Wednesday, May 29, 2019

Business Rat Spoiler Alert System?

From China Daily, news of a fresh twist to the national program of mutual snitching: debt-shaming by smartphone.

Hebei court unveils phone program to expose deadbeats

... With the program, smartphone users can find out how many deadbeats are within 500 meters, as well as their personal information, which they can use to share with friends or report them to the court.

Wang Yanling, a resident in Chang'an district in Shijiazhuang, Hebei province, said she was so surprised when she found so many debtors near her.

"The program shows there are 87 defaulters around my home at Huicui Garden, including individuals and companies such as restaurants and real estate developers," she said.

Wang said she would check the blacklist on the program first next time she wants to go to a restaurant.

We're used to being spied on in the West - not just Five Eyes intergovernmental sharing of information about us, but the rash of trackers attaching themselves as we look around online so that they can target adverts.

But if we're going in for this kind of thing, how about making it work for us?

Wouldn't it be useful to know, before signing a contract to supply goods or services, whether the other party has swindled others? What if such information was so commonly available that such people were driven out of business for lack of victims?

Let me give you a couple of examples I know about.

Case 1: a successful small shopfitting company has a sub-department turning wood products for commercial furnishing and refurbishments. King Rat puts in a big order and when the work is done, withholds payment, falsely claiming that some of the goods were not as specified. The cashflow crisis puts the whole company into receivership; the receiver sells off goods at 10p in the pound - including the original order, to King Rat. The buildings are flogged off at 50% of bricks and mortar value (all this is standard in the world of receivership); a couple of dozen workers are laid off; the director is landed with surplus personal debt after all this bargain basement raiding.

Case 2: another firm completes work and the director goes to see a different King Rat to settle up. Everything has been done satisfactorily, the latter agrees. He then says there are two options: sue him for the £100k owed - and KR has deep pockets for the legal case, which will take a long time; or accept £50k now - "it can be in your bank account this afternoon" (which will wipe out the profit and leave a fair bit of the costs uncovered, too.) There is no choice but to accept the swindle.

This kind of thing is one reason small enterprises struggle to rise and often fail, especially as recession looms.

What if there were some extraterritorial whistleblower setup that could automatically warn all potential contractors via their phones?

If only.

Btw the above Chinese story - quoted in this week's Private Eye - is accompanied there by another, about outsourcing traffic law enforcement to bounty hunters:

"How New Yorkers are making bank ratting out idling drivers."

2 comments:

Sackerson said...

JD comments:

Case 1 and Case 2 look very familiar and that sort of thing was happening before the 'greed is good' ethos of the 1980s became standard business practice.

Knowing the 'secrets' of the other party to any contract would indeed be useful in such cases. I have always thought that 'limited liability' status should be abolished which would oblige company directors to accept responsibility for their decisions. They are happy to take astronomical bonuses as a reward for 'their' success but deflect blame elsewhere for any failures. Among other things it would bring businesses back down to a human scale. 'Small is Beautiful' as advocated by Schumacher and as advocated by John Ward every now and then at The Slog.

It will never happen of course and even if it did, how can you legislate against human nature?

Have you read this book? plus ça change and all that!
https://en.wikipedia.org/wiki/The_Ragged-Trousered_Philanthropists

Paddington said...

Both cases appear to be the business strategy of President Trump, by every account that I can find. Amazingly, because of his taste for gold fixtures, he still managed to drive a bunch of businesses into the ground, including several casinos and an airline.