even if we are reluctant to accept it, the market continues to dictate its universal laws.
2. Secondly, whilst it is obvious that the market was overvalued, we must be aware that it may be many years before it becomes so again. The bursting of a bubble does not necessarily mean that another will immediately begin to form, and it is even less likely that it will do so in the same sector. The level we consider «normal» (sic) may be a long way from the value the market is likely to assign to our properties in the coming years or decades.
3. Thirdly, the growth of our wealth cannot be put on hold and allowed to suffer until the next property bubble has inflated enough for us to feel that our properties are being bought up by others «at its usual price«. We must not let a long and precious period of time and opportunities slip away, so that we can free up our assets and put them towards other investments.”.

The potential realised profit or loss that we will incur if we decide to sell our properties today at current market prices must be fully offset and more than made up for by the returns we will obtain from other investments made with the proceeds of those sales. And this capitalisation on opportunities, much like compound interest, will prove spectacular by the time our properties have regained a market value that we consider «normal». Therefore, the state of our assets at that future point in time when we deem it acceptable to sell our properties would be far worse than what we would have achieved by selling today at market prices and putting our assets to work during those same years.

The show must go on (lyrics). Our assets must continue to perform well, without the long and severe property slump derailing our progress for years to come. As is always the case – and as we never tire of repeating – times of change, crisis, bursting bubbles, and so on… always come with the best investment opportunities. And we must be able to identify and capitalise on them, either on our own or with professional help. But in order to make the most of them, we must at the same time resolve to accept the market price for our properties so that we can begin the road to recovery. This path will be multifaceted and complex, and the worst mistake we can make in terms of building our wealth is to rule out selling, give up and fall into a pessimism about the property market which, let’s not kid ourselves, would be a very a long and fruitless penance.

Here’s one of the most moving posthumous videos from Freddie Mercury. Who better than him to remind us that the show must go on. That our wealth must continue to grow and that we must make the most of the opportunities that arise, despite the distress caused by past and present mistakes. If, to achieve this, we need to convert some or all of our property into cash at market prices, then we must do so. Let us think of the profits we can make with that money and not allow ourselves to be blinded by the capital losses we will incur. The opportunity cost The cost of resigning ourselves to a loss in the property market by pricing our properties well above market value is, without a doubt, far greater than any capital losses we might incur by adjusting our prices to match current demand.

To quote Henry Ford once again: Failure is a great opportunity to start again, but this time more wisely. Today it’ll be the bursting of the property bubble, tomorrow a stock market crash, the day after that hyperinflation with oil at 200$, or deflation itself… We will always have excuses for resignation and defeatism, for cowardly condemning ourselves to investment ostracism. But our wealth growth must continue despite the difficulties, and this is absolutely incompatible with the pessimism about the property market which prevails in our time.

The show must go on
I’ll face it with a grin
I’ll never give in
Let the show go on

For all these reasons, the ultra-competitive world of Formula 1 can show us the way forward in our quest to grow our wealth day by day. We must be aware that the level of competitiveness required to achieve adequate wealth growth over the course of a lifetime is even greater than that of a mere motor racing competition, even if it is Formula 1 itself.

As you’ll see, this article also led to another very interesting one by Echevarri in which he identifies three similarities between Formula 1 and the financial and legal worlds.

Here’s our original post from a year ago:

Continuing with the Anglicisms introduced by the American world of family offices, we refer to these wealth portfolios, which have been adversely affected by the crisis, as «distressed wealth«, and they need a change of course substantial changes to its management in order to achieve positive results, but just in the right direction. Some portfolios and wealth management strategies in general are based on clear, well-defined strategies that have simply not proved adequate in the current crisis.

But they often come to us after a series of contradictory changes in strategy – nothing more than aimless lurches in which assets inevitably dwindle after each corrective swerve. The usual consequence of these lurches of «I’m leaving, I’m off there»… is the investor’s complete lack of confidence in any kind of strategy, which usually ends up…" cowering beneath a bank vault, which, with any luck, will only serve to minimise the effects of inflation. From the consultations and interviews we’ve carried out with new clients, we can confirm that these are common occurrences these days; however, opportunities are like sunrises – if you wait too long, you’ll miss them.

Therefore, having suffered losses as a result of strategies we were following before the crisis – which have now proved detrimental – our main objectives must be twofold:

1. Capital preservation to prevent further losses from occurring (this simple objective can, of course, be achieved simply by holding funds in a bank deposit, for example, but this would not be compatible with objective no. 2).
2. The potential to achieve high returns that will compensate us for the losses incurred to date.

These two objectives, which seem so obvious to everyone, cease to be so when we try to put them into practice. At that point, a multitude of variables come into play, such as: the nature of the previous failed investment, the range of assets (not just financial ones), the level of distress or distress the wealth that has accumulated in the portfolio in question, the specific characteristics of the potential client, the current and desired ratios between property and corporate financial assets, and the specific content of their PGR newly established and/or following their latest development, future recovery and growth needs, etc., etc., etc…

However, any strategy we devise for a distressed wealth It must strictly comply with the two main objectives set out above. To give an example – and depending very much on the specific case – a financial investment that guarantees the principal in the medium to long term and which also places the client in a position to benefit from returns and potential capital gains on property within a US$ framework will perfectly fulfil the two criteria listed. Naturally, we will devise many others in collaboration with the client or prospective client. Time will tell which ones work best, but all of them will preserve the principal whilst allowing the wealth owner to benefit from returns and incidental capital gains. Mission accomplished and strategically flawless.

These strategies are specific to distressed wealth, but they can also form part of the strategies to be adopted for portfolios that have been managed correctly and have adapted skilfully and nimbly to the current crisis scenario. In other words, it can also serve as a complementary strategy to those currently proving successful, as investments of this kind will not undermine the structure of any portfolio – quite the contrary.

Failure is a great opportunity to start again, but this time more wisely.

Henry Ford

Spacious pool home, 4 bedrooms, 2.5 bathrooms and a 2-car garage. Trayed ceilings in the living and dining rooms. Huge walk-in wardrobe in the master bedroom. Eat-in kitchen with all appliances, including a washing machine and dryer, plus a water softener. Walking distance to the neighbourhood playground. Tiles in all high-traffic and wet areas. Formal living and dining rooms, both with coffered ceilings. Galley kitchen features a breakfast nook overlooking the pool and a trussed-roof lanai. The kitchen is tiled, has a gas hob, a walk-in pantry, 42-inch maple cabinetry and a wrap-around breakfast bar. All appliances included. Spacious family room with a wall for your wide-screen TV. The master bedroom has a coffered ceiling and a huge walk-in wardrobe. The master bathroom has two washbasins, cultured marble worktops, a large garden bath, and a separate shower with a bench seat. The secondary bedrooms are spacious, with fans and lighting in all. Indoor laundry room with a utility sink. The hot water heater has a booster pump for quick response. The pool features an automatic sweep system and a safety fence. There is an outdoor shower by the pool.

Price: 300,000′-$ That’s 100,000 per family. But as the US property market was in a real slump (I’d say the slump has now reached the point of attempted suicide), our friends negotiated a substantial discount of 50,000 $, bringing the final price of the house down to 250,000′-$. For those unaccustomed to thinking in square feet or US dollars, let’s break it down: 211 m² for approximately 163,000′- €163,000. That is to say, €773 per square metre.

Of course there were neighbourhoods and houses that are still much cheaper, but our three families were optimistic about their future and decided to ask Mr Cheater, mortgage broker of a a reputable credit company call Quicken Loans, a mortgage for the full value of the house that would make their dreams come true of enjoying Tampa’s pleasant climate all year round, complete with a private swimming pool. The monthly repayment amounted to 1,726,971 TP4T, that is, three instalments of 575,661 TP4T per month; and with that 30-year-and-one-day mortgage, they were able to pay the previous owner in cash, who quickly went off to get drunk at the dive bar nearest.

Thanks to the discount they secured, and as each couple had applied for a mortgage charitable of 100,000′-$, our friends had 50,000′-$ left over from their initial budget, which they decided to allocate and divide up as follows: 20,000 was put into a joint fund and used to cover the transaction costs, fees and taxes, as well as the refurbishment of the house and the furniture. On the other hand, the remaining 30,000 they They divided it equally, giving 10,000 to each couple. With this money, they decided replace the three old cars which the three couples had been dragging along for years.

And so, with their three new second-hand cars in their brand-new second-hand garage and their brand-new second-hand house, furnished and fitted out with the 20,000′- $ from the mortgage, which they put into a joint fund, they began a new and long-awaited life full of hope.

They were immensely happy in their new home and with their new cars. They worked hard and deserved that standard of living, but now they had to cope with more expenses and obligations than they had ever had before. Mr Cheater had already warned them that he would be ruthless about late mortgage payments. If they wanted to continue benefiting from the ridiculously low interest rate of 5 5/8, they couldn’t miss a single month’s payment, otherwise… Our three couples were very grateful to him for his interest and kindness in finalising the details of the sentence… I mean, the mortgage. Without him, they would never have been able to realise their dream of a house or a car. What a great bloke Mr Cheater is!

A few days later, sitting on the deck by their brand-new swimming pool, they began to do the sums and argue amongst themselves. Something didn’t add up in their figures. The Mexican woman and her Puerto Rican husband began to mistrust the Cuban sisters, who had been in charge of negotiating with Mr Cheater. They argued that the three families had each taken on debt of 100,000, but had spent 10,000 on a new second-hand car. Therefore, once the money they had shared out to replace their old cars had been deducted, their net contribution to the house was only 90,000. That is, 90,000 divided by 3 couples, equal to 270,000-$, which, added to the 20,000′-$ for taxes, expenses, furniture and fitting out the house, gave them a total of 290,000′-$. And yet (or perhaps because of it) the ever-so-kind Mr Cheater had mortgaged their lives to the tune of 300,000′-$!!!

The Cuban sisters, who took care of the mortgage paperwork with Quicken Loans They went over the accounts again and again, swearing up and down that neither they nor their husbands had pocketed the $10,000 that was missing from their accounts. The tension between the Puerto Rican and the African Americans rose to a dangerous level. They also suspected Mr Cheater, whom they went to visit in an attempt to resolve the conflict, but all they achieved was mistrust and threats of seizure from Bill Emerson (Chief Executive Officer), the head of Mr Cheater.

They went through the bills for the three cars, the furniture, the air conditioning, the taxes, and the fees and charges from Quick Loans. Everything seemed to be in order, but with each passing day, the mistrust between them grew to such an extent that they stopped speaking to one another. Life in what had been their dream home turned into a nightmare. Even the way the three cars were parked in the huge garage became a source of fierce dispute, and every morning they would wake up to find some suspiciously new scratch or dent.

Perhaps due to their constant state of tension, one of the Cuban sisters and her brother-in-law lost their jobs. They sold one of their cars at a loss to ease their financial difficulties, as it was becoming increasingly difficult for them to meet their monthly payments of 575,661 TP4T. But after a few months, they were unable to make their payments to Mr Cheater on time and received their first threat of repossession. They agreed to put the house up for sale, though not without a violent row between the Puerto Rican and the unemployed African American. But the attempt to sell it and pay off their mortgage was in vain; the same estate agency who sold them the house only passed on a single offer from a investor for 135,000′-$ in cash.

Mr Cheater lost his job and now works as a head waiter at the The Hard Rock Hotel Casino in Seminole. For their part, our main characters had to return to the outskirts of Tampa to rent flats that were even cheaper than the ones they had left behind just a year ago. This time they only needed two flats, as one of the Cuban sisters had got divorced and moved in with her other sister and her African-American husband, who was still unemployed. In fact, she had been having a secret affair with her brother-in-law for years, but neither her sister nor her former Mexican friend ever suspected a thing.

One afternoon, a few years later, whilst our Puerto Rican friend was watching his Mexican wife and their three-year-old daughter playing with a children’s jigsaw puzzle, he exclaimed, laughing heartily: ‘I know what happened to the 10,000′-$ we were short when we bought the house, my friend!’

Supongo que la mayoría de vosotros también lo sabéis. Los que no lo tengan claro, deberán esperar a leer vuestros comentarios.

There are two things that are infinite: human stupidity and the universe. But I’m not so sure about the latter.

Albert Einstein.

Louis Bachelier (foto), basándose en estos movimientos brownianos, realizó su tesis doctoral conocida como The Theory of Speculation, publicada en el año 1900 (precursor donde los haya). Fue considerado el pionero en el proceso estocástico, un análisis que quedó delimitado al mundo matemático y científico varias décadas hasta que Fisher Black y Myron Scholes (éste último premio Nobel en 1997) le dieron el impulso definitivo a su aplicación financiera en 1973. A continuación podemos ver su famosa fórmula para calcular el premium de una opción:

La idea de estos matemáticos y sobre todo de estos economistas no fue otra que la de traer capitales del futuro para su aplicación en el presente. Es decir conseguir una fórmula matemática que cifrara cuánto ha de pagar un inversor hoy para tener derecho a comprar algo en el futuro, y viceversa. Es decir cuánto vale el riesgo en el que incurre el vendedor para fijar hoy el precio de un activo futuro. Black-Scholes lo determinaron matemáticamente, de forma casi infalible (sic). A partir de ahí despegó un nuevo mundo de inversión llamado futuros y posteriormente su infinita evolución hacia todo tipo imaginable de derivados. Nacía así el Chicago Board of Trade (CBOT) y se establecía el caldo de cultivo idóneo para alcanzar la burbuja crediticia actual, agravada por la inmobiliaria. El dinero y la riqueza dejaron de pertenecer al reino de la energía, donde exclusivamente se creaba o se destruía vía productividad, y mayormente se transformaba o cambiaba de manos. Se inició una peligrosa dinámica en la que el dinero dejó de tener relación con la producción y empezó a viajar a través del tiempo, pero sólo en una dirección. Donde la capacidad de creación de riqueza virtual y de inversión actual se tornó casi infinita a través de la globalización de los cálculos estocásticos. Hace años que sólo hay que ir al futuro y disponer de activos y posibilidad de inversión de algo que todavía no tenemos, porque nos creemos perfectamente capaces de cotizarlo con exactitud. Al más puro y salvaje estilo Back to the Future.

Pero cuidado, aunque la mayoría de los usuarios de las finanzas matemáticas no sean conscientes de ello, el modelo browniano no es aplicable correctamente con turbulencias o grandes crisis y variaciones, o sea en la actualidad. Riesgo y Value son dos conceptos que las matemáticas difícilmente podrán cifrar con precisión jamás. Hay un componente psicológico demasiado importante que se multiplica enormemente con la globalización de los mercados de inversión. Sin ir más lejos, la determinación del riesgo de una entidad financiera a quebrar en menos de un año, nada tiene que ver con la probabilidad de éxito de ese mismo método de cálculo a 10 años, por ejemplo. No obstante los derivados no serían intrínsecamente nocivos para el sistema si sólo se utilizaran en empresas cuya productividad sobrepasara en mucho el premium pagado por el margen de riesgo. Pero esto haría reír a la mayoría de financiers and investors que a diario parasitan (parsitamos) en el Sistema Económico. Sería como decirle al prepotente nuevo propietario de un flamante Ferrari que sólo puede ir en primera y a medio gas, o sea, ni por asomo.

La expansión de crédito es una herramienta diabólica capaz de fabricar periodos de crecimiento económico virtual. Y los modelos de finanzas matemáticas, además, nos dan una falsa sensación de seguridad, de cálculo y control del Riesgo y del Valor. Nada más lejos, desgraciadamente.

Hasta hace unas décadas, las contracciones y expansiones de dicho crédito, conllevaban las bonanzas y crisis económicas cuyos ciclos todos hemos conocido y estudiado. Pero el uso y abuso global de los derivados traen al presente ingentes cantidades de dinero del futuro que han hecho estallar por los aires los ciclos, hasta ahora conocidos por todos. Por lo tanto los sistemas y teorías basados de una u otra forma en estos ciclos (casi todos) que se han repetido durante más de un siglo, han dejado de funcionar parcial o totalmente desde que estalló la burbuja crediticia. (Las hipotecas también han traído abusivas cantidades de dinero del futuro, pero esta vez a cambio de nuestro tiempo y productividad vital, pero de eso hablaremos otro día.)

Así pues, podemos ver un periodo de recesión que vaya mucho más allá de la corrección de este exceso crediticio e inmobiliario. O bien que el poder de atracción del dinero del futuro sea tal que veamos un pullback sólo transitorio en los próximos meses, y que éste nos haga huir peligrosamente hacia adelante unos años o décadas más. El Futuro es más que nunca impredecible, aunque su dinero ya nos lo hayamos gastado e invertido.

No nos cansaremos de repetir que la inversión en instrumentos no relacionados directamente con la producción son nocivos para el Sistema, our Sistema Económico. Pero aún lo son más si los alimentamos con dinero arrancado del futuro. Deberíamos poder desinvertirlos y devolverlos al futuro, pero eso no es posible. Sólo invirtiendo lo ya producido podremos conseguir que nuestro dinero, paulatinamente y con largo esfuerzo, viaje Back to the Future.

En la primera versión de esta trilogía cinematográfica el argumento es comprensible y atractivo. Sin embargo el abuso del hilo argumental a través de la segunda y tercera parte, hacen que deje de ser tan comprensible para el espectador. El final, incluso para la industria del celuloide, es una paradoja, tal y como podemos ver en el anterior vídeo. Comercialmente funciona muy bien, ya que sin demanda no cabría la oferta de más secuelas, pero si en lugar de un divertimento ocioso se tratara de economía y finanzas, este abuso se convertiría en nocivo. Eso es lo mismo que ocurre con los derivados y la burbuja crediticia, financiera e inmobiliaria. La demanda existía y existe, pero el abuso nos lleva a paradojas que en el plano del sistema económico y financiero mundial posiblemente tengan terribles consecuencias insostenibles.

The paradojas en el tiempo han tenido una repercusión creativa muy importante a lo largo de los años, y dan un juego para la ficción inagotable. Pero prefiero pensar que mis inversiones no dependen de la teoría de la relatividad. Al menos en lo relativo a la teoría.

Undoubtedly unionism has shaped the nature of the fiercest and most purist capitalism. Indeed many economists consider today's globalised capitalism a hybrid between the failed socialism/communism of the second half of the 20th century and the ultra-capitalism promulgated at the beginning of the last century. The capitalism of our grandparents would have been shocked by the state interventionism in modern Western economies; and also by the social agreements that are achieved year after year by the modern trade unions.

But the workers' spirit and the workers' struggle for rights against the bosses, despite being a phenomenon that occurs in a very similar way almost everywhere in the world, has very significant exceptions. Among them is the behaviour of the worker-management relationship in countries where totalitarian or pseudo-totalitarian regimes are still in place, which are the aftermath of the failed communism of the last century. These phenomena are also evolving rapidly with the adoption of voracious capitalism, this time state capitalism, by countries such as China or Russia, among others. However, in these scenarios of socialised capitalism there are also some tics and conflicts between workers and business, albeit state-owned.

After the failure of communism in the second half of the 20th century, we came to the conclusion that capitalism, whether wildly liberal or socialised, is the second best system the world can run on... Now we only need to find out which is the first. But that would be another subject worthy of countless articles...

Returning to the employment relationship at hand, another major exception worthy of careful analysis in this worker-employer relationship, which we all accept as normal in the first world, is Japan. Such a relationship in that country is absolutely exceptional and admirably sustained over time. A worker's respect for his or her employer and company is something that is difficult to understand for our trade union mentality, in which the interests of the employer must inevitably clash head-on with those of the worker. by definition. But what if that were not the case in the West either?

Many of you will think that if the interests of the worker were to be brought closer to those of the employer, the social situation of the working class would deteriorate dangerously over time, and the disproportion of wealth between the two would increase. With this in mind, let us look at the situation of the workers in Japan. Their weekly working hours and productivity are far above what we are used to seeing around us, no doubt. But we can by no means say that the Japanese working class is exploited or that their standard of living is less than decent. Japanese companies take care paternally of its workers to extremes unthinkable in the West. So much so that to speak of exploitation and lack of labour dignity, we should turn our gaze to the third world, but in no case to the paradigm of capitalism and modern production that is Japan.

As you already know, I have a special passion and weakness for Japan. Perhaps that is why I admire so many of its peculiarities that never cease to surprise me after a few trips. Here are a couple of anecdotes from my friend Hector Garcia You can find more information in what is undoubtedly the best and most complete website in Spanish to get to know Japan and its peculiarities: Kirai. A Geek in Japan:

«A friend who works in Kodansha (Japan's largest publisher) told me about the process they went through to eliminate a magazine that was not making enough money. To get rid of the employees, what they did was to “suggest” to them that were looking for another job several months before the elimination of the department. As the date on which they planned to end publication of the magazine drew closer, Kodansha switched to suggesting to the department's employees to leave the company voluntarily. In the end they achieved their goal, all employees in the department left voluntarily, they did not have to fire anyone (saving all the costs of firing employees). This is an example of how employees “sympathised” with the problems of the company, took responsibility for the failure of the department and felt compelled to leave Don't you think this way of acting is incredible? If this were to happen in a European company I can imagine strikes, unions complaining etc. This is an example of how the Japanese avoid conflict at all costs and the role played by a sense of obligation. giri when making decisions».»

To our mentality, it seems like science fiction or the fruit of an oppressive bosses' mindset in which the working class is enslaved and severely threatened, doesn't it? Hard to believe in an environment of first world freedom. But e pur si muove.

The problems that the Japanese economy has been experiencing for more than twenty years are well known. Nevertheless, its standard of living remains enviable (even now, in times of recession or stagflation, we envy its lack of inflation) for the vast majority of the world, including a large part of the first world. Personally, I would say that I also find this workers' sense of responsibility for the running of the company enviable, as well as the respect of companies for their employees. In this In Japan, jobs have traditionally been retained for life, with wage increases as the worker's age and family obligations increase.. Interestingly, this form of remuneration is a far cry from the productivity or competitiveness incentive that we are so wildly accustomed to here. You may ask yourselves: How can a mediocre employee of advanced age be rewarded more than a young person who stands out for his or her special competence? It is difficult to understand for our mentality and a priori detrimental to maintain a high level of competitiveness. However, for any Western trade union, the precariousness of older workers and their difficulty in finding work is a workhorse that is difficult to resolve. Despite this traditional commitment of Japanese employers to workers throughout their lives, the Japanese economy has been a world benchmark for productivity, competitiveness, technology, innovation and many other recognised virtues for almost half a century.

It is disconcerting, like so many facets of a country of contrasts from which the rest of the world should learn a lot. The worker-entrepreneur relationship in Japan perfectly defines the concept of the win-win to which we so often refer. And that relationship contrasts particularly sharply with the trade union-employer relationship in the rest of the world.

Below you can read another personal anecdote by Kirai in which you will be surprised by the very curious formal relationship between employer and employee:

«A few days ago I was in a cafeteria with two colleagues, at another table there were two other colleagues and at a third table there were two other colleagues. the chairman of our holding company. The president was the first to finish, he came by my table to say hello, but he didn't bow at all, he is way above us, it was me and my colleagues who bowed and made a couple of comments. When he passed by the other table the president didn't know his own employees (there are more than a thousand of us right now), so he didn't even say hello. But it turned out that the president dropped his wallet on the floor next to the table of the employees he didn't know, one of them picked up the wallet and carried it to the president to the door of the cafeteria. The president, seeing that a “stranger” (actually an employee of his) had helped him retrieve his wallet, began to bow 90 degrees (maximum respect). It was the first time I had ever seen the president bow 90 degrees! If the president had known that the person returning his wallet was an employee of his, he would not have bowed at all (You should not bow to an employee of a lower rank), he would have simply made a surprised face and said thank you. This is a situation where the role played by the uchi and soto in Japanese daily life and an example of how the level/rank you occupy in society/company/group is very important in Japan».»

In short, they seem to me to be interesting reflections to make us aware of the possible diversity of the relationship between worker and employer. Different ways of coexisting two worlds without the understanding of which the sustainability of the capitalist system is not possible, however socialised it may be. In any case, they seem to me to be interesting reflections on this May Day, when in most parts of the world people stop working to celebrate Labour Day, while in some places work is something much more festive.

Western civilisation? Well, that would be an excellent idea.

Mahatma Gandhi.